The productive age in some demographics is a target of almost all brands for their products or services, including cigarette brands. The youth is their target to increase sales. However, for cigarettes – the Indonesian government has clear regulation such as not to offer or sell to those who under the age of 18.
Otherwise, the fact is the majority of Indonesian smokers first smoked at the age of 15-18 years. According to Basic Health Research data – from the databox of the katadata site, it is stated that there are 52,1% of smokers who smoke for the first time at the age of 15-19 years old. It can be interpreted that the cigarette brands are right on target.
This may be one of the reasons for the Indonesian government to rise the cigarette excise rates in 2022.
The rise of cigarette excise rates will certainly have an effect in cigarette prices. If the price of cigarettes soars, the possibility is that the consumers will switch brands with lower prices or worse – switch to illegal cigarettes.
These various possibilities will certainly have an impact too on cigarette brands sales. The youth with limited income, naturally will look for cigarettes at lower prices. This is clearly a pressure for the brands.
Minister of Finance Sri Mulyani revealed some reasons that make cigarette excise rates increase by an average of 12% in 2022. Reported by CNN Indonesia, one of the reasons is a request from President Joko Widodo. The other reasons are the impact of smoking on health and the sustainability of the workforce and industry.
A point that can be taken into account for brands is the consideration of the health side – where the government states that Indonesian families with family members who smoke have a 5,5% higher potential for stunting or malnutrition than non-smokers.
Furthermore, the government wants to use the revenue from the rise of cigarette excise rates as revenue sharing funds (DBH) for the regions. It is hoped that DBH will later be used for handling health problems, public welfare and law enforcement.
Cigarette Brands VS Everybody
The government’s line of reasons for the decision to rise up cigarette excise rates is a new challenge for brands. Even though they are often plagued with negative sentiments, one thing is clear that brands should not be trapped by such stigmas or views.
Seeing this becomes a challenge for brands – actually there are many things that brands can know more about. Brands can do a wider exploration to get interesting insights as the basis for their next communication strategy.
From the series of facts above, there are several insights that brands can know:
- The health side of the individual and family of smokers, as well as industrial factors or the sustainability of the workforce are the government’s consideration for rise up the cigarette excise rates.
- The brand is still on target with the youth or productive age target buying its products.
However, brands need to note if the price of cigarettes soars due to rising excise rates, there is the potential for the youth as brand’s target to change their habits. One of the potentials that can happen is the shift of their choice to cigarette brands that still affordable.
Or the worse potential is that they can even try illegal cigarettes which may not have the standards and also no excise rate.
This change in habits or behaviors that brands must know more deeply and sharply.
So, What Brands Can Do?
Before determining where the brands communication strategy is headed, the fundamental thing that needs to be done is to conduct research. This research can target smokers and smokers’ families to find out in detail whether smoking activity really affects stunting in children, and there are many things that can be known from the research in this section.
Research can also be done by targeting workers in the cigarette industry. Like factory employees and so on – with the aim of extracting their voices regarding the rise of cigarette excise rates. This of course aims to make brands aware of organic responses from the industrial sector.
From the research recommendations – one thing that will clearly seen is a person’s behavior or habits related to the cigarette brand. By knowing their habit patterns, brands can find out more about how they are in the eyes of the consumers. Later, this will make it easier for brands to develop new communication strategies.
Seeing that the brand’s target is still on target, the brand should not have to worry too much about the stigma and sentiments that tend to be negative regarding smokers and the rise of cigarette excise rates.
Brands can work with us, StratX KG Media for research. StratX is part of KG Media which has deep and sharp search capabilities to get interesting insights from the issues.
Utilizing big data that is only owned by the KG Media network, brands can get interesting insights as well as consultation on strategies like what can make a brand out of view or current sentiments.
After all the data is collected and arranged correctly – StratX KG Media can help brands to create massive new communications. The media network at KG Media can act as an amplifier campaign so that the public can clearly know how the brands respond to situation like this.
There are many ways to win the hearts of consumers. However, brands certainly expect to have the right way and we are here for it.
