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Marketing Tobacco

Marketing Tobacco. Targeting youth Targeting women Targeting minorities Targeting consumers in developing countries. Targeting Youth: The Tobacco Settlement. 1998 tobacco settlement $100’s of millions in damages health costs paid by medicaid smoking related illnesses Marketing practices

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Marketing Tobacco

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  1. Marketing Tobacco

  2. Targeting youth • Targeting women • Targeting minorities • Targeting consumers in developing countries

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

  4. 1. Targeting Youth2. Cartoon characters • 1975 memo to RJ Reynolds Vice President: • “The Camel Brand must increase its share of penetration among the 14-24 age group…which represents tomorrow’s cigarette business” • 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.”

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

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

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

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

  9. 2002, RJ Reynolds fined $20 million for continuing to advertise in youth-oriented magazines

  10. 2004, Attorneys General sued Brown & Williamson (Kool) • “Kool MIXX 2004” promotion • Focus on hip-hop music • Free interactive CD-Roms • Collectible bags, radios, lighters • Promotions appeared in • Spin, Vibe, Rolling Stone

  11. Flavored cigarettes • Brown & Williamson recently introduced • Caribbean Chill; Midnight Berry; Mocha Taboo; Mintrigue • B&W claims intent is to lure current smokers from other menthol brands • Advertises in bars and clubs, magazines like Playboy and Vanity Fair • readership 85% adult • Advocates claim virtually all new smokers under 19 • Brands aimed at smokers 21-30 will influence 12-17 market

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

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

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

  15. 5. Product placement and sponsorships • Bans payments to promote tobacco products in • Movies • television shows • theater productions or live performances • live or recorded music performances • videos and video games

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

  17. 6. Free samples • "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

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

  19. Targeting women • Philip Morris began targeting women and girls in 1968 • “You’ve come a long way baby” • 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

  20. Dakota cigarettes • While smoking was declining • rate among women was declining more slowly • Rate among young women was actually increasing • Link between income, education and smoking • Smoking rates higher among low-income groups and those with only high school education • Half of female smokers age 18-24 smoked Marlboro

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

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

  23. Targeting Minorities

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

  25. Denied targeting African Americans • Targeted at current smokers • thus no increase in health problems • 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

  26. 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”

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

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

  29. Treaty becomes international law when ratified by 40 countries • As of April, 2004 • 102 countries had signed • 9 countries ratified • As of April, 2005 • 167 countries signed • 55 countries ratified

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