Threats faced by the tobacco company is the raise of awareness on the hazard of smoking and the big increament in taxes. The awareness campaign usually came from the local government which tax is paid to. On the other hand, number of smokers keep on rising each day eventhough the proggresive campaign towards the awareness of hazards of smoking. Several resistance towards the development of tobacco company. Like wise, the company has to raise the good image of their company. By doing this, the bad image as a tobacco company which lead to unhealthy life style will be reduce.
They tried to emerged with a lot of positive approach towards the effort on banning smoking in public area. The world tobacco industry generated sales of almost $721 billion in 2010 according to analyst. Cigarettes represent the leading market segment with revenue exceeding $681 billion, which accounts for almost 95% of the overall market. The yearly rate of market growth is expected to accelerate to be 4. 5% until 2015, bringing the market to almost $890 billion. The tobacco market involves the retail of tobacco, cigarettes, cigars, cigarillos and chewing tobacco. There are currently around 1. billion smokers in the world; this figure is expected to climb at a rate of almost 4% per year. Tobacco is grown in over 120 countries worldwide, using close to 4 million hectares of total agricultural land available globally. Around 12 million cigarettes are smoked every minute around the world. Around 35% of men in developed nations smoke, compared with 50% of men in developing nations. About 22% of women smoke in developed nations, compared with less than 10% in developing nations. Cigarettes represent the largest share of the tobacco market in sales volume and value.
Though consumption levels have fallen, the absolute number of smokers has been climbing along with the global population and disposable incomes, reports Global Industry Analysts. China is the largest regional market for cigarettes. Cigars do not generate the same sales or sell in the same high volume as cigarettes. In a more recent trend, the social cachet attached to cigars has been boosting sales. As consumers become more health conscious, they are opting for cigars for their lower level of harm to health. Cigarillos, which are cigars that way less than three grams, represent the market segments recording the most rapid growth.
In the past, cigars have been much less marketed than cigarettes, associated with a different demographic (that of the older male), and have not been paid much promotional attention by companies. Advertising of cigars is on the rise, along with aromatic filter varieties, which appeal more to younger and female demographics, and there are increasing numbers of tobacco-only stores in operation. The three leading companies in the global tobacco market are Philip Morris International, China National Tobacco Corporation and Japan Tobacco.
Philip Morris International is the world’s largest tobacco company, which sells its products in 180 countries, and held a 16% stake in the international market outside of the US in 2010. Excluding China, the company holds almost 28% of the global market. As tobacco consumption in developed countries declines due to health awareness, tobacco companies are concentrating more on developing countries, including Latin America, Asia, and the Middle East. The industry is focusing its efforts on advertising strategies such as offering low-risk products and re-launching existing products to attract female consumers.
More recent product offerings include cigarettes flavored with mint, citrus, and vanilla, and low-risk products with reduced toxins and carcinogens or free of nicotine. The global tobacco industry continues to struggle with negative publicity due to health concerns, high taxes, and state regulations. Once seen as a social pass time, smoking is now perceived as anti-social and damaging to health, causing premature deaths and lunch cancer. Companies are now required to include health warnings on their product labels and are no longer allowed to undertake marketing campaigns.
For example in America, the tobacco industry has funded state initiatives that provide resources to help smokers quit smoking as per the Master Settlement Agreement regulated by the U. S. government. For example, Phillip Morris USA operates a “Quit Assist” website that acts as a guide for those who choose to quit smoking. Companies and organizations can sponsor events, programs, festivals, performances, individuals, groups, teams, equipment and/or facilities, by providing financial support for activities, promotions and services.
Sponsorship refers to the donation of money, services or in-kind support in exchange for recognition of the donation (e. g. , being listed as a “sponsor” of an event, production or competition). Many companies, including tobacco companies, engage in sponsorship for the purpose of promoting a product or a cause, supporting a needy group, establishing name recognition for a company or brand, earning publicity for a “good deed,” or building an image for a company, organization or product.