Tobacco Asia

tobaccoasia 17 from one another, the context of their development, the defini- tion of their status, and their marketing strategies, there do exist some common characteristics and market performance. The new products can be classified into three categories – Category I with further development momentum, potential, and space; Category II with further development opportunities but lack of effective maintenance; and Category III basically without anybody to care for them. For the new products in Category I, including the Liqun brand from Hangzhou Cigarette (Zhejiang Prov.), Nanjing brand from Nanjing Cigarette Factory (Jiangsu Prov.), and Yunyan brand from Kunming Cigarette Factory (Yunnan Prov.), they are already time-honored products with fine reputations, as well as their high quality, outstanding characteristics and styles, fine market perfor- mance, rational development expectation, and scientific rhythm of supply. Market response to the new products in this category has been very active and positive, and both the commercial sector of the tobacco industry and cigarette retailers are fully confident in the follow-up development of these brands. For the new products in Category II, the development of them has not been seriously problematic and they have not yet shown obvious defects since their presentation to the market. But, their sales seem to have been limited by the relatively poor popularity of brands and weak marketing. Besides, there are some brands that previously belonged to low-grade ones, and their owners strove to lift them to higher grades by developing new products. Since their presentation to the market, the manu- facturers of the new products in this category excessively sup- plied them to the market. Although both retailers and consum- ers have had positive comments on these new products, they are generally lacking sustained investment and further development momentum. At the same time, follow-up promotion of the new products in this category after they were put onto the counter or on display at retail terminals has been relatively simplistic and insufficient. As a result, the manufacturers have failed to grow the group of consumers for these new products. As far as the new products in Category III are concerned, though the manufacturers have all made heavy investment in their development, they do not show any distinctive intention and are all lacking sufficient characteristics and obvious advan- tages at the marketplace. Their supply to the market has ap- peared to be tough since the very beginning. Besides the mean- ingless cost and waste of resources in their development, people can virtually see nothing significant from their existence. Un- fortunately, the new products in this category make up a larger proportion of all the new products than those in Category I and Category II. In reality, their development has done greater harm to the market, and has only led to the waste of marketing re- sources, overdrawn confidence from consumers, and tarnished the image of the relevant brands. Obviously, the development of the new products in this category is by no means cost-effective. Therefore, what becomes essential now is how the tobacco industry should deal with each of these three categories. For the new products in Category I, their future develop- ment can generally be predictable, and what needs to be cared for is proper control over the rhythm of their development. One the one hand, it is expected that the manufacturers of the new products in this category would attach greater importance to the status and profit making by retailers, and manage to guarantee that retailers would be able to make a rational amount of profit from sales from the very beginning. Due to the difficult situation faced by the tobacco industry, manufacturers should never make rash decisions and need to practically and sufficiently prepare in every process and every step. In particular, they need to plan well the scope of supply and the quantity of supply. On the other hand, they need to keep adding value in the consumption link and should be willing to make some hard or even "stupid" efforts that will not yield immediate interests. For example, they need to improve maintenance of their terminal display facilities to enable consumers to see their favorite products in a more distinctive and eye-catching way; strengthen efforts to send sample products to customers for test smoking to allow them to more perceptually experience products; and keep improving their products. For Category II, the manufacturers of the new products in this category should primarily hold on steadfastly and patiently wait until the crucial process of presentation of the new prod- ucts to the market has passed. What they need to do at this point are to develop policy support, allocate necessary resources. and appraise what has been done in a timely manner. For new products in Category III, what should first be done is to solve the looming problems. Why should we say so? Just take a look at the retail counters and see how much of the inven- tory on the counters are "new products" supplied to the mar- ket numerous years ago, regardless of whether the retailers are based in urban or rural areas, and regardless of their regional differences. Obviously, those that were put on the counter for display numerous years ago have turned out to be redundancies today! As bystanders, we just want to remind the manufacturers to launch fewer operations that would be given up halfway as a result of poor planning beforehand. Frankly speaking, before the problems can be properly set- tled, manufacturers should refrain from launching any operation to rashly develop so-called "new products". On the contrary, they should not only do a good job of preliminary preparation and basic work prior to new product development and mar- ket supply, but should also refrain from making futile efforts to work on the development of new products or market areas that are indeed lacking growth potential. Moreover, they should not show contempt for the interests of retailers, and should not unilaterally think that inventory held by the commercial sector have nothing to do with them. Presently, it is by no means difficult for China's tobacco in- dustry to develop and present to the market new products in terms of technology. What is essential now is that in planning to develop and present to the market a new product, manufac- turers need to carefully consider what consumer demands they need to satisfy and whether the new product will be marketable. They should not rashly develop and present new products with- out considering what will happen next. The Chinese tobacco industry is accustomed to both persistent high growth registered in the past few decades, and poorly planned development of brands. As a result, when problems kept erupting in the harsh year of 2016, manufacturers all longed to recover some lost sales and market shares by means of developing and presenting new products to the market. However, at such a point, what manu- facturers should do is just to remember that they can no longer afford to waste time on futile efforts, and remain persistent in innovating new products.

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