Chapter 1183 – E-cigarette
Gerstner went to meet Feng Yu again. But this time, he had come to Feng Yu’s office and is not representing IBM. He is here on behalf of his tobacco company.
Gerstner is a tobacco mogul, and Feng Yu needs his help for something.
Like… promoting E-cigarette.
Feng Yu had thought of E-cigarettes when he started producing humidifiers. Both are using an atomizer to vaporize liquid but are used for different purposes. At that time, the atomizer device is too big to be made into E-cigarettes.
The first generation of E-cigarette was launched last year. Of course, it was launched in China first, and the response is not very good, as it is hard to position it.
You are telling me this is tobacco? But there is no fire. This is a medical device?! But it is harmful to our body. You had removed the tar, but there is still nicotine. This is also not a consumer electronic product. Even the humidifier is considered a home appliance.
This product is not regulated by the authorities, and there are no authority bodies for safety standards. That’s why Feng Yu can set his own standards.
Bing City Pharmaceutical had developed the E-liquid, and Wind and Rain Home Appliances had developed the E-cigarette. The E-cigarette will be under Tai Hua Brand.
After its launch in the Chinese market, Feng Yu discover that this product will not become popular first, but it’s not a problem to get profits. The production cost of this product is very low. Still, the atomizer technology is patented, and other people cannot imitate it.
Feng Yu is going to launch this E-cigarette in America. America is one of the regions with lots of tobacco users. Gerstner is in the tobacco business and is a good partner.
Feng Yu passed a Disposable E-cigarette to Gerstner, asking him to try it.
Although Gerstner is a tobacco mogul, he smokes more cigars than cigarettes. He had not tried smoking this device before, and he looked at how Feng Yu uses it. He took a puff and blew out a mouthful of smoke.
Gerstner did not taste anything in his first puff, and he took a few more puffs. After that, he gave one to his staff behind him. That man is a smoker.
Feng Yu signaled to his staff beside him to take out an E-cigarette to show Gerstner.
“This is the mouthpiece, and it is using the same color as the cigarette filters. This piece is the atomizer, and it holds the e-liquid inside. It can last around 500 puffs. The white part is the battery and some electronic parts…”
“Why don’t you make it detachable? This way, the top part can be discarded.” Gerstner asked.
Feng Yu gave him a thumbs up. No wonder Gerstner is a tobacco mogul. He can point out the flaws of this device with one look. Feng Yu waved his hand, and his staff opened the second box. This E-cigarette is longer and thicker than cigarettes. It looks similar to a cigar with an on/off switch.
“This is a refillable e-cigarette. But the parts inside cannot last long and needs to be replaced after a while. Also, topping up the e-liquid might spill onto the user’s hand. It’s smelly.”
“This is quite small. How long can a full bottle last? Can you increase the size of the e-liquid holder and the atomizer capacity? Many smokers like to take deep puffs when smoking.”
Feng Yu understood what Gerstner meant. He had met many smokers who dislike expensive cigarettes for cheaper ones as the tobacco level is higher.
Feng Yu’s staff placed another box on the table. There is an E-Cigarette inside, which is bigger than a packet of cigarettes. This E-cigarette can last more than a week without topping up the e-liquid.
Gerstner knew Feng Yu is prepared. The different E-cigarettes showed to him caters to different segments of consumers. The first type is for people to try. The second type is for normal users, and the last type is for the people who love smoking e-cigarette.
“We had spent lots of resources and energy to develop this E-cigarette. We own the patents of this E-cigarette, which means we have the exclusivity.”
“This E-cigarette has many advantages. For example, no fire is used when smoking, and it will not be a fire hazard. It also doesn’t have tar and other harmful chemicals in it and is supposedly healthier. Second-hand smoke is also less harmful to family and friends. There are several types of e-liquid, and we can adjust the nicotine levels, and consumers can use it to quit smoking.”
“Quit?” Gerstner frowned. He is a tobacco mogul, and if no one smokes, how is he going to earn money?
Feng Yu laughed. “Don’t be anxious. Quitting is only one of the benefits. The ones who really want to quit smoking can quit with just sheer determination. Those that don’t want to quit will never quit.”
“Most importantly, the profits of this e-cigarette is not lower than traditional cigarettes, and it does not contain tar. Fire is not required, and it will let people feel it is healthier and safer. It will make it easier for us to market it, and I think it is easier to advertise it than cigarettes.”
Many countries don’t allow cigarette advertisements, but tobacco companies will think of other ways to promote their products. For example, they will produce other products and market them under their company’s or brand names. This is promoting its cigarettes indirectly.
“This is the product you want me to distribute for you in the North American market?” Gerstner can see the profits in this product, and it will become a new revenue source for his tobacco company.
“Not only the North American market. Suppose you have the ability and dare to sign an undertaking to guarantee a certain amount of sales. In that case, I can let you have the whole American market.”
“How much will you be paying if you let me handle the whole American market?”
“10% of the total sales, but the sales must not be lower than 100 million USD. You should know that cigarettes’ profits are not a lot, and 10% is the highest we can offer. We will handle the marketing ourselves.”
“Can I get 15% of the total sales if I take over the marketing?” Gerstner is not worried about the 100 million USD target.
“Do you think our marketing fees will reach 5% of the total sales?” Feng Yu asked Gerstner back.
“I can tell the E-cigarette’s profits is higher than ordinary cigarettes. Give me 14%, and I will make this E-cigarette popular throughout the whole of America.”
“How about 12%?” Feng Yu bargained.
“13%. No company is more suitable than us to distribute this product. I can make the e-cigarette appear in front of smokers in the shortest time.”
Feng Yu pretends to hesitate. In his heart, he is jumping with joy, as 15% was what he expected. E-cigarette profits are much higher than ordinary cigarettes. The production cost is much lower and is selling higher prices.
“Alright! Deal!”
Translator’s notes:
Electronic cigarette
