Consumers’ Perception on Product Quality and Brand Dilution in Tobacco Industry of Bangladesh

Now-aday’s quality of the products is the primary concern for the customers. Customers value their money and always prefer the quality product. Tobacco industry is a potential industry and its growth is also related with national GDP. About one percent of our GDP is used in consumption of tobacco product that is why it becomes a huge market for the competitors of tobacco industry. As the cigarette is both competitive and controversial product, so marketing of this product is very difficult. There are many tobacco companies in Bangladesh. Among them British American Tobacco Bangladesh (BATB) is the pioneer and leading multinational cigarette manufacturer followed by local manufacturer Dhaka tobacco. This paper tried to find out the relation with quality and brand dilution and brand dilution occurs broadly in FMCG industry. Brand dilution is the weakening of a brand through its overuse. This frequently happens as a result of ill-judged brand extension. Price cutting that increases sales volumes but moves a brand down-market can similarly damage a brand. Brand dilution is an ever present risk for companies that rely on a strong brand for high margins. A company that owns a strong brand obviously wants to sell as much as possible, but the very strategies used to pursue this end often also brings the danger of brand dilution. However, there are three customers segments in tobacco industry. These are premium, medium and lower class group but brand dilution mostly takes place in the lower segments, which is again the source of gaining maximum revenue. Customers perceive smoking as a matter of their social status. So packaging and other criteria like quality is very important for a customer. BATB ensure quality product as well as always trying to improve the quality. Various segment of the market perceive the quality of a product differently. So in response, BATB has changed the blend of tobacco. In this process they launch various products to various segments. This process causes brand dilution. Brand dilution also occurs when companies introduce new brand to eliminate rivals product. So it is an effective way to take control over the market. Therefore, this research paper will help cigarette industry and policy makers to find out the future of tobacco industry in the context of brand dilution