Up In Smoke: How Do Cigarette Product Managers Do It?

by drjim on June 7, 2010

Altria Product Managers Have A Difficult Job To Do…

Altria Product Managers Have A Difficult Job To Do…

How times have changed! As little as 10 years ago, cigarette smoking was no big deal – lots of people did it. Since then a lot has changed and a lot of people have very strongly held views on the topic. No matter which side of the fence you fall on, it’s important to realize that just like every other product out there, there are product managers for cigarettes (remember: there are also product managers for things like bullets). The interesting question for us is how do you go about managing a product that creates such strong for / against emotions in your potential customers…?

A New Direction

Pity the poor cigarette product manager. They’ve basically got their hands tied. They can’t target new groups of customers (underage smokers), they’ve got huge health warnings stamped all over the front of their products, and “stop smoking” ads are being run everywhere. What’s a product manager to do?

Over at Altria, one of the biggest manufactures of cigarettes (can anyone say “Marlboro”?), the product managers are trying a different approach.

Altia is in the process of doing some test marketing of a new type of tobacco product: Snus. This is basically a smokeless form of tobacco which will allow their customers to still use tobacco in situations in which they can’t light a cigarette.

As with all things having to do with cigarettes, this marketing approach has caused a great deal of controversy. A number of people have spoken up and said that the product managers are just rolling out this new type of product in order to cause the FDA to focus on it and stop their efforts to restrict traditional cigarette smoking.

Just How Do You Go About Getting People To Smoke More?

Altria is the biggest producer of tobacco products out there. It turns out that they already own about 50% of the cigarette market and about 55% of the smokeless market.

Even as the Altria product managers work to roll out new products, the brand managers have to face a harsh reality: cigarettes are where the money is. Last year they brought in $14.4B (yes, that’s Billion) in revenue while the smokeless products only brought in $1.2B.

No matter what you think about smoking or tobacco companies, deep down in your product management heart just like the rest of us you secretly wish that your customers just couldn’t get enough of your product. Well, cigarette product managers have had this wish come true: 40% of smokers try to quit every year, but only 2.5% succeed.

Past cigarette product manager attempts to roll out new products have had mixed success. The so-called “light” cigarettes have captured about 90% of the U.S. market; however, studies have shown that customers tend to inhale these cigarettes more deeply.

How Can You Make Smokeless Tobacco A Successful Product?

Let’s play a game and pretend that you were the product manager for a new smokeless tobacco product? What would you do to make it a success. Remember that there have been precious few new tobacco products introduced over the past few decades that have been a success.

One thing that might work for you is to look for a way to differentiate your product. One way to do this is to add flavors to them. Over at Altria the product managers are doing this very thing. It’s been quite successful: flavored versions of the Snus product now make up about 56% of their sales.

This approach comes with some problems. If you are too successful, critics are going to point out that you may be trying to attract the wrong audience: kids.

What All Of This Means For You

Being a product manager is a difficult job. Being a product manager at a cigarette company is especially difficult. The selling of cigarettes is becoming more and more difficult and so product managers are looking for new tobacco products to sell.

Just like product managers everywhere, cigarette product managers are looking for new products to introduce to their customers. Smokeless products appear to be one way to do this. Adding flavors to these products boost their popularity; however, they may start to make them attractive to the wrong types of customers.

If you were offered the job of being a cigarette product manager would you take it? If times were tight enough, yes you probably would. Would you be able to successfully introduce a new smokeless product? Only time will tell…

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Help

Question For You: If using different flavorings for smokeless products gets banned, what do you think the product manager’s next step should be?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

When it comes time for you to go looking for your next Product Management job you’ll be facing a major decision. I’m not talking about if you should use online resume services or go with a headhunter. I’m talking about something even bigger – the question of whether or not you should create a cover letter when you send someone your resume.

Be Sociable, Share!

{ 3 comments… read them below or add one }

Randal June 8, 2010 at 4:09 pm

It’s the cool. No, not the KOOL. But the cool. Smokeless tobacco products are simply not cool. Chewing tobacco, for example. At best, no one knows you’re chewing it. At worst, they’re disgusted by the spit.

There’s no escaping it… smoking a cigarette looks cool to their customers. If the tobacco product managers want to succeed with their new smokeless products… they’re going to need to capture the cool factor. That’s their real challenge. And that’s going to be tough.

Randal.

Reply

Dr. Jim Anderson June 11, 2010 at 8:16 pm

Randal: you make a very good point — peer pressure and a sense of “cool” is key to smoking (thank goodness Apple doesn’t make cigarettes!). If you put your product manager hat on for a minute, you’ll realize that smokeless products will have to show up in movies (and maybe on TV) before they could ever hope to catch on in a big way…

Reply

Randal July 12, 2010 at 7:02 pm

Agreed. Finding a celebrity or industry to champion the new smokeless products could help bring them into the realm of coolness.

Randal.

Reply

Leave a Comment

Previous post:

Next post: