...The 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. 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...
Words: 292 - Pages: 2
...THE ECONOMICS OF TOBACCO TAXATION IN INDIA Tobacco taxation in India tends to be low for the most commonly consumed tobacco products. In order to suggest ITC about their strategy for the rural market, we must understand the taxation policies that prevail. India has a tobacco tax structure which is complex, different taxes for hand-rolled versus machine-made bidis, etcetera. In the table given, we observe that bidis are taxed less than filtered cigarettes. At the same time, the tax remains constant for bidis whereas it increases for cigarettes. In table 3.5, we observe that cheaper the tobacco, higher the tax because we assume that cheaper tobacco is more hazardous. But for bidis though the cost is cheap, it is taxed less as it focuses on the mass consumer whose buying potential is less. So its demand is more elastic than the expensive tobacco. Considering the data given in table in 3.1 and 3.5, tobacco products like bidis are less taxed, and it caters to the needs of majority of the consumers. Cigarettes and bidis are consumed by classes of people from different economic strata. Rural markets have a potential for bidis since the lower income group resides more in rural areas. The taxation on bidis is almost constant through the years, it is more profitable to enter the tobacco market through bidis in rural areas.. Own price elasticity in rural areas for bidis is more elastic than in urban areas. For example, an increase of 10% in price will decrease the quantity...
Words: 1194 - Pages: 5
...English 1200 10/20/2012 “The” Tobacco Luxury, money, power, pure; these are the type of words that come to mind when one thinks of a cigar, another familiar word is usually Cuba. Cuban cigars contain the finest tobacco in the world and the numbers show for the communist economy as it generated four hundred million dollars last year for Cuba alone according to Money News. The United States which is the largest Cigar market in the world does not even sell Cuban cigars due to a fifty year-long trade embargo with the trifling sized neighbor which is the United States. So then where is Cuba exporting this product to generate such large numbers? Western Europe is responsible for the business, Imperial Tobacco Group located in Britain to be more specific, which is the largest cigar distributor to European nations. With a relationship like this one, the benefits are on each side of the transaction. The Imperial Tobacco group employs over 37,000 people and operates forty-seven manufacturing sites across the globe (Imperial Tobacco Group). That is a large amount of Europeans being employed by a growing industry. With the company mainly based in the United Kingdom, Western Europe is the biggest consumer of Cuban Tobacco right now (Money News). Imperial Tobacco remains at the top for cigar sales across Western Europe. Where would this power house company be without the fine Cuban tobacco? The company would definitely not be worth as much as they are now. The profit for Imperial...
Words: 1097 - Pages: 5
...packaging emphasizes the damage of tobacco therefore the demand of tobacco will decrease by reducing attractiveness of tobacco on consumer (Department of Health and Ageing 2011). However the plain policy is not effective as expect because according to research it only has influence on potential consumers especially on teenagers. In generally, the majority of smokers will become regular smoker after first try smoking (Schmidt 2013), the health warning could lead less teenager’s desire to attempt it. However due to the cigarette is necessary good for the addict, the packaging would not change the existing demand of tobacco. Therefore, there will only have slight affect of demand for cigarette in long run. In contrast, plain packaging would increase consumption by leading lower price of tobacco from two reasons. Firstly, increasing of illegal tobacco lead to price cut of tobacco. Because of the branded tobacco is expensive than unbranded cigarettes and counterfeit cigarettes, the market share of illegal had already growing rapidly from 6 per cent in 2007 to 15.9 per cent in 2010 (Deloitte 2011). After implement of plain packaging, the forgery-proof of cigarette is reduce, a larger amount of counterfeit cigarette are showing in the market, it cause rapidly growing in consumption on those illegal cigarettes. As a result, the rise of supply on tobacco will lead a new equilibrium point with lower price (Clarke and Prentice 2012). Secondly, lower price of tobacco is also resulted from the competition...
Words: 388 - Pages: 2
...A Fire in the Global Village: Teaching Ethical Reasoning and Stakeholder Interests Utilizing Tobacco Lucien J. Dhooge Sue and John Staton Professor of Law Journal of Legal Studies Education Volume 29, Issue 1, pages 95–125, Winter / Spring 2012 [T]is a plague, a mischief, a violent purger of goods, lands, health; hellish, devilish and damned tobacco, the ruin and overthrow of body and soul.( Richard Burton, The Anatomy of Melancholy (1621), quoted in Philip J. Hilts, Smokescreen 185 (1996)) I. Introduction Tobacco has been an agricultural staple from the time of the first recorded European encounter with the plant in the fifteenth century.2 The pervasive nature of its cultivation and consumption has made tobacco one of the most profitable crops in world agricultural history.3 World production is estimated at thirteen billion pounds annually, originating in more than one hundred countries.4 This production has flourished, in part, due to the demand for cigarettes, the leading form of tobacco consumed in the global marketplace. The World Health Organization (WHO) has estimated that 1.2 billion people over the age of fifteen are regular cigarette smokers.5 In developed countries, 35 percent of men and 22 percent of women smoke cigarettes on a regular basis.6 In developing countries, 50 percent of men and 9 percent of women smoke cigarettes on a regular basis.7 Globally, smokers consume 5.5 trillion cigarettes every year, which translates into a consumption rate of one thousand...
Words: 4238 - Pages: 17
...Philip Morris International (PMI), the global leader in tobacco products, is currently experiencing risks to its profitability and future operations, particularly from increasing taxes and prohibitive public policy. PMI must balance strategies which address the heightening involvement of western governments in the tobacco industry with the growth opportunities in developing markets. The following outlines the three most significant risks facing PMI and identifies existing strategies in comparison to competitors. The first significant risk facing PMI is government restrictions on advertising. Governments globally are increasingly restricting the means by which PMI can actively market to consumers. As a result, the branded tobacco industry has been limited to select sponsorship and online marketing efforts. The latest restriction involves mandating plain packaging. Australia is set to become the first country to introduce plain packaging for cigarettes in December 2012, thereby eliminating a critical brand marketing vehicle for the industry, a precedent that will have worldwide repercussions. Such measures are anticipated to expand to other regions, which restrict PMI’s ability to launch new (and differentiated) brands and to command a premium price. In the event that the tobacco product industry becomes a commodity market, with no way to differentiate other than price, production cost-reduction initiatives will serve to partially mitigate against the risk to profitability. In...
Words: 1217 - Pages: 5
...Essay #2- Tobacco Underage use of tobacco is a growing issue in the United States. As time goes on, more and more teens are trying the substance and are becoming addicted. This problem must be stopped, and the responsibility falls on the government, parents, stores and teens themselves. The government tries its best to prevent underage tobacco smoking. Laws have been passed that prevent people under 21 from purchasing cigarettes and other tobacco products. They even require listing side effects in a warning label on the packages of these products. While the Federal Government does not have a gigantic stop smoking program, many other local governments do. New York is one of the best examples of this. They often air commercials showing the dangerous side effects, and offer free programs to help users quit. The Federal Government needs to try to replicate that on a national level, and spread the message to teens across the country. The government also needs to increase the punishment for underage possession. They are too gentle with the teens that are caught. To stop this problem, underage possession should be treated as seriously as a DUI. It is harsh punishment, but it would be effective. Parents are also very responsible for preventing underage teen smoking. Tobacco smoke is very easy to smell on the clothing of the user, so if their child smells like smoke, they should definitely have a talk with them. The parent should explain the inherent health risks of smoking tobacco, as well...
Words: 579 - Pages: 3
...Motivational Interviewing Skills During our interview I tried my best not sound disappointed or disgusted that he smokes. He knows that it’s a disgusting habit so I didn’t need to remind him. I focused more on the positive aspects of what he is doing. I made sure to praise him for wanting to quit smoking; I focused on the positive aspects of how he is taking small steps in the right direction. I noticed he was much more open and willing to talk when I incorporated motivational interviewing techniques. I explained to him that relapse is very common when you try to quit something as addictive as smoking, I encouraged him not to give up. Recommendations Instead of initially giving him my recommendation of what he needs to do to stop smoking I focused the questions on ideas he has. He actually came up with some good ideas. He mentioned that during the commute he could get a stress ball and squeeze it to release some stress. He mentioned he could leave earlier for his commute that way he wouldn’t be so rushed and stressed during the drive. He mentioned he could save the cigarette money and use it to go on a trip with his girlfriend. I recommended that she could do the same thing and they could have twice the amount. He liked the idea; he seemed to get excited and motivated when I mentioned money. Clients Response to the Interview My client was appreciative when our interview was over; he expressed how helpful and easy it was to chat with me about his addiction. He was happy...
Words: 453 - Pages: 2
...The Suing of Tobacco Companies Try to imagine six million people. Six million people are equivalent to the number of Jewish people who died in the holocaust. Six million people are equivalent to five times the number of Americans who have died in all the wars combined. As a society this number is viewed as outrageous and unacceptable, yet every single year six million people die from tobacco related illnesses and for some reason this number is not seen as ridiculous when these deaths are attributed to tobacco related illnesses as when they are due to war and genocide. How can any substance that produces such mass death ever be distributed and produced legally? Well, many have begun to think the same way and have embarked on the long and arduous journey to attempt to sue tobacco distributers. But these large companies have fought back with a vengeance, and so the debate has arisen whether or not people should be able to sue big tobacco companies. People not only have the right to sue, but should sue tobacco companies for a multitude of lawless acts, for pain and suffrage, and as well as for the economic losses many have suffered. The first thing that comes to my mind when I think of big tobacco companies is my beloved uncle. He tragically passed away three years ago from gun disease. My uncle Anthony had been an avid chewer since he was 16 years old. At a very early age he had become a slave to his addiction to chewing tobacco, this addiction ended his life. With the passing...
Words: 3785 - Pages: 16
...Operational Practices of Tobacco Industry PRODUCTION MANAGEMENT - E [Dr. Irshad Khan] Submitted By Irfan Junejo – 9063 13th April 2011 TABLE OF CONTENTS TABLE OF CONTENTS 2 EXECUTIVE SUMMARY 4 INTRODUCTION: 5 Some Facts About Tobacco Industry: 5 NUMBER OF FACTORIES, PRODUCTION: 5 2.1.0 NUMBER OF UNITS PRODUCED: (DURING LAST FIVE YEARS) 5 2.1.1 POTENTIAL FOR PRODUCTION: 5 2.2.2 AREA UNDER DIFFERENT TYPES OF TOBACCO IN PAKISTAN (HECTARES) 6 2.2.3 PRODUCTION OF DIFFERENT TYPES OF TOBACCO IN PAKISTAN (MILLION KGS) 6 2.2.0 MARKET CAPITALIZATION: 6 2.3.0 NUMBER OF FACTORIES: 6 2.4.0 MAJOR CITIES FOR THE INDUSTRY WITH INDIVIDUAL STATISTICS: 7 INDUSTRY CONTRIBUTION TO GDP: 7 EMPLOYMENT IN INDUSTRY: 7 TOTAL TRADING STATISTICS FOR THE LAST TEN YEARS (1997-2007): 8 Government Legislations: 8 AREA UNDER DIFFERENT TYPES OF TOBACCO IN PAKISTAN (HECTARES) 8 PRODUCTION OF DIFFERENT TYPES OF TOBACCO IN PAKISTAN (MILLION KGS) 9 OVERVIEW: 9 COMPANY: 1 PAKISTAN TOBACCO COMPANY 9 COMPANY PROFILE: 9 COMPANY HISTORY: 10 COMPANY’S BRANDS: 10 CAPACITY UTILIZATION: 11 CURRENT MANAGEMENT & OPERATIONAL STRUCTURE: 11 BOARD OF DIRECTORS: 11 COMPANY: 2 LAKSON TOBACCO COMPANY 11 Company Profile & HISTORY: 11 Mission: 12 Corporate Values: 12 COMPANY’S BRANDS: 12 CURRENT MANAGEMENT & OPERATIONAL STRUCTURE: 12 BOARD OF DIRECTORS: 12 EXPANSION PLANS: 13 CAPACITY UTILIZATION: 13 FINANCIAL ANALYSIS: 13 COMPARISON: 14 INDUSTRY GROWTH RATE FOR LAST TEN YEARS:...
Words: 6461 - Pages: 26
...Term Paper For B.B.A(Hon's) Second Year Course Netrakona Govt. College Department of Management Topics : Taxes on Tobacco in Bangladesh Date : Letter of Transmittal Date: 25/04/2014 A.K.M. Khairul Hasan Lecturer Department of Management Netrakona Govt. College Netrakona Subject: Submission of Term paper on Taxes on Tobacco in Bangladesh" Sir, This is my pleasure to submit this term paper on "Taxes on Tobacco in Bangladesh" under the Supervisor. A.K.M Khairul Hasan. I have done my level best to completed Term paper in time. The whole experience of this Term paper enables me to get an insight in to the real life situation. I have really enjoyed working in this field this Term paper prepared by me as a fundamental issue. I hope This Term paper will enable to find out real scenario of on existing Tues or tobacco in Bangladesh. I would like to thank you for your supportive suggestion and helping me to carry on this study. With out your direct helps this term paper would not be prepared by me. Abdul Aziz Roll No: 9822765 Registration No: 1800488 Session: 2010-2011 B.B.A (Hons.) Second year Class Roll: 227 Netrakona Govt. College Netrakona. Author's Declaration of Originality I hereby certify, that I am the sole author of this Term paper on "Taxes on Tobacco in -Bangladesh". it is prepared for a partial fulfillment of BBA degree. To the best of my knowledge my Term paper does not infringe upon anyone's copyright nor violate any proprietary rights. Any...
Words: 7774 - Pages: 32
...Tobacco in America Edward Seavey Drugs and Society Professor Fuchs DeVry University TABLE OF CONTENTS I. Introduction p. 3 II. History of Tobacco p. 4 III. Social Acceptability p. 6 IV. Medical Issues Related to Tobacco Use p. 8 V. Public Health Campaign p. 9 VI. Legal Measures to Ban Cigarettes p. 10 VII. Conclusion p. 12 Introduction Tobacco and nicotine are legal substances in the United States but are surrounded in a flurry of conflict and controversy. Tobacco can be used in the form of snuff, chewing tobacco, traditional cigarettes and more recently the electronic cigarette. After heavy advertisement and use over the past decades there have been many studies that have shown the negative health effects that tobacco can have on the individual and those around them. Tobacco use is the leading cause of lung and mouth cancers in the United States and also plays a role in many other organs such as the heart and lungs. Armed with this information the government and many other agencies have taken to public health campaigns to raise awareness of these negative effects. In recent years there have been many laws put into place to control tobacco ranging from increased taxes and prohibiting where it can be used. This paper is going to lay out how tobacco production helped shape the United States, how it was an acceptable act to partake in and how in modern times it is becoming a health and legal issue and whether or not it is okay for the government...
Words: 3214 - Pages: 13
...1. In the Central Hudson Case, Judge Powell summarized that this case presents the question whether a regulation of the Public Service Commission of the State of New York violates the First and Fourteenth Amendments because it completely bans promotional advertising by an electrical utility, 447 U.S. 557, which is closely related to the tobacco cases. Several opinions presented by Judge Powell can apply in these cases. First, in applying the First Amendment to this area, Judge Powell rejected the “highly paternalistic” view that government has complete power to suppress or regulate commercial speech. Second, the Judge also believed that if the communication is neither misleading nor related to unlawful activity, the government’s power is more restricted. The government agency must assert a substantial interest to be achieved by restrictions on commercial speech. Moreover, the regulatory technique must be in proportion to that interest. Furthermore, the Central Hudson case set the standards as for whether a governmental restriction on speech is constitutionally admissible. It also provided several tests as for whether the restriction is constitutionally admissible. The Central Hudson case, as a key precedent, also developed a four-part analysis for similar cases. a) Determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. b) Examine whether the...
Words: 2777 - Pages: 12
...Death to Tobacco Aaron Smith University of Detroit Mercy Death to Tobacco You don’t have to look at statistics or ask the government to see the decline in tobacco use. Many of the tobacco abusers are people who immigrate to America. The writer has noticed since the days of his childhood, when people could smoke in restaurants, that has changed along with no smoking in public places or government buildings. Even though the officials want to end tobacco use, not until the world ends will tobacco use end, even if it is better for your health. Scientific knowledge about the health effects of tobacco use has increased greatly since the first Surgeon General’s report on tobacco was released in 1964. Tobacco use causes: * Cancer * Heart disease * Lung diseases (including emphysema, bronchitis, and chronic airway obstruction) * Premature birth, low birth weight, stillbirth, and infant death There is no risk-free level of exposure to secondhand smoke. Secondhand smoke causes heart disease and lung cancer in adults and a number of health problems in infants and children, including: * Severe asthma attacks * Respiratory infections * Ear infections * Sudden infant death syndrome (SIDS) Smokeless tobacco causes a number of serious oral health problems, including cancer of the mouth and gums, periodontitis, and tooth loss. Cigar use causes cancer of the larynx, mouth, esophagus, and lung ("Tobacco Use," 2014, para. 1-4). Every year the writer has...
Words: 590 - Pages: 3
...Tobacco is one of the world’s largest consumer goods industries despite pressuring environmental forces that try to diminish its market share. It has a long withstanding global history as a profitable business model rooted on a leisure activity. The use of tobacco first started to spread in the late 15th century after a crewman aboard the Christopher Columbus voyage noticed Cuban natives igniting and inhaling smoke from dried tobacco leaves. News returned to Spain, spreading the smoking experience, which lead to the production of the world’s first cigar. By the 1600’s the use of Tobacco reached much of Europe, Asia, Africa and North America. Although paper cigarettes were developed around the same time as cigars, the first push for factory production came in 1881 with the issuance of a patent for a cigarette rolling machine that could produce 120,000 units daily. By 1944, there were roughly 300 billion cigarettes produced annually.[i] However, the industry would take a turn in 1964 when the Surgeon General of the United States reported the dangers and health risks of cigarette smoking. The tobacco industry has been combating consumer health awareness, governmental restrictions and taxes, and anti-smoking lobbying despite increased profitability ever since its introduction to the global market. Estimates place the current industry revenue at $465BN and gross profit at $280.3BN for 2010. After taxes the estimated net profit will account for approximately 8.5% of...
Words: 14792 - Pages: 60
