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Paramounts Launch: Clean Edge Razor

By Consulting Without Borders:


Aditi Memani, Andres Ramirez, Katerina Potesta, and Camilo Romero

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
2010 Competitors Market's Share

23

21.4

5.7
2.6 21.1 26.2

Paramount Prince Benet & Klein Radiance Simpsons Other

Competitor Analysis
Super-premium Competitor Analysis
13 12.5

12

Price

11.5 11 10.5 10 Cogent Plus Cogent Victric Victric The Naiv Master Advanced Products The Tempest

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

Nondisposable Razor Consumers Market Share


Maintenance

28%

33%
Social Emotional Aesthetic 39%

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


% of Sales in Each Distribution Channel
50 45 40

35 30 25 20 15 10 5 0
2007 2008 2009 2010

Food Stores Drug Stores Mass Merchandiser Club 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 mens grooming. Growing superpremium 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 Mens 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 Mens Fashion and Lifestyle
EX: Esquire, Details, and Mens World

Digital Marketing
Digital Mediums of Print Publications Banner Advertising using Google target advertising platform
Focusing on Mens 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 Mens 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 Lets Shave Noah

Social Media
Efforts focused on promoting social media events Lets 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


$17.99

$15.99 $12.99

$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


Price for Package
$34.13 $18.38 $10.50

Expectations Mainstream Unit Sales from Value Packs:


8 Pack 20% 16 Pack 5%

4 - Pack

8 - Pack 16 - Pack

Consumer Promotion Budget Required to compensate for decrease in price per cartridge: $2,118,100

Price Per Cartridge $2.63 $2.30 $2.13

4 - Pack

8 - Pack

16 - Pack

Advertising Breakdown: Social/Emotional Segment


Advertising Campaign
TV
Print Digital Social Media

2011 $6,000,000
$3,340,000 $220,500 $46,449.70

2012 $6,000,000
$3,340,000 $220,500 $46,449.70

$2,393,050.30 $2,393,050.30

Consumer Promotion
Costs of Added Value Product Options Manufacturing Costs

$6,000,000
$4,896,000 $1,104,000

$6,000,000
$5,440,001 $559,999

Trade Promotions
Instore Advertising for Clean Edge Features Instore Advertising for Product Options

$4,000,000
$1,240,000 $2,560,000

$4,000,000
$1,240,000 $2,560,000

Total Budget

$16,000,000 $16,000,000

Advertising Breakdown: Mainstream


Advertising Campaign
TV Print

2011 2012 $10,000,000 $11,000,000


$4,287,050.30 $5,297,050.30 $5,056,000 $5,056,000

Digital
Social Media

$620,500
$36,449.70

$610,500
$36,449.70

Consumer Promotion
Costs of Value Pack Options Manufacturing Costs

$5,000,000
$2,118,100 $2,881,900

$8,000,000
$6,824,989 $1,175,011

Trade Promotions
Instore Advertising for Value Packs Instore Advertising for Product Options

$2,000,000
$420,000 $1,580,000

$3,000,000
$630,000 $2,370,000

Total Budget

$17,000,000 $22,000,000

Gross Profit: Social/Emotional Segment


RAZORS GROSS PROFIT 2011 2012 Retail Units - OP 700,000 1,166,667 Sales - OP $9,093,000 $15,155,003.03 Unit Contribution - OP $3.90 $3.90 Gross Contr. - OP $2,730,000 $4,550,000.91 Units - AVP 300,000 500,000 Sales - AVP $4,896,000 $8,160,001.63 Unit Contribution $5.57 $5.57 Gross Contr. - AVP $1,669,500 $2,782,500.56 Total Units 1,000,000 1,666,667 Total Contribution $4,399,500 $7,332,501.47 Paramount Total Units 1,000,000 1,666,667 Total Sales - OP $6,363,000 $10,605,002 Total Sales - AVP $3,168,000 $5,280,001 Total Sales $9,531,000 $15,885,003 Unit Contribution - OP $4.09 $4.09 Unit Contribution - AVP $5.76 $5.76 Total Gross Contr. $4,591,000 $7,651,668.20 REFILL CARTRIDGES GROSS PROFIT 2011 2012 Retail Total Units 4,000,000 12,888,888 Total Sales $42,000,000 $135,333,324 Unit Contribution $3.15 $3.15 Total Gross Contr. $41,999,997 $135,333,321 Paramount Total Units 4,000,000 12,888,888 Total Sales $29,400,000 $94,733,327 Unit Contribution $4.92 $4.92 Total Gross Contr. $19,680,000 $63,413,328.96 TOTAL GROSS PROFIT $24,271,000 $71,064,997.16

Gross Profit: Mainstream


REFILL CARTRIDGES GROSS PROFIT 2011 Retail 4 - Pack Units Sales Unit Contribution Gross Contribution 8 - Pack Units Sales Unit Contribution Gross Contribution 16 - Pack Units Sales Unit Contribution Gross Contribution Total Units Total Contribution Paramount 4 - Pack Sales Unit Contribution 8 - Pack Sales Unit Contribution 16 - Pack Sales Unit Contribution Total Units Total Sales Total Gross Contr. 2012 Retail Total Units Total Sales Unit Contribution Total Gross Contr. Paramount Total Units Total Sales Unit Contribution Total Gross Contr. TOTAL GROSS PROFIT RAZORS GROSS PROFIT 2011 2,300,000 $29,877,000 $3.90 $8,970,000 2,300,000 $20,907,000 $4.09 $9,407,000 $49,909,320 2012 3,833,333 $49,794,995.67 $3.90 $14,949,998.70 3,833,333 $34,844,997 $4.09 $15,678,332 $146,185,814 4,425,000 $46,462,500 $3.15 $13,938,750 14,258,334 $149,712,507 $3.15 $44,913,752

1,180,000 $21,688,400 $5.51 $6,506,520

3,802,222 69,884,848 5.51 20,965,454

295,000 950,556 $10,068,350 $32,442,463 $10.24 $10.24 $3,020,505 $9,732,739 $5,900,000 19,011,112 $23,465,775 $75,611,945.20

$32,523,750 $104,798,754.90 $4.92 $4.92 $15,181,880 $48,919,393.40 $12.34 $12.34 $7,047,845 $22,709,723.84 $14.14 $14.14 5,900,000 19,011,112 $54,753,475 $176,427,872 $40,502,320 $130,507,482

Net Operating Profit


NET OPERATING PROFIT 2011 Gross Profit Operating Expenses Capacity Cost Advertising Budget Cannibalization Costs Operating Profit $74,180,320 $35,145,000 $2,145,000 $33,000,000 $58,867,785 -$18,832,465 2012 $217,250,811 $41,575,000 $3,575,000 $38,000,000 $165,222,887 $10,452,924

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