By Consulting Without Borders:Aditi Memani, Andres Ramirez, Katerina Potesta, and Camilo Romero
Paramount’s Launch: Clean Edge Razor
Agenda Situation Analysis
Competitors Consumers Distribution Channels
SWOT Analysis of Paramount Marketing Plan for the Launch of Clean Edge Razor
Positioning and Target Segments Marketing Campaign
Advertising Consumer Promotion Trade Promotion
Financials
Competitor Analysis
21.4
26.2
21.1
2.6
5.7
23
2010 Competitors Market's Share
ParamountPrinceBenet & KleinRadianceSimpsonsOther
Competitor Analysis
Cogent Plus
Cogent Victric Master
Victric Advanced
The Naiv The Tempest
10
10.5
11
11.5
12
12.5
13
Super-premium Competitor Analysis
Products
Pri
ce
Consumer Analysis More brand switching into
super premium market to superior products
Brand loyal Not price sensitive Aware of new products
through advertising Increased blade
replacement Generally interested in
beauty/grooming products
33%
39%
28%
Nondisposable Razor Consumers Market Share
MaintenanceSocial Emo-tionalAesthetic
Consumer Profiles Social/Emotional:
Shaving is an essential grooming ritual that makes them feel more attractive and confident
These consumers differentiate products based on both messaging and functionality
Aesthetic: Desire is for smooth skin and shaving is done consistently Differentiation of products is based solely on effectiveness
Maintenance: Have no interest in product category, are inconsistent, and see
shaving as a chore that should be done quickly
Distribution Channel Analysis
2007 2008 2009 20100
5
10
15
20
25
30
35
40
45
50
% of Sales in Each Distribution Channel
Food StoresDrug StoresMass MerchandiserClub Stores
Distribution Channel Analysis Basic Info about Retail Distribution Channels:
Razors provide higher profit margins Food Stores and Drug Stores are the biggest Retail channels Mass Merchandisers are increasing
Distribution Channel Analysis
Food Stores
• Provides:• All Products
(No Value Pack)
• Focus on:• Niche• Mainstream
Drug Stores
• Provides:• All Products
(No Value Pack)
• Focus on:• Niche• Mainstream
Mass Merchandisers
• Provides:• All Products
(No Value Pack)
• Focus on:• Mainstream• Uninvolved
Maintained
Club Stores
• Provides:• Value Pack
Only• Focus on:
• Mainstream
SWOT Analysis of Paramount
Strengths• Leader in technological
innovation.• Established brand with
strong brand equity.• Significant amount of
advertising expenditure at disposal.
Weaknesses • Lacks presence in the
super-premium segment of the market.
Opportunities• Increase popularity in
men’s grooming.• Growing super-
premium segment.
Threats• Competitors releasing
a similar razor into the Super-premium market.
• Unsuccessful launch could hurt strong brand equity.
Positioning and Target Markets Positioning:
Super-premium category razor Men’s market
Growth due to more media attention and grooming products targeted for men
Marketing strategy will target both a niche and a mainstream market
Target Markets: Social/Emotional Niche Segment
Largest Segment of Nondisposable Razors Needs of this segment fit the attributes Clean Edge Razor provides
Mainstream Large Market that is untouched by super premium products
Advertising: Social/Emotional Segment Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials
Partially cover cost of Ryan Gosling TV Campaign Print Advertisements
Publications that cover Men’s Fashion and Lifestyle EX: Esquire, Details, and Men’s World
Digital Marketing Digital Mediums of Print Publications Banner Advertising using Google target advertising platform
Focusing on Men’s Fashion and Lifestyle
Social Media Create Clean Edge Razor Social Platform
Including: Facebook, Tumbler, YouTube, and Twitter Accounts #CleanEdge
Give a Free Matte Black Razor with Customized Carrying Case to Top Men’s Fashion and Lifestyle Blogging Sites EX: Dappered.com, TheSatorialist.com Have them post about their experiences with Clean Edge Razor on all Social Media Platforms Feature post about different package options for the product
Repost any social media posts about Clean Edge Razor
Advertising: Mainstream Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials:
Joakim Noah – All Sporting Events Beginning from the Super Bowl (February)
Ryan Gosling – All Other Commercials Beginning January
Print Publications News Worthy Print Ads
EX: Forbes, Businessweek, NY Times, WSJ Sporting Print Ads
EX: ESPN, Sports Illustrated
Digital Marketing All Digital platforms of Print Publications Banner Advertising using Google target advertising platform Website for Countdown of “Let’s Shave Noah”
Social Media Efforts focused on promoting social media events “Let’s Shave Noah” Mustache March No Shave November
Consumer Promotion We are a super premium product therefore our focus will be
on Package Differentiation and Product Differentiation Product Differentiation
Offer 4 Different Product Packages: Original Clean Edge Razor Extra Comfort and Grip Clean Edge razor Original Clean Edge Razor with carrying case, and wall mount Matte Black Clean Edge Razor
Package Differentiation Offer 3 Different Package sizes for Refill Cartridges
4 – Pack 8 – Pack 16 – Pack
Reasons for our Consumer Promotions Product Differentiation:
Will allow us to maintain a super premium sub brand image by: Providing Added Value for Social/Emotional Segments Provide a reasonable priced super premium product for price sensitive
mainstream users
Package Differentiation: Refill Cartridges can be used for all the 4 different product options Allow mainstream users continue use of a super premium
product at a reasonable price
Data on Trade Promotion in Different Distribution Channels Food Store Shoppers
Are high impulse and unplanned utility item purchasers
Drug Store Shoppers plan their purchases and
look for features Mass Merchandiser
Shoppers Have an average response
to promotions and look for overall value with average price
Trade Promotion Food Stores:
Receive some of Trade Promotion Budget for: Displays that focus on different Product Options of Clean Edge Razor
Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges Drug Stores:
Receive some of Trade Promotion Budget for: Displays that focus on Attributes of Clean Edge Razor as a whole
Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges Mass Merchandisers:
Receive some of Trade Promotion Budget for: Displays that focus on the 4 different Product options and the 2 Different Packages
for Refill Cartridges Will carry the 4 different Product options and the 4 - Pack and 8 – Pack Refill
Cartridges Club Stores
Will not receive any of the Trade Promotion Budget Will Carry only the 16 – Pack Refill Cartridges
Incentives for Distribution Channels Access to the first of its kind product Sales Forecast for Pro and Avail Razors are said to decrease Higher Gross Unit Contribution Trade Promotions target their specific consumer segments
Food Stores: Both Social/Emotional Segment and Mainstream
Drug Stores: Both Social/Emotional Segment and Mainstream
Mass Merchandisers: Both Social/Emotional Segment and Mainstream
Club Stores: Mainstream
Financials Agenda Retail Prices for Different Product Options and Packages Breakdown of Advertising Budget Expected Capture of Market Share Income Statement for Social/Emotional Segment Income Statement for Mainstream Combined Income Statement
Retail Prices: 4 Product Options
Orig
inal
Grip
/Com
fort
Carry
ing C
ase/
Wall
Mou
nt
Mat
te B
lack
$12.99
$15.99$17.99
$14.99
Expect 30% of Niche Unit Sales from Added Value Product Options
Avg. Price Increase for Added Value Options: $3.33
Consumer Promotion Budget Required: $4,896,000
Retail Prices: 3 Package Options
4 - Pack 8 - Pack 16 - Pack
$10.50
$18.38
$34.13
Price for Package Expectations Mainstream Unit Sales from Value Packs: 8 – Pack 20% 16 – Pack 5%
Consumer Promotion Budget Required to compensate for decrease in price per cartridge: $2,118,100
4 - Pack 8 - Pack 16 - Pack
$2.63 $2.30 $2.13
Price Per Cartridge
Advertising Breakdown: Social/Emotional Segment
2011 2012Advertising Campaign $6,000,000 $6,000,000
TV $2,393,050.30 $2,393,050.30Print $3,340,000 $3,340,000Digital $220,500 $220,500Social Media $46,449.70 $46,449.70
Consumer Promotion $6,000,000 $6,000,000Costs of Added Value Product Options $4,896,000 $5,440,001Manufacturing Costs $1,104,000 $559,999
Trade Promotions $4,000,000 $4,000,000Instore Advertising for Clean Edge Features $1,240,000 $1,240,000
Instore Advertising for Product Options $2,560,000 $2,560,000Total Budget $16,000,000 $16,000,000
Advertising Breakdown: Mainstream
2011 2012Advertising Campaign $10,000,000 $11,000,000
TV $4,287,050.30 $5,297,050.30
Print $5,056,000 $5,056,000
Digital $620,500 $610,500
Social Media $36,449.70 $36,449.70
Consumer Promotion $5,000,000 $8,000,000Costs of Value Pack Options $2,118,100 $6,824,989
Manufacturing Costs $2,881,900 $1,175,011
Trade Promotions $2,000,000 $3,000,000Instore Advertising for Value Packs $420,000 $630,000
Instore Advertising for Product Options $1,580,000 $2,370,000
Total Budget $17,000,000 $22,000,000
Gross Profit: Social/Emotional Segment
RAZORS GROSS PROFIT 2011 2012Retail
Units - OP 700,000 1,166,667 Sales - OP $9,093,000 $15,155,003.03Unit Contribution - OP $3.90 $3.90Gross Contr. - OP $2,730,000 $4,550,000.91Units - AVP 300,000 500,000 Sales - AVP $4,896,000 $8,160,001.63Unit Contribution $5.57 $5.57Gross Contr. - AVP $1,669,500 $2,782,500.56
Total Units 1,000,000 1,666,667 Total Contribution $4,399,500 $7,332,501.47Paramount Total Units 1,000,000 1,666,667 Total Sales - OP $6,363,000 $10,605,002Total Sales - AVP $3,168,000 $5,280,001Total Sales $9,531,000 $15,885,003Unit Contribution - OP $4.09 $4.09Unit Contribution - AVP $5.76 $5.76Total Gross Contr. $4,591,000 $7,651,668.20
REFILL CARTRIDGES GROSS PROFIT 2011 2012Retail Total Units 4,000,000 12,888,888 Total Sales $42,000,000 $135,333,324Unit Contribution $3.15 $3.15Total Gross Contr. $41,999,997 $135,333,321Paramount Total Units 4,000,000 12,888,888 Total Sales $29,400,000 $94,733,327Unit Contribution $4.92 $4.92Total Gross Contr. $19,680,000 $63,413,328.96TOTAL GROSS PROFIT $24,271,000 $71,064,997.16
Gross Profit: MainstreamREFILL CARTRIDGES GROSS PROFIT
2011 2012Retail 4 - Pack
Units 4,425,000 14,258,334 Sales $46,462,500 $149,712,507Unit Contribution $3.15 $3.15Gross Contribution $13,938,750 $44,913,752
8 - Pack Units 1,180,000 3,802,222 Sales $21,688,400 69,884,848Unit Contribution $5.51 5.51Gross Contribution $6,506,520 20,965,454
16 - Pack Units 295,000 950,556 Sales $10,068,350 $32,442,463Unit Contribution $10.24 $10.24Gross Contribution $3,020,505 $9,732,739
Total Units $5,900,000 19,011,112 Total Contribution $23,465,775 $75,611,945.20Paramount 4 - Pack
Sales $32,523,750 $104,798,754.90Unit Contribution $4.92 $4.92
8 - Pack Sales $15,181,880 $48,919,393.40Unit Contribution $12.34 $12.34
16 - Pack Sales $7,047,845 $22,709,723.84Unit Contribution $14.14 $14.14
Total Units 5,900,000 19,011,112 Total Sales $54,753,475 $176,427,872Total Gross Contr. $40,502,320 $130,507,482
RAZORS GROSS PROFIT 2011 2012Retail Total Units 2,300,000 3,833,333Total Sales $29,877,000 $49,794,995.67Unit Contribution $3.90 $3.90Total Gross Contr. $8,970,000 $14,949,998.70Paramount Total Units 2,300,000 3,833,333Total Sales $20,907,000 $34,844,997Unit Contribution $4.09 $4.09Total Gross Contr. $9,407,000 $15,678,332TOTAL GROSS PROFIT $49,909,320 $146,185,814
Net Operating Profit
NET OPERATING PROFIT
2011 2012
Gross Profit $74,180,320 $217,250,811
Operating Expenses $35,145,000 $41,575,000
Capacity Cost $2,145,000 $3,575,000
Advertising Budget $33,000,000 $38,000,000
Cannibalization Costs $58,867,785 $165,222,887
Operating Profit -$18,832,465 $10,452,924