The marketer therefore divides his potential market into segments with similar needs, such as young starters or older established smokers, and targets them with appropriate pricing, distribution and product strategies. The last of these variables has become one of the most notorious in tobacco marketing. Disclosure of company documents, largely in the US, shows that manipulation of cigarette formulation is a key strategy. The ammonia enables the smoker to get quicker and more acute access to the nicotine, a necessity for the established smoker and a valuable hook for the starter. Similarly, the addition of organic salts to tobacco makes the smoke more palatable, especially to the new customer.
Pricing strategies are also important to tobacco.
There is a strong link between price and product image and this provides a good way of reinforcing your brand and differentiating it from the competition. For the starter segment, premium pricing is appropriate. Adolescents are extremely price insensitive and consistently opt for the more expensive products, if they are visible and socially important. For established smokers, their addiction and maturity makes the price-image relationship less of an issue, making them more reluctant than starters to pay higher prices. However, the evidence suggests that consumers would rather cut back on essentials such as food than give up cigarettes altogether.