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International Activities of BAT
Tobacco thrives in poorer soils, providing farmers with a welcome alternative crop. In many
cases, it provides a higher income than any other smallholder crop. It integrates well into
environmentally friendly crop rotations, benefiting subsequent crops like maize. This
excludes the USA, where the crop is mechanically harvested, the farmer will typically
harvest by hand over two to four months, taking off between two and four leaves per plant
as they ripen. A typical farmer in Uganda, with two to three hectares of land, will harvest
about 15,000 plants of 22 leaves each. These can earn a good income from only a small
part of the land. British American Tobacco helps by providing seeds, fertiliser and advice
on planting, growing, harvesting and curing tobacco.
Tobacco is the world's most widely cultivated nonfood crop. The farmers who choose to
grow it, many being in developing countries, because it is hardy, grows well in poorer soils
and unpredictable weather, and they're known for fetching stable prices. Farmers can earn
good yields from very small plots of tobacco, enabling them to put tobacco earnings into
growing other crops, such as food. The techniques used for growing quality tobacco also
help to improve other crops.
Their approach starts with understanding the different profiles of the consumers. BAT invest
in gathering comprehensive insights into smokers' preferences and buying behaviour, then
invest in developments across the marketing mix that are relevant to consumers' tastes,
attitudes, pockets and purchasing patterns.
They aim to be spoton with packaging, taste and product formats that consumers prefer,
with quality that consumers are willing to pay more for and with availability of brands in the
places where their consumers want to buy.
`Markets with high profit margins but declining volumes and markets where profit
margins are currently lower but volumes are set to rise'
BAT's sales are situated in developing and developed countries on a global scale. In
MEDCs there is a higher profit margin because people can afford to pay more for the
cigarettes but the volumes sold are declining because of health being taken more seriously
and there are government campaigns and warnings about the damaging effects of tobacco
on a person's health. The population not buying tobacco in the developed countries are
becoming more active and more health conscious, they are also being put off by the tax
increase because the government has noticed the demand on the health service. Therefore,
more money is needed to account for all the smoking problems healthcare has to deal with.
Smoking bans have also been put in place so the numbers of people smoking have
decreased. Newly industrialising countries has seen lower profit margins as people have less
disposable income this is where the volumes are set to rise as it becomes affordable to
smoke. People are not well educated about the dangers of tobacco to their health and the
marketing/selling laws are less strict.
In the past 20 years, British American Tobacco has closed a number of cigarette
factories in richer countries, and opened new ones in poorer, less developed countries.
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LEDCs have attracted them due to the cheap labour costs so they can sell to the majority
population at a reasonable price. Also, as the governments are struggling with the economy
BAT become an asset because of the job opportunities they provide and the money that can
go back into the economy for higher priorities such as building infrastructures and more links
between countries for trade.…read more