The Filipino "tingui" retailing approach and cigarette price increase

ISSN： 0968-4905

Source： Pricing Strategy and Practice, Vol.5, Iss.4, 1997-04, pp. : 148-155

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Abstract

The practice of selling cigarettes by sticks is a phenomenon that can be observed among Asian countries. It is prevalent in urban centers where the retailing activity is one of the major economic activities undertaken by the middle and lower echelons of the social class. In a study of the switching of consumers from one brand to the other as a response to price increases, the practice has shown a bi-directional effect. In an inter-brand shift, it acts as a buffer slowing down the change in preference by granting the consumers an ability to buy the same brand even if the budget is not enough for one pack. The opposite, however, happens in the intra-brand (local to foreign) shift. The practice makes it easier for the consumer to shift by lowering the perceived "sacrifice" in incremental price vis-à-vis the differential value between the imported and local brand.