11, .1 [I-T-- T Industries document for Province of British Columbia 23 April I MY T industries document for Province of British Columbia 23 April 1 The Benson & Hedges low tar cigarette A report on the recent advertising re-positioning of BENSON & HEDGES SPECIAL MILD 8 Y N R P B-,. 1--6-1 8,,,,d M-9,r, SENSON & HEDGES. The Benson & Hedges name on a packet of cigarettes represents to the consumer the assurance that the product inside is likely to bear the highest level of rational scrutiny. Benson & Hedges's credentials as a manufacturer of high quality Virginia cigarettes has been hard-earned through over a 100 years of experience ("it says so on the pack, so it must be truel"). Benson & Hedges brands are available in over 120 markets; in many, a Benson & Hedges brand is either the largest in its segment or even the outright market leader . So the reputation for international success and worldwide acceptability is well justified. In simple terms, what the above is saying is that the Benson & Hedges name is a most valuable property of the BAT group and, as such, when it is employed on a brand, probably represents one of the most persuasive endorsements we can offer to motivate consumers faced with the ever increasing brand choice dilemma in the fiercely competitive international Virginia market place. It has to be admitted that, with a few notable exceptions, awareness of the Benson & Hedges name and the creation of its enviable reputation is founded in the famous gold box of BENSON & HEDGES SPECIAL FILTER. It is this brand which has, during the last 20 years, grabbed the imagination of consumers all over the world and achieved high sales success on the back of considerable communications investment and marketing persistence. As a brand in its own riqht, SPECIAL FILTER continues to be the group's No. I priority in the international Virginia king size segment; but in addition to this specific role, and as part of the fulfilment of it, the brand has also provided the encapsulation of a corporate reputation. It has come to represent in the eyes of consumers, all the qualities on which a Virginia House relies. Over the last 8 years a number of line extensions have been launched, brands which carry the Benson & Hedges name, feature Benson & Hedges graphic elements in their packaging, capitalise on House identifiers and colours etc. The historical rationale for these brands and their progress/success since introduction is not something which needs to be covered here, but in the case of one brand, BENSON & HEDGES SPECIAL MILD, I do want to present the case for its current positioning; what its relationship with SPECIAL FILTER is and what its role, distinct from that of SPECIAL FILTER, now is. C=) C~D _1 J r1 J At. co BAT Industries document for Province of British Columbia 23 April 1999 SON&REDGES The Benson & Hedge~ 3 ~Ihile called BENSON & HEDGES SPECIAL MILD, and while matching SPECIAL FILTER in graphics and design elements, the brand still lacks credibility as simply a milder spin-off of the parent for the one fundamental and vital "consumer" reason, that it is not "gold". How ruch that mattered to target consumers we were not in a position to say with real confidence until the results of a major 6-market research exercise were available early in 1982. What this convinced us of is, that "gold" does count, very significantly, if the brand proposition is to match SPECIAL FILTER/mainstream appeal in image and emotional dimension, while offering mildness only as a product differentiation. This conclusion has further encouraged us to believe that this proposition should be catered for within Benson & Hedges brand range planning, but that it is not one we can justify for BENSON & HEDGES SPECIAL MILD, as it is currently presented and perceived. "Project Lambeth" is being developed by the IBM to fill this gap in the range and provide the bridge between SPECIAL FILTER and SPECIAL MILD. I have summarised briefly what BENSON & HEDGES SPECIAL MILD is not, what role it is not well equipped to perform, and why there has been the need for a major repositioning appraisal. I would now like to state what BENSON & HEDGES SPECIAL MILD is and what positioning it seems ideally placed to fulfill. It is Low Tar (max. 9mg); it is packaged in the symbolic colour of mildness - white; it is worthy in terms of product quality, packaging and design style of the Benson & Hedges name. These key elements, evaluated and weighted within the context of what are the motivations within the low tar segment, now constitute the fundamental ingredients of the new advertising campaign. The brief for the development of this campaign was based on two important assumptions, which translated themselves into business objectives for the brand. 1. Assumption: competitive activity and the publication of league tables would increase consumer awareness of low delivery terminology and hasten the growth of the low tar segment. The Group needed to increase its representation in this growing low tar segment. Objective: BENSON & HEDGES SPECIAL MILD to be deployed tactically for league tables and competitive pre-emptive purposes. 2. Assumption: The low tar brand from the Benson & Hedges Company in the U.K., SILK CUT, was agressively attacking the low tar segments in a number of our international markets, but without the ability to use and benefit from the Benson & Hedges name and reputation. Objective: BENSON & HEDGES SPECIAL MILD to be targetted N) against SILK CUT (and other low tar international CD Virginia brands). r1) C:D CD BAT Industries document for Province of British Columbia 23 April 1999 'g. AN .. p g ti The Benson & Hedgts low, BAT Industries document for Province of British Columbia 23 April 1999 5 Essentially, therefore, the campaign needed to communicate an uncomplicated offer: low tar product - Benson & Hedges quality; in such a way that reliably assures the consumer that to smoke the right low tar brand was still an enjoyable experience. Put this together with a 'lightness of touch' in a modern, distinctive visual execution, and we could be getting somewhere in presenting a BENSON & HEDGES SPECIAL MILD in a way that is compatible with its revised positioning and strategic objectives. The subjects featured here are only two of the range of six, which will be featured in the International Campaign, breaking on June 13th. A fully integrated communications campaign, covering film, P.O.S., merchandising and tactical promotions, is also in the final stages of production. United Tobacco Company launch WINSTON cigarettes in South Africa The South African cigarette market South Africa is the largest market for manufactured cigarettes on the African continent with annual sales in excess of thirty billion cigarettes. BAT holds a share of over 17% in this market, supplied mainly by local manufacture through United Tobacco Company, and also through imports from the United Kingdom and Zimbabwe. Although BAT's share had been declining over recent years it has generally stabilised in the past two years through progressive brands such as ALBANY and BENSON & HEDGES SPECIAL MILD. The international blended segment The international blended segment in South Africa sold an average monthly volume of 278 million cigarettes in 1982, representing 10% of the total market. This segment is growing at the rate of 20% per annum and is more progressive than any other segment. C:) C) -1 i 1 `10 U1 BAT Industries document for Province of British Columbia 23 April 1999 U.T.Co had no suitable local ly-manufactured contender in this segment. R.J. Reynolds' WINSTON had been imported and marketed in South Africa through agents for a number of years as a premium priced brand with 2ow volume sales and no advertising or promotional support. Research into a suitable contender for the locally manufactured blended segment now showed WINSTON to be the brand most likely to succeed of all the brands examined. This led to the negotiation of an agreement with Reynolds whereby U-T-Co could manufacture WINSTON under licence in South Africa. Specifications for the brand are 79mm x 24-75mm with an 18= acetate tow filter plug. Deliveries are 20mg 'tar' and 1.8mg nicotine. The cigarettes are packed in a 20's hinge lid box and retail at a popular price. Target consumers are young adult males in the A,B and C income groups and mainly urban. The launch strategy for WINSTON ensured that the brand was positioned to "offer the full flavoured taste of America as a result of its unique American blend and heritage". Advertising strategy Creative - the approach majored on "scenarios of typical, contemporary, American life style reflecting the self assuredness, independence, freedom of behaviour and lack of formality of American men". These aspects are most effectively conveyed by the jingle and lyrics in the radio and cinema campaign, these being the prime media used. Press ads and outdoor hoardings supported the launch to ensure immediate pack recognition and increase awareness and coverage in the target market. There was also a merchandising programe covering in-store display, promotions and consurner-contact work. Thelaunch WINSTON was launched nationally in August 1982, and the Sales Force worked hard to fill the pipeline quickly and efficiently. This was particularly important as the main competitor, Rembrandt, launched L&M Filters, in a red and white pack, two days after the WINSTON launch. L&M's campaign also centred on an American theme. The advertising for WINSTON proved very effective, and created a high level of awareness in a short period of time. This was particularly true of the film which uses various macho, sporting scenes in the U.S.A. and which generated a positive consumer reaction. Despite the launch of 3 similar brands by competitor companies, WINSTON has progressed well and by January 1983 C:> was holding 1% share of the international blended segment. NJ CD N) BAT IndustrieS document for Province of BritiSh C01UMbia 23 April 1999 7 VICEROY sponsorship of saloon car racing in Macau By Francis Carlow, Promotions Manager, B.A T Hong Kong The following article describes how B.A.T. Hong Kong became involved in the sponsorship of motor-racing in Macau and dealt with the problem of competing with MARLBORO, both on and of f the race track. Background Macau is a Portuguese colony situated approximately 40 nautical miles from Hong Kong, falling within the territory covered by B.A.T. Hong Kong. It is traditionally a popular weekend resort for Hong Kong visitors, as it is only one hour away by jetfoil. For one weekend each year, Macau is transformed into the Monaco of the Far East; the streets of the town are closed to normal traffic and they form the Macau Guia Race circuit. As there is no motor-racing circuit in Hong Kong, the Macau Grand Prix weekend has effectively become the Hong Kong Grand Prix, with the majority of spectators and competitors coming from Hong Kong. All the events are televised live in Hong Kong. There is motorcycle and motorcar racing for various classes of vehicles and drivers, which culminates in the Guia Race for modified saloon and the Grand Prix for Formula Atlantic cars. VICEROY involvement over the last 3 years, B.A.T. Hong Kong have repositioned 17111 VICEROY in an attempt to increase its appeal to the younger CD adult smoker. It is this group who are primarily attracted N.) CD CD _J N-) BAT Industries document for Province of British Columbia 23 April 1999 H,1-1 G,,-.e, IL1111 and H.1m., R,111 (R191,11. T- VICEROY', 1982 -1 -en 11-9. B A. r Hong K. ng M.,Ilel,nq Dire-, rh. 2 T- VICEROY P-11h. C....... d-.t. he grid .1 M. s,.,, of ~. 1982 race to MARLBORO, which is now Hong Kong's best selling brand. As part of this rejuvenation prograrune, motor racing was identified as an appropriate sport for VICEROY sponsorship. We were therefore keen to involve VICEROY in the Macau Grand Prix weekend, despite the fact that MARLBORO have for many years competed in the Formula Atlantic Event, as a natural complement to their international involvement in Formula One. In 1981, B.A.T. Hong Kong entered into a joint sponsorship arrangement with the Sime-Darby Motor Group (Hong Kong agents for BMW, Ford, Alfa-Romeo, Lotus, Mitsubishi), and a team of 3 BMW 320's were entered into the Macau G.P. Guia Race, under the banner "Team Viceroy-Sime Darby". The Guia Race is the main event for modified saloons. Manfred Winkelhock, our No. 1 driver, drove to a convincing victory. The cars were all prepared by West German motor-racing specialists, Schnitzer. The 1982 sponsorship Encouraged by this successful debut, B.A.T. Hong Kong again participated in 1982, this time sponsoring 2 private entry Porsche Carreras under the "Team VICEROY" name in the Guia Race. Helmut Greiner drove the "Team VICEROY" to a convincing victory. The decision to compete in the Guia Race, as opposed to the Grand Prix Formula Atlantic event, was made for 3 main reasons: 1) To prevent a head-on clash with MARLBORO. The MARLBORO budget was much larger than ours and VICEROY would therefore have appeared the poor relation no matter what the result on the track. Participation in the Guia Race prevented this direct comparison /competition. 2) It is our belief that saloon car racing is more attractive to Hong Kona people as the cars are identifiable as similar to those that can be seen in the streets. They are more directly aspirational. The post- race display of our winning cars created widespread interest on both occasions. 3) Saloon cars are more reliable than the Formula Atlantic cars. Obviously reliability is crucial since winning the race greatly increases the value of the sponsorship. The greater reliability of saloon cars was clearly demonstrated by the failure of any of the MARLBORO cars to finish the Formula Atlantic race in either 1981 or 1982. Promotional strategy Fundamentally the promotional strateny was designed to maximise pre-race activity in order to ensure significant C:) r1 J CD C) BAT Industries doCUrnent for Province of British ColUmbia 23 April 1999 9 VICEROY exposure regardless of the race result; the success of the promotion should not depend solely upon winning the race - The objective was therefore to create a comprehensive promotions package which capitalised on the sponsorship by generating awareness of the VICEROY motor racing involvement amongst the target group of smokers. Due to budget limitations only a re3atively low level of r-edia support was possible, so this awareness had to be generated by other means. Briefly, activity was mounted as follows: Ok Maw _7 Sale of Team VICEROY Items Branded materials such as T-shirts, caps, sew-on badges etc. were produced and sold by a team of VICEROY sales girls through kiosks set-up in Hong Kong and Macau. The items available for sale and the locations of the kiosks were advertised in the Macau press, which greatly stimulated sales. Sales activity started one week prior to the race. The clothing materials collectively made up the "Team Uniform", which was worn by all staff connected with the promotion. Media communication A press conference to unveil the cars was held in Hong Kong 3 weeks prior to the race. A press conference was also staged in Macau immediately after the final practise, giving reporters an excellent opportunity to question the drivers on their performances in practise and their chances in the race. These press conferences were supported by regular press releases reporting on the Team Viceroy race preparations. BAT Industries document for Province of British Columbia 23 April 1999 A r- VICEROY -W k-k 10 As a result of winning the race, we were able to obtain an exclusive interview with the drivers, wearing their full team uniform, on Hong Kong's most popular TV programme "Enjoy Yourself Tonight ". This interview lasted for approximately 8 minutes and, in itself, almost justified the cost of the promotion. Whilst TV cigarette advertisinc -i is still permitted in Hong Kong, it is very expensive indeed and any "free" airtime is highly coveted. A prime time, 30 sec. TV spot costs approximately 11,000. The race itself was also televised live and achieved 1~2 hours of airtime as the VICEROY car led from start to finish in both years. VICEROY exposure during this live coverage was very good. Advertising support 6,000 Team VICEROY car stickers were produced and distributed by our sales girls at the sales kiosks and at the post-race car display etc. This item proved very popular and of course it 'has a residual advertising value. -k" __J C=) 11-i POS Posters being placed by sales grits in a goldsmith's shop BAT Industries document for Province of British Columbia 23 April 1999 TN- 1981 F- of BMW s Heimur Grener's winnng Porsche on d,sPial, after the Y982 race T- VICEROY - 160- b-Ig ple.d di-,ly May ..,1 .1 11.1fil 119hIs (.,,h the car dri-', IF I IM POS posters were used in both Hong Kong and Macau. In both 1981 and 1982 space was rented at a busy shopping arcade where the winning car was displayed. Team VICEROY sales girls were present sampling consumers and distributing stickers. Conclusion The two years of VICEROY involvement in the Guia Race has provided a highly cost-effective communication, although luck has played an important part; MARLBORO's failure in both 1981 and 1982 greatly increased the impact of VICEROY's victory. In summary, the important points we have learnt are as follows: 1) winning is exceptionally important, and it is vital to select the Team very carefully to ensure that they have the best possible chance of victory. Regardless of the efforts made to maximise pre-race activity, the success and value of the sponsorship is primarily dictated by winning the race. 2) Co-operative drivers. In 1982 both Team VICEROY drivers were very helpful in satisfying the requirements of the sponsor. 3) our sales items proved to be very attractive, despite the fact that they were heavily branded. One need not be afraid of being over-commercial, providing that the items are tastefully designed. 4) The morale of our sales force was boosted by the success of Team VICEROY in Macau. This was particularly valuable in the light of the brand's declining sales trend in recent years. 5) The decision to participate in the saloon car event and not the main Grand Prix race was felt to be correct; consumers do not perceive a significant difference in prestige between the two, and our rationale mentioned above was vindicated in full. 6) As with most sponsorships, it is almost impossible to mount research to determine its value, and in the case of motor-racing this is further compounded by MARLBORO's involvement in Formula One, which would tend to distort local awareness levels etc. Evaluation of the sponsorship has therefore been purely judgemental. 7) All promotional communication must be simple and direct. In this context our specially designed Team VICEROY racing motif, incorporating the Team Title, was very effective, and our strategy was to highlight this symbol in all communications activity. CD N) C:) 00 BAT Industries document for Province of British Columbia 23 April 1999 12 STATE EXPRESS of London sponsor a c oncert tour of the Gulf by Lata Mangeshkar, the worlds greatest recording star In the Gulf markets of the Middle Ea st a large proportion (up to 50%) of the population is made up of immigrants who earn money from the various skills that they are able to provide. Most of the immigrants are Asian and they represent a very sianificant part of the smoking population of each Gulf market. Up to 1978 STATE EXPRESS 555 had been BAT's leading brand in the Gulf and was particularly popular with the Asian community as a good 'value for money' cigarette. It had been heavily promoted by a pack redemption scheme (offering premiums such a S china and cutlery), and advertising support. Then in late 1978 the new style cream and gold chevron pack was introduced to conform to the STATE EXPRESS international campaign. The pack redemption scheme was discontinued at the same time. The result was an immediate fall in volume and market share. Recovery plans In order to try and recover the situation and to reassure smokers that the brand was the same as it had been in the old style pack, various promotions were launched between 1979-1980. These included the sponsorship of football matches, both local and those involving the visits of famous international teams. This activity was also backed by considerable supporting work from the field force. The other major factor was the decision in early 1981 to position STATE EXPRESS 555 as a price-competitive brand, and this has resulted in halting the decline and putting 555 once more onto a progressive trend. CD --A r1 J BAT IndustrieS document for Province of BritiSh ColUmbia 23 April 1999 Q Ext- tpsis ST.--.TL 11 .1 : R.- briw YM, T it, A,,~;./V, 13 During the past 2 years or so increasing restrictions on communications concerning the promotion of cigarettes have been evident . The sponsorship of sporting events in particular has been effectively banned. In an effort to find ~n acceptable alternative which would convey the desired imagery and appeal to the Asian immigrants, the decision was made to sponsor a concert. tour. This could not only be very popular with the Asian community .hose main recreations are the cinema and music, but would also be acceptable to the various Arab State authorites. It was quickly apparent that a world famous Indian singer, Lata Mangeshkar, would be by far the most popular choice of possible visiting artistes for the Asians in the Gulf. Lata Mangeshkar was described once by Time magazine as, the "indisputable queen of Indian playback singers". She is recognised by the Guinness Book of Records and Time magazine as the greatest recording artiste of all time, having sung and recorded more than 30,000 songs. Lata retains the supreme range of musical expression that has made her a unique performer. She has sung at concerts held at the Albert Hall in London and Carneoie Hall and Madison Square Gardens in New York and many other well known international venues. However, she had never before sung at a sponsored concert and so when the agency invited her to do a concert tour of the Gulf States sponsored by STATE EXPRESS of London she was at first a little hesitant. However, she had never before sung in the Middle East where she knew that she had very many fans. So she agreed to a 2~ week tour to include 7 concerts. The sponsored concert tour The concert tour party consisting of Lata, 5 supporting singers and 'her own 12 piece orchestra were flown in from India. The concerts were held at well known prestige clubs and hotels in Dubai, Abu Dhabi, Bahrain and Kuwait and were attended by numerous VIPs including ambassadors frorn Saudi Arabia, Kuwait, India, Pakistan and Bangladesh. The Minister of Culture in Bahrain gave a speech of welcome and Sheikh Faisal also attended a concert bere. Each concert attracted a full house which ranged from over 500 in the Sheraton Hotel in Bahrain to over 8,000 at the open air Nasr Club in Dubai. At Bahrain's Juffair Indoor Stadium it was estimated that an extra one thousand (in addition to the 2,500 capacity audience) attended by swapping tickets at the intervals. At the Andalous Cinema in Kuwait, the Director of Kuwait Cinemas commented that it was the first time that they had completely filled this huge cinema (1,900 capacity!). At the end of each performance Lata Manaeshkar from the stage thanked STATE EXPRESS of London for having sponsored the C=) r1 o C) CD -Ii C) BAT IndustrieS document for Province of BritiSh Columbia 23 April 1999 14 tour - Following the last show she also offered to sign an ad thanking the organisers and STATE EXPRESS. This appeared in the local Kuwait press. Supporting advertising The concerts were well supported by pre event publicity in the form of receptions for guests and VIPs at most of the venues and VIP lounges were suitably decorated with STATE EXPRESS signs . Leaflets printed in English and Urdu were distributed well in advance and extensive press advertising was carried out both pre and post concert in each country. STATE EXPRESS theme advertising was run concurrently in the Pan Arab media. Each stage was backed by a large sign in STATE EXPRESS colours:- "STATE EXPRESS of London brings Lata MangeshRar in concert". r1j CD N) C) N) ON BAT Industries document for Province of British Columbia 23 April 1999 Top Let, I~ pe,fo,-- T- R,gM. SI.g. b-dong. Borrom Left. S*i-1,rtq girls n VIP lounge Bottom Right. VIP lounge. 75 High quality, full colour programmes with a STATE EXPRESS branded front cover together with branded 'T' shirts were handed out free with each branded ticket. ~;umrnary Overall, due to the popularity of Lata Mangeshkar, it was seen by all as a most successful tour. It far exceeded the organisers' expectations. As a sponsorship it went a long way to achieving its objective of rebuilding and reinforcing the awareness and image of STATE EXPRESS amongst the immigrant Asian community and in regaining considerable goodwill towards the brand. '555 MARLIN WORLD CUP' - B.A.T Mauritius sponsor a new event in international game fishing A new 2-week event in international game fishing took place i Mauritius at the end of last year. The event was staged from the island's top fishing club, the "Centre de Peche". It was the first Marlin World Cup and was created primarily to promote to the outside world one of the main assets of Mauritius - big game fishing. Mauritius offers superb facilities for big game fishing with the best fishing grounds in the world for Blue Marlin. The event will not only publicise Mauritius to the world-wide game fishing fraternity but will also serve as an added attraction to tourists. In this context it is worth mentioning that Mauritius held the world record for Blue Marlin (1,100 lbs) until very recently, and still holds the world record for Blue Shark (400 lbs) and Bonito (41 lbs), as well as many other..African records. The sponsorship BAT Mauritius quickly saw that the event would he an idpal. CD r1 i CZ) CZ) C71 r1 i BAT Industries document for Province of British Columbia 23 April 1999 16 medium for the promotion of STATE EXPRESS 555 - both locally (where the brand is manufactured and is BAT's premium local cigarette) and also with considerable international spin off. Negotiations were commenced with White Sand Tours, the organisers, at an early stage but the opportunity to secure naming rights to this new world title event arose at short notice. In fact the agreement was not signed until 2 weeks before the competition was due to start, leaving very little time to make all the necessary arrangements. Basically, the sponsorship agreement was that B.A.T. would pay for the prizes - a trophy and replicas designed and created by Garrards of Regent Street, London at a cost of Z8,000. For this they would secure the naming rights to this world title event for a three year period. The agreement included the condition that all materials produced in connection with the event must be approved in advance by B.A.T. Mauritius and must bear the name of the event ie. "555 Marlin World Cup - Mauritius". Shortly before HAT Mauritius had concluded their sponsorship agreement with the organisers for the major sponsorship rights, British Airways and B.N.P.I. (Banque Nationale de Paris Internationale) had concluded an agreement to sub sponsor the event by producina posters and inflight brochures. The communications programme Apart from the posters and brochures produced by British Airways and B.N.P.I. a press conference was held which was attended by both TV and international press representatives, all of whom were given a folder containing photographs of the trophies, a press release and a copy of the official programme. Throughout the competition the media were kept fully up-to- date on event activity and the coverage obtained on local radio and TV and in the press was most satisfactory. international media coverage however was disappointing, probably due to lack of a world news story during the competition - such as a record catch being recorded. 555 advertising was used effectively throughout. The trophy and replica were prominently displayed at the press conference and throught the comiDetition at the Centre de Peche with a 555 banner in the background. 555 signs were strategically placed at the entrance to the club, at the weighing bridge, at the score boards and the restaurant. 555 stickers were placed on participating boats. 555 T-shirts were given to participants and officials. 555 cigarettes were sampled at the various official functions. A souvenir magazine. with a 555 ad (from the international N) C) ro C) C:) _J NJ C711 U-I BAT Industries document for Province of British Columbia 23 April 1999 17 advertising campaign) on the back cover, was printed to provide all details of the competition, including the rules and regulations, prizes etc. Summary The competition was won by a French team, while the biggest Marlin was caught by a South African analer. Although 48 participants divided into 12 teams from 5 different countries took part - Finland, Australia, South Africa, France and Mauritius this was fewer than had been anticipated by the sponsors. This was partly due to the fact that it was the first competition of this series and also to insufficient time in which to arranqe for more effective international publicity. Initially this was entertained primarily as a local but well worthwhile sponsorship for STATE EXPRESS 555. The opportunity arose albeit at short notice, to obtain naming rights for this as a World Title event at a relatively moderate cost and one which, because of its world status it will be possible to expose in future to a very much wider audience. IRU IS. BAT Industries document for Province of British Columbia 23 April 1999 I M, T industries document for Province of British Columbia 23 April I -TRI