This document summarizes a case study analysis of Clean Edge's razor market positioning options. It includes market segment data showing a shift from value to premium segments. Charts project profit under niche versus mainstream scenarios, with mainstream having higher sales and profits but also higher cannibalization costs. Two recommendations are provided: (1) target the niche market to avoid cannibalization and have lower risks, or (2) enter the mainstream with a new product to replace an existing one and take advantage of market opportunities.

1. CASE STUDY:
Prepared by
Ershad Haekal
Martha Siahaan
R. Purwedi Darminto
Yuvi Karauwan
Marketing Management
Dosen : Dr. Iin Mayasari, MM, MSi

2. Case Summary
Main Issue
Problem Statement
Analysis
Recommendation

5. SUPER-
PREMIUM
25%
MODERATE
43%
VALUE
32%
VOLUME

6. SUPER-
PREMIUM
34%
MODERATE
44%
VALUE
22%
SALES

8. PRINCE
BENET & KLEIN
NEW ENTRANTS

12. Market
segments
Super-
Premium
Mainstream Niche
Moderate Value

13. Profit and Loss Forecasts for Clean Edge Under Niche and Mainstream Scenarios ($ in Millions)
Niche Mainstream
Year 1 Year 2 Year 1 Year 2
1 Unit sales - Razors 1.0 1.5 3.3 4
2 Dollar sales - Razors $ 9.09 $ 13.64 $ 25.84 $ 31.32
3 Unit sales - Cartridges 4.0 10 9.9 21.9
4 Dollar sales - Cartridges $ 29.40 $ 73.50 $ 61.58 $ 136.22
5 Total dollar sales $ 38.49 $ 87.14 $ 87.42 $ 167.54
6 Production costs Razors $ 5.00 $ 7.50 $ 15.64 $ 18.96
7 Production costs Cartridges $ 9.72 $ 24.30 $ 22.18 $ 49.06
8 Capacity costs $ 0.61 $ 0.87 $ 1.71 $ 2.45
9 Advertising and Promotion $ 15.00 $ 16.00 $ 42.00 $ 39.00
10 Total costs $ 30.33 $ 48.67 $ 81.53 $ 109.47
11 Operating Profit $ 8.16 $ 38.47 $ 5.89 $ 58.07
12 Profits as % of sales 21% 44% 7% 35%
13 Cost of cannibalization - Razors $ 0.62 $ 0.92 $ 3.48 $ 4.22
14 Cost of cannibalization - Cartridges $ 3.92 $ 9.80 $ 16.63 $ 36.79
15 Profit after cannibalization $ 3.62 $ 27.74 $ (14.23) $ 17.06
(a) Cannibalization cost = % cannibalization from Avail and Pro (5th paragraph in case under Positioning heading) * unit sales * contribution per
unit
where the contribution per unit average for Avail and Pro is $1.76 for razors and $2.80 for cartridges (case footnote 2 under Company Overview heading)
Assumes cannibalization of 35% for Niche, 60% for Mainstream

14. (ALBERT ROSENBERG)
(WILLIAM KIM)

15. APPEALS TO MINORITY
CAN BE BROADENED TO
APPEAL TO THE
MAINSTREAM
AVOID CANNIBALIZING
EFFECT
CREATE A ONE STRONG
BRAND
MARKETING INVESTMENTS
&
FINANCIAL RISKS ARE LOWER

16. CLEAN EDGE IS A
TECHNICAL INNOVATION
 REPLACE THE PRO
SCARE OF NEW ENTRANTS
TIME IS RIPE FOR A NEW
PRODUCT

17. CleanEdge
CLEAN EDGE