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"Industry Experts helping clients improve their competitive advantage and profitability
through executable marketing solutions, specializing in the tobacco industry."

The Good, The Bad & The Ugly

In most of the presentations that I have given over the past few years I challenge my participants to take the time to understand how their business is doing, but to also make sure to check on the competition; after all, the competition is a part of the market reality. I always take the time to observe what is actually happening in the market. It validates the truths of the marketplace and these observations help make a retailer good! From my perspective retailing tobacco is very simple and straightforward. Yes it has some challenges but those retailers that are growing their overall tobacco category are benefiting from growing profits because they take time to inspect their expectations as well as knowing how these expectations will translate into market share and higher levels of performance.

I'm sure that those that believe they have a handle on the tobacco and tobacco-related business are well aware of the explosion that is taking place in the moist smokeless category. They most likely found out some time ago that the pouch business was a significant portion of the growth in this category and they gave it space. The good marketer is most likely looking at ways to make their business better than it was yesterday! They, the good marketers, are seeing this (pouch growth) spilling over into the product offering called Snus. The good marketers are aware that it takes time for these new offerings to take hold but are willing to work with the manufacturers and distributors to achieve success. They are looking for ways to offer their consumers satisfaction.

The good tobacco category manager is willing to change with the times. This manager doesn't give up space but realigns it to the changes that are taking place. This individual looks closely and sees that the cigar category in spite of all the turmoil caused by increased excise taxes is on the rebound. They have chosen to give the category more space and are reaping the rewards. The good tobacco category manager doesn't need to read about the positive growth in the moist, snus and cigar categories because they know they are the ones causing the growth. The good in so many ways just get better.

The good category manager is also willing to take a good hard look at the issues. I believe they see that consumers are looking for value. They see the recent trend that is reforming the price value segment of the cigarette offer as more consumers are looking at price than they ever have before. They are willing to listen to offer that they once avoided. They are embracing an offer to capture the consumer driven by the value proposition. They see the tiers that have actually developed within the premium cigarette brands. In a fast-changing world the consumer is driven by economic necessities. The good marketers are ahead of the curve.

In my travels I see and hear of more and more retailers that are looking at the emerging new alternative tobacco offering. I'm reminded of a recent conversation with a tobacco buyer who found through consumer feedback that consumers were looking at options for those times and places when and where they could not smoke. But the consumer did not know what options existed. This retailer recognized the opportunity, seized it and gave space to numerous alternative offerings. One day this futuristic buyer will be reading about the growth of a new category and know that his efforts and vision as a good marketer have helped bring about greater visibility to the space. Others will follow as they look to meet the needs of their consumers.

There is so much that one can learn by observing the industry when on the road. It's not hard to pick out the good marketers. I enjoy seeing the work of the retailer that gives attention to the little things. It pays great dividends. Often when I am with a buyer on a market ride, I will get on my "proverbial soapbox" about the importance of the details. The good marketer develops a plan that focuses on the details. But, for every good retailer out there with an attention to detail, there are also the bad and the ugly, not only limiting consumers' choices and options, but providing an ugly experience. Typically that experience begins with a filthy dispenser, 386 signs in the front window area, a restroom that makes one leave the location and drive down the road to the next location with high hopes that the "good" retailer's work will be found!

From my experience and my travels, it's always clear - the good retailer meets the challenges of the marketplace and always exceeds his consumers' expectation. As you look forward to the New Year make it your goal to be one of those that is classified by your consumer as one of the good retailers that strives to meet their needs.

About Lou Maiellano

TAZ Marketing & Consulting Group

Anti-Aging Drinks | Smokeless Alternatives | Ampli5 Technology | Retail Tobacco Displays | Store Planograms | About Lou Maiellano

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