Cigarettes In The Product Life Cycle

Cigarettes as a "product category" are in the mature stage of the product life

cycle. When referring to the product category, I am referring to the marketing territory

in which a particular manufacturer's product competes. For example, Marlboro, Camel,

and Winston compete in the cigarette product category. Most products we see every day

reside in the mature stage of the product life cycle. Marketers of cigarettes in the

mature stage use both advertising and sales promotion as a means to compete for market

share within the product category. Marketers focus on both preventing the loss

of market share to competitors and gaining market share from those same competitors. In

this stage, marketing does not serve to recruit new product category users, but rather to

allocate already existing users to brands within the category. All products in the mature

stage of the product life cycle experience entry of new consumers and exit of existing

consumers for reasons unrelated to company marketing activities.

American values are fundamental factors that shape much of the advertising in the

United States. Like companies in other industries, cigarette manufacturers often bring

into play American Values based on cultural norms that appeal to consumers. Cigarette

advertising images have broad appeal to adults, rather than having any distinctive appeal

to adolescents. In addition, cigarette manufacturers' use of image advertising is

consistent with the marketing of other products in the mature category and is targeted to

existing users of the product category.

There are significant and critical differences between advertising and price

promotions. While companies utilize mass media advertising to compete on the qualities

and characteristics of their particular brand of cigarettes, the use of price promotions

represents a fundamentally different marketing objective one specifically focused on and

limited to setting the brand's price. This strictly price based competition reaches only

those consumers who are already making purchases in the product category. In this

manner, price promotions are clearly linked to competition within a mature product

category, where competing cigarette manufacturers try to compete for consumers who are

part of a limited target audience. Price promotions may appear to cost more than

advertising, but the two cannot be compared easily because the cost of a price promotion

is dependent on the level at which the full retail price is set and the number of units sold

at the promotional price.

In the mature stage, sales in the overall product category may increase for a while,

but then level, becoming flat over time. Competition within the category becomes very

intense and the market leaders, which are Phillip Morris, Altria Group, BAT, and R J

Reynolds ("The Big Four"), survive while more marginal manufacturers drop out of the

market. Advertising at this stage is not concerned with educating the consumer, but

fighting for market share among consumers that already know what the product is for and

have chosen to enter the product category. "Advertising becomes less

informative and almost entirely image based as manufacturers protect and constantly

reinforce the equity of their brand. As distinguished from primary demand stimulation,

which takes place at the introductory stage, advertising in