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Food and Drug Administration are cautious about the harmful effects of such devices on users’ health, e-cigarettes have a series of advantages compared to their conventional counterparts. 2. Compatibility Consumers who currently use an electronic cigarette may wonder which cartridges and parts from other companies will fit their model. This may be because their current supplier no longer stocks their model, or has gone out of business, or they just haven’t been happy with the service. Compatibility between e-cigarette models is not easy as there are many models, many names for each model and suppliers often change their product line.
The complete answer comes from the e-liquid. E- liquid can be used to refill almost any cartridge from any model. It is more difficult when using crematories (and not recommended as they are meant to be disposable) but any model where the atomized and the cartridge are separate pieces can be refilled with e-liquid. If consumers wonder about cartridge sizes, this is also difficult to answer due to the reasons stated above. However, each bottle of Instead E-Liquid comes with five empty cartridges.
If consumers are looking for e-liquid and new cartridges, sellers would probably recommend consumers to keep their old used aridest that the consumers know will fit. Then when consumers purchase a bottle of Instead E-Liquid, even if the seller’s cartridges don’t fit, the consumers can still use the e-liquid to refill their old cartridges. 3. Complexity The complexity of the electronic cigarettes is very little; it’s not an everyday product. 4. Traceability The traceability to the electronic cigarettes is either consumers are going to like the e Electronic cigarettes are experiencing a great boom at the moment.
Studies showed an estimated two million people in Germany have already turned to the vapor cigarette, which many view as a healthy alternative to conventional smoking. Although, a number of opinions, primarily from the political people, are in warning of possible health risks, claiming that the long-term consequences cannot yet be predicted. Studies to date have come to mixed conclusions. There is a general lack of demonstrated facts, increasing an ongoing battle between supporters and opponents.
By carrying out a new, independent study, researchers at the Forerunner Institute for Wood Research WOK in Bureaucracies hope to introduce a degree of neutrality into this emotional topic of debate. Many scientists’ goal at the institute was to find out whether e-cigarettes contaminate the surrounding air, thus affecting bystanders of an e-cigarette user. B. Major problems and resistances to product acceptance based on the preceding evaluation There are concerns about the exact benefits and potential harms of electronic cigarettes, secondhand smoke, and air quality.
Supporters see e-cigarettes as a safer alternative to traditional cigarettes, but non supporters question how safe they really are, both for users and people exposed to them as second-hand smoke. So far, electronic cigarettes have been manufactured and distributed without misunderstanding data, or proof that they are a bridge to quitting more toxic cigarettes. Also, many experts question the industry line that Just water vapor is released when users light up. Some researchers are concerned with the average being used in regards to the electronic cigarette.
Researchers have been examining the design, trustiness of labeling, nicotine content, whether the devices or cartridges leaked and looked for defective parts. They also have questioned the devices and how or when the components were disposed of at he end of their useful lives, whether any errors were made in filling orders, and the quality of the instruction manual and what claims were made while advertising, were also examined. One research team found numerous issues including lack of essential warnings, poor or confusing usage instructions and a lack of information about what exactly is contained in the e-cigarettes.
Samples Castro of the University of California Tobacco-Related Disease Research Program – which part-funded the study – confirmed that “virtually nothing is known about the toxicity of the vapors generated y these e-cigarettes. ” The research team also found numerous documents which made claims that could not be scientifically proven. The study concluded with the researchers stating that e-cigarettes present a health risk to users and are advising regulators to consider their removal from the market pending a rigid safety evaluation. Ill. The Market A. Describe the market(s) in which the product is to be sold 1 .
Geographical regions We had an idea about, there being a difference between Asian electronic cigarettes, European e-gigs and American e cigarettes or are they all the same thing. Is an Asian cigarettes better than an American e cigarettes or do the brands Just all get their product from China. Today, in America, electronic cigarettes are on the rise and brands are growing. In fact you can buy brands like Blue and Enjoy disposable e cigarettes in stores today. Recently we have even seen some TV commercials which have interesting marketing appeal for some electronic cigarettes.
While we were electronic cigarettes are like from other countries. When you think about cigarettes, French cigarettes, Canadian Cigarettes and American cigarettes all taste very different. In Asian cigarettes even have a charcoal filters. The construction of most electronic cigarettes that we have seen is pretty similar. There are disposable and rechargeable e cigarettes, some that look like real cigarettes and some that look like boxes or other smoking devices. From what we could find it seems like right now most e cigarettes are manufactured in China and refrained by the e cigarettes companies.
That is why you see so many electronic e cigarettes kits that look so similar, and they even have similar looking accessories. Without regulation there are not restrictions or rules on how e cigarettes are manufactured or where they come from. So it is really hard to tell what you are getting when you buy and electronic cigarette in spite of what brand you go with. 2. Forms of transportation and communication available in that (those) regions In Asia electronic cigarettes are available by being transported by air freight, sea freight, and or land transportation 3.
Consumer buying habits A. Product-use patterns The product use pattern of electronic cigarettes can be an everyday use to consumers that smoke every day. B. Product feature preferences Customers are looking for product features such as long lasting and more affordable long terms than a pack of cigarettes. Also customers are looking for something they can use indoors without the smell and breaking indoor smoking laws around the world. C. Shopping habits If consumers are interested in the electronic cigarettes they will buy the product more and more. 4. Distribution of the product a.
Typical retail outlets Drug stores and corner stores, grocery and retail. B. Product sales by other middlemen Online sales, convenient stores 5. Advertising and promotion a. Advertising media usually used to reach your target market(s) Online sales, convenient stores b. Sales promotions customarily used (sampling, coupons, etc) Using coupons to get Alfa off, when buying electronic cigarettes online 6. Pricing strategy a. Customary markups Customary markups of the e-cigarettes could be for consumers to have a good understanding of the market and its future.
We will make sure retailers will have a complete stock. Provide a competitive discount structure that grows. Also have direct, first-hand experience with the leading manufacturers in the industry. B. Types of discounts available The discounts we will have are buy one single electronic cigarette and get a pack for half off. Also we will sell the cartridges for each e-cigarette for two dollars, if you buy pack. B. Compare and contrast your product and the competition products The Vietnam the black market; however the product is not fully legal in Vietnam.
The state does not allow the sale or distribution of electronic cigarettes in Vietnam but they are ways around the law. We like to think of this market as similar to the US market for “legal” marijuana sold in smoke shops. The government isn’t able to regulate the sale and distribution of electronic cigarettes via internet. The United States, Canada, and the United Kingdom have all Joined forces with China to sell and distribute the product in Vietnam. ) Competitor’s Products One of the competitors, Moored, is a company based in Gudgeon, China which was founded in 2010.
The name of the actual distribution company and factory is Sheehan Moronic Technology Company; Moored is Just the name of the product. This Chinese company not only handles distribution of electronic cigarettes in Vietnam but the whole world! Their main markets are North America, which account for about 55% of their sales, Europe, which account for 31%, South America, which account for 6%, Middle East, which account for 5%, and South Asia, which accounts for only 3% of their distribution and sales. The company is about 91-100% exports to these markets.
The Moored includes the actual electronic cigarette, a battery, wall adapter, USB charger, and an instruction manual. 2) Competitor’s Prices The price of the electronic cigarette is between VEND 1 million and VEND 1. 9 million which is equivalent to $47-$90 in US dollars. Some companies have electronic cigarettes for sale for as low as VEND 400,000 which is equivalent to around $19 in US dollars. The products have the same cheap quality but the different prices reflect the number of puffs and the quality of the battery and the number of batteries included.
The Moored has 800 puffs and has a battery life of xx. The package also includes a gift box, case, and plaster packaging around the actual products. Our company is selling the cigarettes for 13. 99 US dollars and VEND 295,470. Our company decided to use the unbinding tactic to cut some of the costs. The charger and cartridges are sold separately at VEND 23,500 or 1. 15 US dollars. The price of packaging was 5 US dollars as we did not use the plaster packaging around the product and gift boxes and cases were not included. Being a new product, we want our price to be our sales pitch. Competitor’s Promotion and Advertising Methods The marketing and advertising methods for electronic cigarettes in Vietnam are quite tactful on account that the product isn’t exactly “legal”. According to the Ministry of Industry and Trade (OMIT) in Vietnam, the Ministry of Culture, Sports, and Tourism (MAST) takes the responsibility of granting ad licenses to enterprises. OMIT only takes care for the sale promotions and advertisement activities of the licensed enterprises. Neither management agency has given a license to anyone for the sale and distribution of electronic cigarettes in Vietnam.
Most of the advertisements and promos are done via internet. One of the flattering internet ads read : “Electronic cigarette is a battery operated inhaler meant to stimulate or be a substitute for tobacco smoking”. 4) Competitor’s Distribution Channels In a report from Daintier International News on October 8, 2013 a reporter stated that he found an electronic cigarette ad online and the ad gave an address. When the reporter followed up the address, he was surprised to see that building was a children’s clothing shop in Truing Kink Street, Ca Gay District selling cigarettes.
The cigarettes without any outside sign or other visible information. A staff member said that due to not being licensed, the company cannot sell this kind of product openly; customers usually find the shop address on the internet and Just come over. The product is assembled and distributed in China and shipped to the independent shops. The firms only import for sale directly to customers. Shops in Vietnam usually buy in bulk and distribute within the country. A customer on a forum for electronic cigarettes stated that Vietnam customs stopped his package in Hanoi because the product is not declared legal. C.
Market size ) Estimated industry sales for the planning year Marketing consultant Remuneration estimates the world market for electronic cigarettes was more than $500 million last year, with the United States accounting for a quarter of that. It is estimated that sales will reach $1 billion at the end of 2013. When compared to other countries’ electronic cigarette sales, there was only a minimal presence in Vietnam. Although a credible source could not be found, a source stated that Vietnam had $81 billion in Tobacco sales last year and the country lost $193. 5 million in revenue because of illegal smuggling.
With electronic sales caching $500 million in the world, it can be estimated that Vietnam had around $5 million in sales because the entire South Asia region only accounted for 3% of China’s largest e-cigarette factory sales. 3% equals out to approximately $15 million. 2) Estimated sales for your company for the planning year With our product entering the market as a new company with a low cost, we would be satisfied with 1% of those sales and that’s even a stretch. D. Government Participation in the Marketplace 1) Agencies that can help you Since there will not be a license available for the sale of electronic cigarettes in
Vietnam, certain regulations must be followed in order to attempt to get the product distributed within the country. There are no regulations for internet promotion and advertisement so we decided to distribute our product to an online agency. Two of the most popular are Healthiness and Alabama. Com. These companies provide addresses to shops in Vietnam where the product can be purchased and picked up. Vietnam does not allow promotions in their supermarkets or no physical place in the country. 2) Regulations you must follow In 2009, 400 restaurants and hotels set up a smoke free demonstration in Ho Chi
Mini City, Vietnam. The businesses want to keep the area smoke free due to new Vietnam regulations, but they would like to keep the customers. Smoking electronic cigarettes allows customers to still smoke in and outside of the businesses. This past May, the first ever comprehensive tobacco control legislation in Vietnam took effect on May 1, 2013, after being adopted by the National Assembly on June 18, 2012. The new law establishes smoke-free places, increases the size of graphic health warning labels, restricts tobacco advertising, promotion and sponsorship, and establishes a tobacco control fund.
Here are some key contents of the law: The following places are designated as smoke-free: health and educational settings; child care and entertainment areas designated for children; areas at high risk of fire and/or explosion; indoor workplaces; universities, colleges and other academic institutions; health warning labels are required on cigarette packaging, and must cover 50% of the main surfaces Advertising, promotion and sponsorship of tobacco products are banned (with a few exemptions for sponsorship) Tobacco sales are banned within 100 meters of the perimeter of child care facilities, schools and hospitals, preventive decline centers and communal health stations “Kiddies packs” and sales of tobacco products to minors are banned A dedicated tobacco control fund is established to provide financial resources for the prevention and control of tobacco use through smoking cessation programs, research projects, and educational and communication programs.
This new law will help protect the 70% of Vietnamese children aged 13-15 who are exposed to second-hand smoke in public places, and aims to reduce tobacco use, which kills more than 40,000 people each year in Vietnam. There is a huge arrest in Vietnam for electronic cigarettes and we want in! IV. Preliminary Marketing Plan l. The Marketing Plan a. Marketing Objectives Target Market: Our target market for this product is the middle class/high class citizens of Vietnam that smoke cigarettes and are looking for an alternative. People who smoke and can afford our product, aiming directly more so to the male population of Vietnam which has one of the highest male population of cigarette smokers among all countries of the world.
Market Penetration: 100 people die a day from cigarettes (on average) 40,000 people die a year from cigarettes (on average) 7 million people affected by second hand smoke (within household) 8 million workers suffer from second hand smoke (public/workplace) Smokers who are looking for a healthier alternative to cigarettes which will have a positive affect on co-workers, household family members, public specimens. B. Product adaptation or modification Core Component: 1 E-cigarette Packaging Component: Cardboard box, plastic shell Support Service Component: 1 year warranty on E-cigarette, maintenance instructions, warranty on accessories, damage and repair instructions. C. Promotion Mix: 1) Advertising: in-store displays, internet ads, radio . Objectives: Portray E-CGI as healthier in the long-term and more socially and publicly tolerable. B.
Media Mix: Direct mail, radio, newspaper, magazines, phenomenon c. Message: E-gigs are healthier than smoking actual cigarettes; they last longer and are more environment, public friendly than actual cigarettes. D. Cost: TV commercial (Healthier living campaign) -$90-$2500 Newspaper ads-$200 Magazine ads-$500-$20000 Direct mail-$200 2) Sales promotion: target middle/high class smokers who have the financial stability to buy the product. B. Coupons: lifetime/yearly warranties, filter coupons, etc. C. Premiums: Chargers, assorted vapors, cartridges d. Cost: 3) Personal selling: First see how consumers respond to the product from sales of middle men retail outlets. ) Other promotional methods: Social Media, (Faceable, Twitter, etc) D. Distribution: From origin to destination The Aqua E-cigarette origin port will be located in California. This origin port was selected because of its close proximity to Vietnam. California is home to more than 30% of the nation’s exports. The destination port will be located Dad Nag, Vietnam. This destination port was selected because it is the largest city in central Vietnam. De Nag is also one of the countries important ports between the mountains on one side and the South China Sea on the other. The railroad mode of transportation advantages is that is cheaper being that you can carry more quantities of supply.
However, being that Vietnam is overseas it will impossible to use railroad transportation, which makes it a major disadvantage. The transportation of air carriers has both advantages and disadvantages. With using air carriers it faster to get to the destination, which makes the service quicker however, it that is very costly ND there are restrictions on how many items you are able to ship. Using ocean carriers for the transportation of goods is very risky which calls for insurance. The advantages of ocean carriers is that it is fairly cheap and you are not limited to amount of freight on the ship. Motor carriers are better when there is a short distance between the port and destination.
However, the disadvantages are there is a limit on transportation volume and there is always the risk of crash and traffic. On Swept 30, 2006 Vietnamese government passed Decree 89 for the marking and labeling of imported and exported goods. The Decree 89 states that all goods must display: Name and address of the organization or individual responsible for the goods, origin of goods, quantity, date of manufacture, expiry date, ingredients and hygiene and safety information. Labeling of exported goods may be written in the language of the country or region into which such goods are imported. The import rates are 23. 5% for agricultural produce and 16. % for industrial products. The other taxes that are associated with importing into Vietnam are safeguard taxes, anti-dumping duty, countervailing duty, and anti-discriminatory tax. There are a few documents requited to import into Vietnam. The original copy of the customs declaration form from import goods and commercial invoice are needed to import into Vietnam. Also original import permit for goods requiring import permit are required. The copy of the bill of lading and detailed packing list are also required to import in Vietnam. The certificate of origin must be accompanied by an appropriate C/O certifying that they are sourced from preferential treatment.
To reduce the risk of causalities with the transportation of goods to Vietnam there is a need for insurance. The export-import ann. of the United States has different insurance claims that cover freight lost. The claims allow extend credit buyers, which allows exporters to sell on competitive open account terms. There are several Freight Forwards in Vietnam however Assistants Vietnam is in Dad Nag, which makes it easier to access. E. Channels of distribution (micro analysis) Retailers within in the Vietnamese market do not typically advertise their goods but use different convenience, mom and bookshops, and clothing stores where they sell the e-cigarettes. Usually the mark-up for Vietnamese products is between 10-15% for tillers.
The method for paying will be both cash and credit this allows for consumers to not be limited to how they should pay. The scale of operations for the first shipment will be in a small to medium size of freight so that meets the sales needed and breakable. The middlemen will be employees of the company that are working in Vietnam at the headquarters. These middlemen will be able to communicate directly with different retailers to help drive sales in the Vietnam market. The methods will be both cash and credit and with a medium to small size scale of operation. The Vietnam BIB is an agency that helps with importing of goods into Vietnam while using American-export to help with the export of goods to Vietnam.
The warehouse will be located in Dad Among where we will rent and be able to distribute throughout Vietnam. F. Price Determination Cost of shipment of goods: $10,000 Transportation costs: $5,000 Handling expenses: pier charges: $3,000 Insurance costs: $2,500 Import taxes and value-added tax: Safeguard taxes as provided in the law on self-protection in import of foreign goods, Anti-dumping duty as provided in the law against dumping of imports into Vietnam, Countervailing duty as provided in the law against subsidized imports, or Anti- discriminatory tax applicable to goods originated from countries/territories where Vietnamese products are discriminated.
Wholesale and retail markups and discounts: Mark-Up: 10% Company’s gross margin: Retail price: $14. 99 G. Terms of Trade 1) Definitions EX works: This is the trading term that refers to the seller’s responsibility relating to the good ending once the buyer receives the item. The Buyer is to receive the item at the seller’s place of business. There are no shipping or freight charges. FOB: This trade term referring to Freight on Board, involves the seller delivering the goods has passed from the freight to the buyer the sellers responsibility is no longer the sellers. The seller is not responsible for the insurance during the trip either. The item is free on board.
FAST: This trade term has the buyer requiring the seller to bring the item to them by their terms to a certain port or location with the aid of their own means of transportation. So the buyer accompanies the goods from the seller’s location to their location. C: This trade term requires the seller to have all the arrangements made for the buyer o receive the goods by sea. They must pick the port of destination, cover the insurance of the goods during the trip, and provide all paper work needed to transfer ownership over to the buyer upon arrival. Under some circumstances the buyer is not responsible for the insurance of the goods Just the delivery. CIFS: Under this agreement the seller is responsible for the delivery of the goods via sea and the transfer of ownership upon their arrival.
In terms of our product and Vietnam EX works in terms of Vietnam: Under these terms we would only be responsible for the selling of the goods to the customers. They would be sold under our terms and delivered from our headquarters in either Vietnam or they must pick them up from the United States. FOB in terms of Vietnam: Under these terms and conditions we would be responsible for the delivery of our product from the US to the headquarters in Vietnam and then delivery to our retailers. The product would still belong to us until the product exchanges hands. FAST in terms of Vietnam: retailers. The product would fall under the ownership of the buyer upon procurement of their order. Thus, the buyer would be responsible for the insurance delivery charges.
C in term of Vietnam: Under these terms, our central location would be in the United States and we would be shipping our product to Vietnam. We would have to make all of the arrangements for how the buyers would receive the goods and cover all the cost to do so. CIFS in terms of Vietnam: Under these terms we would be solely responsible for the delivery of the goods to Vietnam via sea. 2) Advantages / Disadvantages of each The advantages of this method are that all we, the seller, are responsible for is the creation of the product and advertising. Once someone starts buying the product it is heir responsibility to receive them from our headquarters and get them to their distribution centers or retail centers.
This is the cheapest of all the shipping cost but also the least effective. Even if we have a headquarters in Vietnam, the suppliers of our product still have to find a way to get them from us. FOB: Under these terms we would be responsible for getting the product from the United most convenient ideal for our company because we Just have to get the product from the Vietnam headquarters to the retail outlets. FAST: Under these terms we would be considered working from the United States and the rye would have a delivery relationship with us where we are responsible for the delivery but they are responsible for accompanying the product from port to port to ensure security.
C Under these conditions the buyer would pick the location and the means by which the product are delivered and we would be responsible for all the accrued cost. CIFS: This is a simple shipping and receiving between our product and the buyer upon the arrival of the product in Vietnam or from our Vietnam headquarters. H. Methods of payment 1) Cash Advance With the cash in advance method, we would require the buyer to pay prior to hinted of the product. This would eliminate us from the credit risk and non- payment. This would be applicable due to online sells of our product via websites. This payment method would also help with us staying in the “grey’ area of the regulations of Vietnam.
The con to this payment method is the low cash flows of the customers in Vietnam. Also, against our competitors on the black market they don’t have to wait to receive the product they will get it when the money exchanges hands. And the shipping time might scare customers away. 2) Open Accounts Open accounts include sales where in international trade the goods and products re shipped prior to payment. These shipments and payments usually fall on 30, 60 or 90 day increments. This is a high risk option for exports due to the fact that they are giving away their product without payment. It is hard to develop insurance security with this payment method and still be competitive in the market.
This would work for our product in some forms buy selling to a middle man and they receive commission for the sell and we receive our payments from the product sells on a monthly bases. This would help us compete in a highly competitive market especially in the black market. ) Consignment Sales Consignment consents on the terms that the buyer will pay after the buyer sells the product. It is a combination of open accounts and cash in advance. The agreement includes advance shipment of the product and consignment that once the product or amounted product is sold it will be returned to the seller. If tall the product isn’t sold the buyer is no responsible of the full price of the unsold product. They can send the unsold product back at a cost.
This would work with our product by Consignment in international trade is a variation of the open account method of payment in which moment is sent to the exporter only after the goods have been sold by the foreign distributor to the end customer. This would help us keep our storage cost down because we could send out large amounts of product at a time and have the buyer cover the storage cost. This payment method would also involve is involving a third party, they would be responsible for the storage and distribution of the product. This would be idea for our product. 5) Sight, Time or Date Drafts Sight, time and date drafts are notes used when payment is exchanged when the products are received, they also help the seller keep retain ownership until payment