Is it viable to have your own cigarette brand?

Answer 1

Oh you have hit on a big one. How I would love to have my own cigarette brand at this point in time. To me the answer is a definite yes. I do not know if you have taken any Micro or Macro economic classes yet, but you will find that cigarettes are a very Inelastic product. Which means, to a smoker who sucks down those things all day, they are unwilling to quit their smoking no matter what the cost. Now if you were talking about a soft drink, they are very Elastic which means there generic cheap choices from no name brands to Pepsi or Coca Cola. When people drink soda if the price becomes high, they switch to a cheaper, comparable soft drink. A smoker is willing to pay that extra two to three dollar tax on a pack of cigarettes to get his fix. There is no other choice for the smoker, so they will pay the price.

The key you are learning is Inelastic, it doesn't stretch and there are not many choices. Elastic means there are many choices and most people will opt for a cheaper, comparable product. The Law of Supply, Quantity supplied rises, as price rises, all things constant. Yes, it is most wise of you to have your own brand.