With the launch of Basic last summer, Philip Morris became the second major manufacturer to introduce a new cigarette brand into Britain’s post-tobacco advertising ban dark market.
Not an easy task by any means with the cigarette sector already known as a notoriously difficult market to break into.
On top of this, the newcomer ran into trouble before it even hit shelves as it failed to secure the collaboration of its usual UK distributor, Imperial Tobacco.
As a result, the cigarette and tobacco giant has been handling its own distribution for the brand.
So far the product has clocked up sales of £2.7m [ACNielsen MAT August 6, 2005], a figure with which the company seems pleased. “The reaction so far has been extremely encouraging,” said UK trade marketing manager Clare Walker. Still, there is plenty of room for improvement with Basic having only achieved distribution in 7% of all possible outlets.
Available in packs of 10 (rsp: £2.00) and £3.89 price-marked packs of 20, Basic was launched into the already-congested budget sector and has been positioned as a high-quality cigarette at a low price.
Reaction from buyers has been mixed and the jury is still out.
“Any launch by a company as big as Philip Morris must be taken seriously although it is obviously very difficult to launch a new brand in a dark market. As a budget brand, it may steal share from own label, but I am still not convinced it will work,” said Martin Swadling, category manager for licensed and tobacco, Musgrave Budgens Londis.
Hoping to extend the reach of this low-price range of cigarettes, Philip Morris recently launched a new Superkings version. Basic Superkings is available in 20s at the same price tag.
According to Philip Morris, super-low-price cigarettes account for nearly 40% of total cigarette sales, a 3.4% increase compared with last year.