By Bob Smith

Juul has become an extremely well-known trend recently especially among young adults. Concerns have been raised about the negative effects of smoking a Juul as it contains high levels of nicotine that have addictive qualities. In an attempt to curve teenage juuling, the FDA banned convenience stores and gas stations from selling flavors such as mango and nectar. Fruity flavors are considered to be more attractive and kid-friendly. This flavor ban is a step in the right direction but young adults will still find other ways to get fruity flavors. Flavored products will still be sold in vape shops and online stores. The online stores do have strict age verification measures.  The FDA’s bans on Juul flavors is predicted to have negative effects on the Juul business. One of the reason’s that Juul is popular is due to its flavors. Consumers are attracted to the flavors offered by Juul as they are an alternative to regular vaping and cigarettes. Juul has controlled the majority of the e-cigarette market. These bans on Juul pods could be a good thing for other e-cigarette and vape companies as Juul most likely will take a hit. Tobacco companies that manufacture their own vape will benefit as well and it is likely that tobacco stocks will see an increase in trading. As Juul continues to dominate the e-cigarette market and grows in popularity, it is reached a $15 billion valuation.  

Interestingly enough, Juul was created by a Stanford graduate student as a part of their thesis. In 2007, two Stanford students wanted to create an e-cigarette that would satisfy consumers in similar ways to a cigarette. Their inspiration was the fact that both were avid smokers looking to create an attractive substitute for cigarettes. Juul labs generated $224 million in retail sales over the past year. The retail price for a Juul is $35 and a four pack of Juul pods cost $16.  The Juul brand sales blew up 621% year-over-year according to Nielsen data. Juul has sold over one million systems and it is available at 12,000 convenience stores across the United States. These two graduate students were able to create a differentiated product and grow its brand name across the United States in a considerably short amount of time. The Juul launched in 2015 in a USB drive shape and looks completely different than all other e-cigarettes. Most devices have a cap that needs to be unscrewed and the chamber inside will be filled with liquid.  

The creation of Juul is a prime example of how assessing consumer needs before the consumer can recognize the need. The two Stanford students successfully created a quality substitute to smoking that was completely different than existing e-cigarettes available today. This highlights the importance of differentiation in business whether it is a product or service. It is necessary to add value through offering a new product or an existing product in a different way. It will be interesting to see how the Juul company continues to adjust to the heightening concerns about its health effects. If Juul is able to continue to adapt its product it will most likely continue to be successful.

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