4249 JANUARY 19, 2011 JOHN A. QUELCH HEATHER BECKHAM Clean Edge Razor: Splitting Hairs in Product Positioning On August 9, 2010, a group of executives from Paramount Health and Beauty Company (Paramount) sat in a research room intently observing a dozen men shaving on the other side of a two-way mirror. The subjects were testing out Paramount’s newest nondisposable razor, Clean Edge, and discussing the experience. The verdict was extremely encouraging. The majority of men felt it was the closest, cleanest, and smoothest shave they had encountered. Clean Edge’s improved design provided superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave.1 …show more content…
In general, distribution outlets responded to the growth in nondisposable SKUs by increasing shelf space for the product category. Razors were not purchased frequently enough to be a traffic builder for the stores, but retail margins associated with the products tended to be considerably higher than other personal care items (e.g., toothpaste). Distribution was also starting to shift outside traditional food and drug stores. In 2000, food stores sold over half of all razors, but by 2009 they represented only 42% of sales. Exhibit 4 summarizes the changes in retail channel distribution from 2007 to 2010E. Male-specific grooming products seemed to be a bright spot in the industry. Recent trends indicated men’s grooming routines moved well beyond a splash of aftershave. New products such as men’s body spray, fragranced shower gel, and skincare lines proliferated in the last several years. Male-specific personal care products outpaced the growth in the women’s beauty market as these products became more mainstream. With more media attention on men’s grooming issues and less stigma associated with men’s preening, the segment seemed poised for growth. Company Overview Paramount was a global consumer products giant with $13 billion in worldwide sales and $7 billion in gross profits for 2009. Paramount’s corporate divisions included Health, Cleaning, Beauty and Grooming. Paramount entered the nondisposable
2) How is the nondisposable razor market segmented? What are the crucial elements of consumer behavior for nondisposable razors?
The Philips Norelco QG3280 Multigroom provides a performance grooming experience due to its sharp blades and rounded guard. The groomer will glide gently across the skin, giving you a smooth trimming experience with less irritation, perfect for even the most sensitive of skins. Never before has it been so easy to create and maintain your very own style, the trimmer coming with a trimmer that can be used with or without a comb to create a stubbly or styled look. In fact, you can trim you facial hair with nine different length settings, and then finish off with the mini shaver to obtain precision results, whatever your style.
1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge?
A group of executives from Paramount Health and Beauty Company (Paramount) sat in a research room intently observing a dozen men shaving on the other side of a two-way mirror. The subjects were testing out Paramount’s newest nondisposable razor, Clean Edge, and discussing the experience. The verdict was extremely encouraging. The majority of men felt it was the closest, cleanest, and smoothest shave they had encountered. All executives at Paramount agreed Clean Edge should be priced in the super-premium segment of the market. However, some executives believed Clean Edge should be launched as a mainstream entry
Paramount is a potential merger target to Viacom and QVC for a few key reasons outlined below:
The Clean Edge which is Paramount’s newest nondisposable razor has powerful influence in the market since 2010. It was improved design and used the new skills to make the razor’s properties become better than before. Lots of men like it and consider it was the closest, cleanest and smoothest.
The introduction of the Sensor Shaving System, one of the biggest product launches ever, forced Gillette to reevaluate its strategy in its shaving and non-shaving business. It had to decide whether to go ahead with the launch and if so, at what scale.
200 patients randomized into two groups, 1 with strip shaving (2 cm wide) and 1 with full hair shaving. The study was conducted over 17 months.
Paramount decision forced the film industry to go back to basics. For the previous twenty years, films had been created, produced, and distributed according to the dictates of the major studios. These studios controlled every aspect of each film, and, necessarily also the expenses and resulting incomes from them. With the dissolving of these tightly controlled nationwide organizations, the most immediate consequence of the case was significant financial loss. It was no longer an option to have a single entity produce a film; each part of the process had to be separately hired and planned.
Beginning with the analysis of the competitors in the domestic grooming and shaving market, there are two major categories to be examined; competitors which offer the traditional ‘wet shave’ razors and those which offer electric or other forms of razors which are categorized as ‘dry shave’. Skarp Razor falls under the category of ‘dry shave’ razors as there is no needed application of shaving cream for use. When examining the two major categories of dry and wet razors, Skarp Razor will market to consumers who already purchase another competitor’s dry razors (competitors such as Phillips or Braun) as well as consumers who will make the switch from wet (competitors such as Gillette or Bic) to dry razors, followed by those who are purchasing or entering the market for the first time as new consumers.
Synopsis: Gillette has long been known for innovation in both product development and marketing strategy. In the highly competitive, but mature, razor and blade market, Gillette holds a commanding worldwide market share. The peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Today, innovation in razors and blades is thwarted by a lack of new technology and increasing consumer reluctance to pay for the “latest and greatest” in shaving technology. Gillette must decide how to put the razor wars behind them and maintain or increase its share of the global razor market.
The unique flex & pivot technology delivers an exceptionally close shave. Three individually flexing shaving heads are connected by a ball joint system making them swivel, rotate, and pivot with a full range of motion. The maneuverability allows arcitec to adjust to the contours of your face ensuring optimum skin contact and a closer shave -- even on the neck. The new arcitec Shaver is designed to push the boundaries of shaving and to conquer those hard to shave
* Customers: Male consumer products have been trending upward in the last decade. The customer segments are broken up into three areas; social/emotional, involved razor users, and uninvolved or maintenance users. Social/emotional are responsible for 39% of Nondisposable razors, Involved is for 28%, and maintenance users account for 33%. In 2009 consumers razors and replacement cartridges at a higher rate than ever before.
Product quality and efficient marketing are the core value propositions that set the pace for Gillette’s success. With continued innovation in both product development and marketing strategies Gillette has been able to retain a commanding
Gillette is successful because the focus on the one thing they know and that is men. They understand what men need for their grooming needs, and their products are sold all over the world (P Kotler, 2017). Gillette’s popularity has worked because of several factors, including high-quality innovation, consumer research, and mass communications. With their research, and the fact they have kept improving their product, Gillette has made many breakthrough product innovations, which should allow their success to keep increasing. In 1971, there was the Trac II, the first twin-blade shaving system, then the Atra in 1977 there was a razor with a pivoting head, and then in 1989 they developed the Sensor the first razor with spring-mounted twin blades dubbed (P Kotler, 2017). In 1998, Gillette introduced the Mach3 it was the first triple-blade system, surpassed only by the 2006 launch of the six-blade Fusion, promoted as “the best shave on the planet.” (P Kotler, 2017) It is possible that Gillette can become as successful with Women as Men due to the fact Procter & Gamble acquired Gillette in 2005 and Procter & Gamble are experts at marketing to women, due to the fact most of their lines such as dishwashing liquid, laundry detergent, and hygiene products are aim for their woman clients.