Initial Market - Tax, Price, and Cigarette Smoking - Essay Example

One issue that can be addressed is the combination packaging of products for the 1 million male cigar and cigarette customers who use both products.

We can obtain some information from this segment in terms of the cigar-to-cigarette use ratios, to provide the most desirable product combination. Branding efforts of cigarette products should continue to focus on the retailers who will likely sell higher volumes of products. Data from each retailer and customers who purchased our cigarette brand have disclosed the amount of sales volume we can expect at each location. Survey research efforts have provided information regarding target segments. In addition to the 1 million male cigar/cigarette smokers, the 10 million smokers in Britain come from all geographic regions, with the highest concentrations in urban areas. The largest age group is 18-34, almost equally male and female, with construction, production, and service jobs being the most reported occupations. Though many in the 35-55 age group have ceased to purchase tobacco products, this segment still contains a significant portion of cigarette consumers, as the largest segment of the general population.

For the youngest age group, cost and convenience are the main reasons for selecting the brand, though recognition is another important factor as well. This group selects brand products based on exposure or influence. As peers share products and discuss products they expose others to product brands. Promotional activities for this age group should include referral bonuses and similar programs. Registration cards are sent or given to consumers who have already provided survey information. Three detachable coupons are given to friends so they can go to a retail location for a free pack of cigarettes. The customer is also entitled to one free pack for their efforts. Such activities will help to increase brand awareness. Our brand should be priced just below competitors, to urge repeated purchases and imprint the brand on this age group. “Pricing and price-related promotions are among the most important marketing tools employed by tobacco companies” (Chaloupka, et al). Though this may be true in the introductory phase, future efforts should focus on brand image and availability as they are long-term factors that affect buyers.

The 35-55 age group is a tougher market. Smokers in this segment will likely have tried several brands. While price is a factor, taste and availability are the most important considerations. Market saturation, with the placement of products in the most frequented retailers, should be the main focus. Preliminary market research data suggests that our brand satisfies consumers at a moderately high level, within the 1-5 rating system used. Availability is also important. Those established with families and careers often don’t Have time to search for desired brands. Our research data also indicated that many in this segment frequent retailers located along routes to and from work.

The proper distribution also improves brand recognition. “The marketer doesn't just need to tell people about the product, but also to ensure that it is priced, distributed and engineered correctly In this context, "correctly" means in a way that meets the needs of the customer” (Hastings, MacFayden &Eadie). Meeting the needs of customers in a relatively saturated market is difficult. However, the opportunity exists for unique offerings that are generally provided by specialty tobacco companies. In Greece, tobacco use is most common in the form of flavored pipe tobacco. Cigarette tobacco can easily be flavored in a similar manner. Flavors may appeal to female smokers more than the previous “female brands” such as Virginia Slims, that depended upon current cultural values. “Young women aged 18 to 24 are exceptionally valuable for the tobacco industry” (Century). With the popularity of gourmet coffee flavors among young women, this could become a future niche market for our company. As we determine other regions of the globe where future expansion may occur, import-export statistics provide us with valuable information. Next to the US, China is the largest exporter of cigarettes. European nations like Spain and Belgium export specialty items. As US brands are popular in Germany, Belgium, Italy, and Korea (Tobacco Trade Atlas, 19) are the largest markets that import US cigarettes. Future efforts toward these markets should begin with similar brand introduction and promotion strategies. Flavored cigarettes should be offered only if they are widely accepted in the UK. Once introduced there, if they are desirable, other European markets will be open to such product offerings.