Clean Edge Razor

1488 Words May 2nd, 2012 6 Pages
Marketing Case Analysis
- Clean Edge Razor Case -

Team members * Min Woo Song * Yang-hee Park * Yekaterina Li * Onofre C. Mateo * Khanan Pinnoi

Clean Edge Razor Case 1. What changes are occurring in the non-disposable razor category? What are the strategic life cycle challenges for Paramount’s current products as well as for Clean Edge? Assess Paramount’s competitive position. (1) Market growth in super premium segment
Non-disposable razor experienced approximately 5% growth per year from 2007 to 2010, especially super premium market’s growth rate was higher than other segments. (2) Innovative product and increased media advertising expenditure
Innovative and new products increased total market
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[Graph 1]
However it is very important strategic issue that refill cartridge is more lucrative than razor. The gross profit rate of razor and refill cartridge is 33% and 64% respectively in the mainstream strategy. Accordingly Paramount should increase the sales of refill cartridge revenue. Actually in the 2nd year the operating profit of Clean Edge in the main stream strategy is projected to increase sharply to 27% from -3% in the 1st year attributed to soaring sales of refill cartridge.[Graph 2] Furthermore as Paramount is projected to allocate more marketing budget on Clean Edge, the combined operating profit is higher in the mainstream strategy than niche strategy as shown on Graph 1 and Graph 2.

According to feasibility study, even though Paramount loses -3% in Clean Edge razor and refill cartridge in the mainstream brand strategy in the first year, it is projected for Paramount to increase sharply its operating profit in refill cartridge from 2nd year.

[Graph 2 : First Year Operating Profit Rate - Niche VS Mainstream]

[Graph 3 : Second Year Operating Profit Rate - Niche VS Mainstream]

(2) Reliability of the figures
In our opinion

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