Marketing Tobacco

Targeting youth Targeting youth Targeting women Targeting women Targeting minorities Targeting minorities Targeting consumers in developing countries Targeting consumers in developing countries

Targeting Youth: The Tobacco Settlement 1998 tobacco settlement 1998 tobacco settlement $100’s of millions in damages $100’s of millions in damages health costs paid by medicaidhealth costs paid by medicaid smoking related illnessessmoking related illnesses Marketing practices Marketing practices Focus on youth marketFocus on youth market

1. Targeting Youth 2. Cartoon characters 1975 memo to RJ Reynolds Vice President: 1975 memo to RJ Reynolds Vice President: “The Camel Brand must increase its share of penetration among the age group…which represents tomorrow’s cigarette business”“The Camel Brand must increase its share of penetration among the age group…which represents tomorrow’s cigarette business” 1973 memo, senior researcher: 1973 memo, senior researcher: “If our company is to survive and prosper, over the long term, we must get our share of the youth market.”“If our company is to survive and prosper, over the long term, we must get our share of the youth market.”

Other memos describe success of Joe Camel in France and subsequent creation of character in the U.S. Other memos describe success of Joe Camel in France and subsequent creation of character in the U.S memo noted how US Joe Camel campaign would utilize “peer acceptance/influence” to “motivate the target audience to take up cigarettes.” 1986 memo noted how US Joe Camel campaign would utilize “peer acceptance/influence” to “motivate the target audience to take up cigarettes.”

RJ Reynolds had done research on brand preference by 14 year olds RJ Reynolds had done research on brand preference by 14 year olds Claimed was for planning, not marketingClaimed was for planning, not marketing stated it never marketed to childrenstated it never marketed to children Document indicated company marketed to 13 year olds Document indicated company marketed to 13 year olds Claimed was a typoClaimed was a typo should have said 18 year oldsshould have said 18 year olds

Settlement 1. Bans use of cartoons in advertising, promotion, packaging or labeling 2. Prohibits targeting youth in advertising, promotions, or marketing 3. Bans industry actions aimed at initiating, maintaining or increasing youth smoking

In 2000, marketing expenditures increased by 42% to $9.6 billion In 2000, marketing expenditures increased by 42% to $9.6 billion Most of increase was in retail store marketing Most of increase was in retail store marketing Cigarette and smokeless tobacco brands increased advertising in youth-oriented magazines Cigarette and smokeless tobacco brands increased advertising in youth-oriented magazines Sports Illustrated and Rolling StoneSports Illustrated and Rolling Stone

2002, RJ Reynolds fined $20 million for continuing to advertise in youth- oriented magazines 2002, RJ Reynolds fined $20 million for continuing to advertise in youth- oriented magazines

2004, Attorneys General sued Brown & Williamson (Kool) 2004, Attorneys General sued Brown & Williamson (Kool) “Kool MIXX 2004” promotion“Kool MIXX 2004” promotion Focus on hip-hop music Focus on hip-hop music Free interactive CD-Roms Free interactive CD-Roms Collectible bags, radios, lighters Collectible bags, radios, lighters Promotions appeared in Promotions appeared in Spin, Vibe, Rolling StoneSpin, Vibe, Rolling Stone

Flavored cigarettes Brown & Williamson recently introduced Brown & Williamson recently introduced Caribbean Chill; Midnight Berry; Mocha Taboo; MintrigueCaribbean Chill; Midnight Berry; Mocha Taboo; Mintrigue B&W claims intent is to lure current smokers from other menthol brands B&W claims intent is to lure current smokers from other menthol brands Advertises in bars and clubs, magazines like Playboy and Vanity Fair Advertises in bars and clubs, magazines like Playboy and Vanity Fair readership 85% adultreadership 85% adult Advocates claim virtually all new smokers under 19 Advocates claim virtually all new smokers under 19 Brands aimed at smokers will influence market Brands aimed at smokers will influence market

3. Outdoor advertising Bans all outdoor advertising, including: Bans all outdoor advertising, including: billboards, signs and placards in arenas, stadiums, shopping malls and video game arcadesbillboards, signs and placards in arenas, stadiums, shopping malls and video game arcades Limits advertising outside retail establishments to 14 square feet Limits advertising outside retail establishments to 14 square feet Bans transit advertising of tobacco products Bans transit advertising of tobacco products

Advertising and promotions increased in convenience stores and other retail outlets Advertising and promotions increased in convenience stores and other retail outlets Two-for-one offers and other enticements particularly effective with kids because they Two-for-one offers and other enticements particularly effective with kids because they have less disposable income than adultshave less disposable income than adults are more likely to be influenced by promotional items in convenience storesare more likely to be influenced by promotional items in convenience stores

4. Tobacco merchandise Thirty percent of kids 12 to 17 years old--both smokers and nonsmokers-- owned at least one tobacco promotional item Thirty percent of kids 12 to 17 years old--both smokers and nonsmokers-- owned at least one tobacco promotional item T-shirts, backpacks, CD playersT-shirts, backpacks, CD players Settlement banned distribution and sale of apparel and merchandise with brand-name logos Settlement banned distribution and sale of apparel and merchandise with brand-name logos

5. Product placement and sponsorships Bans payments to promote tobacco products in Bans payments to promote tobacco products in MoviesMovies television showstelevision shows theater productions or live performancestheater productions or live performances live or recorded music performanceslive or recorded music performances videos and video gamesvideos and video games

Prohibits brand name sponsorship of Prohibits brand name sponsorship of events with significant youth audienceevents with significant youth audience team sportsteam sports football, basketball, baseball, hockey, soccer football, basketball, baseball, hockey, soccer Prohibits sponsorship of events where paid participants or contestants are underage Prohibits sponsorship of events where paid participants or contestants are underage Limits tobacco companies to one brand name sponsorship per year Limits tobacco companies to one brand name sponsorship per year Bans tobacco brand names for stadiums and arenas Bans tobacco brand names for stadiums and arenas

6. Free samples "Samples encourage experimentation by providing minors with a risk-free and cost-free way to satisfy their curiosity" "Samples encourage experimentation by providing minors with a risk-free and cost-free way to satisfy their curiosity" Prohibits distribution of free samples except in facility or enclosed area where operator ensures no underage person is present Prohibits distribution of free samples except in facility or enclosed area where operator ensures no underage person is present

7. Gifts based on purchases Bans gifts without proof of age Bans gifts without proof of age

Targeting women Philip Morris began targeting women and girls in 1968 Philip Morris began targeting women and girls in 1968 “You’ve come a long way baby”“You’ve come a long way baby” Six years later smoking initiation for 12-year old girls had increased 110% Six years later smoking initiation for 12-year old girls had increased 110% Virginia Slims “Find your voice” campaign suggested connection between smoking and empowerment and attractiveness Virginia Slims “Find your voice” campaign suggested connection between smoking and empowerment and attractiveness

Dakota cigarettes 1. While smoking was declining rate among women was declining more slowlyrate among women was declining more slowly Rate among young women was actually increasingRate among young women was actually increasing 2. Link between income, education and smoking Smoking rates higher among low-income groups and those with only high school educationSmoking rates higher among low-income groups and those with only high school education 3. Half of female smokers age smoked Marlboro

Target market was “virile” young females with low-to-moderate incomes and modest educations Target market was “virile” young females with low-to-moderate incomes and modest educations Profile of group: Profile of group: Entry-level jobEntry-level job Spent free time atSpent free time at tractor pulls, hot rod shows, watching television (especially Roseanne) and going to dance clubs and bars tractor pulls, hot rod shows, watching television (especially Roseanne) and going to dance clubs and bars

Marketing plan called for Marketing plan called for Promoting male strip showsPromoting male strip shows Giving away premiums:Giving away premiums: washable tattoos washable tattoos “hunk-oriented” calendars “hunk-oriented” calendars his-and-her interlocking beer mugs his-and-her interlocking beer mugs

Targeting Minorities

Uptown cigarettes Menthol Menthol Package designed to be opened from bottom Package designed to be opened from bottom Philadelphia was 40% black Philadelphia was 40% black Advertising was mainly in magazines and on billboards Advertising was mainly in magazines and on billboards Magazines were Ebony and JetMagazines were Ebony and Jet Billboards mainly in black neighborhoodsBillboards mainly in black neighborhoods Ads used African American modelsAds used African American models

1. Denied targeting African Americans 2. Targeted at current smokers thus no increase in health problems thus no increase in health problems 3. Patronizing and racist to assume African-Americans couldn’t make same adult decisions as any other racial group i.e., whether to smoke and, if so, which brand to smoke i.e., whether to smoke and, if so, which brand to smoke

Menthol X “It was just an X. Call us dense if you want, but it [the connection between the package and the film] didn’t occur to us” “It was just an X. Call us dense if you want, but it [the connection between the package and the film] didn’t occur to us”

Targeting consumers in developing countries Framework Convention on Tobacco Control (FCTC) Framework Convention on Tobacco Control (FCTC) Treaty initiated by World Health Association (WHO) Treaty initiated by World Health Association (WHO) Negotiations began in 1999 Negotiations began in 1999 Objective: Objective: “to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke”“to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke”

1. Comprehensive ban on tobacco advertising, promotion and sponsorship 2. Prohibit misleading or deceptive terms on packages “light”, “mild”, “low tar”“light”, “mild”, “low tar” 3. Implement effective measures to protect nonsmokers from tobacco smoke in public places 4. Implement health warning labels that cover minimum 30% of principle display area of each packet

Treaty becomes international law when ratified by 40 countries Treaty becomes international law when ratified by 40 countries As of April, 2004 As of April, countries had signed102 countries had signed 9 countries ratified9 countries ratified As of April, 2005 As of April, countries signed167 countries signed 55 countries ratified55 countries ratified