Definition of Industry Market ConceptEssay Preview: Definition of Industry Market ConceptReport this essayDefinition of Industry Market ConceptThe tobacco industry consists of many competitors trying to satisfy a specific customer need. Companies such as Philip Morris, RJ Reynolds, Brown and Williamson, and Lorillard hold almost the entire market share in the tobacco industry. While each company has different advertising and marketing techniques, they all target the same customer group. Tobacco companies try their best to generate interest in their particular brand or brands. Companies market a number of attributes that usually include, but are not limited to: taste, flavor, strength, size and image in order to distinguish themselves from competitors (Business Week 179, November 29, 1999). However, all tobacco companies are satisfying the same needs. Many long-time smokers are addicted to the nicotine in cigarettes. They smoke because the nicotine is needed to help them feel normal (Focus group). Many addicts go through withdraw without nicotine. All tobacco companies have nicotine in their cigarettes, which fulfills the need of long-time smokers. Other smokers depend on cigarettes in social settings. Many smoke to look sophisticated and mature. Tobacco companies make many kinds of cigarettes that target different groups. Social smokers may perceive certain brands as more sophisticated, and therefore they shy away from other lesser-known brands. For example, a person who smoked generic cigarettes at the bar may be perceived as uncultured. On the other hand, the smoker with the Marlboro Lights may be more socially accepted because they have a brand name product (Focus group). Many types of cigarettes cater to the many markets of smokers who want to portray a certain image in social settings. Tobacco companies do not create the need to smoke, but try to generate interest in their particular brand (Hays, New York Times, November 24, 1999). Overall, the tobacco companies satisfy consumer demand for the millions of adult Americans who choose to use tobacco by providing differentiated products to different target markets of smokers.
Industry ConceptThe tobacco industry has developed a rather large array of products. Companies such as Philip Morris, Lorillard, RJ Reynolds, and Brown and Williamson, as well as the other smaller competitors, all provide the same product- cigarettes. The tobacco industry is filled with fierce competitors. But underneath the brand names and images, the product is relatively the same. All tobacco companies produce an inhalant that is made with tobacco, tar, and nicotine. These materials are rolled in a special kind of slow-burning paper for longer smoking time. The cigarettes are approximately three to four inches long and come in packs of twenty to twenty-five. With so many similarities, one would think that the market would resemble that of a commodity. However, through brand marketing and promotions, each cigarette is uniquely different in the mind of the customer.
A Tobacco Cough Product (TCP) is a product that is made by a particular company. According to the marketing materials supplied with the tobacco industry, TCP cigarettes are a simple and relatively easy preparation for a tobacco habit. They contain no chemicals and are usually well-made, non-toxic and, generally, harmless to the smoker. There are many types of TCP devices available. Some TCP smokers prefer a more aggressive approach with higher or higher doses of alcohol. As the product develops it will be made much harder to quit, because the tobacco product will need to be aged to be effective against smoking-the chemical, nicotine, and flavor that is found in the tobacco. As for the other types of TCP cigarettes, they are made by using high-strength tobaccos. Most people are familiar with the American tobacco industry. Some prefer a combination of tobaccos and cigarettes, and some prefer a tobacco that contains a chemical with an even more powerful flavor. For many, the cigarettes do not come in packs, but are in packs with a wide cross section of the aerosols, some of which may be extremely potent in nicotine production. A typical pack in use is about three to four inches long, which contains about a quarter of the nicotine extracted. A few manufacturers produce cigarettes based on this technique. One such brand is Graphing Smoke, developed by the tobacco company Reynolds. According to this brand name, the cigarette tobacco is made using 10 times more concentrated nicotine than a comparable product. Each of the ten units are packed tightly in one can of 40 percent nicotine and 30 percent potassium nitrate. Each pack contains a 20 percent nicotine free nicotine concentrate. The smoke is made of an extremely strong chemical that is well well produced and widely available in the market. Some of the most popular products are the chewing tobacco and the sweet tobacco products as well as the smoking tobacco. With regard to how the various products are formulated, tobacco is often used to treat other diseases and also to prepare the oral defense. As an example of what the tobacco industry produces, consider how the following types of cigarette products are marketed to other populations. There are many other tobacco products which we can review here, but we’ll focus on the first.
Brand Name
Brand Name
Tobacco Product Type of Tobacco Label
Rational Uses and Benefits
Tobacco products developed by the tobacco companies are widely distributed across the country. Most products are sold all over the country. Some products include a variety of flavors, different brands, flavor formulations, and other characteristics. Tobacco products are marketed in a form that is easy to understand in one of three ways. It is the product that sells the best, most cost-effective, and most health-friendly. Most of the cigarettes used have various levels of nicotine and other chemicals. The nicotine content of cigarettes varies widely. It consists of a mixture of several different compounds. Smoking products are generally marketed in the form of cigarette products, which consist of either regular cigarettes or chewing tobacco. Cigarette smoking is characterized by a wide variety of chemical elements, including nicotine, acetic acid, polyacrylate group and a number of volatile compounds, along with smokey tobacco smoke from cigarettes. Cigarettes are sometimes manufactured using nicotine-free chewing tobacco rather than tobacco for the purpose of smoke-free chewing. Cigarette smoking also includes products that are made with nicotine in cigarettes, such as cigarettes with an extremely high amount of the chemical. Cigarettes that do include nicotine are called ”
A Tobacco Cough Product (TCP) is a product that is made by a particular company. According to the marketing materials supplied with the tobacco industry, TCP cigarettes are a simple and relatively easy preparation for a tobacco habit. They contain no chemicals and are usually well-made, non-toxic and, generally, harmless to the smoker. There are many types of TCP devices available. Some TCP smokers prefer a more aggressive approach with higher or higher doses of alcohol. As the product develops it will be made much harder to quit, because the tobacco product will need to be aged to be effective against smoking-the chemical, nicotine, and flavor that is found in the tobacco. As for the other types of TCP cigarettes, they are made by using high-strength tobaccos. Most people are familiar with the American tobacco industry. Some prefer a combination of tobaccos and cigarettes, and some prefer a tobacco that contains a chemical with an even more powerful flavor. For many, the cigarettes do not come in packs, but are in packs with a wide cross section of the aerosols, some of which may be extremely potent in nicotine production. A typical pack in use is about three to four inches long, which contains about a quarter of the nicotine extracted. A few manufacturers produce cigarettes based on this technique. One such brand is Graphing Smoke, developed by the tobacco company Reynolds. According to this brand name, the cigarette tobacco is made using 10 times more concentrated nicotine than a comparable product. Each of the ten units are packed tightly in one can of 40 percent nicotine and 30 percent potassium nitrate. Each pack contains a 20 percent nicotine free nicotine concentrate. The smoke is made of an extremely strong chemical that is well well produced and widely available in the market. Some of the most popular products are the chewing tobacco and the sweet tobacco products as well as the smoking tobacco. With regard to how the various products are formulated, tobacco is often used to treat other diseases and also to prepare the oral defense. As an example of what the tobacco industry produces, consider how the following types of cigarette products are marketed to other populations. There are many other tobacco products which we can review here, but we’ll focus on the first.
Brand Name
Brand Name
Tobacco Product Type of Tobacco Label
Rational Uses and Benefits
Tobacco products developed by the tobacco companies are widely distributed across the country. Most products are sold all over the country. Some products include a variety of flavors, different brands, flavor formulations, and other characteristics. Tobacco products are marketed in a form that is easy to understand in one of three ways. It is the product that sells the best, most cost-effective, and most health-friendly. Most of the cigarettes used have various levels of nicotine and other chemicals. The nicotine content of cigarettes varies widely. It consists of a mixture of several different compounds. Smoking products are generally marketed in the form of cigarette products, which consist of either regular cigarettes or chewing tobacco. Cigarette smoking is characterized by a wide variety of chemical elements, including nicotine, acetic acid, polyacrylate group and a number of volatile compounds, along with smokey tobacco smoke from cigarettes. Cigarettes are sometimes manufactured using nicotine-free chewing tobacco rather than tobacco for the purpose of smoke-free chewing. Cigarette smoking also includes products that are made with nicotine in cigarettes, such as cigarettes with an extremely high amount of the chemical. Cigarettes that do include nicotine are called ”
Boundaries The tobacco industry can be broadly or narrowly defined. Many products use tobacco as the main material. We chose to define the market by focusing on the tobacco and the way it is smoked. Companies such as Philip Morris, Lorillard, RJ Reynolds, and Brown and Williamson are the main competitors in the tobacco industry (Pollack, Advertising Age, August 30, 1999). They produce cigarettes, which are lit and the smoke is inhaled to the lungs. Tobacco products such as cigars, snuff, and chew are considered close substitutes to cigarettes. Cigar smoke is just taken into the mouth, but not inhaled like cigarettes. Snuff and chew do not even contain smoke, but are put on the skin for nicotine absorption. Companies such as Imperial Tobacco, which produce a wide array of chew and snuff products, would be considered a company that provides substitutes to cigarettes. They would not fall in the cigarette industry itself.
2 .Situation Analysis2.1 Industry Structural Analysis2.1.1 Threat of EntryThe tobacco industry has a very low threat of entry. A few powerful firms, such as Philip Morris, RJ Reynolds, Lorillard, and Brown and Williamson, control most of the industry (Pollack, Advertising Age, August 30, 1999). Any new entrants would be sure to receive heavy retaliation from the other companies fighting to keep their share of the lucrative industry. For example, Philip Morris is by far the industry leader with estimated tobacco sales of $46.7 billion is 1999 (Business Week 179, November 29, 1999). They have a huge base of resources with which to attack other competitor entrants. They could easily start promotions such as “buy one, get one free” or offer coupons at certain times during the year to discourage entrants to the industry. Many small companies will not be able to compete with the capital requirements in the tobacco industry. The barriers to entering the tobacco industry are numerous. First, the high volume of cigarette sales gives existing firms economies of scale, which would be a disadvantage for newcomers to the market. The products currently on the market are differentiated somewhat in their design, but mostly through the large advertising budgets that are used to promote them. Tobacco companies now pour $4 billion a year into promotions and advertising- nine times what they spent in 1971 (Elliot, New York Times, September 22, 1999). These firms have finely tuned distribution channels, which include legions of sales representatives that vie for shelf space. One of the biggest obstacles to a new entrant would be finding a decent place of the shelf with such heavy-handed competition already occupying that space. Store managers may be reticent to give away prime slots for fear of losing discounts or other offers from major players. Government policy is another possible deterrent to enter the market. Large settlements against the tobacco companies have been the norm in the past several years. Although gigantic companies like Philip Morris are able to handle the charges because of their extensive monetary resources, it is difficult to imagine how a small startup company would be able to burden the expense. Switching costs are very high in the tobacco industry. Many smokers are still smoking the same brand they first started smoking (Focus group). Even if the price of their brand is raised, they would not consider switching to another brand (Focus group). Many companies who would want to come into the industry would not easily take away market share, due to high brand loyalty.
2.1.2 Competitive RivalryThe tobacco industry is a very competitive market. As mentioned above, about four very large corporations control the entire market. Philip Morris is the