Essay about Clean Edge

1609 Words Mar 25th, 2012 7 Pages
Arguments for launching Clean Edge as a niche product

A primary of launching the Clean Edge as a niche product is that the company would incur a lot less cannibalization of its Pro and Avail product lines, which allowed Paramount to capture the unit-volume market-leader position in 2009. Though a cannibalization rate of 35% is expected with the launch of Clean Edge as a niche product, the rate is significantly lower than the 60% expected if Clean Edge was positioned as a mainstream brand. As Rosenberg indicated, a niche positioning strategy would be a better fit to the company’s existing product portfolio.

Furthermore, the niche positioning strategy would incur considerably lower marketing expenses than the mainstream positioning
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Rather than directly competing in the mass market with numerous competitors through advertising, Paramount may fare better (and more profitably) if the company was to strategically position itself away from competitors through differentiation.

This argument against the mainstream option holds even more merit when considering the fact that Paramount’s greatest competitors, Prince and Benet & Klein, have far greater media advertising expenditures in 2009 and 2010E than Clean Edge has budgeted for the mainstream approach. Clean Edge’s 2011 mainstream positioning media advertising budget of $19 million is significantly less than Benet & Klein’s ($36 million) and Prince’s ($29.2 million) expected 2010 media advertising expenditures. Therefore, rather than approaching the competition “head-on”, the niche positioning strategy would be better choice.

Arguments for launching Clean Edge as a mainstream brand

Launching Clean Edge as a mainstream brand would entail greater revenues and the potential for greater future market share. Though the mainstream launch would entail a much higher cannibalization rate, one could argue that Clean Edge’s positioning towards the mainstream market is warranted because the Pro is already in the maturity (and soon to be declining) phase of the PLC, and it is only a matter of time before Paramount starts

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