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Zippo VAZO with the Blue Grotto : Highly Personalized for the New Middle Class Apr 26



  The 6th phase of the Blue Grotto roadshow was held on June 19. The brand was Zippo ecig brand, and the guest was David, marketing director of VAZO and Vice President of VAZO Technology China Ltd.

 

Blue Grotto described VAZO as a "let some people be cool first" product. The antique silver series with strong design style will be available at $1,298.


Zippo will not be unfamiliar to most people, from a simple cigarette lighter, has become the sales of more than 200 countries around the world legendary brand, the cumulative sales of 600 million.


Zippo was successful not only because of its usefulness as a lighter, with its windproof ability, beauty, stability and durability. You can choose a cheap lighter for $1, but you can't resist the artistic touch Zippo presents.


From a lighter to a famous cultural symbol, Zippo also gradually derived from a variety of lifestyle brands. It can be said that it is the emergence of a variety of derivatives in different industries, continue to consolidate and strengthen the concept of the brand Zippo, so that more people from the muti-dimensional understanding of Zippo culture.


Today, Zippo is expanding its brand into e-cigarettes.


That's VAZO.


David and blue hole new consumer dialogue is very exciting, both on the low-price market, but also on the view of friendly competition, but also on the industry's thinking and sharing, led to the roadshow crowd applauded.


  • Part 1: The story of VAZO


Zippo accumulated brand culture embodies the spirit of exquisite craftsmanship, courage, strong and durable product performance, day and night accompanied by product characteristics.


At the same time, Zippo has become a carrier since its birth. In product design, it not only cooperates fully with well-known brands and celebrities in other industries, it often reveals important historical events, promotes the spirit of peace, issues fashion elements, and encourages people's passion for life.


Zippo's product range is not limited to the familiar fuel-oil lighters, but can be divided into three main categories:

One is the main line of the brand, that is, we are familiar with the lighter production line;

The second category is living furniture supplies, including a variety of smoking sets, sunglasses, water glasses, clothing, and our new type of atomized tobacco products;

The third category is outdoor supplies, including necessities for survival in the wild, gas igniters, hand warmers, grills, hunting gear, life-saving tools and so on.

 

VAZO's products include two categories, one is ZE ,the charging atomizer with replaceable atomizer, the other is ZT , the one-time atomizer.

ZE can be divided into three types according to the different materials of the panel:


One is a series of frosted aluminum alloy solid color panels, aimed at ordinary business people and people with a simple concept of fashion, to meet the taste of this group but never high-profile consumer demand.


The second is the IMD series of plastic panels. IMD is widely used in surface decoration molding process, the biggest advantage is the decorative pattern wear-resistant corrosion-resistant, long service life feel good.


The second kind of ZT disposable atomizing stick is made of food grade plastic material, and adopts the environmental protection tactile paint which has passed the European Union Rohs certification, reducing the use risk in all directions. Unique Airway design and full power output program, will let the smooth and taste from the first to the last one to get exactly the same excellent performance.


ZT is currently upgrading the taste and packaging and is expecting more market feedback in the near future.


In addition, we are working on other product solutions for disposable disposable products that will be added after rigorous testing with high standards and third party security certification

 

We have complete intellectual property rights to the designs of the products on the market. We can also provide custom-made services to customers, and provide more personalized services to consumers without affecting the performance of the products.


This series of product design philosophy inherited from Zippo, in the marketing side of the choice is very flexible.


The Third Antique Silver Panel is made of pure copper. Continue the traditional process of Zippo, for high-quality needs and independent consumer awareness of the user to provide higher-grade service. Machine Weight and texture is the biggest selling point, special packaging will reflect the sense of brand value.


We believe that the demand for gifts will explode when product education reaches a certain level, so there is a full distribution of these products.

In addition, we have developed and completed a higher level of limited pure copper hand carving series and sterling silver and other precious metal series, welcome to Shenzhen e-cigarette exhibition in August to find our booth visit exchange.




  • Part 2: Talks with VAZO


  • Q1: When, and for what purpose did Zippo begin to focus on the e-cigarette industry?


  • David:

As a traditional tobacconist manufacturer with more than 80 years history, Zippo has been paying close attention to the new technology and products in this field since its establishment. From the beginning of vaping industry, we realized that it was a breakthrough invention and represented the direction of tobacco products.

 

At the beginning of the new century, product innovation has become an important measure to upgrade our industry. The establishment of the Innovation Department also marks the company's new strategic layout of product diversification.

 

As a result, Zippo has been involved in market research, team building and product development since 2014.


  • Q2: How is VAZO product market positioned?


  • David:

Like other products of Zippo, we always follow the cultural spirit accumulated by the brand. We focus not only on the volume of product transactions, but also on the quality and results of transactions.

In China, we always serve the middle and high end of the population.

With the rise of the middle class, the demographic profile of this emerging consumer market has become younger, more advance guard and more dynamic, which requires more personalized product features.

Therefore, we cover everything from disposable products costing tens of dollars to thousands of dollars worth of rechargeable products and even thousands of dollars worth of custom-made precious metal products. As long as R & D is in place, quality control is in place, and the supply chain can be supported, we are willing to do so, so that consumers can not only experience high-quality products, but also get personalized satisfaction.

This is determined by the basic attributes of this category of products, but also the direction of development of this industry.

 

 

  • Q3: How will VAZO and Zippo collaborate?


  • David:

VAZO itself is the brand of Zippo's e-cigarette branch. The whole process from product development, manufacture to promotion and after-sales is subject to the Unified Planning, guidance and audit of the brand. The only difference is the independence of personnel and departments. Welcome to have the opportunity to visit our collection shop, this will have an intuitive impression.

 

  • Q4: Please share your opinion on the recent market trends in the E-CIGARETTE industry under the current epidemic situation.


  • David:

First of all, revenge consumption will not hit, the rhythm of the recovery of consumption restart. The outbreak has not only curbed people from going out, eating out, and spending in groups, but also changed their spending habits.

Studies have shown that the epidemic has caused many people to have fewer disposable income and more uncertainty about their jobs. 60.8% think their income will decrease in 2020; 18.6% think their income will decrease significantly.

Therefore, rational planning of spending, adjustment of consumption structure has become a lot of people are in the act. Lower consumption expectations also mean that retaliatory spending will not come and a return to normalcy may be the most likely scenario.

40.9 per cent of consumers said they would maintain low consumption after the outbreak and 49.2 per cent said consumption would return to pre-outbreak levels.

As a new consumer products, we should be in a normal state of mind, to take a gradual activation of marketing strategy, adjust the marketing rhythm throughout the year. At the same time, take the opportunity to rethink the relationship between brand and consumer, adjust brand strategy, promote more scientific product planning, better energy storage, layout in advance follow-up consumer restart, this is fast consumer goods enterprises can focus on doing.

 

Secondly, the brand effect is more prominent, the well-known brand will continue to lead the consumption. The announcement of two ministry circulars, make traditional on-line consumption way is subjected to the restriction. At the same time, the epidemic also let the previous paragraph hastily laid out the establishment of the offline platform by a great impact.

As far as we know, the sales of some retail terminals hit zero at the low point, and most of them showed negative growth; the closing rate of some new brands exceeded 30% . For Consumers who still use e-cigarettes, the choice of brands will be further narrowed, and staying at home will make it harder for more people to buy products, so the focus will be on brand choices. In addition, brands that were more popular in gift-giving and social settings were less affected by the epidemic.

Well-known brand because of its mature manufacturing process and taste of continuous optimization, is still in the minds of consumers brand representatives. At the same time, offline channel layout early, laying a wide range of products is still preferred. So we think brands will be a big priority for consumers.

 

Thirdly, in the high-end price of the product there is great room for growth. The quality of e cigarettes has also been a concern in the public eye, following a spate of deaths in the United States last year related to Evali from the use of counterfeit THC aerosol products. This impact not only directly impacted the United States as a major consumer, but also caused regulatory changes in Japan and South Korea, Europe and Southeast Asia, which seriously affected the overall growth rate of the industry.

But we also see that a large number of consumers have received further education, thus forming active attention to product quality consumption habits. Such a habit will force the production and marketing end of the research and development and quality control, improve product quality, and consumers will gradually from a taste of the sporadic investment, to become more concerned about the brand and quality of long-term consumption.

We believe that quality control investment will definitely have a great impact on production cost when the product reaches a certain level of shipment. In this regard, quality brands need to continuously improve the process, strengthen quality control management and continue to invest, so it's bound to push up the price of the product. In the high-end price of goods, will be due to its product technology iteration, strict quality control, unique ID design, rich taste, durable performance gradually get the favor of consumers.

From the perspective of price and age space, the current 80's consumer will focus on 200-300 yuan, and 90's consumer will focus on 300-800 yuan, so we believe that the high-end prices of products there is huge room for growth.

 

Forthly, health concept drive quality consumption upgrade. Under the impact of the epidemic, consumers from passive protection, gradually evolved into an active health. Behind the change of consumption habits, it means that consumers' health awareness has been gradually cultivated, which also brings every industry and product an opportunity to merge with the "health concept" .

In the judgment of important attributes of e-cigarette products, the attributes representing quality, such as experience and technology, become the most preferred attributes of consumers. In addition, products that satisfy both the taste buds and the concepts of "natural and safe" will become more and more popular.

For e-cigarette enterprises, how to excavate around the concept of "harm reduction and safety" , further promote product quality upgrading, improve product stability and word-of-mouth, and work hard on taste, is the direction that the enterprise that after epidemic situation needs to rethink.


Last but not least, consumer scene from single to multiple. Short videos and video interactions were prevalent during the outbreak, and were a great way to bond with friends during the outbreak. The outbreak has frozen aggregate consumption, but it is also stimulating the consumption potential of households, further increasing the impact of consumers on their families and friends.

Compared with traditional cigarettes, VAPING does not have a negative effect on other members of the family. On the contrary, it has a positive effect on the promotion of these products.

For e-cigarette enterprises, we must understand the current market competition, is not only the price, cost-effective competition, but also to seize the right to consumer discourse competition. Who can go to users, for different market segments, mining more consumption scenarios, who can win the breakthrough in the competition.


  • Q5 : Nowadays, there are a lot of e-cigarette brands in the market. Please tell us how to choose a suitable agent brand.


  • David:

Principle one, select mature technology products. Electronic cigarette began its market applications since 2004 . At present, it has undergone 16 YEARS OF R & D improvement, but the time of technical verification is still short. In particular, a large body of data is needed to support the question of whether there is a potential risk associated with the mode of inhalation itself.

National Regulatory Authorities still need time to wait for the outcome of this issue, and then formulate scientific and reasonable product standards and regulatory laws and regulations. Therefore, we suggest that both producers, operators, and consumers, in the selection of products to try to have been proven mature, do not blindly pursue novel features or products without third-party certification.


Principle two, do the complete appraisal to the brand side. When we choose a brand, we should not only evaluate the product itself and the brand's market influence, but also carry on the detailed investigation to the production and management behind the brand. Because of the wide range of technology involved in the E-CIGARETTE product features, which means that its product iteration cycle is short, but also means that the market is highly uncertain, a bomb can not be derived from the brand's future sales stability.

Therefore, we need to brand side of the production and operation of a comprehensive study, to confirm his strength, clear direction, at the same time with a sound management system. One of the most important criteria is whether he can adhere to the transaction commitment and service commitment.


The third principle is to make a comprehensive evaluation of the input. For the input, we should not only calculate the start-up capital, balance of payments, profitability, return calculation, but also consider the operating risk and medium-and long-term reinvestment funds. While we can all agree on the industry's current rate of return, how can we replicate the success of others?

Therefore, the so-called comprehensive evaluation is to first frame their own service areas and service targets, more focus on local market data and their operating capacity, operating characteristics. Simply put, add these factors to the calculation of the rate of return to ensure that your risk is minimized.


Principle four, must consider the agency brand legal compliance. Everyone is well aware of the current regulatory priorities, but the key issue is the implementation of these regulations and the future direction of policy guidance.

We believe there is a lag in regulations for new products and technologies, but brands must take a longer-term strategic view. This should not only fall on the product function and packaging, these are only technical standards, but should be integrated into the company's management and corporate culture.

For VAZO, our training system includes not only product technology training, sales training, and management training, but also legal and trade process training. Only legal compliance, in order to effectively avoid all kinds of business risks, more stable income.


Principle five, must consider the agency brand the continuity. As a result of the policy impact at the end of 19 years, we have seen a number of start-up brand companies that simply rely on financing have collapsed. Of course, the reasons for each of the collapsed companies are not the same, but for agents, distributors, it is a major blow. Predicting brand continuity in advance can not only be measured by the volume of the media, but more importantly by the company's ability to deal with the crisis.

A simple indicator is the brand's channel policy. If in the face of a major crisis, still able to stand still, adhere to the policy unchanged, that he has a strong economic strength and reserves, and the ability to withstand risk.

Another indicator is whether the brand has real iterative skills and can invest consistently in research and development.

 

  • Q6: What's VAZO'S plan on distribution channel policy?


  • David:

Before we discuss the channel policy, let's talk about the main distribution channels of Vazo. Vazo has three main sales channels, CVS / Ka, Vazo stores and its own traditional lighter channels. This year's main strategy will also continue in these three channels.

For the CVS / Ka Channel, we have already opened up the Yonghui channel and are in talks with more convenience store chains. We expect to launch a number of convenience store chains and outlets in August to increase brand and product exposure.

Secondly, we have been vigorously supporting the franchised store channel, in product diversification, marketing, decoration, materials have continued to support the policy and goods subsidies policy, and to encourage the exclusive store from a single e-cigarette Peilei sales to the collection of diversified products store transformation. In the sale of e-cigarettes at the same time, join Zippo lighters, water bottles, glasses and more goods. Through the diversification of products to help each store to increase customer stay time and enter the store rate, Improve Ping efficiency.

In addition, we are currently in the process of transforming thousands of traditional stores that are selling Zippo lighters, including renovation, re-display, re-brand VI & SI, to increase consumer freshness.

Our efforts in these three channels will certainly increase Vazo's market share and let more consumers know and love Zippo e-cigarettes.


  • Q7: Please introduce VAZO's marketing strategy. Will there be a price war?


  • David:

Zippo is closely linked to Vazo's marketing strategy. We have previously shown that Zippo is actively involved in the development of new products, taking advantage of the accumulation of traditional products, based on the diversified overall layout of products in the new century. In terms of marketing strategy, we consider the following:

First, explore effective channels. China is the birthplace and largest manufacturer of e-cigarettes, new brands emerge one after another, each has its own channel advantages, consumption hot spot will be an instant change. We must adhere to the direction of their own strengths, rather than to imitate others. Our focus is on how to make good use of the brand side of the channel accumulation, and then use the characteristics of the product to do effective development, to avoid blindly set expansion goals.

Second, the development of its own characteristics of product development strategy. We need to accurately target those who have a certain degree of acceptance of brand premium customers, rapid development for their personalized products. Our Product is characterized by a high degree of personalization, but to achieve this, we need a rapid response mechanism across the entire supply chain, which other new brands can not do. At the same time, we believe that high-quality products require higher cost inputs. As a brand, it has no bargaining power. It is all left to market trends to set prices, or it simply pursues low prices to drive down the cost of supporting products, how can we guarantee the quality of our products?

Third, training marketing knowledge and skills. There is no basic understanding of the product, do not pay attention to or arbitrarily imagine the technical knowledge of new products, which is not responsible for the consumer, also do not talk about brand management. It is not uncommon for companies in the industry to oversell new products and deliberately concoct plausible concepts that are not only misleading to consumers, but also harmful to the industry itself. Next, our brand regular training, will be extended from marketing staff to channel terminal, in a variety of ways to improve the quality of grass-roots.

Finally, we actively appeal to the industry managers and peers, must be able to let consumers understand that the real customer first is not only the low price first, but will protect the interests of customers really fall on the products, fall on the brand operation, that's how you run a business for the long haul.

 

  • Q7:Please explain Vazo's marketing strategy and whether there will be a price war?


  • David:

Vazo's marketing strategy is closely related to Zippo's. We have previously introduced Zippo's active participation in new product development, which is based on the diversified overall layout of products in the new century. In terms of marketing strategy, we consider the following factors:


First, explore effective channels. China is the birthplace and largest manufacturer of e-cigarettes, new brands emerge one after another, each has its own channel advantages, consumption hot spot will be an instant change. We must adhere to the direction of their own strengths, rather than to imitate others. Our focus is on how to make good use of the brand side of the channel accumulation, and then use the characteristics of the product to do effective development, to avoid blindly set expansion goals.


Secondly, the development of its own characteristics of product development strategy. We need to accurately target those who have a certain degree of acceptance of brand premium customers, rapid development for their personalized products. Our Product is characterized by a high degree of personalization, but to achieve this, we need a rapid response mechanism across the entire supply chain, which other new brands can not do. At the same time, we believe that high-quality products require higher cost inputs. As a brand, it has no bargaining power. It is all left to market trends to set prices, or it simply pursues low prices to drive down the cost of supporting products, how can we guarantee the quality of our products?


Thirdly, training marketing knowledge and skills. There is no basic understanding of the product, do not pay attention to or arbitrarily imagine the technical knowledge of new products, which is not responsible for the consumer, also do not talk about brand management. It is not uncommon for companies in the industry to oversell new products and deliberately concoct plausible concepts that are not only misleading to consumers, but also harmful to the industry itself. Next, our brand regular training, will be extended from marketing staff to channel terminal, in a variety of ways to improve the quality of grass-roots.


Finally, we actively appeal to the industry managers and peers, must be able to let consumers understand that the real customer first is not only the low price first, but will protect the interests of customers really fall on the products, fall on the brand operation, that's how you run a business for the long haul.


  • Q8: What's VAZO's target this year?


  • David:

That's a question I can answer from a different perspective.

First of all, from the product perspective, our goal is to launch more IP designs and muti-panel manufacturing, continuously improve the process level, and launch high-grade panels such as precious metal, crystal, etc. on the basis of comprehensive quality control upgrade, to meet the diverse and personalized needs of more consumers who love the brand.

Secondly, from the point of view of channel, as just mentioned, we will update the image of the traditional offline stores, and gradually set up more stores in CVS and stores, so that more customers who have ever heard of VAZO brand could have a chance to buy our products.

Finally, from the perspective of the industry, we hope that through our efforts, more people will change the misunderstanding of vaping , a more rational and objective view of the industry.

In addition, we will extend our reach to the wider international market after completing our pilot mission in China, and finally realize our mission of transformation.

 

  • Q9: What does VAZO think about the competition among e-cigarette brands?


  • David:

First of all, we believe that the market competition in the industry is still in the immature state of imperfect competition. External factors far beyond the industry's own capacity to bear. Most people tend to confine themselves to the marketing aspect and only look at his appearance to external influence.

Regulatory Policies, technical standards, intellectual property and industry codes, for example, are still being passively interpreted without a strategic response to the consequences of their fall. Simply put, there is no defense against future risks.

Let us be clear, it is the basic nature of this kind of commodity that determines its marketing model, and is by no means a personal or opinion-oriented confrontation. Last year, two Chinese ministries issued a circular to try to regulate some of the non-compliant sales, with the aim of strengthening self-discipline in the industry and urging people not to test the red line in any way.

Secondly, we think the market competition of this industry should be presented in the way: product, technology, capital and brand competition, and information (channel) and price competition are only auxiliary means. Look forward to becoming a market benchmark of the mature brand, can not dominate, the auxiliary means above the basic way.

We acknowledge that in immature markets, support measures can, to some extent, yield short term benefits, like subsidies that have been used in the sharing economy for some time, but in the long run, these strategies can not sustain growth and will quickly be eliminated by rivals with truly integrated competitive strategies and a stronger capital base. Therefore, we should see the essence of competition, rather than artificial to hype competition.

Thirdly, we advocate brand competition, not only from the historical development of Zippo accumulated by the corporate culture, more because he has a very important marketing value.

Excellent quality control, quality can better meet the consumer's value pursuit, meet his fashion and cultural expression, and more importantly, in addition to the stability of the product itself and the use of habits resulting in the purchase, it will also allow him to create more visual consumption scenarios.

You have to figure out what consumer needs are, whether they are just needed, and as a necessity, what are the motivations that influence consumption... a simple way to do this is to think in subrogation with a traditional cigarette: what is his purpose of consumption? How many consumers think about convenience, how many think about brand, or both?

It's not hard to conclude that industry education and brand building are both extremely important in this particular category.

Finally, we think that the brand competition strategy needs to be implemented from the following aspects:

1. Differentiation. In addition to the technology itself, such as product positioning, attribution, irreplaceability ,etc. These can all be turned into differences.

2. Quality. Continuous pursuit of higher quality, low-cost inferior products from the interference, firm brand value-added.

3. Build Loyalty. You can also think in terms of alternative thinking. The idea of being big first and then strong only works for Primary market, and the pursuit of market share is a recipe for disaster for small scale start ups.

4. Integrate operations. Not only to advertising investment, media volume, but to products, services as the center to drive to improve the system operation, abandon the suppression, crowding out, belittling peer all practices, to focus on their own self-cultivation.

 

  • Q10: The famous comedian, Yu Qian once posted VAZO on Weibo. Were you aware of it in advance? Or did you contacted him afterwards?


  • David:

Medias and consumers are enthusiastic about peeking the exposure of brands to celebrities. We would love to see it happen, despite we had nothing to do with this exposure.

Zippo has appeared in more than 2,000 movies in Hollywood, and was shown even more in photos through the social media, or actively posted by celebrities. These are the natural exposure of the brand, and most of them are not the marketing activities of our brand.

As far as we know, not only Mr. Yu, China's domestic literary and art circles, entertainment industry celebrities are very fond of our products with distinctive personality characteristics. We are also very happy that Mr. You is using our products. And this is for him: If the atomizing warehouses run out, welcome to call our 400 phone, we will arrange an instant delivery.


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