Chapter 425: Expanding the Market
"It looks like we still need to recruit more workers! Our sales staff is clearly insufficient. I didn't expect to encounter this kind of situation after the outbreak of the economic crisis," said the Human Resources Manager of the Austrian Hechingen Tobacco Company.
As a tobacco giant that had only recently risen to prominence in the last few years, Hechingen Tobacco Company was facing an economic crisis for the first time, so they lacked experience.
"That is correct. Market research results show that following the outbreak of the economic crisis, the pressure of unemployment and the cost of living on workers have increased significantly. The social atmosphere has become increasingly depressed. The uncertainty regarding future expectations has drastically increased people's demand for tobacco and alcohol. This is especially true for the sales of cheap tobacco and alcohol products, which have surged. Right now, as long as we have raw materials cheap enough to produce sufficient low-cost products, we can earn even more."
"However, we should be establishing more sales outlets, particularly mobile street stalls, rather than hiring professional salesmen. Smokers don't want someone buzzing in their ears like a fly at a time like this."
"Exactly. The social atmosphere isn't very good right now; hiring professional salesmen might actually yield the opposite result."
Being a salesman was a job that easily garnered dislike. In normal times when the economy was good, people were more tolerant. But now, with the entire society's mood unstable, salesmen with only average eloquence would likely only spark conflict.
Since the economic crisis, the Austrian Hechingen Tobacco Company had been living quite comfortably. The demand for cigarettes among the spiritually hollow, unemployed population of Austria had noticeably increased. This situation mirrored that of the Hechingen distillery—sales of the cheapest vodka, in particular, had skyrocketed.
Before the crisis broke out, the employees of Hechingen Tobacco had been rather panicked. Every industry was cutting staff and reducing wages, with wailing heard everywhere. They were terrified their company would follow in those footsteps.
There was still some impact, of course. The emergence of a large number of unemployed people had indeed driven down labor wages, especially for positions requiring no technical skills, where competition was fierce. This forced the company's current employees to put in more energy than usual, working at full capacity for fear of having their "rice bowls" snatched away. Right now, having a stable job was better than anything.
Naturally, the company wouldn't lay off staff arbitrarily; after all, experienced old employees were still more valuable. However, the company was happy to see the competition. Some of the "old oil sticks" (veteran slackers) who used to be good at goofing off had started actively throwing themselves into their work, which greatly improved the efficiency of Hechingen Tobacco Company.
"Ever since we got our own tobacco production areas, we realized just how profitable tobacco actually is. The prices foreigners used to charge us for raw materials were practically robbery."
"You can't exactly say that. Tobacco cultivation is concentrated in tropical and subtropical zones and requires significant investment. However, many tobacco-producing regions are colonies. Labor costs in colonies are low enough to be almost negligible. If those colonies didn't exist, the previous market prices for tobacco leaves could be considered reasonable."
"We don't care about colonies or non-colonies. We buy from whoever has the cheapest raw materials and the best quality."
"Well, you can't say that either. Right now, our raw materials are actually shipped from East Africa for free. We no longer have to shop around and haggle over every penny like before."
"Hehe, that happens to be our advantage. The company is still expanding production in Africa. In another few years, we will truly be able to lead our peers by a large margin. It is a pity, though, that our tobacco farmers in East Africa clearly lack experience compared to other traditional tobacco-producing regions, so the taste of the tobacco is somewhat inferior to other regions."
"There is absolutely no need to worry about that. East Africa is vast enough, and the scale of the tobacco fields is large enough. Plus, they've been planting tobacco for some time now; the taste and yield have improved significantly. Besides, ordinary people generally don't understand the nuances of taste that well. They will only feel that the flavor of the cigarette brands under Hechingen is getting better and better. For us, this is a great thing."
"With the East African tobacco going into production these past few years, the constraints placed on our raw materials by tobacco giants in Britain, the US, and other countries have been completely lifted. Once the tobacco leaves from the Matabele Plateau officially enter the market next year, I believe our business will reach the next level."
"Hmm, here are samples of the 'Golden Leaf' produced on the Matabele Plateau. Take a look." As he spoke, he distributed a pack of Golden Leaf cigarettes he was holding.
The packaging of the sample was a coquettish yellow, looking extremely eye-catching. Coupled with the gold 'Golden Leaf' trademark, it left a deep impression.
As the manager passed around the cigarettes from the box, everyone carefully examined the so-called "high-end goods."
"Manager, may I tear one open to take a look?"
"Of course. You can even test-smoke it directly; no problem. You can describe the taste in detail."
The old heavy smokers in the company didn't stand on ceremony. They casually pulled out lighters and lit up. The entire conference room immediately became wreathed in smoke.
Under normal circumstances, smoking was prohibited in the company for safety reasons, mainly due to the fear of causing a fire. As for the issue of smoking being harmful to health—apologies, but people of this era had no concept of that.
"The mouthfeel is very soft and mellow, but it has a strong kick. The aroma seems a bit too rich. I think this type of shredded tobacco would work better if blended with other types."
"With this taste, I feel like we could use it exclusively to produce cigars! In fact, the taste of a cigar is really just like this. This could greatly enhance the competitiveness of our high-end products."
"Cigars are a field we haven't touched at all. And I've heard that the manufacturing process for cigars is very complex and cannot be mechanically mass-produced like cigarettes, so the cost is much higher than cigarettes."
"Actually, we absolutely don't need to do that. The people in the market only recognize Cuban cigars. Although the tobacco leaves from the Matabele Plateau are high quality, they really don't have any fame. What our company should implement most is brand packaging. Take Golden Leaf, for example: build it into a perfect high-end product, so that ordinary people become familiar with the brand name 'Golden Leaf'."
"Essentially, we still need to use high-end products to drive the sales of low-end products. Ordinary people usually can't access high-end products, which gives them the illusion that 'this thing must be good quality.' Then, we can leverage the brand effect brought by the high-end products to boost the sales of low-end products."
Between products of the same quality and price, ordinary people naturally trust big factories and famous brands more.
"So, increase advertising investment?"
"Of course we have to do that, but not right now. At the very least, we should wait until the economic crisis passes. Consumers don't have the leisure to pay attention to advertisements right now. Currently, we still need to increase our market sales efforts, especially by using lower prices."
Although the tobacco industry was showing unprecedented hot sales due to the influence of the economic crisis, other tobacco companies—aside from Hechingen Tobacco—were not very happy.
The main reason was that Hechingen Tobacco Company, this "old six" (sly schemer), relied on its independent supply source and low-cost raw materials to suck up a large portion of the market. Everyone else hadn't needed to hustle before, but now they were being forced into a rat race.
(End of Chapter)
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