Market Research on Cigarettes in Azerbaijan Republic, Baku City

                      Budapest Business School

Market research on cigarettes in Azerbaijan Republic, Baku city

                                                                         By:  Mikayil Isgandarov

                                                                                  Ramiz Akhundov

                          Table of Contents

  Introduction

1. Market segmentation

1. Definition of segmentation

1. Segmentation of cigarette market

2. Commercial specification 

   2. 1 Characteristics of cigarettes

1. The substances contained in tobacco smoke

3 .The concept of price and pricing

 
    3.1 Price positioning of cigarettes

    3.2 The lifecycle of product on the market

4. History of cigarettes

5. Survey

   5.1 The structure of the questionnaire for market research on cigarette market

   5.2 The results of survey on cigarette market in Azerbaijan Republic, Baku

Conclusion

List of references

Introduction

Marketing is a system management of the supply and research activities of the enterprise, the enterprise aimed at achieving the set sales target by selling consumer goods or services that best meets the needs of the consumer.

The purpose of the report is analyzing cigarette market in Baku city, considering the collected and calculated data.

The aim of the report: segmentation of cigarette market, characteristics of product, research on pricing on the cigarette market, lifecycle of product on the market. Conducting a study on the basis of a questionnaire, identification of trends in demand, recommendations on the results of the survey.

1. Market segmentation

1. Definition of segmentation

Segmentation allows to refine, differentiate and structuring demand, to identify the most suitable conditions (border areas of action) to select the optimal variant of strategy and marketing tactics. The segment of the market is the set of consumers, in the same manner responsive to the promised properties of the goods (services) in the incentive marketing stimulus. Market segments are differed depending on the type of consumers, distinctions in consuming characteristics, behaviour and thinking.

Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle.

Four basic factors that affect market segmentation are:

• clear identification of the segment
• measurability of its effective size
• its accessibility through promotional efforts
• Its appropriateness to the policies and resources of the company

The four basic market segmentation-strategies are based on

• Behavioural
• Demographic
• Psychographic
• Geographical differences

1. Segmentation of cigarette market

                                                 Cigarettes vary in strength (nicotine and tar content per cigarette) and tastes (regular, flavored, menthol cigarettes).

 Strong ones are usually distributed in red packs. The light ones traditionally have blue packs or similar shades. Ultra-light cigarettes mostly have grey or white colour. Menthol cigarettes contain special chemical additives that give the cigarette menthol taste. They usually have green designed packs.

Basically, all the cigarettes have the same type but different sorts ( except menthol ones). They contain the same type of tobacco and differ just because of the number of holes in the filter through which additional air is sucked. The more holes the filter has,  the “lighter” it is cause their effect is based on the fact that by using an additional air the concentration of nicotine and tar can be reduced. Moreover, like the other products, cigarettes have price segmentation:

First class (premium)

Middle class

Economy class

1. Commercial specification

1. 1 Characteristics of cigarettes

A cigarette is a small cylinder of finely cut tobacco leaves rolled in thin paper for smoking. The cigarette is ignited at one end causing the cigarette to smoulder and allowing smoke to be inhaled from the other end, which is held in or to the mouth; in some cases, a cigarette holder may be used, as well. Most modern manufactured cigarettes are filtered, and also include reconstituted tobacco and other additives. I

Cigarettes are the best-selling products in the world, and tobacco production is the most profitable in the world.

There is a filter at the end of a cigarette which partly protects the body of smoker person from moisture, tar, nicotine, smoke and other contaminants. Mostly, it is made of secondary acetate cellulose. To improve the effect of filter tobacco factories they increase it length, reducing the diameter of yarns and add some extra material activated coal which delays significant portion of carbon monoxide, hydrogen cyanide and benzene. Moreover, recent studies depicts that green tea in cigarette`s filter almost completely reduce the harmful effect of nicotine.

In order to improve the taste of cigarette, filters sometimes are made with aromatic additives. Cigarettes of different brands have different tastes and different strength. These properties depend on many factors-grades and ratio of various tobaccos, flavors and sauces, filter quality, the packing density of the air permeability of the cigarette paper.

   2.2 The substances contained in tobacco smoke[pic 1]

The average cigarette smoke consists of 12000 different chemical compounds. 196 of them are poisonous and 14 are addictive substances. Acetaldehyde occurs during the combustion of sugar and it is addictive like nicotine.