Your name is Jackson Randall and your job is to provide a written recommendation to Stuart
Quimby regarding the proposed positioning, brand name and marketing budget allocation for the
new Clean Edge Razor.
This recommendation should include a complete assessment of the two alternative strategies
(niche and mainstream) including a quantitative data-based analysis.
Mr. Quimby has expressed concern about the precision of the estimates provided by the
forecasting department in Exhibit 7.
Item Niche Mainstream
Year 1 Year 2 Year 1 Year 2
Razor Unit Sales (millions) 1.0 1.5 3.3 4.0
Cartridge Unit Sales (millions) 4.0 10.0 9.9 21.9
Historically, the standard deviation of forecasts provided by the forecasting department is about
5%. Mr. Quimby wants to be 95% sure that he is making the right decision. (Hint: a sensitivity
analysis where you consider the performance of each strategy where the volume is 2 standard
deviations higher/lower, than the expected value should keep Mr. Quimby happy.) To keep
things simple, the cannibalization estimates (on page 6) for each strategy will be the same (60%
for mainstream and 35% for niche) even if you evaluate the strategies at different volumes.
You also know that Mr. Quimby NEVER reads a recommendation that a) is longer than 6 pages
including exhibits, b) has abnormally narrow margins or c) is in a font less than 12 point.