E-Cigarette Marketing Seen Threatened by FDA Scrutiny

The US electronic-cigarette industry has tripled sales due to the help of TV ads, NASCAR sponsorships, and products giveaways, which has led to a $1.5 billion industry.  However, the Food and Drug Administration may threaten this success.  The FDA is set to decide whether to lump e-cigarettes in with the conventional $90 billion U.S. tobacco market.  This ruling could set up greater restrictions on the product, advertising, flavorings and online sales.  Greater restrictions could harm e-cigarette companies because it would diminish the notion that e-cigarettes are a healthy substitute for tobacco product.  E-cigarettes could experience to restrictions like banned TV advertisements and severed ties with NASCAR.  Another restriction that e-cigarette companies could face is not being able to hand out samples.  The potential restrictions e-cigarette companies could face might lead to a decline in its market.

Another problem the industry faces is the alarming number of children getting hooked on nicotine.  The Center for Disease Control and Prevention found that the share of U.S students in middle school and high school who use e-cigarettes doubled to 10% in 2012 from 4.7% in 2011.  In comparison, regular cigarettes use by adolescents has declined from 8.3% in 2010 from 11.9% in 2004.  With the lack of information about the healthiness of e-cigarettes, government officials are trying to gather more information in order to better make decisions on controlling e-cigarettes.

With the growth of society being health conscious, the implications of the FDA could affect e-cigarettes’ advertising and the healthy substitute for tobacco products.  It will be interesting to see how FDA rules and how these potential restriction affects the e-cigarette market.

http://www.bloomberg.com/news/2013-10-16/e-cigarette-marketing-seen-threatened-by-fda-scrutiny.html

4 thoughts on “E-Cigarette Marketing Seen Threatened by FDA Scrutiny

  1. If the FDA decides that E-Cigarettes are considered part of the traditional tobacco market, the loss of television advertising will significantly hurt the industry. National television advertisements are the most cost-effective way to advertise. It may follow in ‘traditional tobacco’s’ footsteps and rely heavily on point-of-sale advertising and price promotions.

  2. If the FDA decides that E-Cigarettes are considered part of the traditional tobacco market, the loss of television advertising will significantly hurt the industry. National television advertisements are the most cost-effective way to advertise. It may follow in ‘traditional tobacco’s’ footsteps and rely heavily on point-of-sale advertising and price promotions.

  3. It will be interesting to see how public policy drives the demand for E-Cigarettes. Like the FDA, cities don’t know how to treat E-Cigs. Cities like New York City, which prohibits smoking indoors, does not ban the indoor consumption of E-Cigs because the vapor is less offensive than traditional smoke. This might be one aspect that consumers find attractive about E-Cigs. Once the FDA and public policy begins cracking down on the consumption of E-Cigs, will the demand be affected? Do E-Cigs lose their appeal if you cannot freely smoke them inside?

  4. Hi Savas,
    I just stumbled across this and, Predict the direction of change for either supply or
    demand in the following situations:

    a. Several new companies enter the home computer
    industry.

    b. Consumers suddenly decide large cars are unfashionable.

    c. The U.S. Surgeon General issues a report stating
    that tomatoes prevent colds.

    d. Frost threatens to damage the coffee crop, and
    consumers expect the price to rise sharply in the
    future.

    e. The price of tea falls. What is the effect on the
    coffee market?

    f. The price of sugar rises. What is the effect on the
    coffee market?

    g. Tobacco lobbyists convince Congress to remove
    the tax paid by sellers on each carton of cigarettes
    sold.

    h. A new type of robot is invented that will pick
    peaches.

    i. A computer game company anticipates that the
    future price of its games will fall much lower than
    the current price
    Kindest Regards

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