Adam Bowen and James Monsees launched their distinctive Juul e-cigarette in 2015. The product's sleek style...
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Adam Bowen and James Monsees launched their distinctive Juul e-cigarette in 2015. The product's sleek style led to the Juul becoming known as the 'iPhone of e-cigarettes'. Juul became the most popular e-cigarette in the United States by the end of 2017, and by the end of 2018 commanded a market share of over 70 per cent. In November 2018, the Altria Group (a traditional tobacco company) bought one third of the company for $12.8bn, making the two founders billionaires. Bowen and Monsees dreamt up their colourful e-cigarettes while pursuing their master's degrees at Stanford University. They were smokers themselves, wanting to free themselves of a dirty and dangerous habit. The Juul design uses a patented form of nicotine salts, at 5 per cent strength, to deliver the quick nicotine peak associated with traditional cigarettes. The website for their company declares its mission as to 'improve the lives of the world's one billion adult smokers by eliminating cigarettes'. Juul claims that it has converted one million adult smokers to Juul products, allegedly a safer product. Traditional tobacco companies typically rely on television advertising, but Juul initially focused on powerful social marketing campaigns featuring attractive young models and singers on Instagram, Twitter and YouTube. Campaigns went viral, with celebrities such as Bella Hadid posting about Juul. The result was a surge of use among teenagers, attracted also by Juul's sweet flavours and by the fact that its small size and low odours help concealment. In 2018, it was estimated that 3.6 million American schoolchildren were using e-cigarettes, presumptively mostly Juuls. However, Juul faced increasing criticism from the media, health professionals and regulators over its marketing.. Nicotine addiction can cause substantial damage to the developing brain, including lasting impairment to memory and attention span, and increased psychiatric conditions such as depression and anxiety. Four lawsuits were filed in 2018 in the United Sates against Juul by parents, underage users and others, attacking its marketing strategy and safety claims. Monsees declared: 'Any underage consumers using this product are absolutely a negative for our business. We don't want them. We will never market to them. We never have.' The company launched a new marketing and social media code underlining that its products were not appropriate for young people, switched to using only models aged over 35, restricted the availability of sweet flavours, and made increasing use of traditional television rather than social media channels. At the same time, it began exploring markets overseas. Juul's first overseas market was Israel, which it entered early in 2018. At the time, Israel had no regulations on e-cigarettes. However, the Israeli government responded within two months, banning Juul on the grounds that its 5 per cent nicotine concentration was two and a half times the level required by the European Union, a norm that Israel freely adopted. Juul next launched in the United Kingdom, still in the European Union, using a formulation with less than 2 per cent nicotine. In late 2018, Juul launched in Canada, where a relaxed legal regime allowed it to offer both 3 and 5 per cent formulations plus a range of flavours larger than the recently restricted ones in the US. At the same time, Juul was revealed to be considering expansion into Asia. Indonesia was one potential target market, given its fast-growing population of nearly 270 million. Indonesia is also one of a handful of countries which has not signed the World Health Organization's global treaty on tobacco control: two thirds of Indonesian men smoke tobacco daily. Other markets Juul was reportedly considering were Malaysia, Singapore, India, South Korea and the Philippines. Main sources: Fast Company, December/January 2018/19; Reuters Business News, 18 November 2018; Forbes, 16 November 2018; www.juul.com. Questions 1 Assess the relative importance of formal laws and informal norms for the development of Juul's strategy in the United States. 2 How do you think the different institutional environments internationally have influenced Juul's overseas strategy so far and what kinds of countries do you think it should prioritise? Adam Bowen and James Monsees launched their distinctive Juul e-cigarette in 2015. The product's sleek style led to the Juul becoming known as the 'iPhone of e-cigarettes'. Juul became the most popular e-cigarette in the United States by the end of 2017, and by the end of 2018 commanded a market share of over 70 per cent. In November 2018, the Altria Group (a traditional tobacco company) bought one third of the company for $12.8bn, making the two founders billionaires. Bowen and Monsees dreamt up their colourful e-cigarettes while pursuing their master's degrees at Stanford University. They were smokers themselves, wanting to free themselves of a dirty and dangerous habit. The Juul design uses a patented form of nicotine salts, at 5 per cent strength, to deliver the quick nicotine peak associated with traditional cigarettes. The website for their company declares its mission as to 'improve the lives of the world's one billion adult smokers by eliminating cigarettes'. Juul claims that it has converted one million adult smokers to Juul products, allegedly a safer product. Traditional tobacco companies typically rely on television advertising, but Juul initially focused on powerful social marketing campaigns featuring attractive young models and singers on Instagram, Twitter and YouTube. Campaigns went viral, with celebrities such as Bella Hadid posting about Juul. The result was a surge of use among teenagers, attracted also by Juul's sweet flavours and by the fact that its small size and low odours help concealment. In 2018, it was estimated that 3.6 million American schoolchildren were using e-cigarettes, presumptively mostly Juuls. However, Juul faced increasing criticism from the media, health professionals and regulators over its marketing.. Nicotine addiction can cause substantial damage to the developing brain, including lasting impairment to memory and attention span, and increased psychiatric conditions such as depression and anxiety. Four lawsuits were filed in 2018 in the United Sates against Juul by parents, underage users and others, attacking its marketing strategy and safety claims. Monsees declared: 'Any underage consumers using this product are absolutely a negative for our business. We don't want them. We will never market to them. We never have.' The company launched a new marketing and social media code underlining that its products were not appropriate for young people, switched to using only models aged over 35, restricted the availability of sweet flavours, and made increasing use of traditional television rather than social media channels. At the same time, it began exploring markets overseas. Juul's first overseas market was Israel, which it entered early in 2018. At the time, Israel had no regulations on e-cigarettes. However, the Israeli government responded within two months, banning Juul on the grounds that its 5 per cent nicotine concentration was two and a half times the level required by the European Union, a norm that Israel freely adopted. Juul next launched in the United Kingdom, still in the European Union, using a formulation with less than 2 per cent nicotine. In late 2018, Juul launched in Canada, where a relaxed legal regime allowed it to offer both 3 and 5 per cent formulations plus a range of flavours larger than the recently restricted ones in the US. At the same time, Juul was revealed to be considering expansion into Asia. Indonesia was one potential target market, given its fast-growing population of nearly 270 million. Indonesia is also one of a handful of countries which has not signed the World Health Organization's global treaty on tobacco control: two thirds of Indonesian men smoke tobacco daily. Other markets Juul was reportedly considering were Malaysia, Singapore, India, South Korea and the Philippines. Main sources: Fast Company, December/January 2018/19; Reuters Business News, 18 November 2018; Forbes, 16 November 2018; www.juul.com. Questions 1 Assess the relative importance of formal laws and informal norms for the development of Juul's strategy in the United States. 2 How do you think the different institutional environments internationally have influenced Juul's overseas strategy so far and what kinds of countries do you think it should prioritise?
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1 Jule is an American ecigarette manufacturing company that was established in 2017 The company offers a unique product of electronic cigarette for the first time in the market The company gave reason ... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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