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    Clean Edge Razor: What Should Be The Positioning Strategy For Clean Edge Razor? Ans. Niche Mainstream

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    Sudhir Pawar
    The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

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    Clean Edge Razor: What Should Be The Positioning Strategy For Clean Edge Razor? Ans. Niche Mainstream

    Uploaded by

    Sudhir Pawar
    70 views2 pages
    The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

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    Razor

    Original Title

    Clean Edge Razor

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    The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    70 views2 pages

    Clean Edge Razor: What Should Be The Positioning Strategy For Clean Edge Razor? Ans. Niche Mainstream

    Uploaded by

    Sudhir Pawar
    The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

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    Clean Edge Razor

    Assignment Group: 7

    What should be the positioning strategy for Clean Edge


    Razor?
    Ans.
    Niche Mainstream
     Create a one strong differentiated  Capturing a bigger market share
    brand  High cannibalization as 60% market
     Low cannibalization only 35% share comes from Paramount razors
     Low marketing investment than  Higher marketing investing
    mainstream positioning of only $12 requirements of $42 million
    million  Lower profit margin
     Higher profit margin due to high
    pricing

    Why Niche positioning?


     Profitability analysis of both niche and mainstream market demonstrates more
    profits in niche markets
     Low cannibalization in niche market (35%) and less resistance from management
    team
     Less advertising and promotional expenses and no need to increase the overall
    budget
     Low threats and uncertainty in niche market
     Even after considering profits and deducting cannibalization amount, we are getting
    31.365 million $ profit in niche positioning(calculations are shown below).
    Niche Mainstream
    year 1 year 2 year 1 year 2
    Razor unit volume(million) 1 1.5 3.3 4
    Razor unit price($) 9.09 7.83
    Razor sales (million $) 9.09 13.635 25.839 31.32

    Cartridge unit vol(million) 4 10 9.9 21.9


    Cartridge unit price($) 7.35 6.22
    Cartridge sales(million $) 29.4 73.5 61.578 136.218

    Total sales(million $ ) 38.49 87.135 87.417 167.538

    Razor production unit cost($) 5 4.74


    Razor production cost(million $) 5 7.5 15.642 18.96
    Cartridge unit producton cost($) 2.43 2.24
    Cartridge production cost(million $) 9.72 24.3 22.176 49.056
    capacity cost(million $) 0.61 0.87 1.71 2.45
    Advertising cost(million $) 7 7 19 17
    Consumer promotion cost(milliom $) 6 6 17 14
    trade promotions(million $) 2 3 6 8
    Total cost ($ million ) 30.33 48.67 81.528 109.466
    operating profit ($ million) 8.16 38.465 5.889 58.072

    Niche Mainstream
    Year 1 Year 2 Year 1 Year 2
    Net operating profit ( $ million) 8.16 38.465 5.889 58.072
    Cannibalized Razor vol(million) 0.35 0.525 1.98 2.4
    Razor contribution margin ($) 1.76
    Cartridge vol. after Cannibalization 1.4 3.5 5.94 13.14
    Cartridge contribution margin($) 2.8
    total Cannibalization ($ million) 4.536 10.724 20.1168 41.016
    profit after cannibalization( $
    3.624 27.741 -14.2278 17.056
    million)
    Total profit after 2 years (million) 31.365 2.8282

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