Why does ITC sell cigarettes in sachets?

The sale of loose cigarettes will soon be outlawed by the Indian government. This might deal serious damage to the tobacco industry, particularly to the major market participants like ITC. Because they are somewhat less expensive than purchasing a 20-pack, many people in India choose to purchase cigarettes in single sticks. Due to their accessibility, this expands the client base.

The company has launched the smallest version of its premium brand Gold Flake Mixpods in key areas like Mumbai in order to address this issue. Priced at Rs. 82.5, this pack only contains 5 cigarettes measuring 84mm apiece.

How did the idea take place:

You would be completely wrong if you thought that a massive firm headed by MBAs would be the source of the sachetization trend. It truly started 50 years ago in the Tamil Nadu town of Cuddalore. Chinni Krishnan, a farmer-turned-entrepreneur, saw that products like talcum powder and Epsom salts were offered in 100g tin boxes. However, many from low-income neighbourhoods who worked in the factories and fields didn't purchase them. They could not just afford them. Thus, he began to develop the concept of selling 20 g bags of talcum powder. People purchased it. And it was a resounding success.

If you think about it, it's adopting the well-known sachetization technique that FMCG corporations cling to and vouch for. Considering that FMCG sachets sometimes take the role of bottles. Both have containers made of quite different materials. In the example of cigarettes, the packaging will be the same whether there are five or ten packs. But the fundamental tenet of sachetization is that smaller is better. So let's adhere to that rule for the time being.

Additionally, ITC lowers the price of cigarettes by considering a 5-cigarette pack like a sachet. It is known as a "low unit pack" or LUP in industry jargon. In an effort to boost the bottom line, they are hoping that more people will start smoking.

Conclusion:

The government intends to outlaw the selling of single cigarettes in part to eliminate the affordability issue. Let's also assume that the ban on the sale of single sticks is a success. The entire aim of prohibiting loose cigarettes is defeated if tobacco businesses introduce 5 packs or even 3 packs. Small packs will still have the shockingly graphic illustration of lung damage on the packet, which is the only benefit. Hopefully, it will discourage youngsters and first-timers from smoking.

The sale of single sticks should be outlawed, and legislation establishing a minimum pack size should also be introduced, if the government is truly serious about tobacco control and wishes to protect future generations.