Noteon conversation with paul Binnham. 3.1.91


          hlURKEIING OF CIGBRFITES IN C~TI~SIRIESPIITK~[1TBLAITBP~S


         PB made these comments in response to a request from John nethuts5 for
         use in an interview with a t~n~e g~Pne. They could however be of pre
         as a general response to the qucsuon: 'How do you sell dgareaes in a
         caunny where no advc~iog is permittedl'.

         Tne marketing of all ~cg products bar four bade elements · Product
         Place, Price and Prcmo~oa Uyou remove any one of these, the other
         three become more si~ificaat ~So in a market where no Promobbn of
         dgaret~cs is allowed, you could expect to see the following:

         Product ·   innovation becomes the key. A ~uly'ncw' dgarcncwhich
                     offers the consumer something different leg Barclay) can
                     still he introduced succtr~lly in a market where promotion
                     is banned · as Barcfav was in Fialand Also expect to see
                     different pack sizts~nd shapes · with no advertising
                     allowed, ~e pack itself must aeate and maintain brand
                     image,

         Place ·     more cf~dcat me of the trade, and itwtore eommuoica~os
                     ie permanent merchandising material and point of sale
                     temporary material leg be~eo). 'Ibe aim is to create a
                     better impact · to let the retail enirromeet communicate
                     the values of the product more effectively, More ef~dcnt
                     use ofthe company's sales force,

         Price ·     ~ some countries leg France) prices are fixed by law. in
                     all counpics with a~bans however, you can eXPect to see
                     more price compedtionroming in · more bpprice brands
                     entering the market in the longer term,

         Finallv, note that although advemjing war rc~ictcd in Finland since
         1969 ~d banned since 1P78, there is as yet no indication that the brand
         images of the major international brands have weakened · something we
         mi~ have expected to see,

         Sales in Finiand have beta stable for the last five years and smaldng
         incidence is on the inaease · up by over 3% in the past four years to
         28.1%. Ihis is iarhighu than say, Holland (128~ where much fewer
         rts~ic~ops are in place, If the Finnirh ban is wor~ag, why is smoldng
         incidence rising after 12 years of no advertiringl


         Gaye Pedlow

         AGPIAT~
         4thJanuaryl991 zV
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