Posts Tagged ‘Tobacco’
In most countries, alcohol and tobacco advertisements are banned. So, companies use a strategy which is to embed the brand of alcohol or tobacco in some other product and advertise that product. This is called as Surrogate Advertising, where the advertisement ostensibly advertises some other brand. For example, a whiskey brand does surrogate advertisements of soda, mineral water, etc.
Have I made it large
I think most of the people will have Royal Stag’s “Have I made it large” and McDowell’s direct attack on Royal Stag at the top of their minds (TOM). Both of them are surrogate advertisements. Royal Stag is a major brand of whiskey in India. As it is banned to advertise, they associated themselves with cricket gear. So, they advertise for Royal Stag cricket gear and McDowell’s advertise for their brand of soda, McDowell’s No.1 Soda.
Other Surrogate Advertisements
Bagpiper Whisky: Advertises their brand of soda, Bagpiper Soda
Imperial Blue: Advertises their brand of music cd’s
Royal Challenge: Advertises cricket gear, IPL, Music CD’s
As it is obvious, the intention of the advertisements is to build the brand and increase the sales of their whisky products. It is observed that most people know that a Royal Stag advertisement is not for the cricket gear, but it is the whisky. This ascertains that the advertisements are targeted at the right consumer segment.
Meanwhile, the fight between McDowell’s and Royal Stag on the TV continues…
Following are the different types of cigarettes in India:
Cigarette Length: 90mm, 102mm
Brands present: More, Virginia Slim
King Size Filter Tip (KSFT)
Cigarette Length: 84mm
Brands present: Wills Classic, Gold Flake King Size (Premium)
Mini King Size Filter Tip (MKSFT)
Cigarette Length: 76mm
Brands present: Navy Cut; Because of only Navy Cut this category is present.
Regular Size Filter Tip (RSFT)
Cigarette Length: 69mm
Brands present: Gold Flake Regular, and a lot of other brands
Plains – These are regulars without the filter and this is a dying category.
Micros – These are the smallest cigarettes without the filter and it is a dying category.
The total number of smokers in India are 5 million and the total number of tobacco consumption consumers are 9 million (including the ghutka, khaini, bidi). ITC commands a whopping share of around 80+% followed by Godfrey Philips with around 6-9% market share. Gold Flake is the largest selling brand in India.
Overall, the cigarette companies have tremendous challenge with regulations and taxes becoming heavier for them day by day. Already, in countries like the UK, the government has given a notice that all cigarette packs should only come in a white packaging without any branding. So, companies are trying to brand inside the pack. Also, in many countries it is counter-advertised that it is not cool anymore to smoke a cigarette.
ITC is today the leading FMCG marketeer in India, the clear market leader in the Indian Paperboard and Packaging industry, the second largest hotel chain and a leader in establishing new benchmarks in Responsible Luxury, as well as the country’s foremost agri-business player pioneering rural transformation through its pathbreaking e-Choupal initiative.
One of ITC’s most important assets today is its pool of diverse core competencies residing in its various businesses. ITC’s hotels are at the vanguard of service excellence and are an embodiment of “Responsible Luxury”. As is well known India is grossly under-roomed and needs 50,000 rooms in the next 2 to 3 years. One of ITC’s greatest strength is that it is least affected by inflation. The company’s domination of India’s highly priced inelastic cigarettes business insulates it from the vagaries of inflation.ITC is growing very fast and may soon dominate Hindustan Unilever (HUL) in the FMCG and other businesses.
India is one of the most challenging markets in the world which fooled big marketers and companies across the world. We have over 1500 Gods segmented into 350 broad categories, and we have a God for every single day of the week. There are 9.5 lakh pan shops, 638,667 number of villages, 612 districts, and 28 states in India. This is the country where you see a pan shop and Haagen Daz together, and a bullock cart and a Mercedes in the traffic jams. Indian market is very challenging and it really fascinates me as a marketer.A very large part of Indian population still lives in villages defining the Rural India.
Rural India is very important for many companies and there is tremendous increase in investments and strategies surrounding the rural markets. Rural India Market buys:
- 45% of all soft drinks
- 50% of motorcycles, TVs, cigarettes, washing soap, fans, blades, and a lot others.
Rural Market Opportunities
Few of the companies that are going bullish in the rural markets:
- HUL with its Project Shakti has already has a reach of 1.7 lakh villages, and aspires to reach 5 lakh villages by 2020.
- Indian Tobacco Company (ITC) has a lot of penetration in the rural markets and the eChoupals are a big hit in the rural market.
- Airtel is planning to reach around 2 lakh villages.
- Marico with its most famous brand Parachute has a reach of 1 lakh villages.
- Pepsi and Coke, the Cola giants, have a reach of 70,000 villages.
- Dabur, known for its Lal Dant Manjan and Hajmola, has a reach of 60,000 villages.
- Colgate with its Operation Jagruthi has a reach of over 60,000 villages.
- Mahindra & Mahindra sells most of its SUVs in the rural market.
Mahindra Shubhlabh is India’s largest exporter of fresh produce. Mahindra Shubhlabh engages with farmers in the production of export quality grapes, pomegranates, and apples aimed at delivering to domestic and international markets. It has a huge R&D facility in Pune to research on various modern seeds and saplings.
- Nokia 1100 with its torch is a very big hit in the rural market. It is a perfect example of understanding the needs of the consumer. Nokia realized the need for a torch in the mobile for the rural people as they walk in the dark streets and fields of the village. Nokia is set to release some low cost phones to tap more from the tier-3 and tier-4 markets.
There are other companies like Godrej, ParleG, Asian Paints, Yes Bank, Royal Enfield, ITC and Revlon.
Delivering to the rural markets is a real challenge to many companies. In fact, the whole dynamics of these markets are so different that you need to look at a different product mix containing the 4A’s instead of the traditional 4P’s of marketing:
Acceptability – Build what the consumer wants
Affordability - Make an affordable product
Availability - Distribution plays a key role in the rural markets
Awareness - Don’t promote the brand, demonstrate the product.
Top Media in Rural Markets
Dainik group is the leading newspaper in the rural markets. In the realm of television, we have the following in the descending order of penetration in the rural markets.
- Doordarshan has a reach of 97% of the rural markets in India.
- Zee Cinema which carries with the image of movies being the favourites of rural people.
- B4u movies
- Discovery Hindi
One of the key trends in the rural markets is people changing very quickly from cable to satellite TV. This is because of the hassle-free dish connection of the satellite TV. Most of the dish TV companies like Tata Sky, BIG TV, and Airtel are selling good in the rural markets too. Similarly, Revlon has come up with a lipstick for the rural markets and it is doing very good as against Lakme. This shows that there is huge potential in these markets and it is interesting to see how these trends will transform the lives of the rural people and in turn impact the Indian markets.
A smoker is extremely loyal to his brand. A smoker feels that the brand resembles him and he acts as if he resembles the brand. One of the biggest advantages with tobacco companies is it has a process of network marketing for free. Most of the people who smoke would’ve been taught how to smoke by other smokers. This is the way they have a sense of oneness and they feel happy as a part of a group like cigarette brothers. This is why I say ‘Every smoker is a marketer’.
Sometime ago, I had an argument with my friend over the packaging changes to cigarette packs to make people aware of the problems of smoking. Finally we decided that may be the tobacco companies will not let any changes be done in the packaging as any minor change is going to make the consumer conscious about smoking. But we were wrong.
Three months later, the Supreme court ordered for all cigarette packs to carry a ‘Smoking Kills’ pictorial warning which covers at least 40% of the front of the pack. I went to a few stores in Hyderabad and found that the retailers are displaying the cigarette packs on the other side, the side which doesn’t have the warning. This seems to be nice marketing gimmick by the retailers and the tobacco companies.
BRANDING THE CIGARETTE PAPER
For the ‘Smoking Kills’ campaign to be more effective, I think it should also be extended to the cigarette paper. I think we need to brand the cigarette paper with something that the consumers really cares for, wherein they don’t like it to be burnt as they smoke. The immediate question is: what is it? My answer is YOU. Yes, brand the cigarette paper with the word YOU vertically. As and when he smokes he will be burning the word ‘YOU’, which is a direct indication of what he is doing to himself by smoking. It may not be effective immediately, but gradually it makes a subconscious impact on the smoker. Unlike the picture on the cigarette pack, the smoker will be forced to see this text as long as he smokes the cigarette. Though I don’t have any proven results, I think this will be more effective at the subconscious level and it will more effective.
A smoker spends 99% of his time with the cigarette, not with the cigarette pack. Moreover when the text YOU is burning it actually makes a subconscious impact on the people. A smoker is very conscious about the anti-tobacco advertisements which makes life more difficult. If you are consciously ignoring something it is very difficult to make you do it consciously, which is how the anti-tobacco campaigns ask the smokers to quit. For the anti-tobacco campaigns to be effective, the best way is to attack the sub-consciousness.
WHAT THE TOBACCO COMPANIES SHOULD DO?
If you are a smoker or a marketer, ask yourself ‘What is the biggest and the most common problem for a smoker?’. Yes, lighting the cigarette is the biggest problem. So I feel the tobacco companies should provide the dotted striker material on one side of their packs, with a few match sticks in their pack. This removes the dependency of the smoker and it may actually make people prefer your cigarette pack. Many people who smoke don’t like to carry lighters, match-sticks or anything that would indicate that they smoke. This is the best solution to address such problems.
All the above views are completely my individual opinions. Thank you.