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2. Recommendations for the international tobacco business development

Operating in Russia international companies have to adapt to changing circumstances to maintain their positions. They should consider external and internal political risks, as well as such economic factors as the purchasing power of the population. As for the international tobacco companies, we can highlight three main factors that should be taken into account:

the reduction in purchasing power due to the drops in the exchange rate of the ruble and reduction of incomes;

the increase in production costs due to the increase in the cost of the excise tax;

the reducing of tobacco products consumption in connection with tobacco control policies.accordance with these factors can lead to the following recommendations for the development of international tobacco companies in Russia.to the latest researches Russian people still buy cigarettes in large quantities. But most of them try to buy a tobacco product as cheap as possible. In 2015 it is turned out that the consumers begin to buy more of the adulterated tobacco product and less of the branded ones. Thus, to minimize the losses the international tobacco companies should implement measures to reduce prices. This year they should focus on the production of economy class and cut production of the de luxe brands. May be they should develop a new type of goods with minimum price. For example, it can be mini and maxi packs with different numbers of cigarettes, which they will position as more favorable for the buyers. But at the same time the companies should continue to produce goods in different price categories to keep customers with different tastes and incomes.

The companies should include in the number of their goods electronic cigarettes. They are safe for surrounding people and will fit in with the anti-smoking policy. In Russia these cigarettes are not included in the list of tobacco products. So they may be used in public places. Also in this part of the sales the companies will avoid the problems of expensive excise tax.

Conclusion

In this essay there were outlined the main problems which an international company faces to working at the Russian tobacco market. With the aim to allow these companies to function more effectively in the new economic and political conditions, we made the following suggestions.minimize the losses the enterprises should implement measures to reduce prices. This year they should focus on the production of economy class and cut production of the de luxe brands.deal with the anti-smoking policy they should include in the number of our goods electronic cigarettes. They may be used in public places and in this part of the sales they will avoid the problems of expensive excise tax.

Reference list

1. Dynamics of the ruble against the dollar and the Euro in 2014-2015. Retrieved May 12, 2016 from Internet site: http://tass.ru/info/1889272.

. Drobyshevskaya L.N. (2015) Ways to improve the activity of the enterprises of the tobacco industry. Journal of Science and education. (pp.32-54).

. Main directions of tax policy of the Russian Federation for 2015 and on planning period 2016 and 2017. Retrieved May 06, 2016 from Internet site: http://yandex.ru/clck/jsredir?from=yandex.ru.

. Russell M. (2016). Sanctions over Ukraine Impact on Russian. Retrieved May 12, 2016 from Internet site: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/579084/EPRS_BRI(2016)579084_EN.pdf.

5. Western Sanctions Against Russia (2015). Retrieved May 12, 2016 from Internet site: http://sputniknews.com/politics/20150622/1023679889.html.

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