Fighting illegal trading Imperial Tobacco

A company spokesperson explained: “We are very flexible and try to follow the market changes at all times; for now this seems to be the most efficient development strategy. It is hard to predict, however, whether we will continue with this strategy in the long term.”

The expansion of small stores such as Tesco Express has been targeting town centres and housing estates instead of locations in the outskirts of the towns. Most of these shops were previously operating as supermarkets. Tesco buys or rents them and refurbishes them to meet the identified local needs. Many of these shops are now operating in Budapest but more and more are opening across the country.

Focus on own-label brands

The economic downturn created a huge challenge for the whole retail sector, as the company spokesperson says: “We had to satisfy the increased customer demand for cheaper products, therefore the assortment of these products has been greatly increased. At the same time, it was a challenge for us to balance the price boosting effect of the economic crisis and try to sell products that were not more expensive than a year ago.”

The most important product range that was specifically created to respond to the negative effects of the changing market is Tesco’s own-label products. These products have similar qualities to branded products but at the same time they are available at much more favourable prices.

The introduction of Tesco Színes in 2007 brought a new element within Tesco’s ownlabel brands. The range was established to create a new brand that suggests higher quality value than Tesco’s oldest brand, Tesco Economy, which guarantees the lowest prices on the market. The brand name, Színes (meaning Colour) was created by the customers themselves. The range is marketed in attractive packaging and offers a wide variety of goods: fresh and dry products, cosmetics and household chemical goods. Products in the Finest category represent premium quality products at lower prices.

In spring 2009 Tesco launched the Light Choices range in Hungary. This range includes nutritious products that have reduced calories and low fat and sugar content and they are particularly popular among people who live a healthy lifestyle. A new category, the Organic range arrived from England in 2008 and appeals to ethical shoppers, as all products in this range are fair trade goods.

In recent years Tesco has introduced a new discount product range under the name of Családi Márkák (Family brands), which provides great value for the whole family. Products in this range are only available in Tesco stores and they are specifically marketed to compete with products at special discount stores.

Technika, is Tesco’s own brand for electrical goods including LCD and traditional CRT televisions, DVD players, MP3 players and other household equipment. The Cherokee clothing brand was introduced in central Europe including Hungary in 2006 and has been increasingly popular ever since.

A local focus

In Hungary, Tesco has a strong focus on sourcing products from local suppliers. In fact, local products account for around 85 per cent of its sales, and some categories are even higher: for instance, 92 per cent of dairy products sold in its Hungarian stores come from Hungarian producers

In order to foster local production, the company has also developed a support network for its local suppliers, including seminars and a suppliers’ academy. In fact, its efforts in Hungary have been so successful that its suppliers export more than £100 million worth of products to the UK, including TVs, lightbulbs, wine and sweetcorn.

Additional services

Since 2003, Tesco in Hungary has been offering a wide variety of financial services including loans, credit cards and club cards for consumers. In 2009, many new services were introduced: customers are now able to purchase travel insurance, apply online for casco (vehicle safety) insurance and book their holidays with Tesco on the internet. Customers can select their most suitable solutions from offers provided by 30 different banks and insurance companies.

In recent years Tesco has been extending its services even further and intends to respond flexibly to customer demands. The retail group carries out an enormous amount of market research in Hungary and builds its findings into its operations. “Customers’ buying experience is a very important value-adding factor,” says the spokesperson. “The competition is very strong; there are too many players in this sector. Product price is one of the most important issues but there are many other factors that significantly affect customers’ choice. As in other European countries, consumer buying behaviour in Hungary is very sensitive to promotions. They are less likely to stay loyal to a particular chain or retailer; they would rather compare what products are available at what prices in which retailer. They make their decision based on the free promotion leaflets. This is why it is extremely important that our promotion offers have a wide variety and the accessibility of these promotions is also a key question.”

Putting the customer first has put Tesco in a league apart. Service, quality and variety are the key components of Tesco’s success. The range and diversity of stores, products and services mean that Tesco is ready and able to face the challenges of the coming months and years. n

FIGHTING ILLEGAL TRADING

Imperial Tobacco Polska, of Jankowice near Poznan, is the leader in Poland’s tobacco market, with about a 50 per cent market share. The company is also ranked third in the country in terms of cigarette sales.

Imperial Tobacco Polska is a part of thw Imperial Tobacco Group, the leading international tobacco company, which manufactures and markets a comprehensive range of cigarettes, tobaccos, rolling papers, cigarette tubes, cigars and cigarillos. Imperial Tobacco’s products are available in more than 160 countries around the world. Altogether the group has 46 factories and employs about 36,000 people. Imperial Tobacco entered the Polish market in 2002 when it purchased the company Reemtsma, which in 1996 had acquired a majority stake in WWT SA, a local cigarette producer from Poznan. In 2000, Reemtsma built a modern facility in Jankowice, near Poznan, and four years later its name was changed to Imperial Tobacco Polska SA. Today Imperial Tobacco Polska SA employs around 800 people.

Since 2008, when the Imperial Tobacco Group acquired French and Spanish tobacco producer Altadis, an Imperial Tobacco factory has been operating in Radom. Since 2011 the Radom company changed its name from Altadis Polska SA to Imperial Tobacco Polska Manufacturing SA and it currently employs about 500 people. The company’s core products include such cigarette brands as Davidoff, West and Route 66. Other products offered by ITP include tobacco (including Route 66, Fairwind, Drum and Amphora), a wide range of cigars (including the Pleiades, Guantanamera, Vegafina, Fleur de Savane), cigarillos (including Mini Cohiba, Mini Montecristo, Mini Romeo y Julieta) and papers, as well as tubes and machines for cigarettes.

In September this year (2013), Imperial Tobacco Polska SA completed the development of the Janowice plant. Thanks to the new production and storage halls of about 230,000m2, the facility has increased its potential production and stock capacity, improved the process of tobacco manufacturing, as well as strengthened the company’s key position in the Imperial Tobacco Group.

Against illicit trading

The illegal trade of tobacco products (smuggling and counterfeiting) is one of the most serious problems faced by the tobacco industry in Poland. The black market consists of tobacco goods smuggled across the eastern border, counterfeit products made in the country and illegal trade. The economic situation in the country as well as the growth

Manufacturing Plant and office of Imperial Tobacco in Jankowice