Company Good afternoon! My name is . For those who don’t know me, I am the Direct Marketing Manager for Blue E-Gig. I understand that there’s a lot to get done today so I’m going to try and get through this as fast as possible. I would please ask you to hold all questions until the end of the meeting. Thank you! (The speaker is smoking an e-cigarette while saying this) In light of the continually decreasing trend in cigarette smoking, a lot of smokers are realizing it is in the interest of their health, wallet, or both for them to discontinue their habit.
However it is not as easy as it may sound. A lot of people are addicted either to the nicotine, the actual physical habit of smoking, the social aspect that comes with it, or again maybe all of these things. According to the Center for Disease Control, 69% of smokers want to quit completely, and many of them are looking for alternatives. As mentioned earlier, there are many different reasons that a person might have for wanting to quit. It could be for the obvious health issues, with tobacco being the leading cause of preventable disease globally over the last several decades.
Or it could be the initial reason of Just being too expensive, with cigarette prices sky-rocketing from state taxation. Statistics show that the average (regular) cigarette smoker who switches to E-gigs saves $2,000 per year. Because many businesses understand the huge demand for that alternative, they have created their very own revenue- boosting e-cigarette. When looking at the five step consumer decision making process, it’s easy to understand why consumers want to buy our product. Unlike traditional cigarettes, these electric cigarettes only contain water, nicotine, flavors, glycerin, and citric acid.
E-Gigs don’t contain the other 4,000 harmful chemicals that are in regular cigarettes. The number one need is recognition, which is huge when choosing to buy a product. It’s the difference between actual and desired needs. Many smokers realize they need to quit smoking for health reasons, which results in them buying an e-cigarette as an alternative. That’s why there’s solid evidence that this product isn’t Just a passing trend, but is here to stay. The E-cigarette industry is booming based on this awareness. There are currently 2. Million e-cigarette users and that number is expected to quadruple by he year 2014. E-cigarettes have the real look, feel and flavor as a regular cigarette, but without the smoke and odor. With E-Gigs being a healthier alternative, many heavily addicted smokers have switched over, causing the industry to grow as well as the competition. The industry size has approximately $300 million in revenue and is estimated to grow up to $1 billion within the next 2-3 years. The 30,000 retailers throughout the country offering this product represent this number.
Presently Blue e- gigs holds about 25 percent of the market share, making us the second largest in the e-cigarette industry. We do have to be cautious about our competitors so we can remain successful and hopefully gain market share in the industry. It’s key that we understand our consumer behavior so that we understand why our customer base chooses to buy us over our competitors. As you can see, I brought in a visual to help paint a better picture for everyone. The chart above shows how the market share for e-cigarettes is broken down. As you can see, we hold exactly a quarter tot the market snare.
The two top competitors that we need to keep tabs on are Enjoy and V. These two would fall under the category of direct competitors. They both have a lot to offer, so we need to decipher what their strengths and weaknesses are so we have a better understanding of where we are going in the future. We will set our main focus on our direct competitors, but will also put our indirect competitors under our consideration as well. There are a few indirect competitors for the E cigarette. These factors determine consumer buying decisions including, health, socio -economic circumstances and social stigmas.
This cigarette avoids these things because they are cheaper, less harmful, and are odorless which sets them part from the negative social stigmas that go along with traditional cigarettes. Enjoy is leading the E-cigarette industry with 38 percent, making them our main concern. Enjoys headquarters are located right outside of Scottsdale, Arizona. However, they do a remarkable Job of marketing their product nationwide. This makes distribution their main strength on their SOOT analysis. Another strength they have is their prices. They have a less expensive starter kit, starting at $49. 95.
But of course, with strengths in a company also come weaknesses. They do have a less expensive starter it, but have much more expensive cartridge prices. Also, they don’t have a variety of flavors to choose from, having only a selection of two, which includes traditional flavor and menthol. In addition, Enjoy has very cheap packaging, a short battery life and no portable charging, turning off many customers. Our second largest competitor is V, holding 21 percent of the market share. These guys have more strengths than weaknesses. We need to stay informed about what they have going for them so we can relate that to our product lines.
One of the strengths V is their three battery sizes. This is a bonus for customers because no one likes worrying about charging electronics all the time when they want to use them. Also they have many cartridge flavors to choose from, unlike Enjoy with Just their selection of two. They also have lower cartridge prices. They are unlike Enjoy because V doesn’t have the highly priced cartridges. But Enjoy does have a very expensive charging kit for the e-cigarette with the starter kit costing $64. 95. Now I want you all to keep in mind that that doesn’t include the portable charger.
To buy that as well would increase the price to $139. 95 for the Traveler. Another weakness V has is their very limited physical retail locations. Yes, you can order their products off their online website Just like Blue and Enjoy. But if you were looking to purchase them from a store, they have very few physical retail locations. For example, if you wanted to purchase one in New Hampshire, there is only one place that you could go to. Hopefully all of this information gives you guys a better understanding about our competition and, of course their strengths and weaknesses.
So after reviewing our product line, I pinpointed one particular product that I would categorize as our cash cow. Our Blue E- Gig Premium starter kit offers the most product to our customer base with the most reasonable price. As you all might be aware, Blue E-Gigs generated approximately $35 million in revenue Just last year. The premium starter kit that I mentioned helped generate a large portion of this revenue. But what makes this product different from something that V or Enjoy offers? Blue offers the premium starter kit that has a pack that carries your batteries and cartridges all-in-one AND charges your batteries while you are on the go.
The Blue Premium Starter Kit not only offers a portable charging jack, but also alerts you when another Blue “smoker” is near y b . This is called t social feature. So now we will go over a few more strengths that the Premium Starter kit has. They have seven different cartridge flavors to choose from. The flavors include vivid vanilla, cherry crush, magnificent menthol, classic tobacco, Java Jolt, pain cola, and peach schnapps. Another feature is the portable charging pack that was mentioned above, as well as the social awareness feature. Also it has a long lasting battery that has gotten great reviews.
Blue does a great Job with their rewards points aerogram. Everything purchased off the Blue website helps increase your points. Those points then can be used to get discounted or even free cartridges. All of this is very appealing to all different target markets. But the biggest weakness that we need to focus on is the somewhat limited physical retail locations. That’s why we need to take that weakness and use it as a strength to make our company even stronger. I believe that since we are only located online, it makes it tough for people that don’t plan ahead and run out of cartridges.
This is why I believe we should have contracts with as stations, pharmacies, and convenience stores to make our product accessible to everyone. We could then use that to help promote our product in all of those locations. People would see the product every time they enter one of those locations and would become more familiar with our company. We could start doing it in one area and potentially spread nationwide. This would be a good business to business opportunity for Blue,keeping them market oriented. I think another thing we need to focus on and potentially change is the different cartridge flavors.
We have to be concerned about the political and legal factors. The seven different flavors that we have are very fruity flavors. This could look shady for our company, if people try and connect that with underage smoking. They could use the fact that the fruity flavors look appealing towards kids and that we are targeting underage smokers. Having seven different flavors to choose from gives us an advantage against our competitors but could potentially be a threat for our company. I believe that if Blue E-gig put more money into their advertisements then it would result in bigger numbers when doing their income statement.
Right now Blue E-gig has one commercial that isn’t on the air s much as it should be. We used Stephen Doors as an actor in the commercial to help indorse our product. I believe if we used someone that is better known it would help attract more customers towards our product. We could try and find a popular celebrity that is well known from all target markets to help promote Blue E-cigarettes. This could potentially increase our revenue by selling to all demographic groups. Overall, Blue E-cigarette is a young and fruitful company. We’re already the second to the top E-cigarette company in the industry.
Electronic cigarettes are becoming more idly used by people to either help them quit smoking, or reduce the number of cigarettes they smoke each day. Many thought this was Just a fad at first, but now everyone realizes that this product is here to stay. We need to focus on our weaknesses and our competitors strengths to help gain more market share in the e- cigarette industry. Our numbers are high and we bring in steady revenue year by year. But with more people looking for an alternative to smoking traditional cigarettes, we need to put our main focus on getting our name out there and making it familiar to all target markets.
