Consumers’ Perception on Product Quality and Brand Dilution on Various Segments of Tobacco Industry in Bangladesh - an Empirical Study to Identify the Scope of Improvement for Batb

Topics: Brand, Branding, Brand management Pages: 21 (5866 words) Published: November 1, 2010


Now a day’s quality of the products is the primary concern for the customers. Customers value their money and always prefer the quality product. Tobacco industry is a potential industry and its growth is also related with national GDP. About one percent of our GDP is used in consumption of tobacco product that’s why it becomes a huge market for the competitors of tobacco industry. As the cigarette is both competitive and controversial product so marketing of this product is very difficult. There are many tobacco companies in Bangladesh. Among them British American Tobacco Bangladesh (BATB) is a pioneer and leading multinational cigarette manufacturer followed by local manufacturer Dhaka tobacco. This paper tried to find out the relation with quality and brand dilution and brand dilution occurs broadly in FMCG industry. Brand dilution is the weakening of a brand though its overuse. This frequently happens as a result of ill-judged brand extension. Price cutting that increases sales volumes but moves a brand down-market can be similarly damage a brand. Brand dilution is an ever present risk for companies that rely on a strong brand for high margins. A company that owns a strong brand obviously wants to leverage it to sell as much as possible, but the very strategies used to purse this end often also brings the danger of brand dilution. However, there are three customers segments in tobacco industry. These are premium, medium and lower class group but brand dilution mostly takes place in the lower segments which is again the source of gaining maximum revenue. Customers perceive smoking as a matter of their social status. So packaging and other criteria like quality is very important for a customer. BATB ensure quality product as well as always trying to improve the quality. Various segment of the market perceive the quality of a product differently. So in response, BATB has changed the blend of tobacco. In this process they launch various products to various segments. This brands causes brand dilution. Brand dilution also occurs when companies introduce new brand to eliminate rivals product. So it is an effective way to take control over the market. Therefore this research paper will help cigarette industry and policy makers to find out the future of tobacco industry in the context of brand dilution

Keywords: Consumers perception, Brand dilution, Brand switching, Product quality Customers segments and Brand extension.

Tobacco has been smoked for at least the last three thousand years.  Christopher Columbus found it when he landed in the Americas in 1492, but ancient temple carvings show tobacco being smoked in Central America as long ago as 1,000 BC.

Ever since it arrived in Europe in the late 15th century, tobacco has divided opinion, sparked controversy and generated substantial revenue through tax.  Not long after it reached Europe, it was being described in terms ranging from “vile custom of manifold abuses” and “feast for the fiend” to “the divine herb” and “cornucopia of all earthly pleasure”.

Tracking its heritage back to a joint venture formed by the Imperial Tobacco Company of the United Kingdom and the American Tobacco Company of the USA in 1902, today’s British American Tobacco (a pioneer and leading multinational cigarette manufacturer) was born on the world stage. British American Tobacco Bangladesh (BATB) is the number one tobacco company in tobacco industry of Bangladesh which was incorporated in 1972 under the Company Act 1913:7. It is the part of BAT Global that currently holds second position in the world in terms of volume share. In Indian sub-continent it has been dominating as the unique market leader for nearly a century. It was only possible because of its effective practices...

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