Cigarette wars

What is tobacco?

• One of the most widely used addictive substances worldwide

• Its price is determined by its yield (which depends on weather conditions)

The tobacco industry

• Considered as one of the most controversial and morally compromising industry

• In 2005, 7 million tonnes of tobacco was consumed. Top 3:• China = 2.66 (38%)• European Union = 0.71 (10.2%)• India = 0.52 (7.4%)

• In the same year, 6.9 million tonnes of tobacco was produced. Top 3:• China = 2.64 (39.6%)• India = (9.6%)• Brazil = (8.3%)

Brands

• The American Brands Marlboro, Kool, Kamel and Kent own roughly 70% of the global cigarette market

Company Strategy

• Caution• Companies will not let public hysteria cloud

their own opinion• "We also believe that until scientific research

can establish what actually causes the diseases with which smoking has been statistically associated, it would be unfair to advocate any law prohibiting the sale of cigarettes” RJ Reynolds

Consumer behavior

• What do people smoke for?• To be calm• Relaxed• Alertness• For stimulation

Reasons for continuing the habit!

Consumption

• Male and Female consumption by continent or country

Country MALE FEMALE

USA 35% 22%

Europe 46% 26%

Africa 29% 4%

Southeast Asia 44% 4%

Western Pacific 60% 8%

Tobacco industry marketing

• In 2006, cigarette companies spent $12.4 billion on advertising.

• This is more than double of what was spent in 1997...

• $12.4 billion equals to...• $34 million a day• $42 per person in the US

• Over than $275 for each U.S. smoker aged over 18

The following expenses represented over than 90% of cigarette companies

marketing expenses:

• Price discounts paid to retailers in order to reduce retail prices ($9 billion = 74% of total expenditures)

• Promotional allowances ($900 m = 7%)

• Bonuses ($800 m = 6.5%)

• Coupons ($625 m = 5%)

Jobs

• Tobacco industry members claim that:

• > 400,000 jobs directly linked to the industry

• 300,000 linked to the industry (distribution)

The decline of cigarettes…

• Evidence of the deadly effects of cigarettes was revealed in 1964. Since then...

• Global tobacco consumption has been on the decline

• Between 1957 and 2000; the number of tobacco growing farms declined from 0.5 million to 57 000 thousand

Sources

• http://daniel-workman.suite101.com/top-ten-tobacco-countries-a8450

• http://www.cdc.gov/tobacco/data_statistics/fact_sheets/tobacco_industry/marketing/index.htm

• http://en.wikipedia.org/wiki/Tobacco

• http://www.businessinsider.com/facts-about-tobacco-industry-2011-4

• http://listverse.com/2009/01/11/30-fascinating-cigarette-smoking-facts/

• http://www.tobacco.org/resources/history/strategieslb.html