SUMMER INTERNSHIP PROJECT REPORT

ON

“Analyzing consumer acceptance of E-cigarettes in Delhi-NCR”

SUBMITTED TO

ASIA-PACIFIC INSTITUTE OF MANAGEMENT, NEW DELHI.

IN PARTIAL FULLFILMENT OF THE REQUIREMENTS FOR THE AWARD OF

POST GRADUATE DIPLOMA IN MANAGEMENT

UNDER THE GUIDANCE OF

Prof. Ritu Gupta Dutta

SUBMITTED BY:

Shristi Sri

(2K17MKT07)

PGDM BATCH 2017-19

1
 PREFACE

As a part of PGDM curriculum and in order to gain practical knowledge

of the industry, I underwent summer internship at Godfrey Philips
IndiaPvt. Ltd., where I got an opportunity to work in field market and I
could experience the theoretical concepts of marketing being
implemented practically at field level and also got an opportunity to
experience the very basic working of corporates while attending
meetings at GPI office in Jasola. From this internship, I had learnt the
implementation of marketing concepts of customer interaction,
positioning etc. and also had a great experience in sales at the point of
contact with customers.

2
3
 CERTIFICATE

This is to certify that Ms. Shristi Sri, 2K17MKT07,a student of PGDM-

MARKETING in Asia-Pacific Institute of Management,New Delhi, has
carried out the summer internship Project Work presented in the report
titled “Analyzing consumer acceptance of e-cigarettes in Delhi-NCR”
for the award of post graduate diploma in Management for the
Academics Batch 2017-19,under my guidance.

Prof. Ritu Gupta Dutta

Date:

4
 DECLARATION

I, Shristi Sri,hereby declare that the project work entitled” Analyzing

consumer acceptance of e-cigarettes in Delhi-NCR”submitted towards
partial fulfillment of requirements for the awards of Post Graduate
Diploma in Management is my original work and the dissertation has not
formed the basis for award of any degree, fellowship or any similar title
to the best of my knowledge.

Place: Shristi Sri

Date: 2K17MKT07

5
 ACKNOWLEDGEMENT

I would like to express my profound gratitude to all those who have been
instrumental in the preparation of my project report. To start with, I
would like to thank Godfrey Philips India Limited for providing me the
chance to undertake this internship study and allowing me to explore the
area of marketing which was quite new to me and which may come out
to be very beneficial for my future assignments, studies and career
ahead.

I wish to place on records, my deep sense of gratitude and sincere

appreciation to my company guide, Mr. Deepak Behl (Assistant Brand
Manager) at Godfrey Philips India Limited who suggested and prepared
the entire framework of the project and encouragement, without which
the report could never have been completed.

I am deeply grateful, to my faculty guide Prof. Ritu Gupta Dutta for

her valuable suggestion, comments, feedback, guidance and support
throughout the course of work. It is only her cognizant efforts that my
endeavors have seen light of the day.

6
 Executive Summary
The project report is about analyzing the consumer acceptance towards e-cigarettes. As e-
cigarettes are alternate to smoking is a safe way of smoking for consumers who want to quit
smoking or reduce it. As people want that the time they smoke their body wont get harm through
it, so they try to shift towards e-cigarettes or cigalikes.

Objectives of the study:-

1. To study the consumer acceptance for Verge-XL in Delhi-NCR.

2. To study the placement or display of Verge-XL at different counters.

The project report will be having a PEST analysis of e-cigarettes and STP of e-cigarettes in the
current market. There will also be a swot analysis for the study.

With a populace of 11.2% of world smokers, India truly needs a decent and less unsafe option

to smoking. India, which is the home of right around twelve percent smoking populace of the
world furthermore, has one 6th of its passing credited to tobacco truly needs to discover
approaches to substitute and limit the utilization of tobacco items. According to 2017
information, around 1 million individuals bite the dust each year due to smoking, and vaping
being a less destructive substitute to smoking offers pertinence to the point of this task report,
i.e., " Analyzing consumer acceptance of E-cigarettes in DELHI-NCR ". Nicotine is the primary
addictive synthetic in tobacco which gives an adrenaline surge when blended in circulatory
system and furthermore triggers dopamine that is referred as the cerebrum's cheerful synthetic
and over the time use of tobacco in any frame can prompt mental and physical reliance on it.
Furthermore, e-cigarettes being a less hurtful substitute to smoking (with no cancer-causing
substance) makes the examination more applicable.

The report involves a brief introduction of e-cigarettes, what is it position in INDIA, consumer
preference towards it, scope of e-cigarettes, and many other facts,

The report also talks about its competition in the market with other brands. The stores covered
for the study were modern trade and general trade.

The report includes both primary and secondary data. It involves a consumer survey for better
understanding.

7
 TABLE OF CONTENTS

CONTENTS PAGE NO
List of Graphs IX
CHAPTER 1: INTRODUCTION 10
1.1 Introduction of the company 10
1.2 SWOT analysis 12
1.3 PESTEL analysis 13
1.4 Segmentation, targeting and Positioning 14
1.5 Recent scenario of smoking in India 16
1.6 E-cigarette 16
1.7 History of E-cigarettes 16
1.8 E-cigarettes in India 17
1.9 Need and relevance of study 19

CHAPTER 2: REVIEW OF LITERATURE 21

2.1 Literature review 21
2.2 Scope of the study 23

CHAPTER 3: METHODOLOGY AND ANALYSIS 24

3.1 About the project 24
3.2 Product 24
3.3 Competition 24
3.4 Channels covered 25
3.5 Method of study 26
3.6 Sampling method 27
3.7 Data collection 27
3.8 Research methodology 27

8
 3.9 Analysis of data 27
3.10 Statistical analysis of data 31

CHAPTER 4: RESULTS 34
4.1 Results 34
4.2 Weaknesses 34

CHAPTER 4: CONCLUSION 35
5.1 Conclusion 35
5.2 Limitations 35
5.3 Recommendations 36

APPENDICES 37

REFERENCES 39

LIST OF FIGURES

S.NO FIGURE PAGE

1. Graph 1.1 27
2. Graph 1.2 28
3. Graph 1.3 29
4. Graph 1.4 29
5. Graph 1.5 30
6. Graph 1.6 31
7. Graph 2.1 31
8. Graph 2.2 32
9. Graph 2.3 32
10. Graph 2.4 33

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 CHAPTER-1

Introduction Of The Company

1.1 Introduction

Godfrey Phillips India (GPI) Limited is a flagship company started by the well-known Modi
Enterprises with its headquarters in Delhi. With some of the best cigarette brands in its kitty like
Four Square, Red & White and Cavanders, as well as brands like Jaisalmer, Steller and Black
Jack meant for exports and also the newest inclusions like the Hawk Eye (targeting the premium
segment), GPI has emerged to be India’s largest cigarette manufacturing company. Its success
story not only includes manufacturing for domestic and international markets single-handedly
but also with its license agreement with Philip Morris, GPI manufactures and sales Marlboro
cigarettes in India.

The company has also launched electronic vaping devices as well under the vaping division in
order to fulfill their endeavors of creating a new category of vaping , where in the recent past
they had launched Verge as their brands for electronic vaping devices, and their most recent
product in this category is Verge-XL which was developed with increase in the battery life and
more number of puffs per cartomizer as compared to their earlier product i.e ZEST, LITEJOY.

Product Portfolio:
The products are divided into:

1. Tobacco Products

2. Non Tobacco Products

• Tobacco Products:

Cigarettes: Godfrey Phillips India manufactures some of the most popular and iconic cigarette
brands in the country like Four Square, Red & White, and Cavanders. They also have a strategic

10
alliance with Philip Morris, for the manufacture and distribution of the iconic brand, Marlboro,
in India.

A company known for its innovations, they have created products like Stellar - India's first slim
cigarette, and ‘i-gen' - a king-size cigarette that was the first in India to conform to EU norms of
10-1-10.Godfrey Phillips India's newest innovation is the launch of Hawk Eye – a range of
premium king size cigarettes offered in no less than 16 blends.

Cigars: The country's cigar market was fragmented and largely unorganized until Godfrey
Phillips India forayed into it.
Now, an entire range of renowned brands, both hand-rolled and machine-rolled ones, including
Cohiba, Montecristo, Romeo y Julieta, Partagas, Guantanamera, Davidoff, Phillies, Hav-A-
Tampa, Don Diego, Santa Damiana, Flor de Copan, Henri Wintermans and many more, are
available in the country.

• Non Tobacco Products:

Tea: Godfrey Phillips India's Tea City brand is present across all major price points, with a range
of teas tailor made for consumers across India. These include:

*Symphony select
*Symphony Premium
*Super Cup Gold
*Super Cup Premium
*Super Cup

Chewing Products: Godfrey Phillips India entered the chewing category in 2010 with the Pan
Vilas brand of premium pan masala.

Pan Vilas Silver Dewz, a premium mouth freshener made of silver-coated flavoured Elaichi, is
the newest addition to the Pan Vilas portfolio, expanding the brand's range of offerings in the
competitive mouth freshener category.

Confectionary: Godfrey Phillips India's maiden venture into the highly competitive
confectionery segment took place in 2008, when they launched the Funda Mint mouth freshener.

11
 Retail: The Twenty Four Seven chain of convenience stores are another example of Godfrey
Phillips India's innovative approach to business. A first in India, these stores are one of the only
organised retail chains in the ‘round-the-clock' convenience store format.

EVD- Electronic Vaping Device, named Verge XL which is non tobacco product and contents
pure nicotine, mainly own as vaporiser. It is a better alternative to traditional cigarettes.

1.2 SWOT ANALYSIS

STRENGTH WEAKNESS

● Nationwide Presence ● Lack of product awareness

● Dedicated workforce ● Product is costly
● Good Market Reputation ● Low levels of acceptance for the product
● Use of advanced technology ● Supply Glitches to retailers leading to non-
availability

OPPORTUNITIES THREATS

● Slant of advanced indian customer
towards new ways of life where vaping
could be presented as a way of life
● More target audiences
• Lawful limitations that does blocks the item
development in the market
• Banning of e- cigarettes in certain states like
Punjab, Kerela and Bangalore.
• Rivalry to traditional cigarettes by e-cigarettes
which could prompt cannibalization.
• The product is on the Verge of getting a
closure

12
1.3 PESTLE ANALYSIS

Political

• With GST coming into play, price of e-cigarettes has increased by 6%approx.
• At national level leaders in states like that of Punjab, UP and Bihar owing to social
sentiments of public taking a move against tobacco industry and even a move against
vaping in Punjab, Bangalore and Kerela

Economic

● Indian economy has, then again, encountered a higher development rate since money
related year 2014-15. In any case, after demonetization the development rates have
impeded a bit.
● Increase in foreign direct investments has further boosted the Indian economy.
● Prior to implementation of the Goods and Service Tax, the tax rates have always been
kept high for tobacco-based products.
Social

● With awareness spreading regarding the ill effects of tobacco, people will be shifting to
vaping.
● Need of compliance towards CSR as mentioned in companies act, 2013

Technological

TECHNOLOGICAL ABSORPTION, ADOPTION AND INNOVATION

● Converted imported GD X2NV cigarette packing machine from 69mm to 64mm set up
with indigenously developed technology.
● Linked the missing outer detection system to the data acquisition system on the cigarette
packing machine for fool-proofing the packing operations.
● Upgraded from mechanical type sensors to optical camera sensor in chewing products
plant for detecting empty pouch on all packaging machines.
● Utilised existing “Tins Seaming Machines” for packing new SKUs in the chewing
products plant by developing conversion kits locally.

13
Legal

● The concept of plain packaging and excessively large pictorial health warnings has given
rise to a debate in the Intellectual Property Rights (IPR) circles across the globe since it is
strongly felt that it may erode the value of the distinctive trademarks and pack designs
that have been assiduously developed and nurtured over a period of time.
● Compliance of laws related to manufacturing and selling of tobacco products and also
banning of tobacco products in various states of India.
● Compliance of statutory requirements of disclosures, CSR, various central and state
levied taxes, etc.
Environmental

• Making production more eco-friendly which could lead to sustainable development

1.4 SEGMENTATION, TARGETING, POSITIONING

Segmentation

Geographic segmentation:-

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Age-standardised smoking prevalence among adults aged 15-69 years, by state: 1998–2010,
absolute change (%) per decade and number of smokers in 2015 (in millions). GATS, Global
Adult Tobacco Survey; SFMS, Special Fertility and Mortality Survey. Note that reliable
estimates for absolute changes per decade could not be estimated for women.

• The above is a figure referred from http://www.cghr.org/wordpress/wp-

content/uploads/low_bmjgh-smoking-trends-paper.pdftjis link, that shows the smoking
Indian population geographically in 2015

DEMOGRAPHIC SEGEMENTATION:-
● India has over 100 million adult smokers, the second highest number of smokers in the
world after China.
● The age-standardised prevalence of smoking declined modestly among men aged 16–69
years, but the absolute number of male smokers at these ages grew from 79 million in
1998 to 110 million in 2017./
● This is due to population growth offsetting modest declines in prevalence
● Female smoking at ages 18–69 years has also risen.

PSYCHOGRAPHIC SEGEMENTATION:-
As per the feedbacks collected by us in the month of April there are only 10% people who prefer
electronic cigarette as their generation product.

Targeting :-
• The markets targeted by the Evd division of GPI are the places where people come to
find smoking tobacco products these markets are as follows:-
• Pan Bhandars for general trade
• Twenty four seven stores, subsidiary of GPI
• Five websites (ebay.in, chaisutta.com, lovelites.com and two more)

15
Positioning:-

• The product has been primarily positioned at twenty four seven stores and Pan Shops
where maximum smoking population can be targeted.

1.5 Recent Scenario of smoking in India

India is the second biggest buyer and third biggest maker of tobacco on the planet with 277
million individuals utilizing tobacco items and the aggregate cigarette showcase going between
$6 billion to $9 billion. India has one of the world's weakest tobacco administrations in the space
of well-being security, with a rank of 136 among 198 nations. The said rank is as indicated by
the International status write about cigarette bundle well-being admonitions, 2014. Roughly one-
6th of the tobacco related passings happen in India giving it various around 1.1 million. India
was one of the eight nations to approve the WHO system tradition on tobacco control (WHO
FCTC) on February 5, 2004. At that point, India has acknowledged to take after the rules for
measures that would urge smokers to stop and control nonsmokers from taking the propensity.

1.6 Electronic Cigarette

These are the handheld electronic gadgets that are created such that they can recreate the real
smoking. The system behind is that of warming a fluid that produce a vaporized, normally called
a vapour, that the client breathes in. This class falls under the classification of vaping, instead of
smoking making it feasible for a smoker to really have the sentiment a smoke without doing any
sort of ignition, taking a shot at the electronic batteries and create no smoke. The e-fluid
contained in the electronic cigarette is generally made of nicotine, propylene glycol, glycerin and
flavorings, and a portion of the e-fluids don't contain nicotine.

1.7 History of electronic cigarettes

Herbert A. Gilbert is for the most part credited with the making of the primary gadget that
nearly took after the cutting edge e-cigarette. He reports accepting patent in 1965 (which was
documented in 1963) and made models (potentially that never included nicotine), however
neglected to popularize it. Beginning in 1979, Phil Ray, one of the pioneers of PCs, worked with

16
his own doctor Norman Jacobson to make the principal popularized minor departure from the e-
cigarette (which was not really electronic; it depended on dissipation of the nicotine). They
played out the main known formal research in the field on nicotine conveyance. The
commercialization of the item achieved significant retailers. Yet, the gadget was never a
promising innovation for nicotine conveyance. Various licenses for nicotine inhaler gadgets were
recorded all through the twentieth century and mid 2000s by both tobacco organizations and
individual designers, with a whirlwind of action in the 1990s. Numerous depended on dissipation
or physical drive, however a couple were genuinely like current e-cigarettes. One synthetic
response based framework that was developed in the 1990s is still in the pipeline. Reynolds
conveyed to showcase the Eclipse "warm not-consume" gadget, whose working falls some place
in the middle of that of an unadulterated nicotine inhaler and a combusted cigarette. Items nearly
looking like current e-cigarettes pushed toward commercialization in the 1990s. What might turn
into the main economically fruitful electronic cigarette is made in Beijing, China by Hon Lik, a
52 year old drug specialist, innovator and smoker. He purportedly made the gadget after his dad,
additionally a substantial smoker, kicks the bucket of lung growth. The organization Lik worked
for, Golden Dragon Holdings, built up the gadget and changed its name to Ruyan, which
signifies "like smoke." In 2006-2007 electronic cigarettes were presented in Europe and US.

1.8 E-cigarettes in India (Alternative to smoking)

With its fame and acknowledgment at all levels of financial profiles in India, smoking
additionally brings its revile. Be that as it may, the decision of smoking is still broadly well
known and individuals in India adore exploring different avenues regarding different other
options to smoking for various experience and assorted flavors.

However, e-cigarettes in India, is catching attention of the smoker population due to various
factors as discussed below:

1. Easy availability: There were days, when e-Cigarette must be transported in from remote
nations as there were no producers or advertisers of e-Cigarette India. With the transformation
internet promoting stages, requesting e-Cigarette in India has turned out to be simple with online
buy.

17
2. Same flavor with less hassle: e-Cigarette in India is considered as a form articulation for some.
Particularly these e-Cigarette doesn't require lighting and don't create fiery debris. This is one of
the unmistakable focal points for smoking when smoking in a limited territory and littering isn't
allowed. As e-Cigarette taste precisely like their typical partners, individuals smoking this
electronic cigarette don't feel any distinction, while smoking these cigarettes. Eventually
individuals adjusting to e-Cigarette in India, spare a great deal of botheration while smoking and
can seek after their propensity with no generation of real smoke or slag.

3. Quality products at reasonable costs: e-Cigarette in India accompanies quality confirmation

from very much rumored advertisers. Online accessibility and simple home conveyance makes
these cigarettes open to the general population adoring smoking. Additionally the e-Cigarette can
be conveyed in take without stressing for being twisted or pulverized. In the meantime, keeping
these cigarettes in the pocket doesn't notice awful as it occurs with ordinary cigarettes.
Additionally, its reasonable and prudent cost encourages individuals to receive e-Cigarette
smoking as a superior contrasting option to tobacco cigarettes.

4. Variety of flavors catering to various demands: e-Cigarette in India accompanies elective

flavor cartridge game plans. Smoking fans can taste flavors like menthol, typical tobacco etc
with various cartridges and refills. The e-Cigarette unit likewise can be arrange with particular
flavors and fragrance to satisfy the essence of the smokers. With rechargeable battery pack, this
e-Cigarette in India offers a superior other option to leaf tobacco cigarettes over a long run.

5. Less carcinogens & more fun: Vaping with e-Cigarettes offers a superior recommendation as
it doesn't create any cancer-causing agents as it occurs with tobacco cigarettes. Likewise the
smoke that leaves e-Cigarette are not really smoke, rather vapors. So smoking with vapors
enhances your odds against any physical infirmities, lessens cancer-causing agent admission and
offers you an advanced propensity for vaping with finest e-Cigarette in India. Any individual
changing to vaping from smoking can feel the distinction nearly inside a couple of days of use.
As a superior contrasting option to tobacco cigarette, e-Cigarette in India is putting forth you a
more practical decision (think about the normal cost per smoking) with a great deal of different
focal points. The market is developing as is the prevalence of e-cigarette offering a superior
world for the smoking darlings.

18
In Indian setting, there are numerous International brands (eg:- advance vapors USA, Smok
USA, Ismoka Eleaf) and numerous indigenous brands, for example, EON from ITC, Verge Xl by
GPI and numerous chinese brands are endeavoring to settle their foot in Indian E-cigarettes
advertise.

These brands are utilizing different customary channels to put their items in the market, and they
are notwithstanding utilizing non-ordinary channels, (for example, drug stores) to make greatest
conceivable mindfulness about e-cigarettes.

1.9 Need and Relevance of the study

With a populace of 11.2% of world smokers, India truly needs a decent and less unsafe option to
smoking. India, which is the home of right around twelve percent smoking populace of the world
furthermore, has one 6th of its passings credited to tobacco truly needs to discover approaches to
substitute and limit the utilization of tobacco items. According to 2017 information, around 1
million individuals bite the dust each year due to smoking, and vaping being a less destructive
substitute to smoking offers pertinence to the point of this task report, i.e., "Analyzing
Consumer Acceptance of E-Cigarettes in Delhi-NCR". Nicotine is the primary addictive
synthetic in tobacco which gives an adrenaline surge when blended in circulatory system and
furthermore triggers dopamine that is referred as the cerebrum's cheerful synthetic and over the
time use of tobacco in any frame can prompt mental and physical reliance on it. Furthermore, e-
cigarettes being a less hurtful substitute to smoking (with no cancer-causing substance) makes
the examination more applicable.

1.10 Objectives of the study

● To study the consumer acceptance for Verge-XL in DELHI-NCR.

● To study the placement or display of Verge-XL at different counters.

1.11 Organization of the Study

The study is efficient which begins with the introduction demonstrating the procedure took after
and a brief about leanings amid the entry level position, trailed by official rundown that gives the
concise data about the title, "Breaking down shopper acknowledgment of e-cigarettes in India ,

19
after that chapter by chapter list is incorporated. Encourage the principle body of the report
incorporates:

• Chapter 1: Includes introduction of the company ”Godfrey Philips India Pvt. Ltd.”,
recent smoking scenario in India, definition of electronic cigarettes, history of electronic
cigarettes in India, need and relevance of the study, objectives of the study
• Chapter 2: Includes the literature review of the research
• Chapter 3: Includes the research methodology of the study
• Chapter 4: Includes the findings and results of the study
• Chapter 5: Includes the conclusions of the study

The main study is followed by the appendix that includes the questionnaire provided by the
company itself, references.

20
 Chapter -2

2.1 Literature Review

An E-cigarette isa battery-operated apparatus alternative to smoking cigarettes. There is a fierce

debate regarding e-cigarettes in the Indian society as like world over. That debate is likely to
intensify as these devices grow in popularity and help people save lives, medical costs and
provide a healthier lifestyle.

E-cigarettes do not contain tobacco and do not produce smoke like in conventional tobacco
rolled cigarettes or Beedi. Vaporizers has a detachable cartridge or tank that contains ejuice or
eliquid, a blend of PG, VG, food flavors and sometimes nicotine. The “tank” or “atomizer” is a
central part of an e-cigarette, along with a coil and a battery.

Powered by a battery this apparatus heats to vaporize the liquid and creates vapours. (Hence
“vaping” is synonym to e-cigarette). This vapor will deliver the taste, as per the flavors and
nicotine depending on the strength 03, 06, 12, 18mg and flavor delivering a smoking like
sensation to the user and delivering the nicotine.

Herbert A. Gilbert in 1963 designed the first e-cigarette, modern e-cigarettes invented by a
Chinese pharmacist Hon Lik in 2003 came through China after an international patent was
awarded in 2007 – and ever since these have been wildly successful.

E-cigarettes now are a part of larger phenomenon known as tobacco harm reduction. Many
advocate the lack of harsh smoke produced by e-cigarettes, thereby reducing the amount of
second-hand smoke exposure. Naturally, there are other groups opposed to products that can add
to the allure of smoking. Most e-cigarettes still deliver nicotine to the user. Some worry that the
marketing of vaporizers to younger audiences could contribute to nicotine use in the future.E-
cigarettes yield fewer cancer causing agents than traditional smokes. Cigarettes contain between
5,000 and 8,000 detrimental chemicals, produced by the tobacco. Subsequently, e-cigarettes use
vaporing technology, and expose users to fewer harmful chemical compounds. Studies have
shown e-cigarettes to be effective as smoking cessation devices. Multiple surveys and research
papers have shown smokers to reduce their habit or to quit altogether through e-cigarettes. Some
have shown E-cigarettes to be as effective as Nicotine patches. Though second hand smoke
exists, the effects are far less harmful and second-hand effects of “vaping” are degrees lesser

21
than smoking. More socially acceptable and do not smell. E-cigarettes deliver same sensation
and experience for smokers with nicotine habits, not leaving any odor or staining teeth. A much
cheaper alternative to smoking, in India it’s almost 1/10 the cost of traditional cigarettes. Studies
show that vaping is atleast 40 percent cheaper.

According to Those in Opposition of E-Cigarettes

• Nicotine is still an addictive drug. Not all E-liquids sold in India contain nicotine, infact
most do not. Nicotine impacts the neurotransmitters in the brain, causing addictive
cravings and behavior.

• E-cigarettes use liquid nicotine, a highly dangerous substance even in small doses (far
more dangerous than tobacco leaves themselves). A statement which is still to be proven.

• Products are not regulated by FDA and some experts say, this has not been studied
enough to understand its risks.

• Advertisements to young people, studies show that e-cigarette ads reach more than 50
percent of 15 to 18-year-olds, and they are promoting addictive habits to young people.

• Experts agree that activity related to smoking is habit-forming, even without the help of
nicotine or tobacco, making opinions about e-cigarettes in India helping smokers quit
seem inconsistent.

Where do e-cigarettes in India stand today?

While the FDA has not yet expressed interest in regulating electronic cigarettes (and other
vaporizers), several State and Local jurisdictions have already begun cracking down on the use
of these products. Punjab, Maharashtra, Goa, etc are beginning to restrict the sale and use of e-
cigarettes. According to some studies e-cigarettes are playing an important role in reducing the
likelihood of young people smoking, in many cases acting as a "roadblock" to combustible
tobacco. Nearly 66 per cent of Indian see e-cigarettes as a "positive alternative" to tobacco
products. 69 per cent of Indian smokers would consider switching to e-cigarettes "if they were
legal, met quality and safety standards, and were conveniently available". A few smokers in
India have tried them although more than a third 36 percent express some level of familiarity
22
with them. Eighty per cent reported they should have a right to access information about less
harmful products. More than three-quarters agree that "through tax and regulatory policies, the
government should encourage adult smokers to switch to less harmful alternatives to cigarettes
and ensure they are not used by youth," says Heneage Mitchell, co-founder of factasia.org. There
is a clear need for action in India to regularise the industry and to establish quality standards, tax
the products rationally and ensure they are made available only to adults, like many other
consumer items. India is now the fourth largest illegal cigarette market in the world, according to
Euromonitor International -- a London-based private market research firm. "The government has
a great opportunity to ensure there is no repeat of the situation that has arisen with conventional
tobacco products,".

Top global public health experts have described e-cigarettes as "more than 95 per cent safer than
smoking," and have encouraged its use as a far less harmful alternative for smokers who either
find it difficult to quit or who enjoy their nicotine.

2.2 Scope of the Study

• The scope of existing report was limited. Since the competition is high so that the market
evolves everyday.

• It is observed from google trend that the trend of smoking is decling in India.

• Since the price will go up for regular cigarette there is great possibility of consumer
gradually switching to E-cigarettes.

• Chinese players have also captured the market with lots of variant flavor and by its
predatory pricing which was not that competitive during the time existing research was
made.

23
 Chapter 3

3.1 About the Project

To study the acceptance of cigalikes (E-cigarettes), in general and acceptance of Verge-XL

specifically in the vaping category. Visiting of the modern trade, general trade o and non-
conventional outlets and understanding the significance of these trade channels in the sales of
Verge-XL.

Currently, the acceptance levels of cigalikes and Verge-XL in particular are less then moderate
in the vaping category as they are having very minimal preference over vaporizers (mod and tank
vaporizers). So, there is a lot of need for product improvement in Verge-XL.

3.2 Product

Verge XL

It is a product of EVD (electronic vaping

division) of GPI (Godfrey Philips India Pvt.
Ltd. It is an electronic vaping device in form
of a cigalike which is designed to replicate
actual smoking in form of vapors. Verge XL
being available in the market in two flavors: -
one being the full tobacco flavor and the other
one being the menthol one.

3.3 Competition

The market is already flooded with many vaping devices that just not include the other cigalikes
(e-cigarettes), but also the electronic hookahs and various vaporizing devices in form of pen
and tank mods. Some competition comes from Chinese products like CE-4 and other Chinese e-
hookahs. The major competition to GPI’s EVD’s product line up (primarily Verge-XL) is from
ITC’s cigalike product EON.

24
 Others 10

Zesst 20

Ce4 30

Eon 20

If yes, which brand have you tried

0 5 10 15 20 25 30 35

3.4 Channels Covered

Company
warehouse

Regional
SKU's

Modern General
trade trade

25
Modern Trade for Verge XL: They consist of supermarkets that do retail of fast moving
consumer goods (FMCG), here we were assigned twenty four seven store at various locations in
Delhi.

The following observations were made at various assigned MT Outlets (Twenty four seven
stores):

• The Modern trade outlets that were assigned had an average of less footfall across all the
outlets assigned, however the response was somewhere neutral for Verge XL during its
sampling.
• The sales of the product were below average as the customers were already aware of
liquid filled electronic vapourisers.
• The product (Verge-XL) was being introduced as a substitute to smoking and during the
sampling, most of the regular smokers gave a feedback that both the flavors of the
product are not up to the mark for a regular smoker.
• The merchandising like display units, posters and hangings were available at most of the
stores and there were minor issues like non- availability of both the flavors at some of the
outlets.
• Sales at these Modern trade outlets were moderate according to the footfall these stores
received.

3.5 Method of Study

• The study is made from both primary and secondary data.

• The source of primary data was the customer interaction and the questionnaires which
were provided as feedback forms from the company
• The study also uses secondary data, that includes the internet
• Statistical tools of MS-EXCEL were used for analysis

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3.6 Sampling Method

Universe: The universe for our sampling were smoking population of Delhi

Judgment sampling : The technique was used as the most interactions were taken with smokers
only.

3.7 Data Collection

• Data was majorly collected from feedback forms which were the source of primary data.
• Exposure to 24X7 storeswere based on consumer feedback and interaction, compiled the
data regarding sales, feedback of the product which formed the secondary data.
• Some data was also collected from retailer interaction

3.8 Research Methodology

Descriptive research

• Consumer survey including consumer demographics

• Analyzing of consumer acceptance for Verge XL

3.9 Analysis of Data

1) Do you smoke?

Sales

no, 18

yes

yes, 62 no

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Graph 1.1:

• As per the survey done by us in June, 2018 and according to the interactions,78
percent consumers were smokers and the rest twenty five percent were non- smokers.
• However, the nonsmoking population, when asked about if there were any people in
their environment who are smoking or not and if they will be interested in
NRT’s(Nicotine replacement therapies, primarily vaping was put in reference), they
showed keen interest for the product .
• The above mentioned observations are depicted from the pie chart shown above

2) Which Brand do you smoke?

Others
13%
Classic Classic
35%
Goldflake Marlbboro
25% Goldflake
Others
Marlbboro
27%

Graph 1.2:
• The above pie chart shows the market share of cigarettes, where the majority
market share is with ITC with their brands of classic and gold flake combined.
• Majority GT outlets keeps higher stock of ITC cigarettes, and GPI having a share
of just 27%is much because of their licensing to manufacture Marlboro cigarettes
in India.

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3) Have you ever tried an e-cigarette?

No, 40% yes

No
Yes, 60%

Graph 1.3:
• The above pie chart shows the awareness level of surveyed population about
vaping(E-cigarettes)
• Here majority people know about the category of vaping (which is an alternative
to smoking
• Many of the consumers were interested in e-hookahs and mods which shows a
very less acceptance of e-cigarettes in the category of vaping

4) If yes, which brand have you tried

Others
13% Eon
25% Eon

Zesst Ce4
25% Zesst
Others
Ce4
37%

Graph 1.4:

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 • The above pie chart shows the brand awareness in the survey done, where it was
seen that people are already very much aware about ce-4 which is a Chinese brand
• GPI and ITC with their cigalikes capture almost an equal amount of market share
in vaping, almost 50% of the market share is covered by them
• The rest 13% of the market share is covered by imported brands like SMOK etc.

5) How was the smoke of Verge-XL?

Good, 25%
can be
Good
improved, 45%
Satisfying
Can be improved

Satisfying, 30%

Graph 1.5:
• The above pie chart shows about the product performance during sampling of the
product(Verge XL)
• Here majority population(45%) was of the view that the product needs to be
improved
• However, one major part of the population was more than satisfied with the
product

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 6) Verge-Xl is good for me because

It is cheaper than regular

25% cigarettes

38% No tar, CO ad other

carcinogenic substances
It is my generation product

All of the above

6% 31%

Graph 1.6:
• The above pie chart shows why the surveyed sample would buy Verge XL
• Majority of the people said that due to its les harm, they would go for the product.
This means that the population is having awareness about the harm done by
smoking and they need alternatives to smoking.
• One major part of the sample surveyed showed interest because all of the reasons
mentioned, which is a good thing for Verge XL

3.10 Statistical analysis secondary of data

1) Sales Gender wise

No of sales

female,
10%
male
female

male, 90%

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 Graph 2.1:
• From, the above pie chart, it can be clearly inferred that the acceptance of e-
cigarettes in males is 90 percent as compared to a low of 10 percent in females.
• This shows that there is need of more awareness in the females regarding e-
cigarettes

2) Month-wise sales

sales
May, 3, 13%

April
May
April, 19, 87% June

Graph 2.2:

• Maximum sales were made in the month of April owing to 87 percent of the total sales.

3) Age-wise sales

sales

21-30
14%
31-40 21-30
13%
31-40
41-50
41-50
73%

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 Graph 2.3:
• From the above pie chart it is clear that maximum sales were obtained from the age group
of (41-50)
• A low amount of near sales were obtained from the other age groups

4) Location wise sales

Sales

north delhi
9%
south delhi
west delhi
23% east delhi
west delhi
south delhi north delhi
68%

Graph 2.4:
• Maximum sales was in south delhi region accounts to 68% of the total sales.

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 CHAPTER-4

4.1 RESULTS

• From the primary data analysis it is clear that we have a majority population of smokers
including males and females both.
• It is also evident from the study that the sample considered had a majority of people who
were aware about e-cigarettes and showed keen interest in vaping as a less harmful
substitute to smoking
• It can also be seen from the study that ITC is ruling the market in terms of conventional
smoking
• From the study it is also clear that majority people are ready to accept Verge-XL, with
the improvements listed in the feedback
• From the analysis of sales data it is clear that people are ready to accept Verge-XL as a
substitute, provided proper availability of the product is there in the market

4.2 Weaknesses of Verge-XL

• Promotions through advertisement are less.

• Visibility is less at all channels, especially in GT.
• Lack of awareness in retailers.
• The blend is not satisfactory.
• Testers was not working specially in GT.
• Lack of coordination in distribution team.

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 Chapter-5

5.1 Conclusions

• Majority population is aware about the vaping category as a substitute for smoking, and
majority of them shows a keen interest in e-hookahs and mods(pen and tank vaporisers),
so the product needs to be improved to meet that efficiency of the other mentioned
products of the vaping category
• Very less awareness and interest among the retailers of general trade was seen during the
retailer interaction who are sitting on the top of pyramid of smoking market
• The product needs improvement as many customers give a feedback that the product
needs improvement in terms of hard puffs and the blended flavors that gives them a harsh
feeling in throats
• Proper merchandising and the availability of the product is required along with the tester
kits as there is less visibility of the product at majority GT stores, and in some MT stores
as well
• Lack in the commitment of supply and distribution team
• Though, the Indian population is ready to accept the e-cigarettes, provided there is proper
availability of the product and proper regulations are made for it.

5.2 Limitations
• The data collected during this period of internship is just confined to certain parts of
Delhi.
• The time period of this study was just three months of our internship and the marketing
and consumption trends are liable to change over the coming period
• Data collected is purely survey based, and the actual statistics may vary a lot if a large
sample is taken
• The data collected is new as the vaping category is still evolving in the market considered
under this study
• The sampling technique used is Judgment sampling

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5.3 RECOMENDATIONS
• Creating more awareness among the retailers about the product and its benefits and
motivating them to sell the product as a less harmful substitute of smoking
• Building of a strong supply chain so that the product has large availability in the market
• Targeting customers who are looking for a better substitute to smoking for their near ones
• Having proper merchandising at all channels
• Company should use attractive packaging like they made for Verge.
• Vape of the e-cigarette can be improved.
• More focus on advertising.

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 Appendix-1

Questionnaire

Analyzing consumer acceptance of E-cigarettes in Delhi-NCR

NAME:
AGE:

1. Gender

Male
Female

2. What is your occupation?

Student
Service
Business
Others

3. Do you smoke?

Yes
No

4. Which Brand do you smoke?

Classic
Marlboro
Goldflake
Others

5. Have you ever tried an e-cigarette?

Yes
No

6. If yes, which brand have you tried?

Eon
Zest
Verge
other

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 7. Have you ever tried Verge xl?

Yes
No

8. How was the smoke Verge xl?

Good
Satisfying
Can be improved

9. Which is the best thing about Verge xl?

No tar, no tobacco, no carcinogenic substances

Cheaper than normal cigarette
Easy to use
All of the above

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References:

http://www.vapingpost.com/2016/04/04/india-a-snapshot-of-ecig-and-smoking-tobacco-policies/

http://casaa.org/historical-timeline-of-electronic-cigarettes/

https://www.vapourindia.com/electronic-cigarettes-in-india/trending-acceptance-level-and-popularity-of-
ecigarette-in-india/

https://en.wikipedia.org/wiki/Smoking_in_India

http://www.healthline.com/health/addiction/tobacco

http://timesofindia.indiatimes.com/life-style/health-fitness/health-news/66-Indian-smokers-view-e-
cigarettes-as-positive-alternative/articleshow/54582831.cms

http://ivape.in/blog/2015/12/06/india-vaping/

39