Imperial Tobacco counts on the cigarettes of queen size format
Fall of legal production of cigarettes makes tobacco Companies taking courageous marketing steps. Imperial Tobacco has declared about launching three new brands at once in the queen size segment on Ukraine market. Market participants consider that launching new types of tobacco products in conditions of total ban on advertisement is a challenge, moreover that there is risk of absorbing one brand by another.
From November Imperial Tobacco Ukraine (ITG) will be selling cigarettes Davidoff Shape and "Prima Optima" in queen size format. In the beginning of December will come into the market West Compact Blue cigarettes, now in this size are manufactured only "red" and "silver" versions of this line.
According to AC Nielsen data, queen size format or king size slims (KSS) cigarettes is one of the most dynamically developed. On Ukrainian market its share has increased more than twice and to September has made 2.7 %. Diameter of such cigarettes is 4.8 mm what is 1 mm less than classic king size form.
ITG public relations manager says that such cigarettes usually attract men that seek to innovations but are not ready to change their habits and switch to super slims cigarettes. "It is like nothing has changed but for account of less diameter it seems that you smoke less" - explains the source in one of tobacco Companies.
Vast majority among Companies that produce cigarettes KSS belongs to Philip Morris Ukraine - in September 2013 - 30 %. However, their index has reduced by 21 per cent point for account of BAT Ukraine that has entered this market. In March, July 2013 were launched on the market Kent HDi and Rothmans Demi Slims cigarettes. And according to AC Nielsen data Company has taken 23 % of the segment. Price policy of offers is different. Major part of products is presented in premium-segment. The format leader is Winston XStyle (the top price segment), launched by Japan Tobacco International (JTI) last years (2012) with market share of 0.8 %.
Now share of "Imperial Tobacco Ukraine" in segment makes 16 %, it has reduced during one year by 3 per cent points. Also during one year in the Company is planned to increase their share in segment by 22 per cent points and, in such a way, to recover lost ground.
Source in one of tobacco companies marks that launching three new products at once is ambitious task. "It is not so expansive as logistically difficult. When a new product is being launched uninterrupted supply should be ensured and during one month at least end up with 80 % of presence on the market" - says the market participant. And new brands have to be launched on the market in conditions of full ban on advertising tobacco products. The only way for consumers to find out about the novelty is to see it on shop-window. "To display three new products, other three should be removed. It is unlikely that retail shops will agree to remove popular brands or to spent money for buying cigarettes that nobody knows and they should have minimum 3 cartons", - tells interlocutor. Segment development will partly restrain reduction of the volume of legally manufactured cigarettes. For 9 months shipments have made 55.1 billion cigarettes what is 8.1 billion cigarettes less than for the same period of the last year.
Also there is danger of absorbing one brand by another. "When new product is offered with analogous characteristics but cheaper than cigarettes that smoker is used to smoke, it is logical that consumer will switch to such cigarettes." - explains interlocutor.