Tobacco Industry: Its Significance in US Economy

The United States is the worlds second largest baccy plant grower. Thus, baccy plant is an important cash crop and the cigargontte manufacturers play a very important role in the U. S economy.(72)Approximately 500,000 Americans die constantlyy(prenominal) year as a direct result of sess (166). As the U. S. population be lessens more health conscious, the depend of smokers is decreasing every year. However, the tobacco plant intentness has remained prosperous due to the continuing demand of millions of smokers static present in the U.S.A and other places like Asia, Russia and Eastern Europe.(72)The tobacco manufacturing has never before publicly admitted to a direct connection amongst dope and lung or heart diseases (72). Since 1954, 825 cases defend been filed against cigarette companies demanding compensatim. Out of this simply 22 score gone for trial, three of which resulted in partial victory.(166)merchandising can be defined as the process by which beloveds and go are sold and purchased. It also includes functions like, advertisement, mail-order business, public relations and the like. The main finis of market is to acquire, retain and assemble customers.(21)Cigarette companies seem to understand the above mentioned definition perfectly. They carefully follow managements wishes about promotion of cigarettes. Like whatever other firm, cigarette manufacturers try to submit, design and produce products that will satisfy consumer needs.(44)However, critics complain of the effects of marketing tobacco on society. Advertisement of check names like Marlboro, Lucky Strike etc. are baneful for children since they generally glorifies smoking. Cigarette firms develop been criticized for designing and promoting brands that target the special tastes of operative persons, African -Americans etc. (44). Thus, critics feel that for tobacco no marketing prick that increases profit or marketing share should be mathematical functiond.(411)No e vent how unhealthy cigarettes are, they still are legal. Therefore, tobacco companies have a decently to market their products. After all, we could categorize tobacco marketing as set Marketing.(44)The major tobacco companies of U.S.A were headed for trouble this year. In early 1997, the smallest tobacco company. Liggett Group agreed to a wide-ranging settlement of health-related lawsuit and admitted publicly that tobacco causes cancer, is addictive and is marketed to teens. This admission ended up being a big problem for others tobacco companies.(63)On 27 June 1997, the companies Philip Morris RJR Nabisco Holdings, B.A.T Industries, Brown & Williamson and Loews Corp. reached an transcription with the attorneys -general of nearly 40 American states. This settlement resulted in the tobacco assiduity changing its own marketing rules.(523)1.Financial implications of the settlementThe above mentioned settlement calls for the tobacco industry to start an annual payment of $10 billion (eventually come up to $15 billion) to compensate states for smoking-related health costs and to pay people who successfully file for damages. The five tobacco companies must also finance anti-smoking health check and educational research, in order to prevent youths from smoking.(523)The cigarette companies also have to pay $60 billion in damages as a form of punishment. Besides all this, the industry will face supererogatory penalties if the number of teenage smokers does not decrease by 50% in seven years.(525)This settlement, is set to drastically change the marketing program of the tobacco companies.From now on, human or cartoon figures will not calculate in cigarette advertisements. That is, the advertisements will have to consist of words scarce (523). Tobacco advertisements are also banned from billboards, stadiums and the Internet. They are also prohibited from advertising in films or in theaters. The settlement also ends the use of all cigarette vending machines (524 ). Tobacco companies cannot use their brand label on T-shirts, caps and other promotional free gifts (525). The agreement would give the nutriment and Drug Administration (FDA) authority to regulate tobacco products. In addition, cigarettes would come with tough new-fashioned warnings such as smoking causes cancer and smoking can kill you.(524)The above mentioned changes will alter the marketing techniques of tobacco as never before and thus, the tobacco companies have to adapt to a new way of doing business.The tobacco industry has been hit hard by the settlement it signed. But it does not mean the end of this multi-billion dollar business. allow us have a look at some new and upcoming ways in which tobacco is sold.Even if the tobacco industry faces a gloomy business future in U.S.A it can accomplish a lot by selling more cigarettes in underdeveloped countries from the Middle East to South East Asia INTERFERENCE With practically no government interference and millions of smok ers, tobacco companies could even earn dinero from brands that are dead in USA. They can also expect bigger profits by trying to change local customs. For example In Japan, the number of womens smokers is on the rise, after tobacco promotions persuaded society not to prohibit women smoking.(334)As the numbers of public outlets for cigarettes decrease in the future a mail-order tobacco business could be created and this could be even more profitable. Being good database marketers, the databases of the tobacco industry will act as a discourse and distribution channel. RJ Reynolds has already taken a lead in this fiber of marketing.(334)From now on, tobacco companies will have to do most of their advertising in adult magazines. They might even end up first step cigarette only retail stores, as another way to supply smokers. As marketing of tobacco has become more challenging than ever before, it will remain a powerful part of management for the tobacco companies.(527)Tobacco firms have always shown enthusiasm in marketing their products. However, they have to face constant criticism of their marketing techniques. Critics feel that tobacco marketing is an example of misplaced marketing. The recently signed agreement between booster cable cigarette companies and nearly forty American states, will lead to native change in the marketing field.Besides financial penalties, cigarette companies have also agreed to restrict and reshape their promotional strategies. In the future, tobacco firms will have to come up with new ideas to market cigarettes and plausibly will have to increase their foreign sales. Basically, cigarette manufacturers have to by rights to promote and advertise their products so long as they are legal. Thus, clearly tobacco will be marketed, in some form or the other, for years to come.