Clean Edge Razor Case

967 WordsAug 22, 20134 Pages
Paramount Health and Beauty Company is in the process of launching a new technologically advanced nondisposable razor “Clean Edge”. With its improved design, Clean Edge provides superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave. The company has decided to introduce it in the men’s market where it has a strong presence. The company is now focussing on positioning and naming of this new product. It also needs to decide on the promotional activities to be performed adhering to the budget constraints and also must decide on the distribution channels through which it can reach to the masses. Industry experts have divided the nondisposable…show more content…
Present sales of the Paramount in razor industry come to $170 million and Paramount Pro contributes to this significantly. By introducing Clean Edge in the mainstream sector a 60% fall in the sales of Pro is predicted and the revenue generated by it will come down to $68 million. But it is expected that clean edge will generate a revenue of $147.8 million* and in turn Paramount can achieve a net sales of $215.8 million. Marketing cost is approximated to $42 million and Paramount will be able to generate a profit of $173.8 million. If they had positioned it in the niche segment they would lose only 35% sales of Pro. But at the same time, due to the constraints in the market clean edge can raise sales of only $52.8 million and the net sales will total to $163.3 million. Here the marketing cost is approximated to $15 million and the revenue generated will amount to $148.3 million. Thus the figures clearly indicate that concentrating the mainstream would be more beneficial. Also Paramount will be able to achieve a profit margin of $3.09 per unit even after providing distributors a margin of $3.36 per unit. Since the product is being positioned in the mainstream segment it would be better if it is named “Paramount Clean Razor” because this helps customers relate with the brand and would be easier for it to compete with Naiv since it is a recognized brand in this

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