Tobacco Industry

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  • Created by: igmh
  • Created on: 08-03-16 12:08
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  • Tobacco Industry
    • The Industry
      • Controlled by a small number of TNCs
      • More than 5000 billion cigarettes made per year
      • 1billion adult smokers per day
      • Biggest market is China accounting for 35%
    • Tobacco Leaf
      • Only purchase leaf from responsible and sustainable sources
      • Social Responsibility in Tobacco Production Programme addresses the social and environmental issues
        • Good agricultural practices
        • Improving soil and water conservation
        • Occupational health and safety
        • Eliminating exploitative child labour
        • Promoting afforestation initiatives
        • Appropriate use of agrochemical
      • 80% of leaf purchased is from farmers and suppliers in emerging economies
    • Marketing
      • Focus on existing market
      • Build brand loyalty
      • Win consumers away from competitor brands
      • Market the brand competitively
      • Market in developing countries
        • e.g. India
      • growing the value of their share of the existing large number of adults who choose to be tobacco consumers
    • Global Drive Brands
      • Streamlining the business to make it more efficient
      • Very broad geographic base
      • Well placed to meet the changing environment
      • Adopted tight voluntary marketing standard  to comply with strict laws on tobacco marketing
    • Production in LEDCs
      • Expand markets in LEDCs
      • Source of cheaper tobacco
      • Cheaper labour costs
      • Danger with this is that tobacco cultivation will replace food crops
      • BAT is the largest agribusiness company in Kenya, contracting over 17,000 farmers to cultivate tobacco
      • Indian government has relaxed investment rules so that TNCs can now have 100% ownership of their manufacturing plants

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