Electronic Cigarettes In The News

Big Tobacco Falters, Hooray for the Little Guy

They say that “Variety is the spice of life.”, and it would appear that electronic cigarette users wholeheartedly agree with this sentiment. It is also becoming apparent that, in the vaping world, big bucks are not necessarily a formula for big success.

Americas' top two tobacco companies, Altria Group Inc. (Marlboro) and Reynolds American Inc. (Camel); have decided it is time for them to make a big push into the electronic cigarette market. These two firms, that collectively control over 75% of the traditional cigarette market, in the United States, may not be, as The Wall Street Journal aptly stated “fishing in the right pond with the proper bait”

E-cigarettes are Not Traditional Tobacco

They seem to be trying to make the market fit their business model, which is; create a demand exclusive to them. Then expand that market through advertisement, make it easily available, using their masses of cash and the virtual lock they enjoy on the large retail and convenience store outlet systems.

While this system may have worked, with traditional tobacco products, where you are pretty much limited to the options of Full Flavour, Lights, Menthol, and Menthol Lights, with only slight variations from brand to brand; it is not playing out so well for electronic cigarettes.

Freedom is the Key

What Big Tobacco is failing to realise is that, one of the key factors that lead people to use an electronic cigarette, is the freedom to choose from not only a wide variety of easily customised e-cig designs, but also from a mind boggling array of flavours.

While the exact number is unknown, The Smoke-Free Alternatives Trade Association estimates that in the U.S. alone, there are now over 8000 different flavours of e-liquid or e-juice available, to users of refillable electronic cigarettes. That is a monstrous number of options and doesn't take into account those who custom blend and make their own unique flavours and recipes!

In contrast; with Big Tobaccos e-cigs each company has a proprietary system. This means you buy their electronic cigarette, and then you must buy their cartridges, and theirs alone, to continue using it. Their system simply can’t compete with the freedom that refillable e-cigs offer.

Dollars Are Not Buying Success

The results of traditional tobaccos short sightedness, is that they are failing in their attempts to infiltrate and dominate the electronic cigarette market.

Despite advertising budgets, that are averaging 150 million U.S. dollars per company, Big Tobacco’s market share is slowly dwindling, with Altria Group Inc. and Reynolds American Inc. each seeing their, electronic cigarette market shares, shrinking by 14% and 11% respectively this year.

The money they are spending on marketing is doing its job, but for the wrong businesses. They are in essence leading people away from their bread and butter product lines only to lose them to the bistro down the street.

Little Guys Rule

What the big companies have failed to realise is; that by concentrating their sales efforts toward their traditional customers, and competing with their own products in their traditional manner, they are actually building a customer base for their competition.

Their simple products, being primarily sold through the large outlet and convenience stores make wonderful introductory products, for those interested in trying electronic cigarettes. The problem is people quickly outgrow these offerings, and move on to the more sophisticated and cost effective products that are found in the new high street vape shops and in online vape stores such as Exhale. 

Big companies are designed to provide volume, not variety. That is the purview of the little guy. The small business owner can more easily read the market in his own neighbourhood and react to it. This does, and always will, give him the advantage over any large corporation in a variety driven market.

Hooray for the little guy!