Due to the fact that sales for both the razor and cartridges are higher in the mainstream market, so are the costs of production.
Looking at the exhibits, it is clear that using this marketing strategy would lead to consistently high profit margins. I have attached a spreadsheet showing the cost of cannibalization on both market positions.
However, the new Clean Edge razor has great long-term potential. Even with this greater cost, however, the mainstream market seems to hold strong until we take into consideration the effects of cannibalization.
Mainstream unit volumes are expected to gain over three times that of the niche market in the first year. As illustrated in Exhibit 6, unit sales and cartridge sales are larger in the mainstream position. Even though cannibalization gives us first year losses for both scenarios, we do end up with a greater profit using the mainstream method in the second year.
Therefore, the operating profit margin as a percentage of sales turns out to be less in this position than in the niche.
Pertaining to overall pricing, it appears that Clean Edge is competitive in this aspect, as seen in Exhibit 7 of the case. Looking at advertising and promotional costs, it is evident that these are much lower in the niche marketing. The company may risk losing their loyal customer base by positioning itself in the niche segment.
The down-side of entering this new product into mainstream would be the fact that the pro is already been marketed mainstream, and the clean edge would risk decreasing the brand power, and this would in turn lead to cannibalization.
Analyzing the data on the attached spreadsheet data, the cost of cannibalization is less for the niche marketing strategy. By introducing another cutting-edge shaving technology into the broad marketing position, it may help to keep those customers who want to stay up to date with the most innovative products.
Looking at the data in the long-run perspective, it appears that the niche market would be more profitable, especially in the event that the company was forced to increase advertising or promotional costs.
Question 1: SWOT Analysis Strengths Revolutionary product: Clean Edge’s new design provides superior performance (vibrating technology allowing for smoother shave) Provides scientific testing by a third-party to support claims of a greater shaving experience Previous products (Paramount Pro and Avail) have allowed brand to capture the unit-volume market-leader position Paramount is an.
Clean Edge Razor Case Study Positioning Clean Edge razor as niche would go nicely with the company’s current portfolio. Looking at the exhibits, it is clear that using this marketing strategy would lead to consistently high profit margins. MBA Marketing Case Study about Clean Edge Razor by smmnor in Types > Presentations and marketing case.
MBA Marketing Case Study about Clean Edge Razor. Explore. Explore Scribd Clean Edge Razor Case Study Analysis. uploaded by. binzidd Clean Edge Razor Case Analysis. uploaded by. Abhinav Singh. Clean Edge Razor Case Study. uploaded by.5/5(5).
Clean Edge belongs to the nondisposable razor and refill cartridge category. The nondisposable razor market is in a rapid growth stage (approximately 5% per year from to ), while the refill cartridges market is growing less (approximately 2% growth per year from to.Download