Value of a Brand – Cigarette Pack Case Study
There has been considerable controversy over whether plain packaging has reduced cigarette consumption, but one thing is not in dispute, there has been a rush to cheaper brands.
Last century, there were many big brand cigarettes. They were heavily promoted on TV, newspapers and through sponsorship from sport through to fashion. Appealing to markets as diverse as the outdoors man, international travellers, sophisticates and trendies with their different flavours and associations with celebrities.
Each of these brands were able to charge a premium in the market niche they had created for themselves.
When those avenues of marketing were closed, all the marketers had were the packs themselves. A lot of research was undertaken into pack design, colour, fonts, logo’s and slogans. Not a lot to work with, but with no other marketing option, probably no-one knows as much about package design as the tobacco industry.
Then came the warnings, and later the awful images of cancer sufferers, but the package designers were still allowed a portion of pack real estate for their brand, although this shrunk over the years. Even so, the major brands were still able to attract a premium.
Then came plain packaging. The colour of the packs were now all the same, with the only differentiator being the brand name itself, with not even different fonts being allowed.
What happened next? Not really a surprise, with no points of differences being allowed, even in package design, there has been a substantial shift to the cheapest brands. Any marketer could have advised the government that this would happen.
While the jury is still out on whether the number of actual cigarettes purchased has declines (as opposed the gross value of the sales- economists at 20 paces), what is not in doubt, if there is no point of difference, buyers choose the cheapest product.
What are you doing to differentiate your products so that you are reassuringly expensive?
[Declaration- I have never smoked and I have never worked for the tobacco industry.]
All you need to do now is to Empower yourself and take action …
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
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