Pricing strategy is an important element of any product marketing campaign. Given that a big advantage that the e-Cigarette (e-cig) industry has over combustible cigarettes is its lower price point, it is not surprising to see price being a central element in many advertisements. One of the reasons that e-cigs can be priced lower than traditional cigarettes is that unlike conventional cigarettes, e-cigs do not contain any tobacco and therefore are not subject to the hefty cigarette tax but only to local sales tax.
As with all consumer products, discounts are widely used by the industry to drive short-term sales, remain competitive, and urge price-minded consumers to use the product. Price discounts offered by e-cig brands include percentage discounts, multi-pack offers, and “buy one get one free” deals. Since e-cigs are primarily sold online promotional discounts, especially through social media channels during the holidays, are extensively being used to grab a larger market share. As the e-cig market continues to grow and begins to utilize more retail outlets and convenience store chains to sell its products, it is expected that more e-cig companies like tobacco companies will offer retail owners incentives for ordering their products, placing advertisements in specific locations, and providing prime shelf space for their product. This in turn will drive more consumers to their products.
Price is a powerful tool that promote product use. For teenagers who are very price sensitive, the lower price of disposable e-cigs may make for an easy introduction to a product that is often described as a “gateway” to addiction. 1
1. Grana, Rachel A. "Electronic cigarettes: a new nicotine gateway?." Journal of Adolescent Health 52.2 (2013): 135-136.