Tabaco Competitive Advantage

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According to the World Health Organisation (WHO) Tabaco kills up to half the people and around 7 million people die each year from smoking or being exposed to cigarette smoke (Anon., 2017). “Over the last few years, a new idea for improving public health has been slowly spreading across the world: a ban on selling cigarettes in packages with custom brand designs. Instead of selling branded tobacco, all cigarettes are sold in either plain packages or packages with grotesque pictures showing the health consequences of smoking”.
The Tobacco industry is one of the most highly legislated industries in the world with the industry facing regressions in volume both globally and in South Africa (Euromonitor International Country Tobacco Report, 2011). Tobacco manufacturers in South Africa could however, face even more stringent legislative changes in the form of the Australian legislation on plain packaging.

The research sought to consider various
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According to Yee and Sidek (2008), pricing is the most crucial factor when making decisions for an average consumer. Consumers usually have a perceived price and often not go over that margin. Consumers with higher brand loyalty are willing to pay a premium price for their preferred brand (He and Li, 2011). With the new laws in place tobacco companies are facing a challenge since the packaging is standard, they will now compete on price , and how does a superior product drop its price to compete with average products. Many big firms like Phillip Morris and BAT specialise in superior brands and will face huge competition and possible downfall in income. Some speciality products which companies like Phillip Morris makes will now be impacted and have to find a new way to reposition. Some favourable brands already built its customer base example: Marlboro , and even if the price was higher the consumers would of bought due to their loyalty and preference towards the
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