Marketing Assignment Assessing Product Sustainability of sustainability of British American Tobacco

Question

Task: MARKETING ASSIGNMENT TASK
Imagine you have just been hired in your dream marketing job. You have been assigned to analyse a conventional product in your portfolio, analyse its sustainability and provide recommendations on how to make the product more sustainable.
You may choose any product, but have a good think about the product bearing in mind the elements listed below. Some interesting areas for sustainability include fashion, transport, and fast-moving consumer goods (FMCGs).
Make sure you address the following elements in your analysis:
1. Provide a brief background on the product and its industry/sector. What is the function of the product What is the industry worth ($) Is there any relevant history of the product and its design Are there many manufacturers/competitors Who is your customer(s)
2. Critically evaluate the main environmental and social impacts associated with the product life cycle. Make sure to draw (whether by hand or software) your product lifecycle. What are the important steps and stakeholders in the production and consumption process, and the connections between them In your written text, you could reflect - Does the price reflect the cost of the product How is the product promoted What are the environmental and social impacts related to production and consumption These issues maybe related to the 17 Sustainable Development Goals or elements in Doughnut Economics.
3. Provide at least two detailed recommendations about how to make the product more sustainable. Some starting questions you may want to think about. What happens at the end of the products useful life What needs to change to the product to make it more sustainable What could make the product cradle to cradle Perhaps it's reused in a Product-Service-System, or remanufactured through a company take back program.
4. Writing style, visuals and language. Make sure your report looks professional and has appropriate writing style. The writing style is professional in nature – use the third person throughout the report. Watch your grammar and spelling, and make sure to use APA referencing. Proof read carefully - professional presentation is important. Use of tables and figures is allowed (i.e., could aid your recommendations section).

Answer

Introduction
The report on marketing assignment aims to assess the sustainability of the product and provide recommendations based on evaluating the product and its subsequent impact. For this purpose, the environmental and social impacts related to the product life cycle will be assessed. The recommendations rendered will help the business to shift towards more sustainable product life cycle that might make the product and the overall business perceived as useful.

Background of the product and its industry
British American Tobacco (BAT) is a multi-category consumer products organisation that sells products like tobacco, cigarettes and nicotine products. Cigarettes remain the core part of the business and the reason can be attributed to manifold smokers present globally despite knowing the related risks connected to smoking. At present, the portfolio of cigarette brands is accompanied by an increasing range of possibly reduced-risk products like tobacco heating products, vapour and modern oral products like nicotine pouches (bat.com, 2020). BAT also has many local and global brands that are not part of the strategic portfolio, however, are popular in the countries where they operate. Here are the basic functions of the products:

Figure 1: BAT products portfolio
Source: (BAT, 2020)

i) Industry value
BAT as of 2019 made revenue of £25,877 million. The global revenue of tobacco-based products accounts for US$805,885 million in 2020 (statista.com, 2020). The market is anticipated to increase yearly by 3% compounded annual growth rate (CAGR). Appendix 1 illustrates the revenue growth product-wise.

ii) Major competitors/ Manufacturers
There are major competitors for BAT’s products like Japan Tobacco, Imperial Brands, Altria and Philip Morris. Below is the illustration showing the major competitors for the product:

Figure 2: Competitor for BAT products
Source: (Craft, 2020)

iii) History of the product
The products targets all adult customers who are in the age group of 20 years and above. According to Peeters & Gilmore (2015, pp.182-183) in 2008 the BAT created an exclusive website to promote its research and development for its tobacco products. The company originated in 1902as a joint venture with the US-based company. This is a multinational organisation with its American subsidiary Brown and Williamson Tobacco company situations in the US. The cigarettes demand augmented during World War I and later that led to the heavy promotions of cigarettes globally and attaining a strong presence especially in China.

iv) Product design
The products are manufactured in high-quality factories that are strategically set-up using optimum efficiency and ensures the products are manufactured and distributed at the correct time. The production units manufacturing cigarettes and the sticks for the tobacco heating products are designed to meet the requirements of a flexible supply chain, thus, offering a world-class operations division that is suitable for the future scaling. The new categories of potentially reduced-risk products are manufactured in a combination of BAT and third party locations. The processed tobacco leaves arrive at the manufacturing plant and its initially checked for quality and then cautiously mixed with other tobacco and ingredients that the product recipe calls for like flavouring that equalises the taste. The moisture content is checked to see if it’s dry as the tobacco leaf will disintegrate and excess moisture may spoil during storage. The mixed tobacco is treated with the correct amount of steam and water to make it flexible and then is cut to appear like cigarettes. The entire process is automatic as the machine is set to handle different phases like cutting tobacco, cigarette papers and filters. Every cigarette is quality controlled to make sure it meets the specification. Packing machines pack them into accustomed brand packs, wrap in a protective film and categorise them into cartons and cases. Thus, every stage passes through strict testing and quality review and then distributed in the markets.

Evaluation of environmental and social impacts linked to the product life cycle
i) Product lifecycle
Below is the product lifecycle of cigarettes and its associated products:

Figure 3: Product lifecycle; Source: (Prepared by Author 2020)

Introduction stage–This is the stage where the cigarettes and various tobacco products are introduced in the market to consumers. This requires sufficient financial support in terms of marketing of the products. The growth is slow in this stage and consumers are not familiar with new brands. Thus, the demand is immature for BAT cigarettes at this phase.

Growth stage –The cigarette selling starts to pick-up momentum at this phase as it increases awareness about new product offerings with different flavours and also innovative products like nicotine. Thus, product development starts to mature in this stage. Maturity stage –The sales are at a peak and the demand is very strong for the products. The product starts to contend with other similar rival products where the prices may be cheaper. This makes the customer switch to alternate or demand for a price reduction of the present cigarette product being used.

Decline stage –Cigarettes especially manufactured by BAT has reached a saturation point in some markets and as a result, the sales start to decline. The company has to introduce more innovative products at this phase to retain its brand position.

ii) Important steps and stakeholders connect
The below table represents the important steps and the various stakeholders in the production and consumption state and the relevant link between them:

Table 1: Important steps and stakeholders connect
Source: (Prepared by Author 2020)

iii) Price replicate on the cost of the product
According to Cantrell, et.al. (2020, pp.86-87) when there is an increase in the federal taxes on cigarettes and related products this is passed on the end-consumers. Thus, premium brand smokers could shift to common cigarettes or they could buy cigarettes from lower-taxed sources. Pricing has been one of the most critical marketing strategies engaged by tobacco companies around the globe. Hence, the fluctuations in cigarette taxes and the price variations they encouraged were of substantialworry for the cigarette manufacturers.

iv) Product promotions
Most of the tobacco companies including BAT’s advertising and promotions influence young adults to start using tobacco. Adolescents exposed to such ads find them appealing and increases their desire to smoke. For example, BAT promotes Vype e-cigarettes through its social media handles like Instagram, Twitter and Facebook. The ads feature celebrities and social media influencers using the product. These mostly appeal to young customers by including travel, fashion, known films and celebrity endorsements. As stated by Cruz, et.al. (2019) advertising for e-cigarettes has increased severely across media channels with the highest expenses spent on magazines and television ads.

v) Environmental and social impacts related to production and consumption
Environmental effect - There is an enormous series of undesirable and environmental influences linked with all facets of cigarettes right from the initial stage of the life cycle until the final stage. During the raw material, stage land is cleared and deforested to make way for tobacco plantations. Moreover, the chemicals and fertilisers used in the tobacco crop can harm the land for a long period and a large quantity of water is used to grow the plants faster which is again a scarce resource in places like Africa and some parts of Asia. During the manufacturing stage of the product tends to causecontamination as a by-product of the machinery utilised. There are also adverse impacts for the wood pulp used in creating the filter and the seed flax used for forming paper. Environmental impacts of cigarettes are also seen when the product is used and at the end of its product life cycle (Zafeiridou, Hopkinson & Voulvoulis, (2018, p.8087). Lastly, poor discarding at the end of the product life cycle is a severe environmental worry due to fire perils.

Social effects –Inactive smoking is a noticeable concern disturbing those who are present around smokers as these people are prone to serious illness than active smokers. Despite British American Tobacco efforts to place itself as a thoughtful company is done to gain public attention for more positive initiatives and are concerned about increasing the revenue and profits of the business. Thus, both the impactsconflict with the sustainable development goal number 3 that promotes good health and wellbeing globally.

Recommendations
A gradual ban in phases – Sudden imposing of a ban on cigarettes could bring potential economic losses to the globe and also the employment of workers in the manufacturing plants will get impacted. Thus, a gradual transition over years is more apt. Limits on cigarette and tobacco products manufacturing are imaginably a better alternative course of action to ponder as a means of influencing the supply side of the economic balance. If such limits are gradually dropped it would permit for the agricultural and manufacturing segments to slowly familiarise to the change. Push notifications – Mobile applications can be installed in business phones that will send push notifications to users on their monthly consumption of cigarettes along with recommendations to quit smoking. Furthermore, it can give choices where the highest number of users who send butts for recycling can earn virtual points that can be redeemed at any retail stores or redistributed towards environment protection care centres or anti-smoking organisations.

Conclusion
Thus, it can be stated from the above findings that cigarettes although poses many safety and health issues globally and causes various environmental disturbance to land, forests, water, pollution and excess energy usage. The demand for cigarettes and tobacco products are ever on the rise. The main reason is due to people’s perception of cigarettes as a constant habit and stress relief factor increases sales. Although cigarette products have heavy competition in the market they are a source of revenue generator in the economy. Hence, it’s recommended that restrictions must be introduced in phases starting from manufacturing stage and push notifications must be sent to consumers about the number of cigarettes consumed in the month and also motivate them to dispose the butts wisely and earn points.

Mapping
Step 1: Identify the stages in your life cycle

Step 2 – Lifecycle mapping – Cigarettes

Step 3: Identifying key environmental impacts

Step 4: Developing strategies to reduce environmental impacts

Step 5 - Selecting most effective strategies Value versus Effort Grid - Cigarettes

Step 6: Developing SMART1 action plans

Step 7 – Implementation

Step 8: Evaluation and continuous improvement process

Total quality management (TQM) - The main aim of TQM is to focus on refining quality management and performance in all cigarette products manufactured to offer quality products and services that surpass customer expectations.

Just in time - This improves skill and lessens waste by procuring the right amount of raw materials for manufacturing cigarettes, thus keeping a control on the inventory levels. This will also be helping in reducing the storage spaces and requirement for large warehouses.

Kaizen–This will help to eliminate excess during the cigarette manufacturing by applying structured methods and actions. A software installation in the manufacturing unit will simplify the inventory management and complex labelling needs.

References
bat.com, (2020). British American Tobacco - Overview of our portfolio.
Retrieved 9 September 2020, from https://www.bat.com/group/sites/UK__9D Cantrell, J., Huang, J., Greenberg, M. S., Xiao, H., Hair, E. C., & Vallone, D. (2020). Impact of e-cigarette and cigarette prices on youth and young adult e-cigarette and cigarette behaviour: evidence from a national longitudinal cohort. Tobacco control, 29(4), 374-380. DOI: http://dx.doi.org/10.1136/tobaccocontrol-2018-054764

Cruz, T. B., McConnell, R., Low, B. W., Unger, J. B., Pentz, M. A., Urman, R., ... & Barrington-Trimis, J. L. (2019). Tobacco marketing and subsequent use of cigarettes, e-cigarettes, and hookah in adolescents. Marketing assignment Nicotine and Tobacco Research, 21(7), 926-932. DOI: https://doi.org/10.1093/ntr/nty107

Peeters, S., & Gilmore, A. B. (2015).
Understanding the emergence of the tobacco industry's use of the term tobacco harm reduction in order to inform public health policy. Tobacco control, 24(2), 182-189. DOI: 10.1136/tobaccocontrol-2013-051502 statista.com, (2020). Tobacco Products - worldwide. Retrieved 9 September 2020, from https://www.statista.com/outlook/50000000/100/tobacco-products/worldwide

Zafeiridou, M., Hopkinson, N. S., & Voulvoulis, N. (2018). Cigarette smoking: An assessment of tobacco’s global environmental footprint across its entire supply chain. Environmental science & technology, 52(15), 8087-8094. DOI:10.1021/acs.est.8b01533

Appendix
1. Revenue of Tobacco – Globally

Figure 2: Revenue growth by products Sou