The Uk And Europe Tobacco Market Marketing Essay

The Uk And Europe Tobacco Market Marketing Essay

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The UK and Europe Tobacco market is growing day by day. Smokers totally spent £13.1 billion in 2008 on tobacco and 90 of their spending was on cigarettes. So we can say that there is a big market for the Benson and Hedges available out there.

According the government General life Style Survey of 2008 says that most of the Adult peoples in United Kingdom are smokers [1] . These Tobacco companies are contributing mostly to the society around 5000 peoples are working inside these industries. On contrary most of the peoples are working with the whole seller and the retailer of the tobacco market.

Currently we can say the market of the Cigarettes is mature in nature. But mostly the duties applied on the import of the Tobacco are increasing day by day. So we can say that the consumers are moving from the higher and costly brands to the low priced brands. We can say that for the company like British American Tobacco is effected with this buying behaviour.

Company Profile

British American Tobacco Company is one of leading group among the tobacco manufactures. It is operating globally into main 180 markets of the world. It is one of those good companies which s not producing the tobacco goods but it is competing globally and providing the quality goods to its adult consumers.

Also the company BAT is operating in the world of Tobacco from last 100, years. One of the key feature of the company is they are not just promoting their products to the young smokers but also they are providing the quality products to billion of adult smokers in the world. While talking about the company they say we don't believe that "one size fits to all" [2] so they have such a strong brand portfolio which includes a range of products which suits to all.

On the other hand the company British American Tobacco is making its strategy in such a way that they want to return the high value to its share holders. The company is also holding 56000 employees across Europe, Asia, Africa, and America.

In 2008 the company produces 751 billion cigarettes on its 49 plants installed around the globe. This is one of the biggest group which is investing in the production of Tobacco leafs. On the other hand this company believes in accepting this that as our products posses the risk so it must be for those who are adults our above 18 years of age. Because they know it better.

As described above the company "BAT" is well known in today's world of tobacco. The company is operating its business with the help of different strategies and plans to cope up with the tough competitions given by the market competitors.

From the raw material till the finished product the company is taking these steps to make a good product with batter quality. The basic concept of the operations can be shown in the below figure.

3Fig

As the company "BAT" is in the business of Tobacco, so the only main raw material (input) for their business is the tobacco leaves. For every kind of product they are making this is the essential input that they need. For that purpose they are doing

Leaf Operations

The company "BAT" is one of the largest tobacco producers in the world. The company have its core operation in this regard. As the leaf of tobacco is the basic ingredient of their all products. So the best thing they are doing is they have strong operations in those countries where the leaf of tobacco is cultivated as a crop. Also the peoples of that particular area are involved in the business of tobacco leaf. The company currently purchasing its tobacco leaves from Bangladesh, Srilanka, Brazil, Kenya, South Africa.

The company "BAT" have a strong image of responsible tobacco productions. According to the company "Our Group purchases approximately 390,000 tonnes of tobacco leaf a year, around 80 per cent of it by volume from farmers and suppliers in emerging economies. We aim to ensure that we only purchase leaf from responsible and sustainable sources" [4] . The above statement shows that the leaf production is one of the core operations of the company.

Leaf Production Strategies

The company "BAT" have a policy to work alongside with the farmers of Tobacco leaves. For this vary purpose the company have different support programmes for the farmers. The company is doing following programmes to got best quality leaves.

The company "BAT" is providing the seeds to the farmers.

The company is conducting the training programmes to grow the best quality leaves.

The company is doing its best practices for environmental control and production facilities.

On the other hand the company is extending this program to facilitate the farmers to do their best.

On the other hand the company have a strategy to ensure the good production related to the crops of tobacco leaves. Because getting the good leaves from the tobacco farmer is one of the key operation of the company. For this vary purpose the company is introducing the agricultural practices. According to the company "Our approach to crop management is to use good agricultural practices alongside new developments in crop and environmental protection, to support farmers in producing tobacco that provides a good income and is grown in harmony with the environment" [5] why the company have made this strategy, the reason is the tobacco is risk for the health that is why some part of the world whole land is used for tobacco cultivation.

On contrary the company have a policy for tobacco curing process as the tobacco is essential for their manufacturing processes. So the company have different specific process to cur the tobacco leaves. For curing mostly in past wood was burned. Now the company have decided instead of wood the rice husks can be used to cur the tobacco. The reason of developing this was to become the social green company for that vary purposes company made the plan to plant trees as well because they cut down many trees in past for the operation of their business.

Other Raw Materials

For further operations of the company also need some other raw materials for the manufacturing of its products. According to them the company use to purchase "packaging materials, cigarette paper, filter materials, glues, and inks and plug wraps" [6] .

Manufacturing Operations

The second phase of the product involves the manufacturing of the tobacco and its blending processes. As it is described above that the company is doing its best to get the good tobacco leaves. Here the actual scenario starts when the company check every single leaf for the quality assurance. The first step the company involve in making the finished product is as follow.

Primary Manufacturing Department

The cured leaf use to get into this primary department to be used to make the final finished product. This process can be shown in the below figure.

Fig [7] 

The company have its strong operation in its basic manufacturing processes. The process shows that how the cured tobacco leafs is received into this primary manufacturing departments. It shows that on arrival the company used to receive more than 80 of leaves dried using the curing methods before, and only 20 percent of the leaves have some kind of green factors in it. The process of dry lamina shows that the company is using this process to completely dry all the leaves which have some kind of issues while curing before.

On the second step in the manufacturing departments the company is suing its method of humidification and casing process which is clearly involved to process the tobacco leaves before blending.

In primary manufacturing department the third and most important step of operation is called blending which is one of the core competences of the company "British American Tobacco" in this process the company use to blend the tobacco which mainly includes the mixing of different ingredients and their

expansions. On the other hand in the next process the company use to compress and cut the tobacco to make its useable shape because for making cigarette and all other finished products the company need its small and compressed pieces.

After the cutting and compressing of tobacco the next process involves the drying of the tobacco again. As shown in the above picture it can be seen clearly under the heading of step 5 which is marked as "drying" after this process the job of primary manufacturing department is finished and the finished tobacco is ready to be used in next department.

Filter Rod Department

Second and most important part of the "British American Tobacco" manufacturing is filter rod department. The main function and operation of this department involves the key stages of making the rod and the filters for the cigarettes. The wide range of this department can be shown in the picture below.

Fig [8] 

The filter road department is only involved in making the filter which is used as a key input to the final product. This above picture is showing that on the first key step the cellulose acetate is been used as a input material for the filter rod department. Side by side to this input the paper is added and the hardener is added to put the inputs in further process, it is shown in the heading number 2. At this stage the final shape of the filter is ready and on third stage the process is set to cut the filter according

The standards of the company "BAT". After this process the filters are stored for a good period of time to be hardened for further use. Mainly the company "BAT" is one of those companies which is producing 12 million filters a day. After the hardening process is done the filters are moved to the secondary department to make the cigarettes.

Secondary Manufacturing Department

The last and the final process to make the finished products of the company is done in the secondary manufacturing department. The operations and working of this department can be seen in the figure below.

Fig [9] 

The first key stage involve in this department is all the end products of last two departments are the inputs to this department. Here the paper is used in the first step and the blended tobacco from primary department is used to fill the pipes of cigarettes after that the cigarettes are cut down with the high speed cutter, according to the set standards of the company "BAT" after the completion of this job the process of filtering starts here the filter are received from filter rod department and been used to make the cigarettes after that the cutting process is used to cut the cigarettes down according to set measure. And now the time come to pack it to be sold into the market as shown in the above picture.

Manufacturing Strategies

As the company "BAT" is one of the largest tobacco producer in the world. Following are its key manufacturing strategies to be the best in this competitive market. The company have the following strategies.

The company have its strong polices regarding the cost of manufacturing, this is ensured by purchasing the quality raw material at low prices. On the other hand the company have also closed its some the plants to reduce it's over manufacturing. This is another aspect of the manufacturing strategies that produce that much whatever u want to sale in the market.

On the other hand the company is using the strategy of technology advancements which does mean that that the company is looking towards its future sustainability. On contrary the company have a strategy of not selling its old equipments. Because they don't want their competitors to achieve that efficiency or to own that manufacturing infrastructure. The company is also using its computerised system to control the moisturising control.

Distribution Operations

The company "BAT" is one of the biggest companies of the world which is taking care of it world wide distribution operations. The company is looking into many aspects of its core operations to make their product available in the market. As the products of the companies are only for the adults. So the company is particularly focusing to make its product available is hotels, restaurants, cafes and all such places which are widely visited by public. The key roles to manage the distribution involve.

Channel strategy, the company "BAT" is using the distribution channel strategy approach to make its products available in the market. In simple word we can say that this is the way to move the products to its end consumes. The company is achieving this benefit through different approaches some of them are from direct sales approach and some are from the distributors for its products which really cost less to make the product available. By doing this the company is getting the benefits of low costs distribution and the increase in sale as well.

Key Accounts management, this process is done to manage all the key accounts which are mainly known as those who sell the company product. For examples big stores and shopping malls and it also includes those who really buy the company products to sale it to the retailers. Which are mainly known as distributors.

Category management, the company "BAT" is using the technique of category management as well. The company have a strategy to make the groups of similar product according to the region where they are sold most. This done by making the products groups which are widely known as the category management.

Account Servicing, the company is using an advance method of account servicing; the process is used to receive the payments from its distribution key customer. This is done to avoid the late payment for the product they ordered, which may result into over demand and many other conflicts which may arise for the company.

Distribution Strategies

The company "BAT" is having the major market shares because of its strong distribution strategies. The key activities involved in this includes.

Development of distribution plans and strategies which are mainly focused on how to achieve the high sale of the company's products. Secondly the company is focusing on merchandising and point of sale plans. Which are mainly focused on how to setup the price competitively and to keep the cost low. Side by side the company have its policy to monitor the stock of raw material and the finished products as well.

Conclusion and Recommendation

The company "BAT" is well known in today's world of tobacco. The company is operating its business with the help of different strategies and plans to cope up with the tough competitions given by the market competitors.

The company "BAT" have strong operations in those countries where the leaf of tobacco is cultivated as a crop. Instead of doing this the company should have its strong logistics to move the raw materials to different location around the world. The company "BAT" is involved in providing the seeds to the farmers where the company can expand its budget to cultivate its own tobacco where it is not cultivated as a crop. This could help the company to get the low cost raw material.

The company use to purchase "packaging materials, cigarette paper, filter materials, glues, and inks and plug wraps. As the company is the second largest tobacco producer in the world, based on its profit and revenues the company should own its plants an operation to manufacture its other raw materials.

The company "BAT" is using the distribution channel strategy approach to make its products available in the market. In simple word we can say that this is the way to move the products to its end consumes. Instead of moving the products by the help of intermediaries the company should have its own retails store with its own brand name to sale the company products.