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Analysis of British American Tobacco Marketing Research (Essay Sample)


Analysis of British American Tobacco


Analysis of British American Tobacco
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Analysis of British American Tobacco
British American Tobacco (BAT) is the second leading tobacco manufacture in the world according to Dow Jones world index. Although there are several barriers and restrictions in this sector, the company continues to thrive while providing top quality tobacco products. The company invests averagely £105 million on research and development and produces more than 700 billion tobacco products in a year. Despite this heavy investments, Bat has managed to be a market leader in more than 50 markets among the more than 170 across the world. BAT has more than 250 brands providing its customers with a variety of products to choose from. Besides cigarettes, it is also involved in the production of Pipe tobacco, Cigars, Smokeless Snus and Roll-your-own. Its brands in the international markets include Kool, Dunhill, Viceroy, Vogue, Kent, Benson & Hedges, and Pall Mall among others. It also strives at providing its customers with less risky alternatives to the common cigarettes. They have named this alternative choices and Next Generation Products or E-cigarettes. BAT has a characteristic of a wide geographic and well proportionate portfolio that is aimed at providing value to its customers at a varied price criterion.
British American Tobacco was established in 1902 as a joint venture between American Tobacco Company of the United States and Imperial Tobacco Company of the United Kingdom with an agreement that both companies were to keep off each other’s local market but use each other’s trademark and brands within their respective regions. This agreement led to its expansion into new markets such as Japan, China and Canada in 1904. In 1905, it expanded to Ceylon, India and Egypt, in 1906, it penetrated to Sweden, Holland, Norway, and Belgium. In 1908 it entered East Africa, Indonesia and Finland. In 1911, American Tobacco disassociated itself from the joint venture as it entered Malaysia. However, despite the withdrawal of the American Tobacco Company, BAT continued to expand into other markets such as Argentina and Brazil in 1913 and 1914 respectively. BAT entered Central America, Venezuela, Mexico and Chile in 1921. It expanded to North Carolina during its 25th anniversary that is in 1927. In 1990 it established its operations in Far East as well as in Central East Europe. Two years later it entered into Ukraine, Russia, Hungary, Czech Republic, Poland, Uzbekistan and Romania. In 1994, BAT merged again American Tobacco Company. In 2001, BAT expanded its operations to Turkey, South Korea and Vietnam. In 2007, BAT stopped its operations in the UK (British American Tobacco, 2017). BAT’s headquarters are located in London and is being utilized by more than 55,000 individuals across the world. It has maintained a diversified working environment and its structure gives local workplaces independency of choosing its own actions. Decision-making by local stakeholders based on the local situation but within the set policies and principles.
Macro Environment Analysis
The PESTEL/PEST analysis helps in defining the threats and opportunities that BAT faces as well as helps in the visualization of external aspects that may not be controlled and have significant impact to the company.
Political/Legal Factors
The tobacco industry is faced with strict regulations such as heavy taxes and duties from the government. It is also restricted on marketing, product exhibitions and it is advised to avoid certain descriptions such as nicotine, and prohibition of smoking in public places. To address these aspects, BAT has employed lawyers who provides it with legal advice on marketing, social responsibility and stakeholder matters. In addition, BAT did not escape the effects of B...
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