Electronic Cigarettes International Group (ECIG) is an international producer, distributer and retailer of e-cigarettes, e-liquids, and vaporizers with outlets and kiosks in several countries around the world as well as online stores. The company has steadily been growing over the past two years with sales approaching $20 million per quarter in 2016 (SA Transcripts, 2015).
Dan O'Neill replaced Brent Willis as CEO and President of ECIG on January 9, 2015. Dan O'Neill's record of experience as CEO of Molson's and top leadership positions at Heinz and Star-Kist suggests that ECIG is positioned under uniquely qualified leadership for the first time since its creation (it was under Willis that company's share price plummeted to its current record lows). With the reduction of debt and the one-time write-off of losses taken by O'Neill in his first year as President, the company has pivoted for better years (Hoogervorst, 2012).
The electronic cigarette and vaping market is primed for expansion. Wells Fargo analyst Bernie Herzog has suggested that it could reach in the tens of billions of dollars in revenue by 2017. Between 2012 and 2013, e-cig sales reached more than $600 million (Giovenco, Hammond, Corey, Ambrose, Delnevo, 2014, p. 14). Bloomberg predicts that ecig sales will match or "exceed those of traditional cigarettes by 2047" (Goodman, 2013).
ECIG is a non-traditional electronic cigarette and vaporizing company with retail shops and kiosks in the UK and USA as well as an online store for each of its various brands, ranging from the popular VIP brand to the FIN and Vapestick brands. VIP is a major seller in UK, with more than 100 kiosks established in high traffic locations, including in and around major metropolitan areas like London. FIN has recently been launched in America and has quickly expanded to more than 5000 locations nationwide. The products do not come with warranties or have significant life cycles. New product development consists of identifying the latest advancements in vaporizing technology and utilizing this to appeal to individuals looking to quit smoking (SA Transcripts, 2015).
Pricing is competitive and ranges in products from a few dollars/pounds for disposables and e-liquids to higher ranges of twenty or more dollars. Kits can range from $50 to $200 depending on their level of qulaity. This pricing is competitive with other brands in the market. Because ECIG is already well-established in the UK it looks for more penetrative pricing in the U.S.A. and establishing value-based pricing guidelines.
ECIG looks to compete with other brands through non-traditional channels as well as by supplying the best vaping experience to become the number one brand in the world.
ECIG currently faces competition from Blu Cigs as well as UK brands like V2 and Apollo. But ECIG's Vapestick consistently ranks in the UK as a top ten starter kit and recently was voted best starter kit by an independent reviewer.
Restructuring its debt and distribution channels has been the main focus of ECIG over 2015. With profits increasing quarter-over-quarter throughout this year and SKUs being reduced to a more tolerable level, the company has essentially turned itself around under O'Neill's leadership, emphasizing target markets, better accounting and distribution, lowering costs, and raising visibility.
Issues ECIG Should Consider When Trading Across Borders
The company needs to consider social, economic and political issues when trading across borders. The most relevant social issues would be related to laws, rules and regulations regarding e-cigarettes and vaporizers, as in some countries these devices are illegal to sell (in India, for example, and in Egypt). Thus, expanding into former British colonies would be an ideal situation for brands like VIP, which is very successful in UK and would be likely to have a similar impact in India -- but because of the social condition and orientation of the government towards vaporizers (they are viewed as a conduit to drug use in India) these regions are not viewed as target regions at the time but rather as "trouble" places to be avoided (Kotler et al., 2003).
Political issues are also a going concern, as politics and economics are so interwoven, especially as the former is responsible for legislation that regulates the latter. Politically, there is concern in regions like the U.S. where FDA regulation is still expected. Any announcement that could cause stress or volatility to the sector would be seen as a negative, especially to the stock price of ECIG. As the company has issued more than 300 million warrants to lenders in exchange for capital, driving
Electronic Cigarettes International Group (ECIG): Report on Strategic Management Electronic Cigarettes International Group (ECIG) is a publicly traded (OTC:ECIG) company that specializes in producing, distributing and selling e-cigarettes, vaporizers, e-liquids, and related merchandise to consumers looking for an alternative smoking experience or a method to help them quit smoking traditional cigarette or tobacco products. ECIG develops and sells a number of brands including VIP, FIN and Vapestick in the UK, U.S.,
Marketing Strategy for ECIG (Electronic Cigarettes International Group) Dan O'Neill took over as CEO of ECIG on January 9, 2015, replacing outgoing Brent Willis, who founded the company but who has also been viewed as the main reason for the plummet in share price. Dan O'Neill's record of experience as CEO of Molson's and top leadership positions at Heinz and Star-Kist suggests that ECIG may finally be in more capable hands.
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