More on marketing after e-cig sales slip in the US
Sales of the US tobacco industry’s most innovative product of recent times, the e-cigarette, have fallen in May and June of this year. This is not good news for tobacco companies that have already broken into the e-cigarette market after reporting losses on traditional smoking. Continuous and relentless competition from vaporisers, which are refillable with various flavoured liquids containing nicotine, isn’t doing much to get consumers attention pointing in the e-cigarette direction again.
However, it seems like Murray Kessler, the CEO at one of the US tobacco giants, isn’t panicked at this time, saying “it’s normal for a brand new category to have some ups and downs.” His aim is to invest in greater marketing strategy to keep people using the product and bring new customers.
Recent studies seem to suggest that sales of e-cigarettes are wavering as some long term smokers tend to return to traditional smoking methods. Vivien Azer, analyst at the leading financial services company Cowen & Co, said “There’s clearly a willingness to try the product; the problem is the technology is just not good enough. If it’s not good enough in terms of replacing a cigarette, smokers are going to stay with the cigarette.” - Sometimes you have to wonder where these studies are conducted! (Vapouriz have plenty of testimonials from ex-smokers who would not dream of returning to tobacco products.)
USA Paving the Way?
In 2013 sales of e-cigarettes, vaporisers and e liquids went through the roof and more than doubled to $1.7 billion of a $100 billion nicotine products market. This year there are signs of change in the market and a pattern seems to be developing. Sales of all electronic smoking devices fell 2.9% in May and fallen double that figure in June. This may be the seasonal trend tobe expected every year, or could it be an indication tht smokers are moving to vaping giving up completely after a time?
E-cigarettes were invented back in 2003 by a pharmacist from China, and back then e-cigarettes weren’t known for their quality. A US company jumped on the band wagon and released more attractive and slicker looking smoking devices. Watching observantly, the US tobacco giants jumped in as soon as they became aware of the success they were having and brought them to the US market.
In April of this year the US Food and Drug Administration said it intended to limit the sale of smoking devices to minors, ban samples given out for free and enforce that manufacturers include nicotine addiction warnings. TV advertising would not be affected and marketing could continue as before.
Figures released suggest that analysts projections had started to decrease early this year, the reason for this being that only 26% of smokers who tried aigrettes returned for a second purchase. Cowen & Co figures tend to back up the claim, as Azer said “While the e-cigarette is widely viewed as a close substitute to cigarettes, for an actual cigarette smoker it really does not mimic the experience.”
Azer’s research has discovered that consumers aren’t happy with poor battery life, consistent nicotine delivery and the feel of an e-cigarette in the mouth does not closely resemble the feel of smoking a cigarette. It is estimated that 80% of regular e-cigarette smokers still smoke regular cigarettes. “There’s just too much of a divide between what the combustible cigarette smoking experience is like and what the e-cigarette experience is like", said Azer.
Tobacco Prices and Advertising
Price in the US is undoubtedly an issue; a disposable e-cigarette cost around the same as a packet of traditional cigarettes. A trend toward vaporisers seems to be growing as the carton’s worth of puffs last much longer. Tobacco companies are aware of this pattern, as some of the e-cigarette customers that they have lost have moved on to vaporisers.
It seems that marketing campaigns for the e-cigarette and the vaporiser are the way forward and marketing companies are using ideas from original smoking advertisements for the TV adverts. Just turn on your TV and watch the good looking men and women puffing what looks to be like healthier and more enjoyable smoke puffs, not a million miles away from the black and white TV ads of the 1930s promoting traditional smoking.
The e-cigarette is not sold as a tobacco product and therefore not covered by all of the same restrictions on advertising, depending on where the ads are shown and whether products actually contain nicotine.. Competition is hugely fierce with some companies spending up to $14 million every six months on marketing alone.
Will E Cigs Destroy Tobacco Sales?
So should the e-cigarette and vaporiser companies be worried? We wouldn’t have thought so. People will continue trying them and many millions will continue to use them and hopefully kick the tobacco & nicotine habit all together. Perhaps a focus on promoting them as a short term fix to break addictive behaviour rather than trying to convince consumers that they are a healthy alternative would be more realistic, as we live in times when people are more prone to think for themselves.
There has been talk for some time about e-cigarettes could eventually overtake the sale of traditional cigarettes, but this can only happen with tough and exciting marketing campaigns from the various and competitive smoking device companies.
Watch this space.