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Marketing Research On Nicorette

Paper Type: Free Essay Subject: Marketing
Wordcount: 3025 words Published: 11th May 2017

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The objective of the project is to identify the reason why Nicorette, a Johnson Johnson product to help smokers and tobacco users with their addiction problems has only limited success in India. We aim to analyse the current competitive position and competitive advantage of nicorette and with the analysis aim to develop a new marketing strategy which will reposition Nicorette and establish Nicorette as a market leader with increased market penetration. Our initial analysis shows huge potential for Nicorette and we aim to capitalize on the huge untapped market. In this report we have done an STP analysis and also identified the potential market size. We have used the tools taught in our Marketing Management course to conduct the market research and identify the segment, target and positioning of the product

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Current standing of Anti Tobacco products

The tobacco industry is one of the largest contributors to the national economy and our literature study shows that its products are used by more than 35% of the adults. The strength of adult tobacco users is around 279 million of which 72 million are in urban areas on which this tobacco cessation thrives. Of the smokers 33 million people make an attempt to quit smoking ever year. The distribution of quitters is evenly spread across males and females but the number of female smokers is very small compared to the number of male smokers. Around 28 million people in urban areas wish to quit. Most of them are educated and employed in private or government sector.

There are lot cessation methods available in the country namely counselling, nicotine replacement therapy, prescription medicine like bupropion, other medicine streams like Ayurveda, homeopathy etc., quit smoking helpline and smokeless tobacco. Counselling and pharmacotherapy has a very small share of this market in India. Most of smoke quitters about 25% use methods like smokeless tobacco and traditional medicine. But if we look at the educational and occupational profile of these people we find that 13.4% of them are educated at secondary education and above. Among students 19.6% of students use pharmacotherapy and private and government employee add another 8% to it. We see that there is a huge potential for Johnson & Johnson, Pfizer, Cipla and Birlaveda with their products like Nicotex, Nicorette, Champix and Quitobac. Nicorette is the most prominent brand in this segment. There is a huge potential for multinational drug companies to leverage their brand to promote pharmacotherapy and capture this market.

2.0 Initial market Research

2.0.1 Key findings from our primary research

89% of the smokers surveyed were men

Almost 58 of smokers surveyed were in the age group of 20-30

There is high awareness about tobacco consumption related issues, 95% people surveyed

Were aware of at least one harmful effect of tobacco consumption

The smoking habit is analysed and we find that 65 % of the smokers prefer medium nicotine content cigarettes

Around 34% of the smokers would definitely want to quit smoking

Around 52% of smokers would quit smoking if they found a good substitute

51% of smokers smoke to gain sensory pleasure while another 31% smoke to reduce stress and improve performance

Health concern ranks highest among the reason for quitting, if they plan to quit

Awareness of nicotine replacement methods is also very high, brand of nicorette is also readily recognizable

The highest proportion of smokers who would want to quit smoking if there is a substitute is in the age group of 30-45

The highest proportion of potential quitters, smoke the medium nicotine content, while high nicotine content users do not want to quit

around 62.5 % of people who want to quit smoking are aware of nicotine gums

2.0.2 Key findings from IDI (In depth Interviews) of people who want to quit smoking, who are aware of nicorette but are still not using them.

Out of the 5 people interviewed, all 5 of them said that the taste of nicorette is very bad and so they do not buy that product

Second major factor for not purchasing nicorette was the non availability in small stores, people can buy cigarettes in any small pan shop but nicorette is not readily available

Third visibility of nicorette is very low in the shops. They don’t see nicorette in kirana shops

Price of nicorette is not high, for the OTC product so price is not a major concern

2.0.3 Overall conclusion from Primary Research

We need to target the urban male population in the age group of 20-45, who smoke medium nicotine content cigarettes and other tobacco products.

Price has to be within Rs. 20- Rs.30 for the OTC products

There has to be significant improvement in the taste, as people are aware of nicorette but do not consume it due to bad taste

The visibility of nicorette has to increase and sales must be provided to small kirana shops as well

Health is the primary concern of the smokers who want to quit, nicotine must position itself as a healthy product which can help people quit smoking

Significant market is available for nicorette , as large percentage of smokers want to quit or may quit if they find better substitutes

2.0.3 Some statistical Analysis

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Segmentation, Targeting and Positioning

Segmentation

Psychographic segmentation: Nicorette uses motivation as one of the driving force for people who are addicted to smoking (or consuming tobacco), are aware of the health hazards and want to quit. It feeds on the same urge that a customer gets when he sees a Health warning on the packet of a cigarette.

Lifestyle Segmentation: Smoking for some of the heavy smokers is close to an addiction while for some a way to fit in with their peers. People who are heavily addicted consume cigarettes after each and every activity they do in a day. This often impacts their effectiveness and efficiency at the workplace. The older age group of smokers also feel guilty of passing on the habit to their children who generally copy their parents when they grow up. Hence using Nicorette serves multiple purposes here.

Demographic segmentation: Very interesting data is available for consumption behavior of youths(15-24) and elderly(35-40) as far as cigarette and smoking in rural and urban India is concerned. In the beginning, Nicorette as a brand targeted the youth but they later realized that older smokers are more aware of the physical, mental and social implications of smoking and would be more inclined to quit.

Need segmentation: The consumer base of a product relate to specific need fulfilments provided by the product. In case of Nicorette a primary need is to get rid of an unhealthy habit. People also relate to removal of social stigma associated with smoking as smoking in itself is injurious for people alongside the smoker as well. It fulfils a need to reduce craving for smoking at workplaces, public places like movie theatre, in the train or on a plane. It also targets the customer in the non-ambulatory health condition as in case of pregnant women where cigarette smoking may be harmful for the newly born.

Usage Rate Segmentation: We have seen that Nicorette is launched to target two sub-segments in the customer segment. They are the heavy users and the light users. The product also recognizes sub-segments like potential users, former users and the first time users. We have one packet containing 4 gums of 2mg for light users as an OTC product and another packet containing 10 gums for heavy users available through a prescription of the Registered medical practitioners.

TARGETING

35 percent of adults in India use tobacco (cigarettes included) and 80 to 85 percent of them are daily users. One surprising fact is that out of the 279 million consumers, 216 millions are rural people. Consumption was found to be more for people who were less educated (89% for consumers with less than primary education) with more than 10% people smoking daily (12 cigarettes a day) and with 24% people smoking more than 10 cigarettes a day. It’s also quite interesting to find that 39% people initiate smoking around the age group 20 to 24, and hence can be identified as an important target group for Nicorette.

The quit ratio is 13% implying that one out of every eight person quits smoking. There is not much relation of quitting to residence and education of the customer. Students on the other hand had very low quit ratio of around 6 percent. This number increases to 27% for retired persons. Out of the total population of people who attempted to quit 38% were male and 39% resided in urban India. The willingness to quit is also presented by 49% of the consumers in 15-24 years age group which is much higher than 37- 38% of their older counterparts. South India emerged as the region which presented the highest quitting zeal.

The percent of consumers planning or thinking about quitting smoking within 12 months (12%) and number of people interested (21%) provides a great opportunity for brands like Nicorette to excel in India. Rural India showing increasing trends towards consumption of cigarettes with average monthly expenditure nearing 350 per month(urban 470 per month) also represent a prospective market in the future.

Primary target market

While the entire population of India that smokes can be a potential market, the primary target market which we are focusing on comprises of all consumers who show a willingness to quit smoking. This group comprises of former users , new users, occasional users and daily users. The age demographics of the group which we have identified is between 20 to 45 years of age. We are also limiting our target initially to the urban middle and upper class since the prduct has been most successful in this segment in other global markets. Further, we want to price Nicorette at a slight premium, taking into account that our research indicates that price is not a major factor for such consumers.

Secondary Target market

The secondary market segment would include smokers who want a nicotine replacement product while in public places. These are all those people who wish to improve their efficiency at their workplace or get acceptability in the society. They may be corporate employees who find themselves stuck at their desk most of the time or frequent travellers in flights, trains and buses. Another secondary market is the youth where the product can challenge the loss of stamina that happens with the use of cigarettes or the type of diseases it may cause.

The product should also be targeting customer base like that of Innovators present at the higher resource end of the customer base. These are the people who are viewed as learned and are susceptible to use products which act as differentiators in their community. They like trying new things and are easily approachable. Promotion for the same on internet, social media sites and magazines are the principal ways of targeting them.

Positioning

The focus segment in our market will be the people who wish to quit smoking. Though the product can be used as a short term substitute by some segments as a lifestyle product to substitute smoking as it saves time and smoking is not allowed in work places but demand from such sections does not seem to be large and is intermittent. Instead those who have committed to quit smoking have strong motivational factors like improving one’s own health or that of family members. These people have realized the cons of smoking and urge to quit is as strong as the urge to smoke. Often they are low on confidence as they now consider one of their habits as an evil and seek alternatives to quit in desperation. But, at the same time we will not want to project this condition as a medical illness. On the other hand, pharmacotherapy brands them as ill and so there has been a decline in the percentage of smokers pursuing pharmacotherapy (only 4%), with more and more people opting for counseling.

The existing alternatives in the market are:

Counselling (9%)

Traditional medicines like Ayurveda, homeopathy

Prescribed medication like Bupropion

Other nicotine replacement therapies like Nicotine patches, lozenges etc

Positioning as a consumer brand hence serves the customer well rather than as a pharmaceutical brand. It is recommended that the brand be positioned as a friend or an ally to whom the customer can approach to suppress his cravings to smoke. Further, the product must be positioned as an aid which will reinforce their will to quit smoking.

Transcripts and Raw data

Survey data

Link for survey

4.0.2 In depth Interviews

Profile of the interviewee

Interviewee 1 is a student at IIM Bangalore and smokes on an average close to 15 cigarettes per day.

Question 1: Do you think that you have a smoking addiction and do you realize the health implications?

Interviewee 1: Yes, But I have tried to quit and have not been able to do it. I have quit for a week or two but again start it over. Yeah…. I would like to quit if it’s possible but its not easy.

Question 2: Do you think that your attitudes towards smoking have changed at all over time? If yes, in what ways? Why do you think this has happened?

Interviewee 1: Yes, I used to smoke only 2-3 initially when I was in IIT Kanpur, now I smoke more. There is no specific reason for it, it just happened.

Question 3: You said you wish to quit smoking? If so, what things have helped you to decide that you don’t want to smoke?

Interviewee 1: Its becoming an addiction, it’s a costly habit. I find it difficult to climb three floors..hahahaha…Plus I know its not a good habit as far as health is concerned so I want to quit.

Question 4: Are you aware of any methods that aid you to quit smoking? If so, how much do you think that the method is relevant to you?

Interviewee 1: Yes, I know some medicinal options to quit , plus you need to quit with your will power ..which I do not possess hahahahha

Question 5: Are you aware of the product nicorette? Have you tried this? If yes, how did you like this product?

Interviewee 1: Yes, I know nicorette, the green packet thing right. I tried it once it has horrible taste, I never tried it after that, so I don’t know if its effective.

Profile of the Interviewee 2

Interviewee 2 is a student at IIM Bangalore. She smokes on an average close to 10 cigarettes per day.

Question 1: Do you think that you have a smoking addiction and do you realize the health implications?

Interviewee 2: Yes I am aware of the consequences of smoking 10 cigarettes a day.

Question 2: Do you think that your attitudes towards smoking have changed at all over time? If yes, in what ways? Why do you think this has happened?

Interviewee 2: I believe I started smoking more ever since coming to IIMB. While I smoked around 3-4 cigarettes a day in Delhi, my smoking has increased due to the stress I face here.

Question 3: You said you wish to quit smoking? If so, what things have helped you to decide that you don’t want to smoke?

Interviewee 2: Mostly health concerns. I know it’s not a good habit.

Question 4: Are you aware of any methods that aid you to quit smoking? If so, how much do you think that the method is relevant to you?

Interviewee 2: I am aware of nicotine replacement products like chewing gums and patches. However, I am not sure I need a product. I think it’s just about making up my mind and sticking to a decision to not smoke,

Question 5: Are you aware of the product nicorette? Have you tried this? If yes, how did you like this product?

Interviewee 2: Yes, I am aware of Nicorette. I did try it, but I hated the taste. I don’t think I can use it in place of a cigarette.

Interviewee 3: Mr. Ashwin Asokan

Profile of the interviewee

Mr. Ashwin Asokan is a senior manager in a multinational company based out of Bangalore. Mr. Ashwin Asokan doesn’t keep count of the number of cigarettes he smokes. But roughly he says it’s around 2 packs of 10 cigarettes.

Question 1: Do you think that you have a smoking addiction and do you realize the health implications?

Mr. Ashwin Asokan: I know that I smoke a lot and I am starting to realize some of the ill effects in terms of physical fitness.

Question 2: Is there any change in your attitude towards smoking over time? If yes, in what ways? Why do you think this has happened?

Mr. Ashwin Asokan: I started smoking in college just because it was pure fun. But over time I feel that cigarettes help me with a clear mind. Nowadays, whenever I am tensed I feel the urge to smoke.

Question 3: Do you wish to quit smoking? If so, what things have helped you to decide that you don’t want to smoke?

Mr. Ashwin Asokan: I do wish to quit smoking provided I can find an alternative method to help in my thinking process during crunch situations.

Question 4: Are you aware of any methods that aid you to quit smoking? If so, how much do you think that the method is relevant to you?

Mr. Ashwin Asokan: My family doctor suggested me to attend counselling with a specialist to refrain from this habit. But I don’t think I can find time for such activities.

Question 5: Are you aware of the product nicorette? Have you tried this? If yes, how did you like this product?

Mr. Ashwin Asokan: One of my colleagues here suggested me this product. I did like this product but it doesn’t last long as I had to spit it out immediately as the taste becomes horrible once I start chewing it.

 

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