r%j C) r*%) C:) 0 1.4 %D BAT Industries document for Province of British Columbia 23 April 1999 1 95 ; M- T industries document for Province of British Columbia 23 April V*PP, Millbank's third Brand Development course 4 L The third in the series of Nillbank-run Brand Development Cour ses as b~ ld in February at the Great Fosters Hotel at rgha r. near London. A uniquely attractive venue, this hotel provided comfortable modern conference facilities in one separate wing, but with a charminq 16th century main building where delegates dined and were able to relax. Sixteen Manaclers with Brand Management responsibilities from no less than fourteen different markets attended and underwent a programme that took them through all the stages of brand ~ievelopment, whether for a new brand or fo r the development of an existing brand. This included sessions on the use of information, concept oeneration, product design, name and pack selection, communication strategies, and launch planning; plus the consumer research and the controls necessary tbroughout any brand development project. Speakers were from B.A.T. Germany, the U.N., International Brand Hanageinent, and t)ie final Case Study exercise was prepared anc3 presented by B.A.T (Suisse). In addition there were outside speakers from a Few Product Development Agency - Presight, and advertising and research aqencies. C) BAT Industries document for Province of British Columbia 23 April 1999 Auqustine Tan Liat presenting tne launch of FMRITAGE in Malaysia. Javier Area- George Akib-Betts- ikiiii 1,"1,all,h.,d,,Manu*l villamayor oiving, r. ,at i -I.Prent. of CONSUL in % .... I.. CI .... - R.~i App.d.r.i. Oky IVAN Go NZALEZ ti4t, thIle Oncar Iwanis-ich. Ike E-sq-21. Penninqton Kalua. AS. BAT Industries document for Province of British Columbia 23 April 1999 G:,r,d.Y,V nbera (oue.t speaker) from WT G y prez.---nq the launch of KIM in An aspect of the course which delegates particularly enjoyed and found most useful was the opportunity to listen to six different case )iistories, presented durinq the second week of the course by delec-ates themselves. Of the different Marketinq Training programmes that are available, Dick Jones feels that this is probably the one which is most closely job-related and which, apart from offering the Brand Man&qers themselves the opportunity to improve t1heir skills and knowledge, almost certainly contributes in the relatively short-term to a higher success rate with new brand launches, and a better performance of existing brands, as a consequence of Managers responsible for these brands putting into practice some of the ideas and disciplines they learn on this course. Delegates who attended the course were:- Oscar Ivanissevich, Arqentina. Jim Brennan, Australia. Ivan Gonzalez, Chile. Oky Arguello, Guatemala. Antony Leung, Hong Kong. Augustine Liat, Malaysia. Pennington Kalua, Malawi. ike EY,,eag,ali, Nigeria. Javier Arce, Panama. Ravi Appadurai, Sri LanKa. reorqe Alibo-Setts, Sierra Leone. Daniele Michel, Switzerland. Benjamin Kemball, Venezuela. Manuel Villamayor, Venezuela. Russell Clemence, BATUKE. Paul Matthews, SATUKE. Ohserver: Andrew Georc7e-Perutz. 0 C) BAT Industries document for Province of British Columbia 23 April 1999 Antony -ng. Jim Brennan. Paul Mattliew.. Daniele Michel. 4 The launch of PLAZA in Brazil- Souz Cruz responds to a sudden reversal of market trends The Brazilian market (as at July 1981) The Brazilian market is characterized by its size - about 11-000 7illion per month - and its dominance by BAT subsidiary Souza Cruz, which liolds about BO% of the market. It is largely homogeneous - all cigarettes being of domestic manufacture and using effectively only Brazilian leaf. All cigarettes are sold in 20's packings, by law, and althouqh there are currently 114 brands on the market, the 4 biggest brands (all from Souza Cruz) hold over 69% of the market. One unusual feature is the wide range of prices. The most expensive cigarettes on the market cost CR$ 340-00 (84p) while the cheapest cost CR$ 105-00 (26p) per pack. Prices are arranged in 11 'categories' named alphabetically A (cheapest) to K (dearest). The average price is about 50p per pack, and the market leader is HOLLYWOOD at 55p (category H), with 29% of the market. Souza Cruz's main competitors are R.J. Reynolds, Philip Morris, and a small group of Brazilian companies. The problem During the 1970's, the Brazilian market had enjoyed steady growth, averaging 7% p.a. This was largely because the prices for cigarettes had remained fairly static. Besides volume growth, the market showed healthy signs of uptrading the mix improved on average 1% p.a. In 1976 Philip Morris launched GALAXY KS in the low tar segment, with advertising comparing its deliveries with those of the established Souza Cruz brands. This appeared as a major threat to Souza Cruz's market share as GALAXY, in category I, seemed ideally placed to benefit from (a) a trend to white tip, lower delivery brands and (b) the trend to up trading. Souza Cruz responded with a series of counter launches:- LUIZ XV (1977), ADVANCE (1979), CARLTON LIGHTS (1980), COLUMBIA (1981) and MINISTER LIGHTS (1981). NJ C:> C) all BAT Industries document for Province of British Columbia 23 April 1999 5 Suddenly, in July 1981, the simultaneous effects of real cigarette price increases, rising inflation, and a worsenina economic situation be~,an to reverse existing market trends, and downtradina began, accompanied k-y volume losses. .-uza Cruz had beciur, 1981 with the assumption of continued I low real prices, which bad an effect of reducinq profitability on cheaper brands to almost zero. Rising real prices invalidated this assumption. Whereas Souza Cruz had ceased to advertise its cheap brands and concentrated all efforts on future arowth segments, competition was now well placed in lower categories to benefit from downtrading. Specific problems and opportunities Althoug~i Souza Cruz 'had a fairly monolithic 80% of the market nationally, it had specific weaknesses. For example in the Southern State of Rio Grande do Sul (8% of national sales), Souza Cruz 'had in July 1981 only about 52% market share. Also, in low price categories Souza Cruz was weak. Further, Souza Cruz 'had no mild brand beneath price category I (well above average price). These weaknesses -ere being exploited by two competitive brands; PM's MONTEREY (3.2% market share, + 8% growth) and RJR's VILA RICA (2.3% market share, no growth). Both these brands were in category E, were perceived by consumers as mild, and had strenotb in the South (where t1hey 'held 15*,; share). P-otl, used TV advertising. Additionally. they showed success in attacking sophisticated and trend setting urban areas, outside t~e traditional stronahold of the competition in the South. Brand switching data showed that both brands were taking smokers from liOLLYWOOD, and indeed takina more smokers than any other brand. Souza Cruz's counter attack Souza Cruz decided to counter launch into this sector. The planned counter-attack product was to be mild (perceivedly milder than MONTEREY and VILA RICA), with a white tip, in the same price category (E), and with a 100mm version in category G (as with competition). The target consumers (broadly identical with the profile of the competitive brands) were of both sexes, urban dwellers, in the medium-to-low socio-economic class and over 25 years old. Typically they would be office workers or shop assistants, and would consequently be in day to day contact with people higher up the social/economic scale. So status - in dress and so on - was important to them, though constrained by economic considerations. _D BAT IndustrieS document for Province of BritiSh COlurnbia 23 April 1999 The brand name chosen - PLAZA EXTRA SUAVE The Souza Cruz marketing team had initially chosen CAPRI, a Souza Cruz traditional brand name as the preferred contender. Research however, had indicated that this brand 'residual ' was of a short, strong cigarette. PLAZA was chosen instead, and the 'Extra, Suave' on~ey-l the ~ilri- ;-,spect. Product It was decided to develop 2 versions:- a KS in category E and a 100mm version in category G. This followed competition, but the extra touch was that the 100mm was 'slims'. This was perceived as a value for money innovation since all 'slims' brands up to this point had been in a very high price category. The idea was to reinforce the elements of elegance, luxury in the brand positioning. In terms of blend, the cigarette would be milder than competition. Pack Label design would be a decisive element in the product's performance, as the pack would function as an 'indicator of status' for the lower social economic classes - PLAZA would have to have a label seen as traditional but at the same tirne distinctive and with status. Heraldic symbols and wording are considered important by the target group, and so pack design majored upon the crest, using 4 colours to give greater richness than competition packs. Communication A brand that was patently a 'downtrader' had to treat the questions of social class and value for oney extremely delicately. It was decided to advertise the brand without any consumer imagery at all. The whole campaign was product based, concentrating on label and product (white filter). The pack and cigarettes were the central, and indeed the only subject of films. Thus the campaign transmitted the essential product characteristics of mildness and elegance, while avoiding any overt status symbols. The slims version had prominence. A new media technique was the use of 2 15" Films in the same break, to avoid montony. Radio, outdoors and merchandisinq were heavily used. Pricina was communicated to the consumer only at the point of sale: thus (a) qencratina an agreeable surprise and (b) avoiding labellinq the brand as 'cut price' in the eyes of non-consumers. N) C) ID CO BAT Industries document for Province of British Columbia 23 April 1999 r\.) rD r\-) C) C:) -4 BAT Industries document for Province of British Columbia 23 April 1999 8 Result PLAZA was launched in September 1981 in Rio Grande do Sul - Souza Cruz's weakest area - and was an immediate success. !~ small pilot market simultaneously conducted in the centre of Brazil indicated good prospects for the brand, and consequently from December 1981 to May 1982 a series of launches in Souza Cruz's various branches achieved almost national distribution for the brand. The results of PLAZA in market performance are given below, showing how the brand has contributed to an overall share gain, with 7.2t market share. BRAZILIAN CIGARETTE MARKET BEFORE PLAZA AFTER PLAZA 1981 1982 MAY-JULY (t) MAY-JULY (t) COMPANY SHARES Souza Cruz 79.4% 81.4% R.J. Reynolds 9.6% 8.5% Philip Morris 8.5% 7.5% National Companies 2.61 2.7% SEGMENTS Low Tar 4.6 4.7 Perceived Mild (High Price) 10.1 7.8 Perceived Mild (Low Price) 6.6 10.9 Full Flavour 78.7 76.5 KEY PERCEIVED MILD BRANDS MONTEREY Family 3.3% 2.3% VILLA RICA Family 2.4% 1.4% PLAZA Family - 7.2% RIO GRANDE DO SUL Souza Cruz Market Share 52 t 57.5% R.J. Reynolds Market Share 21.3 18.8 P. Morris Market Share 18.2 15.9 Nationals Market Share 8.5 7.8 PLAZA Family - 9.4 MONTEREY Family 9.9 8.0 VILLA RICA Family 5.2 3.8 CD CD C=) BAT Industries document for Province of British Columbia 23 April 1999 9 Brand switching data since the launch of PLAZA shows that it accounts 46t of all MONTEREY losses, and has taken 15-20t of the target brand's smokers. About 12% of PLAZA's current smokers came from HONTEREY. it is int--stinq to note fliit PLAZA also affected GALA\Y. It nas been the most successful brand in taking GALAXY smokers during 1982, particularly through the slims version. Conclusions There are many conclusions to be drawn from the PLAZA case history: PLAZA clearly indicates the necessity to have brands ready to meet situations, for which the market or company may not have an immediate need. Circumstances can change rapidly, and basic assumptions evaporate, presenting new opportunities to a company that has the right brand ready. The value of a 'family' launch. Although most of the volume is with the king size, the presence of the 100mm slims versions has greatly contributed to the elegance, status and femininity of the brand offer. The value of a comprehensive analysis of the market not only by price categories but also by conceptual segment, and by region, to arrive at the correct offer. The necessity of delicate communication of price to the consumer, in a market affected by economic problems. Downtraders do not like being reminded that they are being forced to cheaper products, and the avoidance of price-sell in mainstream advertising is vital. Note: The launch of PLAZA into the cheaper price category has since been followed by the launch la.t September of CASSLNO backed by heavy advertising and which is reported to ha%re achieved an overall market share of 4.91 (January '83).raking it .r. til's sixth best selling brand. An account of the launch of CASSINO will feature in a forthcoming issue. BAT Industries doCUrnent for Province of British Columbia 23 April 1999 10 JPS and the Grand Prix involvement It is over ten years ago that JOHN PLAYER SPECIAL became the sponsoring bra nd for the Lotus Formula 1 motor racing team. The decision was made by Players in the U.K. who had previously sponsored the team under the GOLD LEAF name. So was born the now familiar black and gold racing livery, ec hoing that of the JPS pack, which 'has become known around the world, even where JPS cigarettes are not marketed. The "John Player Specials" as the cars were known, made their first appearance in the Argentine Grand Prix in 1972. Grand Prix motor racing has a worldwide appeal, all the excitement and glamour one could wish for, and its media coverage in C) r%1) 0 C) BAT Industries document for Province of British Columbia 23 April 1999 "E...p. f- ~h. rdi-y' i, 1h, -pyll- th. i~t ernational JPS campaign a.tr. b.- f th. ads. i I I M T industries document for Province of British Columbia 23 April T' W** the straights, and slower, but more spectacular round the I corners, with the skill required of the driver becoming more important than ever before. Brazil'83 will witness the debut ofthe Renault-powered John Player SpeCi2l, Jacques.Lafitte back with Williams, Rene Arnoux in a Ferrari instead of a Renault, and America's Eddie Cheever in a Renault rather than a Ligier. BAT Industries document for Province of British Columbia 23 April 1999 VOZZ0070Z n ElTeam'-" ithThejoh Player JOHN PLAYER TEAM LOTUS-John Player TC2M Lotus embark upon the 1983 season with their morale high, and a burning desire to win. Following the tragic death last year W. ofColin Chapman, the founder of force Lotus and the driving behind all ' s successes, the John Player -7 y the team peCi2l cars have a great deal to prove. S Elio de Angelis, the Italian who drove to victory 12ST Year at Zeltweg in Austria, will introduce in Rio the exciting John Player Special 93T, a totally new Renault turbocar. Nigel Mansell, the team's other driver, will be racing another ew, but totally different John Player Special. This car, the 92, will be powered by one of the new uprated Cosworth Ford normally aspirated engines. The team also has a new tyrc supplier- Pirelli, but the cars JrG.. still retain their familiar black and gold John Player Special a-1-7 ONE ~1 lis' livery. Team Manager Peter Warr, now at the helm of one of Grand Prix racing's most famous and successful teams, is c vi, convinced the team wdl continue winning. Not only is Elio joining'The Turbo Club'at long last, but the cars also have a secret new suspension system, which will help them enormously in all sorts ofracing situations. The team is determined that 1983 will be a great tribute to the John Player Special Lotus team's founder, the late Colin Chapman. John Playel-Special ;< ----> cb, cr~ C5 -4 r,-) CD BAT Industries document for Province of British ColUmbia 23 April 1999 N~ C) N) CD V --j N) CD ON BAT industries document for Province of British Columbia 23 April 1999 print and on TV is exceptional It is also very, very expensive. For many years BAT were able to gain a certain amount of spin-off benefit from Players' sponsorship of the JPS Lotus tear_ through on-th-spot promotiona I activity. But distribution of the JPS brand did not dovetail neatly with the geographical pattern of the Grands Prix race programme. Players in the UK could only benefit in the overseas race appearances in term&; of redia coverage in the UK. However, events have now moved on, and U-T plans for JPS have been formulated on a widening scale. With the already established awareness of the JPS/Grand Prix connection, it became a 'natural' to re-examine our position regarding motor sport involvement. In 1981 BAT agreed with Imperial (whose present ownership of the JPS mark is confined to Europe) to make a contribution to team costs and at the same time acquire full exploitation rights in our company's JPS markets. Primarily our interest lay in South America. The Brazilian and Argentine Grands Prix open the international season, and both countries have a history of enthusiasm for the sport, and for producinq drivers with flair and skill, like the great Emerson Fittipaldi and Juan Fangio. Also on the programme in South Africa, where the Kyalami circuit is the world-famous venue for the Grand Prix, and where BAT interest in the brand -as also important. Now the Far East, hitherto off the main Grand Prix map, is of importance to PAT in the JPS scene. As part of its 1983 season support programme for JPS, the Special events team in cooperation with the International Brand Group and the advertising agency is developing a series of 4-page full-colour features for the international media. These identify the brand involvement with the racing team, and project the excitement and glamour of motor sport. Of particular interest is the way in which these colour features can include in such a complex production bana-up-to-the- minute reports on the latest position in the drivers' championship table, together with comment on the chances for the next big event. To produce a complex colour print job for publication in a magazine normally means a lead-time of 6 to 8 weeks, and this time scale would effectively prevent highly topical content from being a feasible proposition. The JPS plan to issue colour features with up-to-the-minute detail, reporting on a Grand Prix situation where the big events are spaced roughly two weeks apart, therefore posed quite a problem. From the release of the material to the appearance of the magazine on the news stands is never more than a week. So how could the JPS problem be overcome? It has in fact been overcome, but with only one publication so far. This is "Newsweek" magazine, who have cooperated C) with the JPS advertising ac .1 ency and CSS, the organisation BAT Industries document for Province of British Columbia 23 April 1999 12 which looks after the entire sponsorship operation on behalf of both BAT and Imperial (UK). This entails oroducing all 7 colour separation work in advance, but holding up final production for the preparation of copy which 7annot be prepared until the results of the latest race are known. The plan of publication of the features in "Newsweek" is to run them in the Middle East and Latin America editions in support of the Brazilian, Monaco, German and South African Grmnds Prix. Other JPS/Grand Prix activities A considerable amount of other supportive activity has been arr,anged in the promotion of the sponsorship of the JPS Lotus Team. Two identical replica JPS Formula 1 Lotus racing cars are beinq built for use by Associated Companies for promotional use in the launch of JPS. A 27 minute film planned for general TV/cinema release and entitled "JPS Lotus goes turbo" has been produced, which descibes the introduction of the Renault engine into the Lotus car from the press announcement of the agreement through the design stages of the new car to final testing. An innovative departure from the usual racing films are a series of short two minute clips which are used throuah a race commentary. Each clip describes a facit of racing technology, from the Kerlar built bodies to the "grand effect" generated by racing car "skirts". A range of advertising has been designed for display at Grand Prix circuits around the world which can be used by Associated Companies together with a range of JPS clothes. The range is designed to suit every climate and to reflect the image of JPS. A new venture is the development of a prestige BMW car in JPS livery. Negotiations are far advanced for BM11 to produce a car with special trim and selling at a premium price. Initial reaction from BMW distribution in the Middle East has been most encouraging and it is hoped to extend this arrangement to the Far East and South America. An idea that has not yet fully been exploited is "Radio JPS". The intention is to sell very cheap non returnable headphones to spectators at a Grand Prix and to either use a local radio station or use our own station at the track, to broadcast news, music or advertising throughout the meeting. Behind all this is the JPS racing service. For each race informal comment, together with black and white and colour N) photographs, is sent to a nominated list of newspapers and C) specialist magazines throughout the world. r*..) C) C~ --4 NO BAT Industries document for Province of British Columbia 23 April 1999 13 Trademark diversification: neither new nor just a cigarette-name phenomenon The February issue of Advertising Age's FOCUS carries an interesting article which examines what the magazine calls extension and brand stretch" - what we tend to call :'line 'trad mark diversification". , The article cites as the earliest example that of fashion designer Coc 0 Chanel. when she branched out with Chanel No. 5 perfume in 1923. And ever since, it goes on, "stre-:ching a well-known brand has become a familiar method for companies wanting to squeeze the most benefit out of their marketing investments". Today's lower profit margins and rising media costs have underscored the importance of expanding brand names into new fields and FOCUS states that increasina numbers of companies throug~.ut Western Europe are looking to 'brand stretch' as the most economical means of introducing new products. As Max Wilkins, deputy chairman of Ted Bates in London, is quoted as saying: "companies and agencies have got to recognise that well-known brands represent years of investment. If one takes account of today's media cc-sts, all that money doubles in value. So it must be exploited". Among examples of current activity of extending established brand names in new product -areas, FOCUS cites those of the French Charles Jourdan firm wbich first extended its shoe business into other leather goods, and then into men's fashion; and the Dior explosion which today ranges from men's fashion to baby clothes, to silver and china ware. Cigarette name examples from Europe The article makes reference to several examples of new-product extensions of cigarette trademarks, most of which have been reported in earlier issues of "Marketing News". These include the MARLBORO and KIM range of clothing marketed in Italy, and the MURATTI name which in Italy has been linked with watches. Also the R.J. Reynolds name - one add to the travel interests listed in the February 1983 ~ oarketing News". of interest is a reference to CAMEL Boots which have been advertised both in Germany and in Norway. These boots are made under licence by Salamander, Germany's largest shoe manufacturer. The close resemblance between the CAMEL Boots advertisements and the international advertising for CAMEL cigarettes (the same outdoor man is rIeFicted in both, in similar situations: see "Marketing News", October 1981) has incurred the displeasure of the authorities in Norway where there bas been a total ban on =igarette advertisinq since 1975. BAT Industries document for Province of British ColUrnbia 23 April 1999 14 ~ MW V ~~- -X. Z he MARLBORO a ,, I nd KIM range of clothing marketed in Italy (where there is a total ban on d_ -i.ing) ' . "! . Reference is also made to publishing ventures incorporating cigarette trademarks: the RB publications which have been described in "Marketing News" of June 1979, and the more obscure use of Reemtsma's R6 mark in a magazine called "Lady R " in Holland , where (so the report states) it is sold through tobacco kiosks. In Holland too the CABALLERO trademark has been extended from cigarettes to sherry and books. 'Wasting a valuable asset' Spokesmen from all the companies interviewed agree that extension into a new product field must be in keeping with the standing and image of the original product associated .ith the trademark. And that includes pricing. C:) r1 j 0 C) --j C) ~10 BAT Industries document for Province of British Columbia 23 April 1999 15 TO Plax Wilkins Of Ted Bates comments on the dangers of undermining .1 1 the c7ood work invested in a brand trade-mark by ignoring this seemingly obvious factor "Brands are built up by reminding people of the benefits they give. I f the brand name is put on a product whic1h does not provide those benefits, then you are wasting a valuable asset". Few rules, says the FOCUS article, have yet emergel on the technique of brand stretch, but it identifies as rrobahly the must crucial, the need for a company to be certain about tl-.e consumer attitude to its ow n brands. "It's essential. to know exactly wliere a brand name lies in the public's wird", said Pierre Dessis who runs a market research organisation in Paris. NJ C) BAT Industries document for Province of British Columbia 23 April 1999 1. A. T, il- .Illy': -1.i- publish-9 '.. th t ti . ,ik D u d ._). Th' C E'- 'd ulhich featured in in Nor-ay. 16 Cp-rofile: Patrick O'Keeffe Patrick O'Keeffe is the Marketing Manager , Greater I.D.F. (International Duty Free) within BAT (UK and Expor t) Ltd. The 1 .D.F. Area has ' in the recent past had several geographical changes. From March 1983 it will cover the duty free and domestic business in Europe, and the duty free and export business to the Far East. Patrick reports to Mark Aitken who is the Senior Area Manager for the Area. Patrick was educated at Couai in Berkshire, and the Polytechnic of Central London where he graduated with a B , A. in Business Administration. His first job was working offshore on oil rigs in the Far East but he found that fourteen days at a time on the rig away from creature comforts proved too much, and he returned to England where lie joined BAT in August 1977. His first posting was to Souza Cruz in Brazil in January 1978 as a Marketing Trainee and then, in June 1979, to Bigott in Venezuela where he held a number of appointments: Market Research Manager, Product Development Manager and finally Sales Operations Manager. "The dynamism of Bigott in Venezuela was what impressed me most" says Patrick. The company's gain in market share from approximately 34 per cent to 68 per cent during the two years 'he was there was a most exciting time and confirmed the saying that "success tends to breed success". Patrick says that working largely in international duty free markets is of course a big change from Latin America. One has to be and to be seen to be an expert in what is possibly the world's most sophisticated marketing environmen-:. Patrick is married with a four year old son. The nature of his job means that a large part of his time is taken up in travelling abroad. He hates the cold but loves golf and this pastime is therefore restricted to the warmer .-months in N.) England. In the winter he watches T.V- and waits for summer and more golf. CD BAT Industries document for Province of British Columbia 23 April 1999 17 Warketing 'Appointments 6&%ansfer-s R.W. Jones A. Georgc-Perutz R.W.B. Burnett Voking - (UK&E) Miami to Indonesia Hillbank mar)-eting Services Manager, (February 1983) harketinq Research Adviser, (January 1983) Honduras to Guatemala Marketinc Manager, (February 1983) ON REPORTS OF ONEENNEN MEN COMPETITORS' MENEM MEN MENEM ON ACTIVITIES NOMMOMMEN Ad- ~-q Age. 31.1983 The cowboy gets worked over in the East By Dennis Cbmot Marlboro i..- rid h, world. one thir,g Philip Morris ..Iy does is roess ih "' cowboy' But in Hong Kong*. -~lci mar. _iro. r. kain, *nt, he do.. ret " d more ban ..Y.n. rise and domin4te the sim-ts. Phi lip Morris Asia had . pr.ble.: It. introduction of the M.,Ibo,o b,..d i. 1976 - colossall f.iju_ The brand was bombing. even though the tobacco ..,ke,,, and its gmey, Leo Burnett Co., ,,dD-,. Chose u ---l ,I- ofA- A had foll-d .11 he classically ,.cc -'.' strategies that were -kingeverywhere else. The ca.p.iff included that vital I.rnent-the 'Marlboro Cou - try" commercials with the f:. to d-1Li...g symbol, the ,a. ad American Cd-boy. Thin'. -1. . that so.. local Philip Morris official. con- sited rejecting the 'Marlboro Country- approach totally. 'But h-dq.- said.N. -y.' .d we agreed.' recalls Daniel Tso. Philip Morris' Asia g..,,.l ma.- age,. Instead. what the markeur and jency did do - modify Lh:;zmercisls volve what th _Wd th key prob. I..: Th. 1..h be,.,.. the -Marlboro M_* image and the dominant Chinese culture in Hong Kong. 'Th e Younger pop.lti.~ cl~'L relate to an, older an. said Jam- Harris. head of th. 8 ...... . c, in Hong Koog. *Ala.. catd. equal. rice pdd,- and *mlim* The Chinese don't aspire to thmL' Th. commercial& eere reshot in the U.S. The older cowboy usa replaced by a younger man -ing . a,hi. hat and riding . white horne. He=shonm lead, ing s group or , hand. n cattle d,i... i.- preasion that he -d not just amrked on. the ranch. He was ..... . ho- alone (-Th. Chi- a - "id ;7 .Zhi' '~`d' he - n-.r ilti.g around . -pr- (-Me Chin.. ?,,far action,' added Mr. H...). With home hoof. p-ding and a dcaen cattlemen racing for h-4cice in the -ci.l says, '. tougher the rid., he more you like iL* Said Mr. T.o: "We saw the result. overnight. S Is. -r. up 0.; after _ ho..d the - commercials.' The Iesso.? -V_.,y concepts c be - tly I.1ed to for- igri '-k-* i1 T:* *They .11 need dju t~ ment' C) N) (Z) C) --,I rQ r1 j BAT Industries document for Province of British Columbia 23 April 1999 18 J...... 31 013 Galaxy goes into orbit in Uruguay By Randy Drapeau bin e August. rh- Phil iP Morris Inc.'s Uruguay *n subsidiary launched Galaxy ci.- "It, in . 1--tar pach designed to I'i. he N_adii. :at 1, 4 - It leader brand has ,,n,,rd -!~ -be, he is h_j,hy I . of , --y.. at", G.I.W. hard hitting -.- p.-wit advertising campaign centers on&Ue" - port. tommissloned barch!4! P. Abel Br in Montevideo. which .h.-,d he n- brand t: b, II--- in ta, and M I in ni_1in, 11- L11 11 selling brands South Atn-- The 'i"im of the campaign -, ll,.C' ,'. Ind ...... I T.- be, C.. 11TC). mark,,,, of d N-da and .10 hr.n ftrindy 0-prou ix a corre- ~- A-- A,;. - B.,..,A -Arpe-ri. Iwhic h hats seeniits market share lip r,om 90% n the first quar- ter to its cumot 82%. Ciurcl in the vidirly diswerni.- ated _. 'TC .. '"' "P sell.-N-d. and Corona& -Ioth of hose tar content 19.6-g and 111.1mg. re.pec- _, co. or ply) p ed unfavorably ,th G-1-Y.. 9. 0mig- Ad. by Radius Agericy, based in Bue- Air.. Argentina. sub- sequenLIY app-ed on tv. in nev,spapers. on outdoor boards and at point of We. all promin. ently displaying the e-rl, lindings, I.r h. I.. -1.tintelligent decision.' 'F:7,he first time. JUru- guoyanj ~hal they .- tellinginto their -d R... Scull. pre.i- dent oi Abel Br. T.he core f the c..P. "n sists of 90-second tv c..mc,. -1., whic ih initially ran e."y night dnit prinit, time it.- rrL News February 24. 1983 BANGLEDESH LAUNCH FOR IMPS BRAND ,nit I... --nes as. Istroo.. al : l E-h-,- L-K. i bi i,h, to 111, ...-,,a- Alpha Tobwo C~psnv . Dh k f - 1. ., . . - . -I T-m 1.rA.HLP, ,.ckcr. , Th, 1, --- P'..c,..n cno.,1-01 ?-11 D'oot, a. h 14-. ra", 6_ S-- - .--cl h. a.. a, A,hion. 11,- n-r% ., e, I L LAUNCH , ., . ;, Ih 0~1, .,,d 11, in Chi,, I,"; 11- t _ ".; _ ow- 'h~ pla"I't ." ..he. ~-- I -i. -h- Is, -d granting on all three m)w chan. nels. G.Iiry do -I be -k! as .. "iI.I.Higirot d-foits. In he p.,.. . well-known news onchnwmmn appears in front -f . giant screer, -hirrir .11 Ad-1-.9 Age. F,b--y ZI. 1983 Ii,,,d ~ilh .It.tar of, After describing the test and repulls, the spokesman son: -if You are interested in .,,king . k- tar and nicotine cit. re , I advise you to switch to Mr. Scull -ld not reveal the c. .1 (Z.mpig..b.1ad.i. he, 'by local standards it is d, finitely . Allhoug for 1. G , I ",in or .. d -ere rid. "d in Brazil andj~rgentina. a. -11 as Uruguay. the brand us cy*n,,e"d;r-i' am is On. etiploinii Radius' general super. Miguel Di 111.16. ',..k... here preferred to stick bv their full flavor brand,. ignoring "I hn -. is( I- _ and ,co. in. 1-6. IN i1. in he U.S. 'I", is a _rv formed mneept nf 10 w._ and health. h... it hasn', always been __i-V Until no- PM products a double-take By JOHN J. O'CONNOR N M Y-a-In an unusual move. Philip Morns USA will use identi- cal packaging and advertising in esurig new upscale cigar ts- Play-stZrol Raffics-in three 'mar- kets. In r-ealing details of the dual testing PM/USA exec- vp Jim Morgiin said Players is a non- m,nth IDOmm smoke in a black- and-gold package hat will begin les-g in Phoenix and Portland. Meis next week Raffles (AA. Feb 11 i,~*nlh,l s-1keh.11 100mm nd , _, z. styles , will bv looking . build . ....-rig in Its Rochester. N.Y.. debut. UnLil Mr Morgan shed some light on the _ branft compel, tors admittedlyliwere pual over _-ngly conf " R brane'n", reports concerning . n- pli., 'iR- 'ret in a black -and-gold p-k Why test two urnilar-lookIng brands' Mr Morga n s remarkably simple explanation. "To , ~h~ch on; d,.c, lies ~. - c-pe-- r ....... Mr. a ~, he MorR n declined to discu ere ijve strait-gy unul .1- he ad, break in - m-kets However. a stntr,ce said a Raffles ad shows suc- cessful-looking men and women at a party accompanied by the the e line. -Raffles go places - Mr Mor- gan said Wells. Rich. Greene. whi chhandles the Benson & Hedges line. he, both est brand- The test will t-lve heavy news- paper. magazine and outdoor sup. port for both . Interestingly, Player's is a well- know,, British c)garet brand that is produced by John Player & sons Co of Nottingham. England. In act. hot company pr-- ri.afl, a dozen sty It% of cigar,ets under the Player', or John Ple yer labels. HoweverhP /USA hs the trade- mark rig tslo the Player's name in he 11 S in he let, '71), i's _t le-1 , bccr nd, hat ..in., and or o_ ye, , he, m1r, keted a premeu in_ p- smoke. Player % Navy Cut. lh.~ has a small bu,'I.y.1 (.11-ng I, y,,:,.,,hk,Iy twhat Ithe Player's N - brand d 1. iilfecl~ should Players beat out Raffl,et -t her, 0 (D U1141 BAT Industries document for Province of British Columbia 23 April 1999 19 .. .. .... . .. Marketers clamor to offer a lady a cigaret By Annis Sobezynski 1. he -iii 1.11-i-j, World 11, j st three m.jc,r 1-od, -i,fied ,,.Rhly 80'~ of :he need, I the smok- ,, puhlic. Tod-, 200 different _CIEs h.of ..k,.-. c_d one an - ,,t er I- share or market-or at Ihe, in inimum. a trial and repeat ptirchase. Aggrmiveriess is now the nime of the game as tob- "'m p.,.i,, r,.;.,k the,, market. ing -Ira. oker ~ to amu%e sm e R Te ine new markets r .,nd',he ,,by gain re. sitidi-e, .nd %vider acceptance The wbacco indumrv has had hsre of tr ubie,. and they',, o n~,t. The y,.r 1983 with higher ta... in place. or %t a push rnoger warning I.f in l ab 1% on nc" and apparent decline in the smoking popula- tion. And Jeffrey Wei ingarten. invvirnent with Grldman. Sz C.; N Y. k, ,,, stagna,inn a on' or t~e prob- lems facing the indust'. An -h v ,:I g,o.,h that as -_ i ,u,,Id , W,b.,~d to -* prod- uct Introduction. "in the last two " I hr hree years. industry growth as been the r-It of the pipe- o, ang of new products rather n th an increase in the con. stimption rate.- Mr. Weing.irteiii -5. Twent% -one or the two doz en or so in -'771 competitive brands that were introduced in 1981 were low-tar brands (15 mg or re-ir). And although the low-tar ct. Loril,lard's smooth. new smok, -, no .--h- ,g-y a, inv, crime h."n he" fie'.. pie are 11's InIlle."d I,, 1,-I- brands, but because the category become saturated. No. that h.5 1 th %!gment has - ed do- what : next?- is a que3Lion ,,,h ching crinbequence the industry. An efre tive way to deflect at - I tention fr.. the swirling smoke engendered by ongoing health controversies and econo mc pressures is to continue to char, nel talent, energy and billions into advertising. Image ad ... tis. ing, coupled ith targeted kt,Ling ff Tlard' or (and sptin with . wide .,r., of 'r """: continue to he w: d ~d..., Id 1 e ons in the marketplace. Image creation of one type cc. d` :nother dominates tob, ertising; identifying "n'"t' dominates the marketing k t segmentation began.with"Ith, introduction of filter tips some 30 years agn. One such filter tip -the beauty tip--wa5 de- signed by Philip MOrntisfroic re What made it diffe, other.ips was its red color, Its practical purpose was to camou- flage lipstick marks. The brand' M.,)b.,.. Hard to imagine today's nnacho cowboy con ' cerned with lipstick stains on his Marlboro- todav's woman. for that matter. What women look for in a cig- aret has become the increasing concern of tobacco market.,,. and with good reason. In the 1960s, fewer then one-third of the country's smokers were women. That number has since swelled to about half. or 30 mil- lion "men. Marketing theorists speculate that mor women are Laking up smoking n order to cope with on-the-job p......... which ... growing along with women's - celerating participation in the business world. The Federal Trade Commission in its May. 1 ~81, 'taff report to Congress on c,g.,,i advertising c;ochided hat cigare advertii, is m.k- t in inR efforts to.market especially to adrileacent nd voting wrime". labeling that as the ".ncrii Indeed. -tZK gr arket. tic, cited in that report reveal hAt while male %moking is level [lot od n s inK" Ic.,me d,m. 11-Phic 1-1- umlv declin- Inc, the riumhe, a young female ..,k,r, ision the i ked up the - --- p c ~Iell Ababa and their numl grew, they smoked t I "e' ' and menthol brand . ', then on he market .They still do. But in 1968, Phili p Moll"' revolu ,oniie-d the indull" when it introduced is con - new i"lv cipt, the first cigaret escl.. . marketed to women-Virginia Slims. "Virginia Slims fit what our research told us ladies were looking for. It had a lot or style. Ily different.' and it was vi,u d Jmes C. Bowl `p an ing. irman f hi- in he r ~b. assistant o P lip Morris Inc. New York. fe. cafl.. It .1. h. 11"Id cl, PP. _111.pprl on the market t tune time- As 4r. Bowling sa -Timing is eve-hing. Sinc then. competitors have introdeuced their own 'rernale appeal" smokes and the categorv continues to be actively and gressively courted. There is 11.1~ R miriolds Tobacco Co.'s Mo ights 100s. which hit the .- ket in July. 1981. and became the f.."m gir.ivirig main "'t brand in the country in' 'I'A 98' growing by nearly 32~ , accord- me to Marti. Orl-ky, -p- bra I'd marketing with R Y-ld.. Th. campaign for the I.` th, "' ng beige cigis"t is targeted si ly -" toward women, especially he .,.,o.". year-old f~:ale who considers he,aelr to ophi.b. cated, well eduuted and up to date. Reynolds even ciffe" an I- ternative for the mo female (34 to 44) who's looking Z -.tu'~ for a lower-tar cigaret. That product is - Other Zllwknown women's brands include Liggett & Myers, Eve and Lorill.rd'. Max line, In addition to test marketing Ms. Slim Lights in Portland. Ore. and Phoenix and Tucson. Ariz.. Lo rillard is rolling out nation. wide a new woman's cig.ret, Satin, after test marketing the brand in D,n%-er and Milwaukee. A variation or, the Iring, thin Irooke, this woman's cigaret's claim to fame is a unique satin. ii k filter t p. The campaign drsI`ws attention to that innova. t,or, with the theme. "Sp6I V-self with Satin." Says Sara Ridgway. vp-public relations with Lorillard. 'Satin is directed at the wnfnan who*s self-confident, relased, realizing her goals." Lorill.rd also resur. rected -1970' P' d,Ict. M.v.,- d, ik,.:,.,, ,p",il,,.ed it for he arkeL as "a wh,,Ie new . b-ed I I` wa: rappa rently a , ois -d the fernial rke, - no, yet ready for. since the promo, tion has now been scrapped. r- 11, however, the to. 0 'acco -mp.o,e~ still plan to continue targeting the female au-iience. Reynolds. which is said to be planning several new product introductions for 1983, b:iieve,,that th: women's mar- s til play ..j.r role in terms of opportunities, "hupi, fully at the experne of our com- 11 ition." Reynolds' Mr. Or- p, I-liv says half jokingly. Aiding the I I he h __e' s market wi h I. e ,d,.,, enlry.'*Ihilip ..rtr is is cnnfi- ritly for de braced the antici. Not only is pated Competition. Virginia Slim. the top ciiiare, designed for women. the P Morris philosophy ap- pears to be the more the merrier. Senior corporate vp Mr. Bowling explains: 'Crowding the cate- g Iry with ..petition iorne- tiries helps the original. It cre- aties more interest in a categor - you il-civ d.min.,,.- At a-v rat tobac' co n.,k,,,-r,; b,lie,,e e that women -tiriti, to -- ("W- . Max today"). I- uri- in (-Spuil youys!l with Satin-). and rally rfound ("You*ve come a long way. h.b,--) their f-irit, brand. Until recently. the industry .eemed to feel equally co fident about the low-tar cat- e,n -v. To demonstrate their conflilence, the three major ciga. rel companies ill.J. Revriolds. Philip NI-marid Brown'& Wil. Tobacco C,,,) ..... .. id to h-, spent e1- to S.100 roil- li,i n in 1981 just to advertise one Itt-tar rubsitgment-tiftra Inws to I-ding National A:I, - & William- s, n spent Ihell.' 7 g- amount fu, anv coinsurner product introduc- Lion in hist-y-pprnximate1v Sir,(, millitin-when it drarnsli- cnily threw it, support behind il~ Mirclav li-id. according to Walker Merryman, vp-direritir of c-muni Ti - ~i the To. In,t.Iw,'in W,,hhi I- The 1-1d did an".' n.1, he Nn. 2U posifion I- "ciXa` ret in he nd..trv. Ili., r1 j C:) NJ C) BAT Industries document for Province of British Columbia 23 April 1999 20 Poo, 19, over-all. the ultra-low segment ,v ,. actual .gi t,,ed a dechne in market %hre during the last quart, r of 1982. F- one. Philip Morns is not faring quite so well with its ultra.lfiw entry. Cambridge But the tobacco giart. shrugs that off With this explanation by Mr. Bawling: 'Cambridge is a strate- gic entry that accomplished its purpose. Around the time it was int,od ced. several people were already marketing exceedingly low-Lar product" in a busi ass this competitive, one cannot be excluded from any new or grow- ing category. As it turned out. ul tra 10- is notacategory of - briancy, But we have to be posi. ,ioned the~re in carse itshould be- Come "'. Philip Morris, however. can I, w ell . ford to accommodate one or two hirrigers-on and even an occasional dud like Northwind. PM.s recent foray into free- standing menthol territory that fizzled ea r1 y in 1982. The rea- Son, Philip Morris i. the proud parent of ~:rit eigareU. the top selling. f, tanding 10-tar brand,n th: coun Meri t managed to burnp American Brands' Pall Mali to take the 'i xth position in the industry. ac cording to the Maxwell Re- pnrt. Its ultra-light 1005 exten- sion went national in 1981. One surefire way to reach can - surners in a myriad of market se "ril, is through just this ityaof Iine exurrition, which is increasingly being supported by "' ily brand advertising. Kent ,egu at with Kent III :rndI wahl Came[ Filter. =_ p1 l". Few products can claim to reach all market segments. but M:r1b.ro can car toinIy boost th t comes close with its ex- tended family. Besicle.,i being the No. I cigareL brand in the world. A cignret meant for the dis- criminating female 3moker. Marlboro has been -treme y successful at line extension- It iq available in . box. a Soft pack. regular. 100-5. low-tar. full-flavor and menthol. -The product is so diverse in the marketplace. it just happens to reach all the segments." Mr. gowlitig say,. Then there are experimental products like Reynolds' newly launched BrighL. Descr ibed a s being a "taste that goes beyond menthol.- Bright. with its new taste characteristics, is designed to appeal to a market segment loosely described as maie and fe- male, 18 to 34. many of whom may already smoke a menthol product. Claiming that Bright rills a perceived need in the market- place. Reynolds' Mr. Orlowsky believes the company has "a unique. pre-emptive opportu- nity in a new mtegory.* Reynolds has successfully wooed the market with an old product directed at new market segments. notably today*s young rnale audience. Camels hove been around since t913. But Advertising Age, Febmary 7. 1983 iu S ) SATIN STYLF- Roughly 80 editors of top consumer and trade publications recently were treated to an individual "press party- to announce Lorillard's newest smoke. Satin. According to Lorillard vp-pr Sara Ridgway. an un- usual press kit sent to each editor was designed to "spoil" them. an allusion to the new smoke', ad theme. "Spoil yourself with Satin" (AA, Jan. 10). The velvet-covered kit contained a bottle of champagne, a box of Godiva choco- lates. a long-stemmed glass. a Satin eigaret lighter. two packs of Satin and an audiccassetle about the product Carl Byoir & Associates. Lorillard*s pr shop. handled. Advertising Age. January 10. 1983 even though they are Reynolds' oldest brand family. Camels had been virtually deserted by the many smokers (wet the years who reverted to filters and low- L.". Cameli have made a come back after being repositioned and aggressively promoted. The familiat dromedary placed fifth nationwide. a 13',' growth in just one year, 1981. "We did our homework with Camels. With- out changing its heritage, taste and quality, we bK.rrowed from the success of the past and created a new advertisihg imag," Mr. Orlowsxy explains. he creatior of 3tr -g T,rn.g,' has indeed become on,. 'if the most important fac- tors n the selling of eigarets. i Target audien-. once defined. are pursued in various media blitzes. Once tho- -- limited to the print mediR. Today, Lhev include car races (CameD, fsh- ion presentations I More). skiing promotions and inner city con- certs (Salem), jazz festivals flK ol) and ethnic festivals IWinston). to name- a few- Each event is married t., or created for. the target audience. These Strategies have served the industry well, but there are those in the business who feel that selling cigareLs successfuRy need not be based - these iron- clad approaches. RA. Reynolds and Philip Morris, for example. are decidedly leRs d')g-tic in their approach toward market- ing. First. the issue of segmented marketing. "Advertising was never meant to appeal to . par- ticular segment. It is simpi 'y designed to symbolize the char- acter of the brand itself,- P NI " Mr. Bowling says. -Those of us who worked with Marlboro HAMBURG-German tobacco giant ReemtSM2 has re- spnoded to disappointing results for its American-style West cigaret. launched in 1991 with a record $22 million in support. by pulling the 15 mif lion account out of GGK. A new agency will be announced this week. would not call it an advLrti%ing success. but a product success.' As evidence. he points to Marlborn's No. I standing in markets like Italy, where not one nickel has been spent on adver- tising. Marlboro's image rreator. Len Burnett, once !,aid that .11 advertising does is get the con- sumer to try one pack. Mr. Bowling recalls. "If Marlboro wasn't good tasting, that's what everyone would have bought- just one pock.' he chuckles. For the future. R.J. Reynolds plans broader and more bal- anced emphasis for its fuil-fla- -red and low-tar stvles. accord- irig to Mr. 0,1-sky. Three years ago. Reynolds began to shift it, -edi:,,-ph.,i., via, from rna... in , . media cat gory the tobacco companv -1,1- dominates, to newspapers and out-of-home. Calling it "market p-ence- strategy. Mr. Orlow,kv claims newspapers give Re Y, Ids a greater level of focus and con- centration on . market by mar. ket basis. The approach has al- lowed the company to expand its media resources. a rna)or chal- lenge for an inclustry barred from the airwaves. K.V. Dey. president of Liggett & Nivers Tobacco Co. succinctly sums up where he thinks to- bacco marketing may go in 1983. He believes the industry's mar- keting priorities will be 'to maintain business in light of federal excise tax increases and promote current brands with less emphasis on the ultra-lows. Basically, we'll be consolidating where we Anna Sobczymkii ts a When- ion. &-basedfreir lame t-itter and frequent coniributor to MaiwarInt. Ad,rmang Age. Firbluary 14. 1983 PM will expand cigaret nationally in Germany Mi:.,itm-Philip Morris GmbH is going national in Germany with the Philip Morris Light American eigaret- Agency is Luerzer. Conrad & Leo Burnett * Under the slogan "Win a voyage 1. the future.' trips to Cape Cana- I, Fla.. for !h: launching of the vnerl p... 1hual _11 be awarded by a totterY. The brand is already in the French. Italian and Benelux mark,,,. r1 i Ui BAT Industries document for Province of British Columbia 23 April 1999 I LOA M, T industries document for Province of British Columbia 23 April V'RK