Top Story


Home >> Marketing >> Article

Market Dynamics: Cigarette retailer as the new king

Font Size   16
Market Dynamics: Cigarette retailer as the new king

The war for cigarette marketing has been reduced to a three-by-two foot space. That’s the size of the board on which cigarette makers can advertise at retail outlets. With the advertising ban now in effect, cigarette retailers have lunged up the value chain, and are elevated to being the premium publicity battleground between cigarette makers.

Cigarette makers like Godfrey Phillips India (GPI) are rushing to forge exclusivity contracts with cigarette shops for better display of their products and fliers. Market leader ITC says it already has exclusivity arrangements and will work within this before it can come up with something new and innovative later. More goodwill strategies include both GPI and ITC shipping display boards to retailers which say that cigarettes will not be sold to people under 18.

For starters, ‘Cigarettes will not be sold to persons below 18 years of age, and the panwadis who violate this will be prosecuted’ (in Hindi). Now that would seem like just a clause from the Tobacco Bill. It is actually part of point-of-sale (PoS) material that cigarette companies like GPI are shipping out to retail outlets as a goodwill gesture. Though the Bill says that retailers are required to carry these statutory signs, it does not say that cigarette companies are required to supply these to retailers. GPI is supplying over four lakh retail outlets with the warning sign—the beginnings of the retailer’s new exalted status.

GPI senior vice-president (corporate affairs) Sundeep Kumar says the signs are “to help retailers comply with new government directives which require them to display such a sign.”

ITC senior executive vice-president K Vaidyanathan says, “We will supply such boards to our retailers. We will also advise them on these signs and help in translating exactly as per the government directive, so that they are not harassed.”

According to the government directive, cigarette companies are allowed to have two boards advertising their products at retail outlets and merchandising racks.

Another battleground is product packaging itself—another brand promotion gimmick to make cigarette packs visually attractive as well. GPI launched its flagship Red & White in new packaging a few months ago, while ITC introduced the ‘wave pack’ for certain Wills brands including Silk Cut recently. ITC’s premium Insignia brand also has a new pack and other products are being considered for new packaging.

Whisper Design, a Delhi-based design studio is in the final stages of negotiations with ITC for the latter’s dispensing and merchandising retail publicity. The firm’s managing director Niladri Mukherjee feels cigarette companies are still in the process of understanding what they can and cannot do under the ban and once they figure that out, there will be more clarity on the significance of design in retail publicity.

Considering that cigarette shops are the only place now left where cigarette companies can advertise their products, the fight for space is narrowed down considerably. ITC and Godfrey Phillips were the major point-of-sale advertisers even before the advertising ban came into effect.

GPI will also forge exclusivity contracts with retailers across the country for better display of its products and publicity boards than others.

“The retailer is now absolute king. We will also look at exclusivity contracts,” says Mr Kumar, “with as many retailers as possible.”

KSA Technopak chairman Arvind Singhal says, “Cigarette retailers tend to gain from other means of brand promotion — glow signs, cigarette shelves and even empty cartons supplied by cigarette companies.”

ITC’s Mr Vaidyanathan says the company already has exclusivity arrangements with retailers and will work within these parameters.

Either way, it’s time for retailers to live life kingsize.


Our typical marketing budget is usually 10 per cent of the topline spend

There are some forces impacting the way our business works. The IT/ITeS sector has changed tremendously. Platforms like Twitter have made everyone journalists. Smartphones have made everyone a photographer. The trend that we are seeing is one of hyperdigitalization, which is causing the lines between product and services to blur. For example, <a href=

The OOH sector is among the fastest growing, globally. Brands and marketers have realized its potential and impact and begun to craft medium-specific adverts. Self-regulation is not only necessary but also essential to growth of the sector. The industry needs to exercise a certain level of this self-restraint to prove its commitment to maintaining the best standards in advertising.

<b>Clients are looking for experiential solutions beyond radio or print: Abraham Thomas, Radio City 91.1 FM</b><br><br> From entering new markets to launching large format events, Radio City 91.1FM has been on a roll. The radio channel recently announced the launch of India’s biggest singing talent hunt-Radio City Super Singer Season 8. Earlier this year, the channel set up its own creative-cum...

Under the watchful eye of Walt Disney, Bindass undergoes brand repackaging with a fresh new show ‘Dil Buffering’ simulcast across its linear and social media platforms on September 29 and will launch...

Apart from the mandate for the first project which is the Ashiana Town in Bhiwadi, Tomorrow and InterTwined will deliver brand solutions across film, print, radio, outdoor and activation besides provi...

Despite advertising picking up after a slow Q1, regional FM players still feel that the lingering effect of GST, RERA, demonetisation will still make its impact felt during the upcoming festive quarte...