Israel, like other Middle Eastern countries, is an ideal target for exclusive cigarette manufacturer Davidoff. Israel has not yet become militantly anti-smoking, the way western nations have. "Israelis still regard smoking as one of life’s pleasures," is how the cigarette manufacturer assesses the situation. The target market: Israel’s upper echelons.
As part of the assault, importer YD Enterprises which represents Davidoff brand liquors and cigarettes in Israel, has launched a promotional campaign. At the same time, the company is negotiating with its parent company in Switzerland to set up two Davidoff smoke shops in Israel. YD Enterprises also intends to distribute Davidoff cigarettes in kiosks and grocery stores.
Penetration of the Israeli market is part of a broad strategy initiated by Reemtsma International, global distributor of Davidoff brand products. The brand was founded by Zino Davidoff, a Russian immigrant to Geneva, who set up his first business in 1916. He offered hand-rolled cigarettes and cigars to a select upper-class, local clientele.
Over the years, the list of famous Davidoff customers has expanded to include politicians George Bush, Bill Clinton and Francois Mitterand, and movie starts Kim Bassinger, Arnold Schwartzenegger and Roger Moore.
The Davidoff revival began in 1986 when German company Reemtsma International received distribution rights for Europe. The company was aware of the problems in selling cigarettes in a world rapidl weaning itself of the smoking habit, and decided to conquer the market using the properties amassed by the prestigious brand. The first thing it did was release a fancy lacquered box priced 30% above other brands.
The next step was to move into developing markets, who were hungry for exclusive brand names in all areas. Among those countries selected as preferred marketing targets were the Mediterranean countries of Greece, Turkey, Italy, Cyprus and Israel, along with CIS countries, the Gulf States and South East Asia. "The strategic decision stemmed from a saturation of the western market", explains Reemtsma’s representative to the Mediterranean and Gulf States. "We were not prepared to be at the center of the fight".
This strategy works, it turns out. While total global sales amounted to 15 million cigarettes in 1986, by 1990 they were up to 350 million cigarettes. That same year, the company introduced a light version and a "classic" version, in a black box. In 1992, global sales volume was up to 1.5 billion cigarettes and 4.1 billion in 1994. In 1996, sales of premium-quality cigarettes along leapt to 500 million, an amount unprecedented in premium cigarette sales, the company says.
One must understand the world market, the company’s representative says. "This is a clear status symbol. In the Far East and Gulf States, there are many nouveau riche who need to display their wealth. Israel is a market suited for massive product penetration."
"We place quality at the forefront of our campaign and people learn to tell the difference between us and other brands. Our data proves that a product which cultivates brand equity has the power to take market share away from other brands".
The promotional campaign planned for Israel also emphasizes quality and exclusivity. Davidoff cigarettes are sold at the Duty Free shops for $20 per 10-pack, while the same size package of Marlboro or Kent sell for $14.