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Marketing Of Tobacco Essay

1165 words - 5 pages

I. HISTORICAL BACKGROUND The United States is the world?s second largest tobacco grower. Thus, tobacco is an important cash crop and the cigarette manufacturers play a very important role in the U. S economy.(7:2) Approximately 500,000 Americans die every year as a direct result of smoking (1:66). As the U. S. population becomes more health conscious, the number of smokers is decreasing every year. However, the tobacco industry has remained prosperous due to the continuing demand of millions of smokers still present in the U.S.A and other places like Asia, Russia and Eastern Europe.(7:2) The tobacco industry has never before publicly admitted to a direct connection between smoking and lung or heart diseases (7:2). Since 1954, 825 cases have been filed against cigarette companies demanding compensatim. Out of this only 22 have gone for trial, three of which resulted in partial victory.(1:66) II. VIEWS ON MARKETING OF TOBACCO Marketing can be defined as the process by which goods and services are sold and purchased. It also includes functions like, advertising, mail-order business, public relations and the like. The main goal of marketing is to acquire, retain and satisfy customers.(2:1) Cigarette companies seem to understand the above mentioned definition perfectly. They carefully follow management's wishes about promotion of cigarettes. Like any other firm, cigarette manufacturers try to supply, design and produce products that will satisfy consumer needs.(4:4) However, critics complain of the effects of marketing tobacco on society. Advertisement of brand names like Marlboro, Lucky Strike etc. are harmful for children since they generally glorifies smoking. Cigarette firms have been criticized for designing and promoting brands that target the special tastes of working persons, African -Americans etc. (4:4). Thus, critics feel that for tobacco no marketing tool that increases profit or marketing share should be used.(4:11) No matter how unhealthy cigarettes are, they still are legal. Therefore, tobacco companies have a right to market their products. After all, we could categorize tobacco marketing as ?Misplaced Marketing?.(4:4) III. CHALLENGES FACED BY BIG TOBACCO The major tobacco companies of U.S.A were headed for trouble this year. In early 1997, the smallest tobacco company. Liggett Group agreed to a wide-ranging settlement of health-related lawsuit and admitted publicly that tobacco causes cancer, is addictive and is ?marketed? to teens. This admission ended up being a big problem for other's tobacco companies.(6:3) A. The ?Big? Settlement On 27 June 1997, the companies: Philip Morris RJR Nabisco Holdings, B.A.T Industries, Brown & Williamson and Loews Corp. reached an agreement with the attorneys -general of nearly 40 American states. This settlement resulted in the tobacco industry changing its own marketing rules.(5:23) 1.Financial implications of the settlement The above mentioned settlement calls for the tobacco industry to start...

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