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Marketing Plan: San Miguel Cigarettes

Overview of the Industry


With a smoking population of over 38 million strong (or 47% of the total Philippine population), the cigarette industry proves promising to enter into. Having one of the highest smoking prevalences among East Asia Pacific countries, the industry bears the contradiction of having a steeping demand despite an ever-emergent poverty crisis.
The Philippine cigarette industry has thus far experienced unprecedented growth; from 67,851.11 million sticks in 1997, the cigarette industry totaled 88,316.37 million sticks in 2003∗., accounting for an average annual growth rate of 4.57%. In 1998, tobacco imports accounted for $33,586,000 (or 4,693 metric tons) of total imports. Meanwhile, during the same year, $6,550,000 (or 1,392 metric tons) worth of tobacco was exported to over 60 countries worldwide.

Since the 1970s, annual cigarette consumption in the Philippines has been steadily increasing. However, per capita cigarette consumption has decreased due to a greater awareness of the health risks involved in smoking. Consumers are more informed of its harmful effects to the body and the environment and are exposed to a more regulated advertising campaign. Despite this, the popularity of cigarette smoking especially among adolescents as well as an ever-growing population have allowed annual cigarette consumption to steadily increase.


Competitive Analysis

Two main contenders dominate the Philippine cigarette industry: Fortune Tobacco Corporation and La Suerte Cigar and Cigarette Factory. They are the market leader and challenger respectively.

Fortune Tobacco Corporation
One of the largest non-monopoly cigarette companies in Southeast Asia, Fortune Tobacco Corporation (FTC) holds a high share of 67% of the local market, or in volume terms, over 50 billion cigarette sticks per year. FTC's fully integrated plants are equipped with the latest machines at par with international standards.
The...