Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116- BUSINESS PLAN SPAIN-March 15th 2013Jose Luis Ibarra
Jose Luis Ibarra // email@example.com //+34 655434116• SPAIN MAIN FIGURES• TOBACCO MARKET IN SPAIN• TARGET GROUP (Consumers)• COMPETITORS• PRODUCT• PRICE• PLACE (Distribution)• PROMOTION• SWOT SMYRNA• ACTIONS (Steps to follow)INDEX
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116•GDP 2012: 1.051.339 M €•GDP per cápita: 22.800 €•Population: 46 M people•Unemployment rate: More than 25% (6M people)•Smokers: 24% (1.1 M people)•Number of Estancos (Tobacco Shops): 15.779•VAT: 21%•Total taxes of tobacco: around 80%SPAIN MAIN FIGURES
Jose Luis Ibarra // email@example.com //+34 655434116Spain is typically divided in 5 commercial areas:•North•South•Centre (Madrid and surrounded cities)•East (Cataluña and C. Valenciana)•CanariasSPAIN MAIN FIGURES
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116TOBACCO MARKET IN SPAINGovernment Regulation:The tobacco business in Spain is closely regulated by the Governmentthrough the “Comisionado para el mercado del tabaco”The special taxes and VAT of tobacco is an important revenue stream forthe government generating nearly 9,400 Million €.(2012)80% of the price of the pack of cigarettes is tax, being one of the highesttax of Europe.Tobacco is only allowed to be sold in the official shops called “Estancos”Law against-tobacco 2/01/2011.Since 2011 it has been illegal to smoke in enclosed spaces such asoffices or bar/restaurants etc. Moreover, it is illegal to smoke in openspaces such as school areas, near to medical centers and childrengardens/parks.It is still legal to smoke in smoking clubs (With nonprofit purposes) whichare expanding a lot in the recent years.
Jose Luis Ibarra // email@example.com //+34 655434116TOBACCO MARKET IN SPAINBy now, the Estancos can only buy tobacco from the officialwholesalers approved by the “Comisionado” who have the“monopoly”BUTAn appeal has been sent to the European commission toallow Estancos to import and export tobacco freely.According to the ECOT (The Spanish association ofentrepreneurs of tobacco) the final decision should betaken this year.
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116TOBACCO MARKET IN SPAIN•In general there are more male smokers than female•The higher % of smokers are in both sexes between 45-54years old.•The greater % of Ex-smokers are males 65-74 years oldand females 45-54 years old.Smokers in Spain:24% of the Spanish population are smokers16 -24 years 25-34 35-44 45-54 55-64 65-74Daily SmokersCasual SmokersEx SmokersNever SmokedSource: European Survey of Health in Spain 2009 INECopyright INE 2013Smokers by age and sex% of population over 16 years oldMen Women16 -24 years 25-34 35-44 45-54 55-64 65-7428,9 36,8 37,5 38,4 26,6 16,3 23,5 28,6 29,2 29,7 13,2 5,46,3 5,9 4,2 3,7 2,9 1,8 6,3 5 4 3,8 1 0,44,7 14,8 20,5 27,9 22,5 15,8 6,742 48,1 6,4 15,242,5 37,8 3020,846 44,1 70,1 87,528,5 33,9 63,8 51,260,1
Jose Luis Ibarra // email@example.com //+34 655434116TOBACCO MARKET IN SPAIN•In recent years there have been several price increaseswhich have caused an important decrease on sales.•Smokers have quitted or changed to roll cigarettesSource: Comisionado para el mercado de tabacosEvolution of Sales of 20 pack cigarretes010002000300040005000Year2000Year2001Year2002Year2003Year2004Year2005Year2006Year2007Year2008Year2009Year2010Year2011Year201220 Packs cigarrettes
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116TOBACCO MARKET IN SPAINThe total sale of cigarettes in Spain in 2012 was10,799,877,519 € with a peak season in summer months.Source: Comisionado para el mercado de tabacosSales of cigarrettes in 2012 by month0200.000.000400.000.000600.000.000800.000.0001.000.000.0001.200.000.000JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberSales in Euros
Jose Luis Ibarra // email@example.com //+34 655434116TOBACCO MARKET IN SPAINBrands EurosMARLBORO 1.548.602.370WINSTON 1.284.421.593CHESTERFIELD 984.734.418FORTUNA 926.078.260CAMEL 708.477.659DUCADOS NEGRO 660.278.623LUCKY STRIKE 629.941.275L&M 544.779.568NOBEL 499.796.957DUCADOS RUBIO 428.270.157PALL MALL 215.471.530DUCADOS RUBIO BLANDO 201.721.931FORTUNA RED LINE 136.004.474JOHN PLAYER SP. 109.672.545Others 1.921.627.534Brands by the market share are divided as below:Source: Comisionado para el mercado de tabacosMarket Share by brands in Euros MARLBOROWINSTONCHESTERFIELDFORTUNACAMELDUCADOS NEGROLUCKY STRIKEL&MNOBELDUCADOS RUBIOPALL MALLDUCADOS RUBIO BLANDOFORTUNA RED LINEJOHN PLAYER SP.Others
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116TOBACCO MARKET IN SPAINPipe Tobacco* in Spain:2012 sales of pipe tobacco in Spain were 40,056,257 €,decreasing by 35% from 2011 (61,460,339 €).In volume, there were sold in 2012 more than 883 tons ofpipe tobacco, dropping by 37% from 2011 (1,402 tons).Source: Comisionado para el mercado de tabacos*The Comisionado includes in the same group statistics ofthe normal pipe tobacco together with the Water pipetobacco (Shisha tobacco)
Jose Luis Ibarra // email@example.com //+34 655434116TOBACCO MARKET IN SPAINPipe tobacco in Spain:The Market Share by brands in Euros in 2012 was as below:We can say it is a diverse market with 71 brands operating.The first 10 brands sell the 60% of the total salesSource: Comisionado para el mercado de tabacosMarket share 2012 Pipa tobacco (Value €)BRAVO 11,79%GOLDEN AMERICAN 10,46%EXCITE 7,73 %NAKHLA 5,87%SPECIAL STAR 5,58%BIG CHIEF 4,82%AMSTERDAMER 4,36%BORKUM RIFF 3,75%AL FAKHER 3,65%FLORINA 3,63%BULLBRAND 3,32%BASIC 3,05%MARK 2,55%AL SULTAN MOLASSES 2,36%OTHERSBrand Euros Acum1 BRAVO 11,79% 4.722.339 11,79%2 GOLDEN AMERICAN 10,46% 4.190.665 22,25%3 EXCITE 7,73 % 3.094.504 29,98%4 NAKHLA 5,87% 2.349.953 35,84%5 SPECIAL STAR 5,58% 2.233.104 41,42%6 BIG CHIEF 4,82% 1.930.486 46,24%7 AMSTERDAMER 4,36% 1.747.848 50,60%8 BORKUM RIFF 3,75% 1.502.506 54,35%9 AL FAKHER 3,65% 1.463.656 58,01%10 FLORINA 3,63% 1.453.408 61,63%11 BULLBRAND 3,32% 1.328.267 64,95%12 BASIC 3,05% 1.220.232 68,00%13 MARK 2,55% 1.019.572 70,54%14 AL SULTAN MOLASSES 2,36% 943.342 72,90%15 OTHERS 10.856.365Total 40.056.247
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116TOBACCO MARKET IN SPAINDistribution:There are only 5 Wholesalers authorized by the “Comisionado”1.Logista2.Tamco3.Altadis4.Compañía de Tabaco Mediterranea5.ConwayTo be a distributor in Spain you have to be approved bythe“Comisionado”. You only have to fill in an application ontheir website and provide all required documents.The most important distributor by far is Logista
Jose Luis Ibarra // email@example.com //+34 655434116CONSUMER TARGETAlthough the Shisha tobacco is not really popular in Spainwe can differentiate 3 target consumers:•Arabic population in Spain•University students•Stressed PeopleThe only way to smoke Shisha tobacco is by going to aShisha/Hookah bar or buy a Hookah for your home.
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116COMPETITORSThere are few brands on the Estancos currently, distributedmainly by 2 distributors: Logista and Comet1.NaklahProducer: TradingConsultoria Internacional (Egipt)Represented by: Carlos Zouein2.Al FakherProducer: Al Fakher Tobacco FA (UAE)Represented by: Tobaccoland SPAIN S.L3. SimbadProducer: Von-Eicken (Germany)Represented by: Promotobacco S.L4. Mac BarenProducer: Mac Baren Tobacco CoRepresented by: Promotabaco S.L
Jose Luis Ibarra // email@example.com //+34 655434116COMPETITORSThere are few brands on the Estancos currently, distributedmainly by 2 distributors: Logista and Comet5. Cleopatra molasses6. Al Sultan
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116COMPETITORSNakhla Tobacco is distributed in Spain by TCI SL, working closely withLogista (Tabacalera Española).It is the main brand present in the “estancos” visited and they have awide variety of flavours mainly in 2 sizes:•50gr at 1.50 €•250 gr at 6 €They are without no doubt the main competitor of Smyrna tobaccos inSpain.
Jose Luis Ibarra // email@example.com //+34 6554341164P MARKETING PLANPRODUCTPRICEPLACEPROMOTION
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116•There are 2 tobacco brands: Rossanna and Adalya and oneTobacco and nicotine free: Nina Herbal.•This situation allows Smryna to target different segments ofconsumers and also different channels, as Nina Herbal canbe sold not only in Estancos but also in other shops.•The variety of flavors is huge, but it is also for the rest of thebrands.•It is sold in 5 different sizes: 50 gr, 125 gr, 250 gr, 500 grand 1.000 gr4P: PRODUCT
Jose Luis Ibarra // email@example.com //+34 6554341164P: PRODUCTMost of the distributors have in their portfolio other productsapart of tobacco. It could be a possible idea to offer othercomplementary products as water pipes or coals.This would give added value to the brand and of course itwould increase the profit of the business.Packaging:It is a must to print the advice/sign messages in Spanish onthe packaging:
Jose Luis Ibarra // firstname.lastname@example.org //+34 6554341164P: PRICE• The most important point regarding price is the highamount of tax that is added to the sale price (80%).– VAT: 21%– Ad valoren tax– Specific tax– Minimum tax• There is a official price list of all the tobacco brands soldin Spain which is monthly updated.
Jose Luis Ibarra // email@example.com //+34 6554341164P: PLACE (Distribution)Distribution channels:•Estancos (Tobacco Shops)•Automatic Machines•Shisha/Hookah Bars•Internet: http://www.cachimba.es/•Arabic Shops (Nina Herbal)To coordinate the sales with Logista Smyrna would need aKAM (Key Account Manager) to push the channel,introduce and promote the brands.
Jose Luis Ibarra // firstname.lastname@example.org //+34 6554341164P: PLACE (Distribution)There are 15.779 Estancos.The Spanish regions with the most number of Estancos arein order: Andalucia, Cataluña, Castilla y Leon, ComunidadValenciana, Comunidad de Madrid and Castilla la Mancha.Region TotalCantabria 327Ceuta (Ciudad Autónoma) 74Comunidad de Madrid 1.162Illes Balears 360La Rioja 144Melilla (Ciudad Autónoma) 61Navarra 262Principado de Asturias 569Región de Murcia 491TOTAL 15.779País Vasco 664Galicia 1.675Islas Canarias 122Comunidad Valenciana 1.491Extremadura 609Castilla-La Mancha 1.040Cataluña 1.953Aragón 728Castilla y León 1.687Andalucía 2.360
Jose Luis Ibarra // email@example.com //+34 6554341164P: PROMOTIONPromotion of Tobacco is also controlled by the “Comisionado”.It is not allowed to advertise Tobacco in general but we canpromote it in different ways:•Stand in Estancos (Negotiate conditions with each Estanco)•Promotion in Shisha/Hookah bars and Smokers clubs•Clipper as a gift (The value of the gift can not be higher thanthe 5% of the product itself)•Website for Spain (Minimal cost and maximum impact) andalso social networks.
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116SWOTTHREATS-Bad reputation of tobacco itself-Political regulations against tobacco-Taxes including VAT of nearly 80%-Distribution reduced just to “Estancos”-Monopoly of LogistaOPPORTUNITIES+Only 2 large competitors+Continuous price increase ofcigarettes+Distribute water pipe/ coal as well+Possibility for Estancos to importthemselves (Pending approval of thelaw by the European Commission)WEAKNESSES-Shisha tobacco not popular-Brand not known in SpainSTRENGTHS+Higher quality than competitors+Nina Herbal range without tobacco+Own warehouse in Spain
Jose Luis Ibarra // email@example.com //+34 655434116ACTIONS: Steps to follow1. Register the brand in Spain (If not done already)2. Send the application for being an importer to the“Comisionado para el mercado de tabacos” and waitfor their green light.3. Contact with the main distributors to enter into“Estancos” or register as an importer and distributorand distribute by yourself to estancos after theapproval of the “Comisionado”4. Develop a cost analysis to set the best price policy.5. Promote the brand in Estancos, Shisha/Hookah barsand Smokers Clubs/Associations
Jose Luis Ibarra // firstname.lastname@example.org //+34 655434116SOURCESTobacco business in Spain:http://www.cmtabacos.es/http://www.altadis.com/grupo-imperial-tobacco.phphttp://www.preciotabaco.com/precios-de-tabaco-de-pipahttp://www.feriadeltabaco.comTobacco Associations:http://www.union-estanqueros.com/http://www.ecot.es/http://www.estanquers.cathttp://www.asezar.com/Distributors:http://www.tcisite.com/http://www.logista.comCompetitors:http://www.nakhla.comhttp://www.altawareg.comhttp://www.hookah-shisha.com/Online shops:http://www.cachimba.es/http://lacachimba.es/tienda/ (TCI shop)http://www.hookah-shisha.com/
Jose Luis Ibarra // email@example.com //+34 655434116PERSONAL CONTACTS• Clipper• Smokers asociations• Logista• Cataluña estancos networking• Media Agency• POS Agency• Web developer