Starz

CLEAN EDGE RAZOR:SPLITTING HAIRS IN PRODUCT POSITIONING

GROUP 14

THE GENERAL FRAMEWORK OF OUR BUSINESS CASE

DETERMINING PROBLEMS:1.WE HAVE 2 SCENARIOS:MAINSTREAM

POSITIONING & NICHE POSITIONING2.CHOOSE THE MOST RELEVANT BRAND

NAME3.PREDICT BUDGET ALLOCATION & PRIVATE

MARKET SHARE

ELIMINATION OF THE 2ND SCENARIO

LET’S COMPARE FINANCIAL FORECASTS OF 2 SCENARIOS BASED ON EXHIBIT 7

MAINSTREAM NICHE

YEAR 1 YEAR 2

YEAR 1 YEAR 2

SUGGESTED PRICE

123 242 53 130

MANUFACTURED PRICE

84 164 37 79

PRODUCT COST

35 64 13 25

GROSS PROFIT

7 61 9 38

OVERALL GROSS PROFIT

44 98 69 101

COMPARE THE SUGGESTED PRICE (IN MAINSTREAM POSITIONING) WITH COMPETITORS

SDS

IN YEAR 1 OVERALL GROSS PROFIT FOR NICHE POSTIONING IS MUCH MORE THAN MAINSTREAM POSITIONING (69>44)

IN YEAR 2 THERE IS A LITTLE DIFFERENCE AMONG INDICATORS

THE CONS OF MAINSTREAM POSITIONING

1. THE CANNIBALIZATION OF EXISTING PRODUCTS IS VERY HIGH(60%)

2. THE COST FOR MARKET PROMOTION IS VERY HIGH($ 42 MLN)

3. THERE IS NOT CONCRET TARGET SEGMENT, SO IT IS VERY HARD TO MEET , ANALYSE, DETERMINE THEIR PREFERENCES,AND TO FIND OUT THE MOST RELEVANT BRAND NAME)

RESULT: WE PREFERED “NICHE RESULT: WE PREFERED “NICHE POSITIONING”POSITIONING”

LET’S BEGIN TO CONSTRUCT STRATEGY FOR NICHE POSITIONING

TARGETING THE MOST APPROPRIATE SEGMENTS

WE CHOSE 2 SEGMENTS: SOCIAL-EMOTIONAL &AESTHETIC SHAVERS—OUR TARGETED SEGMENT IS 67%

OUR COMPETITORS AND PREDICTED PRIVATE SHARE IN THE MARKET

Market leader since 1950s, 224 mln $ revenue, 45 mln $ operating profit

Brend: Vitric, 23,2 % of market share

Brend: Naiv, 2,6 % of market share

Brend: Tempest5,7 % of market share

23 % of market share

PRIVATE SHARES FOR YEAR1 & YEAR2(WITH $(%))

BREND CONSTRUCTION BREND POSITIONING

THE FOLLOWINGS HAVE TO BE TAKEN INTO ACCOUNT IN CHOOSING BREND NAME

WE HAVE 3 ALTERNATIVES OF THE BREND NAME

ADVERTISING & PROMOTIONYEAR 1:

SOME BASIC HIGHLIGHTS ABOUT A&PROMOTIONS

• IF THERE WILL BE 35% CANNIBALIZATION IN SALES , WE HAVE TO TAKE INTO ACCOUNT THIS IN A&P , SO

$48,3 MLN*35% / 100%=$ 17 MLN

IT MEANS THAT WE CAN ALLOCATE THIS AMOUNT OF MONEY FOR THE NEW PRODUCT & IN Y1 AND Y2 WE NEED $15 MLN,$16 MLN FOR A&P PROPORTIONALLY===== $2 MLN & $1 MLN SURPLUS

A&P EXPENDITURES FOR PARAMOUNT ULTRA ҉ THIN 5

IT CAN BE MUCH MORE BENEFICIAL TO SPEND HALF OF THE MONEY ON MEDIA, AND SUBSTRACT THE REST HALF-HALF FOR CONSUMER PROMOTION AND TRADE PROMOTION

THANKS FOR ATTENTION!!!!