EXECUTIVE SUMMARY
This assignment is based fully on Survey on various areas of Dhaka city. Here collect those samples from different level smokers. To protect open smoking Bangladesh government regulates a new law on open smoking. This survey reflects on the present situation before and after the new law. We get lots of information about anti-smoking law in different countries of the world through internet. We also included that information in this assignment for avoidance of anti-smoking law. Anti-Smoking law are government prohibitions on tobacco smoking in public or quasi-public indoor areas such as offices, restaurants, hotels, or even outdoor public areas such as parks and sports stadiums, educational institutes. Outright bans on smoking altogether are rare, although in most jurisdictions the sale of tobacco to minors, or minors under a certain age, is prohibited. Such laws have been introduced by many countries in various forms over the years, with legislators citing health statistics that show tobacco smoking is often fatal for the smokers and also sometimes for those subjected to passive smoking (also known as secondhand smoke).
However, some countries such as Spain hardly enforce their smoking prohibitions, and continue to profit from tax on tobacco products. Tobacco advertising is also banned, or at least restricted, in most countries. The Government of Bangladesh implies this law in March 2005.
Cigarette smoke is probably one of the world’s most complex mixtures and one that has been extensively studied. Like any natural substance, tobacco contains thousands of different constituents (approximately 2,500 have been identified in tobacco). Approximately 4,000 constituents are formed when the tobacco burns, at varying temperatures with varying concentrations of oxygen. Many of these are found in very low concentrations.
After research we observed that, before the law the smoking habit of the smoker have certain limitation. They smoke everywhere, they have no restriction for open smoking. After the law they have certain restriction but their smoking habit increase rapidly. Smokers don’t obey the law because the government doesn’t take any attempts properly.
This situation creates for lake of implementation of this law. The Government should take attempt properly to reduce smoking habit of the people. The people of the country also aware about the bad effect of the smoking and to help the Government to establish the law effectively. To reduce smoking the people should profitable economically and make the environment clean.
Introduction
Smoking is the most common matter in the daily life of us. Most of our people are with the habit of smoking. In many cases, many people of us can’t pass their time without Smoking.
In Bangladesh, Smoking is widely spread in all class of people like Service holders, Businessmen, Students etc. So, many foreign Cigarette Companies is running their business successfully here. The numbers of Smokers are increasing day by day. The most common cigarette is ‘Gold leaf’, ‘Benson & Hedges’, ‘555’ etc.
To control Smoking the Government of Bangladesh has created a law. To know the impact we have collect some information like Chance of habit of people before and after the law, marketing strategy of the Cigarette Company before and after the law etc by data collecting method.
Marketing information system can help formulation of the marketing strategy of Cigarette Company. This study aims to overview how “The British American Tobacco” authority can improve their marketing strategy and able to fulfill the need of the Smokers after the Government new law. Market segmentation can provide information about the characteristics shared by the Smokers. Long-term vision is required to sustain the upcoming challenging environment with the rapid changes in the world. Competition is a never-ending process. Before the law “Gold leaf”, “Benson & Hedges”, “555” was the highest position. However, these could not retain the position of highest sailing Cigarettes after the law. “The British American Tobacco” authority may use constant intelligence force to remain number one in sailing in Bangladesh.
Objectives of the Study:
The main objective of the study is to make an overview of the habit of Smokers before and after the Government new law. Also an overview of the marketing strategies of some cigarette companies like “British American Tobacco”, “Dhaka Tobacco”, “Akij Group”, “Nasir Gold”, etc. However, the specific objectives are as follows:
(1) To conceptualize ‘what marketing strategy means’ through a smoking survey.
(2) To define effective marketing strategy for motivating potential smokers before and after the Government new Smoking law.
(3) To ascertain the fulfillment of the smokers through their habit of smoking.
(4) To provide recommendations for decreasing number of Smokers.
(5) To suggest how “The government of Bangladesh” can control the smokers by its new laws.
Methodology of study:
The study is based on primary data. For the purpose of collecting primary data, a structured questionnaire is used. Under the preview of the interviewed- Students of various institutions, Government employees, Private firms employees, Businessmen, Day labors are covered to analyze the competitiveness of Various Cigarette Companies and then provide recommendations for designing effective marketing strategy. The study used random sampling in designing the sample. Total number of respondents was 50. Out of them total number of students were 10, Other respondents were – number of Government were 10, Number of Private firm’s employees were 10, Number of Businessmen were 10 and number of Day labor were 10. Without this we have collected data from 25 retailers. The study determines weighted average of the Smokers. The study tried to collect the opinion of the smokers as well as target customers regarding their expectation from the Cigarette Companies. We also tried to collect the opinion of the non-smokers regarding their expectation from the Government to protect Smoking with the law. The study also interviewed marketing managers of varies Cigarette Companies to know the present and past numbers of Cigarette in Dhaka. The study also analyzes strength, weakness, opportunity and threat. Time period of the study is July 26 to July 31.
BBC News Africa Public Smoking Banned in Uganda
Kahinda Otafiire said smoking in restaurants, educational institutions and bars would now be an offence.
Offenders will be fined between $10 and $50 if arrested by policemen who have been instructed to enforce the law.
But the BBC correspondent in Kampala says the smoking ban has not been gazette so it remains unclear quite how rigorously it will be enforced.
Dangerous Product
Mr. Otafiire said the cabinet and parliament are backing the ban.
A spokesman of Environmental action network, (Tean) which works for tobacco control, Philip Karugaba said the minister was simply implementing a court decision passed in December 2002.
Mr Karugaba said the ministry was instructed to prohibit smoking in public places after a court ruled that the habit was dangerous to the health of Ugandans.
“We are absolutely delighted, just as we have rules on how we should drive we must have rules about smoking because its a dangerous product,” he told the BBC.
It is unclear whether Ugandans will abide by the minister’s announcement, but it is bound to raise concern among tobacco farmers in North-West Uganda.
BBC NEWS AFRICA (Tanzania)
(Tanzania bans public smoking)
By Premy Kibanga
BBC, Dar es Salaam
Smokers in Tanzania cannot light up in public places
Smoking in public places has been banned in Tanzania under a new law that came into effect on 1 July.
Under the Tobacco Products (regulation) Act 2003 it is illegal to smoke inside public transport, hospitals, schools and many other public places.
Tobacco is a major foreign exchange earner and tobacco-growers have condemned the law.
It is also an offence to sell tobacco products to persons under the age of 18.
The government has called for the setting up of special smoking areas at places of work.
Tobacco advertising on radio, TV and in newspapers has also been prohibited.
The government will issue guidelines on sites where tobacco advertising can be placed.
A statement by the country’s health ministry said the aim of the Act is to reduce the use of tobacco products in the country in order to reduce the occurrence of diseases that are brought about by smoking.
Non-Smokers
The new law will also protect non-smokers and educate smokers on the importance of quitting smoking.
Advertising of tobacco products on radio, television and in newspapers is prohibited
This, the government says, will help to “create an environment that will help to make the society a non-smoking one”.
From 1 July, cigarettes manufactured in and outside the country will have to adhere to international standards and will have to carry a warning in both English and Kiswahili on the negative effects of cigarette smoking.
The bill was passed by parliament in February.
President Benjamin Mkapa signed it into law in April.
Caution
MPs from the tobacco growing regions cautioned the government against passing the law, expressing fears that the ruling party might lose votes from tobacco farmers in the 2005 general election.
However, the Minister for Industry and Trade, Dr Juma Ngasongwa, says the effects will only be temporary and that the country has to look at the issue from all angles.
“After all the ban is a universal issue and people will get used to it”.
“We are not worried at all,” Dr Ngasongwa said.
BBC News Europe
(Italian police implement anti-smoking law)
Police in Italy have been carrying out spot checks to enforce a newly introduced law banning smoking in public places, including bars and restaurants.
Dedicated police squads have issued hundreds of fines to smokers.
Under the new law, which came into force this year, offenders face fines up to $250.
They could be fined twice as much if they smoked in the presence of a pregnant woman or a child.
Restaurant owners and bars face a $3,000 fine if they fail to enforce the new law.
Thousands of deaths in Italy each year are blamed on smoking. A BBC correspondent in Italy says the real test of the new law will be once the initial police operation is over.
Government commits to smoke-free province
(Newfound and Labrador)
A complete ban on smoking in all indoor public places and workplaces, including bars and bingo halls, will become a reality, announced Health and Community Services Minister John Ottenheimer today in a ministerial statement to the House of Assembly.
“The time has come to launch a more aggressive attack against tobacco use in our province – the leading cause of preventable illness and death,” said Minister Ottenheimer. “Our government is committed to shutting the last door on second-hand smoke and endorse a smoking ban in bars and bingo halls, the last remaining indoor public smoking places.”
Minister Ottenheimer confirmed government’s intention to proceed with legislation as early as spring 2005 to create a 100 per cent smoke-free environment in all indoor public places and workplaces, following province-wide consultations set to begin this January. The consultations will assist government in determining target dates for implementation and allow individuals and organizations to offer their perspective and provide input on the best approach to achieve our goal.
“Clearly we are moving forward with a smoking ban and the public consultations will allow individuals and organizations to give us input as to how best to achieve a smoke-free environment,” added Minister Ottenheimer.
Newfoundland and Labrador Medical Association President Dr. Andrew Major congratulated the provincial government on moving forward with a total ban on smoking in all public places. “Tobacco is the most significant public health issue facing our population today. Implementing a complete ban on smoking in all public places and workplaces demonstrates government’s commitment to protecting the health of Newfoundlanders and Labradorians. The physicians of the province commend Minister Ottenheimer for his leadership on the issue and we look forward to the implementation of 100 per cent smoke-free public and workplaces at the earliest possible date.”
Kevin Coady, Executive Director of the Newfoundland and Labrador Alliance for the Control of Tobacco (ACT), is delighted with news of the impending legislation. “ACT and its partners have been anxiously awaiting legislation that will fully protect all people from the devastating effects of second-hand smoke. We are looking forward to working with the Department of Health and Community Services to ensure a speedy implementation of this legislation.”
In Newfoundland and Labrador, 112 deaths will be attributed to the effects of second-hand smoke this year. Annually, second-hand smoke exposure results in an estimated 784 hospitalizations, 8,400 hospital days and $11.9 million expenditures in our health care system.
As part of a growing trend across the country to move toward a healthier, smoke-free environment, Newfoundland and Labrador is the second province this fall to commit to further smoke-free legislation. Provincial jurisdictions including New Brunswick, Saskatchewan, Manitoba and the Northwest Territories have adopted provincial smoking bans.
Media contact: Carolyn Chaplin, Health and Community Services, (709) 729-1377 or (709) 682-5093
A copy of Minister Ottenheimer’s complete ministerial statement follows:
The following statement was issued today by John Ottenheimer, Minister of Health and Community Services. It was also read in the House of Assembly:
More than 45,000 people will die prematurely this year in Canada due to tobacco use and at least 1,000 of them will be non-smokers exposed to second-hand smoke. This year in our province, 112 deaths will be attributed to the effects of second-hand smoke. This year, second-hand smoke will result in 784 hospitalizations and cost our health care system $11.9 million.
In 1994, through the Smoke-Free Environment Act, smoking was banned in public places such as day cares, schools, hospitals and recreational facilities. Incremental progress has been made since 1994 to expand our smoke-free spaces to include restaurants, shopping malls and libraries, to name a few.
A decade later, the time has come to launch a more aggressive attack on the fight against tobacco and preventable illness. This fall, organizations such as the Newfoundland and Labrador Medical Association, Newfoundland Federation of Municipalities, Alliance for the Control of Tobacco and the provincial Cancer Society, have all said the time has come for a smoke-free province. Municipalities including the cities of St. John’s and Mount Pearl and other municipalities in the North East Avalon have also endorsed the move to ban smoking in the last remaining public smoking places – bars and bingo halls. In addition, we have heard from over 120 private citizens in support of a smoke-free province.
Your government has heard you and has listened. Today, I am announcing our government’s commitment to “Shutting the Last Door on Second-Hand Smoke.” Our government is moving forward with a smoking ban in bars and bingo halls and will introduce legislation to create a 100 per cent smoke-free province in all indoor public places and workplaces, as early as spring 2005, following province-wide consultations. Beginning in January, these consultations will allow individuals and organizations to offer their perspective and provide input on the best approach to achieve our goal. Consultations will also assist government in determining target dates for implementation.
As a result of further smoke-free legislation, we hope to continuously improve the health and wellness of the people in our province, and offer more protection for our hospitality workers who are routinely exposed to the harmful effects of second-hand smoke.
It is my hope that all members of the house will endorse the leadership government has demonstrated today and work with us toward a healthier, smoke-free Newfoundland and Labrador.
BBC News Jerusalem
Following a growing European trend, lawmakers passed a bill banning smoking in most public places in this Baltic state, a health ministry official said Friday.
The law takes effect in January 2006 but will only be enforced starting in July in order to give businesses time to prepare for it.
The law, which was passed in a 70-1 vote with six abstentions, bans smoking in front of office buildings and in most public places. Smokers will still be allowed to light up in restaurants and bars but only in areas closed off from nonsmoking areas.
Smoking will be banned in single-room establishments.
“We wanted a total ban in restaurants and bars to protect those who work there but this is a step forward in protecting our people,” a health ministry spokeswoman, Zaiga Barvida, told the AP.
Ireland was the first country to outlaw smoking in enclosed workplaces, modeling its move on similar measures enforced in California and New York City as well as more than a dozen other US states and cities.
Since then, other European countries like Sweden, Norway, and Italy have passed similar laws.
India banned smoking in all public places as of April 30, while New Zealand passed a ban that went into effect late last year.
Bhutan
(Becomes First Nation to ban Tobacco Sales)
16 November 2004 – The Himalayan kingdom of Bhutan will become the first country in the world to ban tobacco sales nationwide starting in a month, official media reported.
The country’s trade and industry ministry issued a notification giving shops, hotels, restaurants and bars until December 17 to dispose of tobacco stocks, the kuenselonline.com Website said on Monday.
The notice extends to the capital Thimphu a ban on tobacco sales that was enforced in most of the country since summer.
Bhutan’s national assembly voted in July to ban tobacco sales nationwide and levy a 100 percent tax on any tobacco products brought into the country for personal consumption.
Cities such as New York ban smoking in public places and several countries including India ban tobacco advertising.
Bhutan, a Mahayana Bhuddist nation of 734,000 nestled between India and China, proclaims a development goal of ”gross national hapiness”. It is the first nation to ban tobacco sales outright, according to the website of the anti-smoking group, Action on Smoking and Health.
An Indian cigarette maker said the ban on tobacco sales was too severe and that Indian cigarette companies would see lower sales as most of Bhutan’s trade is with its southern neighbor.
“The question is one of personal choice,” said J.P. Khetan, managing director of one of India’s largest cigarette makers GTC. ”It is not fair. Whether it be of tobacco or something else. If I want to smoke I should be allowed to smoke. The government can take whatever safeguards need to be taken such as on health.”
Anyone caught selling tobacco in Bhutan after the December deadline faces a 225 dollar fine, a hefty sum in a country where the poverty line is set at about an income of 16 dollars a month.
Smoke free Environments (Enhanced Protection) Amendment Bill (New Zealand)
The Smoke free Environments Amendment Bill was passed by the New Zealand Parliament on 3 December 2003, by 68 votes to 52. It was signed into law by Governor-General Dame Sylvia Cartwright on 9 December 2003.
Under the Smoke free Environments Amendment Act 2003 all workplaces including bars, cafes, casinos, restaurants, factories and schools will become smoke free on 9 December 2004.
From January 2004, schools and early childhood centers will become 100 per cent smoke free, both inside and outdoors, 24 hours a day, seven days a week. Childhood centers that are on non-exclusive premises, such as crèches in university grounds or playgroups using a church hall, are required to be smoke free when and where young children are present.
The new Act introduces stricter regulations relating to the sale and supply of tobacco products and the provision of consumer information and warnings on the health effects of tobacco products.
The Parliament vote was:
Labor, Progressives and the Greens: all in favour, Act: all opposed.
Independent Donna Atwater Huata: opposed.
National: opposed except for Paul Hutchison and Lynda Scott.
NZ First: opposed except for Pita Paraone.
United Future: opposed except for Judy Turner and Murray Smith.
A description of the new law with implementation dates is provided on the National Drug Policy
Summary of NZ Drug Foundation position
The NZ Drug Foundation presented its submission on the Bill and SOP to the Health Select Committee on 2 October 2002. The Foundation’s submission is posted on this website (see section NZDF Releases and Submissions). A brief summary of the Foundation’s position is outlines below.
Smoke-free workplaces
The Smoke Free Environment Act (1990) established the right of office workers to work in a smoke-free workplace. However, the Act does not extend the same rights to blue-collar or hospitality workers.
Second-hand smoke is a significant hazard in the workplace, responsible for an estimated 145 deaths a year.(1) Hospitality workers are particularly at risk because of the high levels of second-hand smoke they are exposed to. More than 6,000 bar and restaurant staff in New Zealand are at risk of premature death and disease because of exposure to workplace smoke.(2) These workers may be exposed to as much as six times more tobacco smoke than office staff.(3)
The Foundation would like to see smoking restrictions that already apply to offices extended to include hospitality venues and enclosed shared workplaces in the blue-collar sector.
In line with this, the Foundation supports a smoking ban in bars, casinos and all clubs, including chartered clubs, RSAs and sports clubs. Evidence suggests that ventilation is not a viable alternative to banning smoking in hospitality venues. A panel of ventilation experts, brought together by the US Occupational Safety and Health Administration (OSHA) in 1998, found no evidence to suggest that there was any ventilation system available that could adequately or practicably control second-hand smoke in hospitality venues.
Smoke-free schools
Many schools already operate smoke-free policies. The Foundation would like to see a total ban on smoking in schools and school grounds as was proposed in the original Smoke-free (Enhanced Protection) Amendment Bill. This recognises the important role model staff provide to children. It would send a strong message to children and adults about smoking and support smoke-free messages being taught to children.
Restricting young people’s access to tobacco
While it has become increasingly difficult for underage smokers to buy cigarettes, the impact on prevalence of smoking amongst this group has been limited. Instead, under age smokers have increasingly obtained cigarettes from older friends, siblings and family.(5)
Unlike for alcohol, supplying tobacco to a minor is not illegal. The Foundation would like to see the same restrictions on supplying alcohol to minors applied to tobacco.
The offence of selling tobacco to minors also needs to be taken more seriously. The number of minors buying cigarettes from dairies and supermarkets has decreased but sales to minors from takeaway shops, vending machines and tobacconists have increased.(5) According to the MOH, more than 160 retailers had been convicted of selling tobacco to people under 18 by the end of February 2001. The maximum fine that may be imposed for this is $2,000. However, most fines were less than $500 plus court costs. In one case, a retailer convicted of selling to minors for the third time received a fine of only $600 plus court costs.(4)
The Foundation thinks retailers should be required to sight proof-of-age ID before selling tobacco products to young people. Self-service vending machines for tobacco products should be banned.
Restricting promotion of tobacco products
The current law bans tobacco advertising at point of sale. In May 2001, the Ministry of Health reported that large displays of cigarettes and tobacco at point of sale had increased in the previous 2 years. Such displays effectively circumvent the law and indicate the need for stricter controls on the display of tobacco products.
Ideally this would involve banning the display of tobacco products in shops, other than tobacconists’ shops, so that retailers would only be allowed to display a list of the products available and their prices. This would avoid any promotion of tobacco products at points of sale and discourage impulse buying.
Dedicated tobacco tax
An issue not addressed in the Bill and SOP but that the Foundation thinks is important is tobacco taxation. Tax increases are an extremely effective means of reducing tobacco consumption. This was seen here when a 20 per cent rise in the price of cigarettes in May 2000 (14 per cent due to tax increases) was associated with an 18 per cent decrease in tobacco consumption.(6) The Foundation believes that tobacco taxes would be even more effective if a mechanism was established to ensure tobacco tax income was dedicated to tobacco control work. Such a mechanism already exists for alcohol.
This could be used to directly fund tobacco control programmes, including health promotion to prevent smoking and cessation programmes. It is particularly important to fund cessation programmes which reach low-income earners to offset the economic burden on this group. According to the HFA, “Health sector funding from tobacco tax occurs in at least five countries including seven US states and three Australian states (Laugesen 1997). The experience of California is that tobacco tax funded initiatives can contribute to significant improvements in tobacco control and reductions in smoking prevalence”
What is a cigarette? Not all cigarettes are the same. Smokers around the world prefer a range of tastes and strengths from their cigarettes.
Tobacco
The tobacco in a cigarette often contains a selection of different types of tobacco from different countries, blended for aroma, taste and character to meet smokers’ taste preferences. There are three main types of tobacco used in cigarettes – Virginia or Flue-cured, Burley and Oriental. Smokers’ preferences vary considerably around the world. For example, in the UK most people prefer cigarettes with mainly Virginia tobaccos, while in the US most people prefer American-blended styles that include Virginia, Burley and Oriental tobaccos.
Cigarettepaper
Cigarette paper is specially made, and influences how the ash holds together and how much air enters through the paper, thus diluting the smoke. Choosing papers of different porosity (the ability to let air through) can help in the design of low tar yielding cigarettes.
Filter
Filters are designed to reduce the amount of smoke reaching the smoker. Most are made from a textile fibre – cellulose. It has no taste, and is firm enough to hold its shape. Along with other design elements such as ventilation, different filters can result in different yields of tar and nicotine, resulting in different strengths of the taste of the smoke.
Ventilation
A cigarette can be ventilated to dilute the smoke, which in turn reduces delivery of tar, nicotine and carbon monoxide. All cigarettes are ventilated through the paper, through which air can penetrate, and many are also ventilated through small air holes on the filter tip. When a smoker inhales, air is drawn in through these small holes, and mixes with air drawn in through the lit end, diluting the smoke. Filter ventilation can be an important feature of lower tar cigarettes.
Smoke
Cigarette smoke is probably one of the world’s most complex mixtures and one that has been extensively studied. Like any natural substance, tobacco contains thousands of different constituents (approximately 2,500 have been identified in tobacco). Approximately 4,000 constituents are formed when the tobacco burns, at varying temperatures with varying concentrations of oxygen. Many of these are found in very low concentrations.
‘Mainstream’ smoke is the smoke taken into the mouth when the smoker ‘puffs’, and ‘side stream’ smoke is the smoke that comes off the lit end of the cigarette.
The complexity of cigarette smoke is among the difficulties that researchers have come across while trying to determine which of the constituents are related to various health effects associated with smoking.
Consumer Information
We believe consumers are entitled to have relevant information about the tobacco products available to them, including information about product-related health risks, and the steps people can take to minimise them. For tobacco, we believe national governments should play a central role in determining and providing such information, while tobacco companies should assist governments by providing relevant information and reinforcing government messages through health warnings on all packs and advertising.
We believe national governments have an important responsibility to communicate accurate information to the public about tobacco-related issues.
As well as stressing the health risks associated with smoking, we believe these communications should:
• Emphasise that youth should not consume tobacco products;
• Remind tobacco retailers of their responsibility not to sell or otherwise distribute tobacco products to anyone other than an adult;
• Provide advice and encouragement on quitting;
• Encourage moderation among those adults who choose not to quit.
In our view, tar deliveries are useful consumer information in relation to taste, as are brand descriptors such as ‘lights or ‘ultra-lights’. We do not make health claims about lower tar cigarettes, though science suggests they should present reduced risks, provided the way people smoke remains constant when they switch from higher to lower tar yielding cigarettes. There is more information on this topic in the Smoking and Health section.
We think internationally recognized standards – such as those developed by ISO (the International Organization for Standardization) – should be used for consistent measurement of tar and nicotine yields. Where governments have an alternative view, we believe they should also express that view, and the scientific rationale, clearly.
Standards of Business Conduct
Our Standards of Business Conduct form an integral part of the Group’s corporate governance and, together with the Statement of Business Principles, continue to underpin our commitment to high standards of corporate responsibility.
For many years, our Standards of Business Conduct have set out key expectations for British American Tobacco Group companies and employees worldwide. The Standards require all staff to operate to high standards of business integrity, to comply with laws and regulations wherever our companies operate, and to ensure that our Standards are never compromised for the sake of results.
Each operating company in the Group is expected to adopt the Standards or its own local standards reflecting them. All employees are expected to follow the Standards or the local standards adopted by the Group company for which they work. No manager has the authority to order or approve any action contrary to the Standards and penalties for not following them may include termination of employment.
While the Standards have been written for British American Tobacco Group companies and their employees, in response to stakeholder interest in dialogue, we are happy to publish them externally to continue promoting dialogue between our companies and their stakeholders on good corporate conduct.
About Smocking
At British American Tobacco, we have long accepted that smoking is risky. Our business is not about persuading people to smoke; it is about offering quality brands to adults who have already taken the decision to smoke. We strongly believe that smoking should only be for adults who are aware of the risks.
In a nutshell, our view on smoking is this:
British American Tobacco companies produce fine quality products that provide pleasure to many millions of adult smokers around the world. Along with the pleasures of cigarette smoking come real risks of serious diseases such as lung cancer, respiratory disease and heart disease. We also recognise that, for many people, it is difficult to quit smoking.
Put simply, smoking is a cause of certain diseases. This has been the working hypothesis of much of our product modification research, has been believed by smokers for decades and is the most appropriate viewpoint for consumers and public health authorities.
The risks associated with smoking are primarily defined by epidemiological (population statistical) studies that show that groups of lifetime smokers have far higher incidence of certain diseases than comparable groups of non-smokers. These risks tend to be greater in groups that start smoking younger, smoke for longer, smoke more cigarettes per day and, to some extent, smoke high tar cigarettes compared to those who consume less tar. The statistics, however, do not tell us whether a particular individual smoker will avoid an associated disease by smoking less or smoking lower tar cigarettes. Moreover, all smoking behaviors are associated with some risk, and the only way to be sure to avoid a smoking-related risk is not to smoke.
Environmental Tobacco Smocking
There are claims that environmental tobacco smoke (ETS), sometimes called ‘passive smoking’, is a cause of various diseases. We believe, however, the claim that ETS exposure has been shown to be a cause of chronic disease is not supported by the science that has developed over the past 20 years or so. In our view, it has not been established that ETS exposure genuinely increases the risk of non smokers developing lung cancer, heart disease or chronic obstructive pulmonary disease.
What is ETS?
Technically, it is an ‘aged’, diluted mixture of sidestream smoke (from smouldering cigarettes) and exhaled mainstream smoke (from smokers puffing).
The WHO study
The largest study on ETS and lung cancer, undertaken by the World Health Organisation (WHO), found no meaningful increase in lung cancer risk for growing up, living, working, travelling or socialising with a smoker. The WHO claimed this study was consistent with an increased risk from passive smoking, a claim that is hard to make on the basis of their research findings.
A very large new study of thousands of Californian adults, published in May 2003 in the British Medical Journal, has found no increases in risk between environmental tobacco smoke exposure at home and the diseases of lung cancer, coronary heart disease and chronic obstructive pulmonary disease.
The United States’ Environmental Protection Agency declared in a 1993 report that ETS was a cause of lung cancer in non-smokers, but this finding was heavily criticised by the US Congressional Research Services and by a US federal judge who declared the finding invalid.
Science, of course, cannot definitively prove there is no risk associated with passive smoking.The studies on lung cancer to date, however, do not demonstrate that ETS is a cause of lung cancer and to the extent that these studies are used to suggest that there is a risk of lung cancer from ETS exposure, it is too small to measure with any certainty.
Major studies
The most substantial sources of data on ETS and heart disease are two huge databases of the American Cancer Society’s Cancer Prevention Study, and the database of the US National Mortality Followback Survey. Analyses of these have reported no overall association between ETS and heart disease.
Epidemiological studies on ETS and respiratory disease in adults, taken overall, do not show an increase in risk. Clinical studies with adults suffering, for example, from asthma have had difficulty in prompting a measurable response, though clearly some asthmatics do have adverse reactions to smoky environments.
Quite a large number of studies report a statistically significant increase in respiratory symptoms in pre-school children exposed to ETS at home. Other studies have suggested a relationship between parental smoking and sudden infant death syndrome. Whether or not passive smoking plays a causal role in this, we believe it makes sense not to smoke around infants and young children, especially in poorly ventilated environments. We also believe smokers should be considerate towards people who suffer from respiratory problems such as asthma, and who may regard themselves as particularly sensitive to ETS.
Tomorrow’s Company
There is an emerging view that companies can express performance and long term sustainability in terms of economic, social and environmental indicators, reflecting what is sometimes called the ‘triple bottom line’. As a 1995 report, Tomorrow’s Company, by the UK’s Royal Society of Arts, Manufactures and Commerce (RSA) said: “Those companies which will sustain competitive success in the future are those which focus less exclusively on shareholders and on financial measures of success – and include all their stakeholder relationships, and a broader range of measurements, in the way they think and talk about their purpose and performance.”
Financial
Announcing the 2004 results, Chairman, Jan du Plessis commented: “2004 has been a good year for the Group, with all regions apart from America-Pacific achieving organic growth at comparable rates of exchange. This demonstrates the fundamental strength provided by British American Tobacco’s successful strategy and geographical diversity.”
The Investor Centre section of our site has a comprehensive review of the Group’s financial performance including our results for 2004, detailed spreadsheets with regional breakdowns and a five year profit and loss summary.
2004 at a glance
Gross turnover £34,255 million
Net revenue £12,410 million
Operating profit pre exceptionals £2,830 million
Pre-tax profit £1,886 million
Adjusted earnings per share 75.83p
Profit after tax £1,224 million
Dividends per share 41.90p
Global cigarette volumes 853 billion
Environment
We report annually on Group Environment, Health and Safety performance, on the basis of reviews across all our operations. Overall performance is progressing positively, and we are committed to continuous improvement.
In the 2004 Business in the Environment annual Index of Corporate Environmental Engagement, widely recognised as the UK’s leading benchmark of corporate environmental engagement and performance, British American Tobacco was ranked 26th out of the 168 companies participating.
Social
Societal expectations of multinational companies are continuously changing. Today, companies are being asked to be more transparent and accountable to society about all aspects of their business.
Our products pose risks to health and our industry can be seen as controversial. We believe that if a business is managing such products, it is all the more important it does so responsibly and demonstrates how it is doing so.
We are committed to an ongoing process of stakeholder dialogue and social reporting. This process enables companies to listen and respond to the reasonable demands of stakeholders, and enables them objectively and openly to demonstrate progress in their performance against accepted standards of corporate social responsibility. On a similar model to financial accounting, it includes stakeholder dialogue, internal audit and external verification, and public reports to accepted standards of accountability. A range of expert external organizations are guiding us. Visit Social Report 2004/05 to find out more.
Where we are going
British American Tobacco has grown significantly over the last decade, delivering to its shareholders a total return that has outstripped the FTSE 100 over the last one, five and ten year periods.
Chief Executive Paul Adams leads the Group in its strategy of pursuing industry leadership in order to build long term shareholder value – a strategy based on growth, productivity, responsibility and a winning organisation.
“In the five years to end 2004, we have delivered total shareholder return of 29 per cent per annum average, compared to minus 3 per cent for the FTSE 100 as a whole. It’s been a great performance for our shareholders, for our consumers in terms of enhanced choice of high quality brands, and for our employees in terms of growth and morale.”
— Paul Adams, Chief Executive, British American Tobacco.
How do you define leadership of the industry?
For us, it means leadership in two ways: quantitative leadership in terms of sheer numbers and qualitative leadership in meeting stakeholders’ expectations of how a responsible tobacco company should be run in the 21st century. We are pursuing sustainable profit growth, achieved by balancing revenue growth, productivity and responsibility. We won’t compromise one of these for the others. So while we are certainly pursuing leadership, it’s not ‘leadership at any cost’.
We have worked hard at defining what corporate responsibility now means for a business like ours – one where the products are legal, enjoyed by about a billion adults, yet pose risks to health. We are working to live by the high standards we set for ourselves and which we openly publish. Stakeholder dialogue is giving us new and better ways to engage and listen, and our stakeholders internationally tell us we’re on the right path.
How do you feel the Group is doing on achieving quantitative leadership?
Our most recent results give a pretty good snapshot. 2004 saw all regions apart from America-Pacific achieving organic growth at comparable rates of exchange. Pre-tax profit was up 20 per cent and diluted adjusted earnings per share, perhaps the best indicator of how the business is performing, grew 10% to 75.8p.
The combination of the US businesses of Brown & Williamson and R.J. Reynolds and the formation of Reynolds American was a landmark event for the Group. It gives us 42 per cent of a stronger and more sustainable US business with an enhanced brand portfolio and a much more competitive foothold in the world’s most profitable cigarette market. Integrating the business we bought in Italy has gone very well, with profit ahead of expectations and market share above 30 per cent.
In 2004, Group volumes were up 8 per cent at 853 billion, mainly as a result of acquisitions and the Reynolds American transaction. Our global drive brands, Dunhill, Kent, Lucky Strike and Pall Mall, grew by 2 per cent overall. Kent in particular grew 10 per cent, in its fifth consecutive year of organic volume growth, to a new record high of 33 billion and Pall Mall gained significant share across all regions, making it even stronger globally.
In 2004, some of the markets where our drive brands were relatively strong did decline. Dunhill and Lucky Strike were affected by markets where steep excise increases reduced overall industry volumes, for example Dunhill in Malaysia. But volume declines in Germany, France, Canada and Japan were offset by strong volume performances, for example, in Russia, India and Pakistan.
So while 2004 was not all plain sailing, it showed the fundamental strength of our strategy and geographical diversity.
Does China still interest British American Tobacco?
Yes. China accounts for a third of the global market for tobacco products, and international companies currently have very little share in it. Many of our brands – notably StateExpress 555 – are already understood there. Our discussions there continue.
What’s your view on tax increases, given that they’ve affected volumes in some markets?
We are particularly active as a Group in working with governments to address illicit trade. We believe it’s vital that governments maintain workable tax regimes that don’t create the conditions where illicit trade flourishes. Big volumes of contraband and counterfeit tobacco brands are moving around the world. Governments need to be highly aware of this – and that it could go on growing. They need to have effective legislation and strong border controls, but they also need to ensure that tobacco tax regimes are workable and avoid unintended negative consequences.
As in all other areas relevant to our business, we stand ready to support governments in achieving a ‘win win’, and many of our companies are doing just that. As just one example, British American Tobacco Nigeria won an award last year for its support to Nigerian Customs and was cited in the recent Commission for Africa Report as a positive corporate example in helping to stamp out illicit trade.
Why is productivity important in the business strategy?
Productivity helps us to use cash and all our other resources more effectively. It’s about being smart with money and how we spend it. By working this – and we have some interesting scope for it – we will release funds to invest in our brands and secure earnings growth.
Productivity can also be a ‘win-win’ for our suppliers and for the trade who are our customers. To manage our supply chain efficiently, we have to be responsive to our suppliers and our customers, so they benefit too.
We have begun buying more efficiently, leveraging our presence across many sites or countries to achieve economies of scale. We have continued to meet the commitment we made two years ago to reduce overheads and indirect costs by £200 million a year by 2007. We saved £64 million in 2003 and a further £89 million in 2004, and have now raised our five year target on overheads and indirects to £320 million a year by the end of 2007.
To grow your business, don’t you need to persuade more people to smoke?
No, we don’t. This is an accusation made by some anti-smoking campaigners, but it misunderstands the dynamics of our business. Our business is about offering a choice of quality brands to adult smokers, not promoting smoking.
You can see the dynamic in the figures. In the last decade, we have grown our world wide market share by 50 per cent and have more than doubled our operating profit. Yet in the same decade, the total global volume of cigarettes sold has been nearly static. We certainly don’t need the overall world market to grow to grow our business, our brands and our profitability.
Our business is about growing our share of the market, and our profitability within that share. It’s not about growing overall consumption. We are confident that with our brands, and with our ability to run our business efficiently and responsibly, we can go on meeting consumers’ preferences better than our competitors and delivering sustainable shareholder value.
You do business in a lot of emerging markets. Is this because fewer people now smoke in the ‘developed’ world?
Emerging markets represent opportunities for us because, as an economy develops, its consumers become more interested in ‘trading up’ to international and premium brands of all the goods they buy. Quality tobacco brands like ours are one category of all those goods.
It’s sometimes forgotten that in these markets, millions of people already chose to smoke for decades or indeed hundreds of years before we were able to enter and offer our brands. Nearly a third of all the world’s cigarettes are smoked in China, for example, and there are millions of smokers in India and Eastern Europe. People smoked for generations in Russia or Japan before we entered those markets in the 1990s. Being able to enter markets is about changes to trading conditions or trade barriers ending, and we are interested in going where good markets exist.
In short, people don’t suddenly start smoking because our brands are on offer, competing with other brands that have been available for years. There is high awareness all over the world that smoking poses risks to health, and people in emerging markets are just as capable of informed choices as people elsewhere. We market only to adults who choose to smoke wherever we do business and we put a health warning on every pack we sell throughout the world.
Is your drive for growth compatible with responsibility?
Some of this stems from concerns about the pace of globalisation, some of it from well-publicised failures of corporate governance and accountability to shareholders. People are also becoming less willing to take things on trust and more questioning of traditional ‘authorities’ and ‘experts’.
But that’s the world where we work and compete. We must respond to it – and a tobacco Group, given the nature of its products, has all the more need to demonstrate that it is managing its business responsibly. All large multinational businesses face some barriers to trust today, and we face more than most. We are working to understand and meet stakeholders’ reasonable expectations, including for openness and accountability.
Social reporting based on dialogue has helped us to engage with stakeholders in a more fresh and direct way. In working to embed the principles of corporate social responsibility throughout the Group, my message is that CSR is for all our companies, whether or not they are producing Social Reports.
We believe that our focus on responsibility, as part of the mainstream business agenda, is helping us to create sustainable shareholder value. Visitors here on bat.com can read more about our approach, our Statement of Business Principles and our Standards of Business Conduct, including in our Social Report. I hope they will, and we always welcome views and comments through ‘Contact Us’.
What does a winning organization look like?
To me, it means two things: having outstanding leaders and British American Tobacco being a great place to work. It means an environment that makes people feel good about where they work, the quality of the people they’re working with, and the business they’re in.
If you have the right organization and the right values, culture and motivation, it makes a huge difference to performance.
You say overall consumption is nearly static. Does that mean the business is static?
For me, the most exciting thing is the way that British American Tobacco has rediscovered its ambition and confidence in the last decade. We are innovating everywhere – in brands, costs, productivity, planning, corporate responsibility, everything. I love the creativity of our people and their willingness to drive change.
This business is truly fast moving and highly competitive. It’s a stimulating place to be, and I’m proud of the talent, energy and responsiveness that have delivered our excellent results for the last five years and that offer us a great deal more to play for.
Can people quit smocking?
We accept the common understanding today that smoking is addictive. Certainly smoking is pleasurable and smokers can find it hard to quit even though they know that smoking brings a real risk of serious disease. People realise, as they should, that someone who starts smoking may find it difficult to quit.
It has been known for centuries that smoking may be difficult to quit. Public health authorities have reached differing conclusions in the past, but most now describe cigarette smoking as an addiction.
However, we believe it is also important that smokers who decide to quit realise they can, provided they have the motivation to quit and believe that they can. Millions of smokers have quit without any medical help, and millions have modified how often, where and when they smoke in the light of differing social norms. In some countries, such as the UK, there are now almost as many ex-smokers as smokers.
A variety of ways have been suggested to help people quit, including the use of nicotine replacement therapy (using patches and gums). Most people believe, however, that the most important factors in quitting successfully are having the motivation to quit and the self-belief that you can do so.
Health Risk of Smocking
British American Tobacco recognises that along with the pleasures of smoking there are real risks of serious diseases such as lung cancer, respiratory disease and heart disease. We also recognise that for many people, smoking is difficult to quit.
In the most simple and commonly understood sense, smoking is a cause of certain diseases. This has long been the working hypothesis of much of our research, has been believed by smokers for decades, and is the most appropriate viewpoint for smokers and public health authorities.
Studies
Our views on the health risks are largely driven by the epidemiological studies. Epidemiology is a statistically based science, dealing with risks among large groups of people, rather than with individuals. Through questionnaires and observations of people, epidemiological studies can identify the incidence of disease in a given group, such as smokers, and compare it with the incidence in another group, such as non-smokers.
Over many years, epidemiological studies have reported a much higher incidence of certain diseases among smokers compared with non-smokers.
Traditionally, epidemiology has been used to identify associations that point to possible causes of a disease, providing direction for thorough laboratory investigations. With smoking, the many laboratory investigations over the years have proved more problematic, and science has not to date been able to identify biological mechanisms which can explain with certainty the statistical findings linking smoking and certain diseases, nor has science been able to clarify the role of particular smoke constituents in these disease processes. Science is still to determine which smokers will get a smoking related disease and which will not. Nor can science tell whether any individual became ill solely because they smoked. This is, in part, because all of the diseases that have been associated with smoking also occur in life-long non-smokers.
The lack of complete understanding at a biological level of the disease mechanisms and role of particular smoke constituents creates uncertainty for efforts to design less risky cigarettes.
Since the initial epidemiological studies were published in the 1950s and 60s, the working hypothesis for British American Tobacco’s own scientific research has been that there is a link between smoking and certain diseases, and our scientific research has focused on attempts to assess and make potentially less hazardous products. Given that these statistics show the greatest risk in groups that smoke heavily for many years, a sensible hypothesis has been that the less smoke that someone takes over a lifetime, the less the risk. This in cigarette design terms suggests that lower tar cigarettes should be seriously considered as having a role in reducing risks.
Competitive Analysis
Marketing Highlights: The Competitors
Through effective planning among competitive marketing strategies, the organization needs to have knowledge about the products of their competitors. At first, it has to identify its actual and potential competitors. Presently, “Goldleaf” is the highest produced cigarette of Bangladesh. But in order to maintain its leading position in the market, it has to focus on the competitors of “Benson & Hedge” are “555” and “Castle”. “Navy” is now at the leading position, “Benson & Hedges” is at the second place, while “555” is at the third position.
Product Overview of Cigarette:
Now a comparative study among different cigarette is given below:
In the marketing strategy, price is one of the important factors.
Current sales in Dhaka City:
(Survey among 25 Retailers)
Number of Retailers
Interviewed Purchaser of Goldleaf (Average)
(Packet) Purchaser of 555
(Average) (Per Shop)
Purchaser of Benson
(Average)
(Per Shop) Purchaser of Castle
(Average)
(Per Shop) Purchaser of Navy
(Average)
(Per Shop) Purchaser of Rothmans
(Average)
(Per Shop)
25 250 75 200 50 150 35
Sources: Opinion Servey
Current sales in Dhaka City (Per Day):
Name of Cigarette Numbers of sale of Cigarette in packet (Before Govt. New Law) Numbers of sale of
Cigarette in packet (After Govt. New Law)
Benson 350000 (App) 345000 (App)
555 250000 (App) 235000 (App)
Rothmans 25000 (App) 20000 (App)
Goldleaf 600000 (App) 620000 (App)
Castle 25000 (App) 23000 (App)
Navy 50000 (App) 47000 (App)
Legend 15000 (App) 12000 (App)
Sunmoon 15000 (App) 14000 (App)
Source: After collecting data from 25 Retailers, this chart is make (Appromaxly).
From the aforesaid table, the study observes that “Goldleaf” has the highest sales among other cigarette in Dhaka City.
Analysis of some Smokers Psychology
Smokers are the main focus of the Cigarette industry in the today’s competitive market. Sound marketing requires careful analysis of the smokers. In case of “Goldleaf”, we have known from the retailers that 60% of the total Smokers of Dhaka City take “Goldleaf”. Before regulating Government new regulation about Smoking, Cigarette companies marketing strategies was different from now. They need to develop their appropriate marketing strategies for Cigarette, the management of the company has to know the actual number of smokers as well as prospective smokers before and after Government new regulation. To sustain in the competitive advantage position the management of the Cigarette companies has to research and develop strategic marketing on the basis of all categories of smoker’s opinion.
