To make matters worse for the industry, MPs have voted on a national scheme set to standardise tobacco products. This, according to Marlboro-owner Phil Morris, would lead to the industry being compensated £9bn to £11bn for branding. Of course, it was suggested that such a claim was “ludicrous and unjustified”.
This left tobacco firms targeting developed economies. Rising income levels recorded in countries such as China, Russia and Indonisia, has helped overall global tobacco sales. According to Brand Finance research: “The problem facing tobacco brands today is that the high profits originating in developed nations are on the decline, creating more emphasis on growing brand purchase in emerging markets. At the same time tobacco brands are having to adapt to changing consumer behaviour and further government regulation.” Read more about the tobacco industry:
The government’s plan for plain packaging is still a long way off and will undoubtedly see numerous court battles along the way. But with more countries reviewing the legislation and increasing evidence and support in favour of plain packing, it appears to be only a matter of time. Brand Finance suggested that when the market starts feeling the impact, Marlboro and Camel will be the brands best placed to attract new customers. Marlboro is one of the 86th most valuable brands, not to mention the most valuable tobacco brand, with a value of $13.1bn. Essentially, the company dwarfs its closest rival, Japan Tobacco’s Winston brand, which achieved a 2015 value of $3.1bn, a 21 per cent reduction on 2014. With developed economies hopping on the tobacco trend, companies such as Indonesian Gudang Garam and Indian Gold Flake are well positioned to take on the competition. “Competitor brands will need to learn to become more innovative in the way they deliver nicotine to their customers,” the report said. “The rise of electronic cigarettes is a good example of this innovation within the market.” This is something the numerous brands are now investing. Among them are Japan Tobacco International and Lorillard, which have been investing heavily into e-cigarettes, which “permits liberal advertising in most countries”. “There’s a difference of consumer behaviour across different markets and the impact this is having on the brands operating predominantly in one region,” suggested the report. “The need to replicate Marlboro’s global presence will almost certainly put an emphasis on expansive marketing strategies and more M&A activity wutin the tobacco sector over the coming years.” By Shané SchutteImage source
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.