Mikes Cigars loses Oliva.

[Silound]

I'm of mixed opinions about this, mostly because I've only got a limited amount of information. As far as I can tell, that sampler is the only thing that's being sold so far below MSRP.

Any retail knowledgeable person will tell you that brand recognition is a major player in sales. Many retailers (whatever the product is) sell a certain item of a name brand as a "loss leader" to attract other sales. If I like the cigars in this sampler, I'm very apt to buy more of those cigars, probably at the full price. So it's very possible that MikesCigars was using that sampler to boost Oliva sales. Why they didn't simply make arrangement to do this with Oliva, I'm not sure.

I can also see Oliva's point of view trying to protect the brand, but there are other ways of getting around that problem, so I don't see why there's a need to pull the account. Raise your price to the supplier, and let them sell the item for no profit or a loss. Limit the available stock to them.




I'm wondering what other information we aren't privy to, because a half million dollar a year account is a LOT of money for a business to simply throw aside, even a multi-million dollar outfit like Oliva can't afford to go killing accounts left and right. "A penny here, nickle there, and soon you've lost a whole dollar" as the saying goes.