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Book part
Publication date: 13 December 2013

Wei Tan

A dynamic oligopoly model of the cigarette industry is developed to study the responses of firms to various antismoking policies and to estimate the implications for the policy…

Abstract

A dynamic oligopoly model of the cigarette industry is developed to study the responses of firms to various antismoking policies and to estimate the implications for the policy efficacy. The structural parameters are estimated using a combination of micro and macro level data and firms’ optimal price and advertising strategies are solved as a Markov Perfect Nash Equilibrium. The simulation results show that tobacco tax increase reduces both the overall smoking rate and the youth smoking rate, while advertising restrictions may increase the youth smoking rate. Firm’s responses strengthen the impact of antismoking policies in the short run.

Details

Structural Econometric Models
Type: Book
ISBN: 978-1-78350-052-9

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Article
Publication date: 5 July 2023

Yanmei Xu, Yanan Zhang, Ziqiang Wang, Xia Song, Zhenli Bai and Xiang Li

Unlike traditional industries, the e-cigarette is an epoch-making innovative product originating in China and occupying an absolute competitive advantage in the international…

Abstract

Purpose

Unlike traditional industries, the e-cigarette is an epoch-making innovative product originating in China and occupying an absolute competitive advantage in the international market. The traditional A-U model describes the laws and characteristics of technological innovation in developed countries. In contrast, the inverse A-U model depicts the process of “secondary innovation” in late-developing countries through digestion and absorption. This paper aims to find out that if the e-cigarette, as a “first innovation” industry in a late-developing country, conform to the A-U model or conform to the “inverse A-U model”.

Design/methodology/approach

This paper takes the patent data of e-cigarettes from 2004 to 2021 as the research object, and uses Python’s Jieba segment words to divide product innovation and process innovation, and then uses statistical analysis methods to conduct empirical analyses on these data.

Findings

Thus, an improved A-U model suitable for the e-cigarette industry is proposed. In this model, product innovation in the e-cigarette industry appeared earlier than process innovation, but the synchronous development of product and process innovation is not lagging. The improved A-U model in the e-cigarette industry is not only different from the traditional A-U model but also does not conform to the inverse A-U model.

Research limitations/implications

It is conducive to expanding and clarifying the theoretical contribution and applicable boundaries of the A-U model and has sparked thinking and exploration of the A-U model in e-cigarettes and emerging industries.

Practical implications

On this basis, suggestions on the development path and countermeasures of the e-cigarette industry are put forward.

Originality/value

Based on the e-cigarette industry, this paper takes patents as the research object and provides the method of dividing product innovation and process innovation, and proposes an A-U model suitable for the e-cigarette industry on this basis. By comparing the traditional A-U model with the inverse A-U model in latecomer countries, the background and causes of e-cigarette A-U model heterogeneity are analyzed from different stages and overall morphology. Based on this, the heterogeneity characteristics of e-cigarette innovation are summarized and sorted out.

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Nankai Business Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 1 April 1995

Bernard Frank Kinman and Gerald Vinten

Tobacco has exercised the interest of the nation since Elizabethan times, and the inhalation of its smoke for pleasure has become very widespread. It was not until the…

Abstract

Tobacco has exercised the interest of the nation since Elizabethan times, and the inhalation of its smoke for pleasure has become very widespread. It was not until the mid‐twentieth century, however, that its effects upon health were suspected. It is now widely accepted that tobacco smoke is implicated in a range of dangerous diseases, although the tobacco industry sometimes argues that the link is not proven. The arguments about the conflicting needs of a large, world‐wide industry and the health and prosperity of individuals and society are complex, and often influenced by conflicting vested interests. Government's involvement in the issues is further complicated by its reliance upon large tobacco revenues. The link between advertising and increased smoking, either by existing or new smokers, is not proved by research, although there are strong indications that it exists. The behaviour of most parties involved, including the tobacco companies, indicates that they share the belief of a link. Voluntary controls upon tobacco advertising have had some effect, in that, for example, advertising in the U.K. is no longer overtly directed at children, but various anti‐smoking lobbies believe voluntary control to be ineffective. The present British government has toyed wth the possibility of statutory control, but faces stiff opposition from back‐benchers and within the cabinet; it is also probably philosophically opposed to such measures. More research is needed into the link between advertising and smoking behaviour.

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International Journal of Sociology and Social Policy, vol. 15 no. 4/5
Type: Research Article
ISSN: 0144-333X

Book part
Publication date: 7 September 2012

James Langenfeld and Brad Noffsker

In a number of recent multi-billion dollar cases brought against cigarette manufacturers, plaintiffs have in part alleged that the cigarette manufacturers (1) conspired not to…

Abstract

In a number of recent multi-billion dollar cases brought against cigarette manufacturers, plaintiffs have in part alleged that the cigarette manufacturers (1) conspired not to compete on the basis of health claims or the introduction of potentially safer cigarettes since the 1950s, and (2) engaged in fraudulent advertising by making implied health claims in advertisements selling ‘low tar’/‘light’ cigarettes. In this type of litigation, defendants’ actions could be due to alleged illegal behaviour as asserted by plaintiffs, or be the result of market forces that may have nothing to do with allegedly inappropriate acts. We examine the economic evidence relating to these allegations, taking into account some of the major influences on cigarette company behaviour. In particular, our analyses show that much of the cigarette manufactures’ behaviour can be explained by Federal Trade Commission and related government actions, rather than conspiracy or fraudulent acts. We find the economic evidence is inconsistent with an effective conspiracy to suppress information on either smoking and health or the development and marketing of potentially safer cigarettes. Regarding ‘lower tar’ and ‘light’ cigarettes, the economic evidence indicates that the cigarette manufacturers responded to government and public health initiatives, and that disclosing more information on smoking compensation earlier than the cigarette companies did would not have had any significant impact on smoking behaviour.

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Research in Law and Economics
Type: Book
ISBN: 978-1-78052-898-4

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Case study
Publication date: 26 October 2015

Chen Cheng, Nicola Persico and Nicola Scocchi

You are the CEO of an e-cigarette company that has just been acquired by a major tobacco company. Your company operates in the European market. The July 2013 draft of the EU…

Abstract

You are the CEO of an e-cigarette company that has just been acquired by a major tobacco company. Your company operates in the European market. The July 2013 draft of the EU Tobacco Products Directive (TPD) recently has been crafted by the European Commission, but it has not yet been examined by the EU Parliament and its Council. The draft proposes that all e-cigarette products be classified as medical devices, regardless of nicotine content. This is the strictest available mode of regulation. If the directive goes into effect as written, e-cigarettes would have to undergo costly and lengthy clinical trials to receive approval and face much stricter marketability restrictions.

The case details the state of the e-cigarette industry in 2013, including consumer data, distribution, competition from similar products, and public health concerns. Students will analyze the current regulatory environment, determine what outcome would be most favorable to the e-cigarette industry, and identify the ways to achieve that goal.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

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Article
Publication date: 13 April 2010

Fred Beard and Anna Klyueva

The purpose of this historical paper is to examine arguably the most controversial advertising campaign of all time. Critics have condemned tobacco marketer George Washington…

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Abstract

Purpose

The purpose of this historical paper is to examine arguably the most controversial advertising campaign of all time. Critics have condemned tobacco marketer George Washington Hill's “Reach for a Lucky Instead of a Sweet” campaign in the late 1920s and early 1930s for its explicit attempt to encourage smoking among women by linking cigarettes with themes of slenderness and youth.

Design/methodology/approach

The paper relies on primary sources obtained chiefly from the important advertising trade journals Printers' Ink and Advertising and Selling. Many sources, in turn, pointed to historically significant advertisements from the “Reach for a Lucky […]” campaign, some of which are included among the findings. Tentative themes of analysis were: the strategic motives behind the “Reach for a Lucky […]” campaign and the campaign's outcomes and consequences, both positive and negative.

Findings

Hill aggressively pursued the female smoker of the 1920s, as did other cigarette marketers of the period. However, the paper's findings support a conclusion that Hill had additional motives for attacking “sweets,” other than merely encouraging women to smoke with a slenderness appeal. Hill's primary strategic concern must have been how to address the extraordinarily competitive situation he faced with the other “big four” cigarette brands.

Originality/value

Focusing on the strategic intent of the campaign and its outcomes and consequences, findings strongly suggest that prior perspectives and conclusions found in advertising history texts regarding this infamous campaign often fail to reveal its significance as an historical event.

Details

Journal of Historical Research in Marketing, vol. 2 no. 2
Type: Research Article
ISSN: 1755-750X

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Article
Publication date: 1 January 1968

C.L. Pass

Investigates the effect of coupon trading on the overall level of cigarette consumption. Reveals that there seems to be no correlation between the expansion of coupon brands and…

Abstract

Investigates the effect of coupon trading on the overall level of cigarette consumption. Reveals that there seems to be no correlation between the expansion of coupon brands and total cigarette smoking but merely a change of pattern in brand preferences. Suggests that the government's intentions of prohibiting coupon schemes as a means of achieving a reduction in cigarette smoking can be regarded as irrelevant in the light of these findings.

Details

European Journal of Marketing, vol. 2 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 June 2000

Charles R. Taylor and Mary Anne Raymond

Many nations have restrictions on advertising in certain product categories. This paper examines product category restrictions on advertising in four large East Asian markets…

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Abstract

Many nations have restrictions on advertising in certain product categories. This paper examines product category restrictions on advertising in four large East Asian markets: Japan, Taiwan, the People’s Republic of China, and South Korea. Product categories included in this study include alcohol, cigarettes, ethical drugs, contraceptives, personal hygiene products and undergarments. The authors describe regulatory policy in these categories and use Albaum et al.’s framework for assessing environmental factors in advertising to assess the logic behind the regulation. A wide range of regulations is found across the four countries and it is concluded that a complex web of factors underlies the regulations. Implications for managers are provided.

Details

International Marketing Review, vol. 17 no. 3
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 28 August 2019

Anouk de Regt, Matteo Montecchi and Sarah Lord Ferguson

Diffusion of fake news and pseudo-facts is becoming increasingly fast-paced and widespread, making it more difficult for the general public to separate reliable information from…

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Abstract

Purpose

Diffusion of fake news and pseudo-facts is becoming increasingly fast-paced and widespread, making it more difficult for the general public to separate reliable information from misleading content. The purpose of this article is to provide a more advanced understanding of the underlying processes that contribute to the spread of health- and beauty-related rumors and of the mechanisms that can mitigate the risks associated with the diffusion of fake news.

Design/methodology/approach

By adopting denialism as a conceptual lens, this article introduces a framework that aims to explain the mechanisms through which fake news and pseudo-facts propagate within the health and beauty industry. Three exemplary case studies situated within the context of the health and beauty industry reveal the persuasiveness of these principles and shed light on the diffusion of false and misleading information.

Findings

The following seven denialistic marketing tactics that contribute to diffusion of fake news can be identified: (1) promoting a socially accepted image; (2) associating brands with a healthy lifestyle; (3) use of experts; (4) working with celebrity influencers; (5) selectively using and omitting facts; (6) sponsoring research and pseudo-science; and (7)exploiting regulatory loopholes. Through a better understanding of how fake news spreads, brand managers can simultaneously improve the optics that surround their firms, promote sales organically and reinforce consumers’ trust toward the brand.

Originality/value

Within the wider context of the health and beauty industry, this article sets to explore the mechanisms through which fake news and pseudo-facts propagate and influence brands and consumers. The article offers several contributions not only to the emergent literature on fake news but also to the wider marketing and consumer behavior literature.

Details

Journal of Product & Brand Management, vol. 29 no. 2
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 1 March 2000

Suzanne Thorpe

Briefly highlights the history of litigation against tobacco companies in the USA. Introduces the legal issues brought before the courts, the parties involved and the outcome of…

1002

Abstract

Briefly highlights the history of litigation against tobacco companies in the USA. Introduces the legal issues brought before the courts, the parties involved and the outcome of significant cases. This overview is followed by a guide to relevant legal research tools that are useful for exploring tobacco litigation in depth.

Details

Reference Services Review, vol. 28 no. 1
Type: Research Article
ISSN: 0090-7324

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