I.
M, T industries document for Province of British
Columbia 23 April I --TTF~


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BAT Industries document for Province of British
Columbia 23 April 1999


6
Henri Wintermans'
cigars in Italy
Increasing sales In an expanding
but difficult market
Henri Wintermans are the largest cigar exporter in
the world
with exports to over 100 countries. The U.K. where
they
account for two thirds of all imported cigars, is
their
biggest export market and France and the Duty Free
trade are
also among their most successful European markets.
Over the
past 5 years they have made a successful entry
into the
difficult Italian market where imports and
distribution are
completely controlled by the State Monopoly, whose
various
brands of Italian cigars such as TOSCANI and
TOSCANELLI have
dominat'ed the market.
Although the Monopoly have accepted imported
brands for some
years the disadvantageous conditions imposed have
limited the
growth in this sector. One of these conditions had
the
effect of penalising cigars using "homagenised
tobacco leaf"
by the imposition of higher duties. Nearly all
miniature
cigars nowadays use homogenised tobacco leaf as a
binder in
the interest of efficient and economical
production. A cigar
consists of 3 components, the filler, the binder
and the
outer wrapper leaf and in the production of the
100% natural
tobacco product the natural leaf binder and the
wrapper are
placed in a largely manual operation. The use of
homogenised
tobacco for the binder in cigars enables them to
be produced
in much the same way as cigarettes and avoids the
more
expensive and less mechanised method of cigar
manufacture
using 100% natural tobacco.
At the end of the '70s Henri Wintermans, after
studying this
problem, decided to put to advantage their
expertise in
making natural tobacco leaf cigars. They started
manufacturing a series of miniature cigars using
100% natural
tobacco. Although more expensive to produce this
would be
more than outweighed by the much lower excise
levied by the
State Monopoly on these 1001 natural tobacco
products.
The "natural tobacco" series launched by Henri
11intermans
included brands like CAFE CREME, CAFE CREME TIP,
CAFE NOIR
and WILDE HAVANA. It was then not long before
competitive
importers followed suit.
The result was a gradual increase in the market
share of the
imported cigars until in 1982 it achieved 41% of
which Henri
Wintermans' share represents about 21%, or 8~% of
the total r1j
Italian cigar market. CD
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BAT Industries document for Province of British
Columbia 23 April 1999


Ap~
New introductions
.7 -~77
Henri Wintermans are ever on the look out for new
marketing
opportunities. Two of these were identified in
early 1982
and have resulted in successful brand launches.
One was MINI
HAVANA and the other was CHE.
In Italy, as in many other countries, the
recession has meant
a reduction in the purchasing power of the
consumer. Smokers
are looking for a product as close as possible to
the one
they are used to but at a more moderate cost. MINI
HAVANA
was introduced to cater for this need, being a
high quality
product of 100% natural tobacco leaf but priced
significantly
below CAFE CREME. It already ranks among the 15
highest
selling imported cigars. Furthermore there is
reassuring
evidence that its sales are not being won at the
expense of
Henri Wintermans' own CAFE CREME.
The second recent successful launch was of a
"Wilde" type of
cigar. As readers may know a "Wilde cigar" has a
rough uncut
end. This type of cigar is popular in some markets
like
Holland and France among the "back to nature"
consumer
segment.
Identifying a similar appeal in Italy Henri
Wintermans
decided to launch a small cigar of the "Wilde"
type in a 20's
tin under the macho brand name of "CHE". The brand
was
immediately successful and quickly achieved
nationwide
distribution. The demand for CHE continues to
increase and
it is at present the sixth best-selling imported
cigar; not
too far from CAFE CREME which holds third place
and is Henri
Wintermans' main seller in Italy.
Henri Wintermans' agents in Italy are Italtabacchi
who, with
their well trained and skilled staff have
contributed greatly
to the progress that has been made in this
difficult market.
CD
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BAT Industries document for Province of British
Columbia 23 April 1999


8
Delegates from Bangladesh and
Pakistan attend a Regional 'Taste
and Flavour' Training Course
A regional 'Taste and Flavour' Panel Training
Course was
conducted in Dacca from February 25th to Marcb
lst, 1983 by
Mr * Rob Ferris of the Psychology and Sensory
Testing Group,
GRI, DC, Southampton. The course was attended by
14 delegates
from Bangladesh and Pakistan Tobacco Companies and
was
designed to train future T&F Panel Leaders for the
region.
The course ranged over a number of key issues
involved in
set t ing up and training a panel, and theoretical
sessions
were interspersed with several practical sessions.
Typical
theoretical sessions included:
- The relationship of sensory testing activity to
orZanisational (product development and marketing)
.i ..
- selection and motivation of panellists, and
sensory
testing methodologies.
- Human perception and quantification of taste and
flavour
experience.
- Panel data analysis, statistical options and
results
interpretation and presentation.
- Future challenges in sensory evaluation, the
special
~a N)
m:e ofcthe low delivery product and judgement of
ch.ni (:D
N)
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BAT Industries document for Province of British
Columbia 23 April 1999


9
The course represented the first exposure of
operating
companies to the control cigarettes which are to
form the
foundation of the new OMEGA method of sensory
evaluation.
OMEGA is a panel method designed specifically to
contemporise
the 1400DROSE system of evaluation, (a more
commonly used
F-ethod in RAT which involves scoring test
cigarettes against
identified standard cigarettes) and will
ultimately replace
the latter throughout the Group as the standard
method of
cigarette evaluation. The OMEGA approach will bear
a close
resemblance to its forerunner with the additional
benefit of
a more consumer-oriented vocabulary, up to date
cigarette
standards, and generally more adaptability to the
special
problems of lower delivery evaluation.
Retailer Own Label and
tfF
Generic cigarettes
Q1
No.
The price advantage of Own Label brands
may pose a threat to rnanufacturers'brands -'-IG
N.
n riLTER CW~RETTEN
In December 1980 and September 1981, 'Marketing
News'
published an article on Generic cigarettes in the
USA.
References from Advertising Age have been included
since from
time to time.
Generic cigarettes are non-branded cigarettes,
usually in
white packs with the plainest of contents
descriptions on the
pack. In the USA and in Europe, the development in
grocery
outlets of generic products has generally taken
place after
retailer own label products have penetrated most
categories.
Generic products have so far been limited to a few
product
categories, most often in the area of soap
powder/detergents
and paper products - One senior UK manufacturing
spokesman
stated that his company's concern was that
generics had
helped to affirm the legitimacy of retailer own
label
products in the consumer's eyes as well as hurting
sales of
manufacturers' branded products through a further
price
advantage. In Australia private label products
have lost
more to generics in a number of categories than
have r1j
manufacturers' brands. CD
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BAT Industries doCUrnent for Province of British
COIUMbia 23 April 1999


10
The environment which fosters own label and
generic
cigarettes usually involves multiple retailers
flexing their
buying and distribution muscle in another product
category;
no retail price maintenance; a pricing structure
enabling
such brands to offer the consumer a saving; severe
disposable
income problems for many consumers; and
manufacturers with
spare capacity and failing brands.
For many years, the consumer's cigarette brand has
been an
emblem, a badge saying something about his or her
self-
projection and self image. Manufacturers have
spent billions
of dollars projecting images for their brands to
match
consumers' needs and values. The growth of
retailer own
label cigarettes, and to a lesser extent generics,
is not in
the long term interests of manufacturers with
large market
shares. Grocery manufacturers have been unable to
stem the
growth of multiple retailer power despite some
support for
the independent, small grocer. Fortunately for the
major
cigarette manufacturers, in many countries the
independent
trade is likely to continue to dominate total
sales of
cigarettes, and many consumers do not buy 100s
cartons where
the savings on own label/generics are at their
greatest.
In the USA and Germany, any pricing difference
between
retailer own label cigarettes (Krogers or Aldi's
TOBACCO
HOUSE NO. 7 for example) and generics is blurred.
The growth
of the total segment in the USA gives it some 2%
of national
market share or around 13 billion cigarettes
annually.
Within supermarkets, that share is around 3%. In
Germany,
the segment volume growth has more recently been
hit by
branded cigarettes offered at the same price (L&M)
or just
above (GOLD DOLLAR, WEST, LEXINGTON 100's,
CHESTERFIELD).
However, the segment holds some 7% of the national
market at
around 8 billion cigarettes annually.
The average national price advantage the segment
holds in the
USA against manufacturers' brands is around 25c or
25%
depending on the State retail price. In Germany
where prices
are banderolled, the generics/own labels cost
between DM 2.95
or DM 3. 00. HB and CAMEL sell at DM 3.80 and
MARLBORO DM
4.00 giving the generics well over a 20% price
advantage at
retail.
Consumer profile and switching data will be
referred to in
later articles. Preliminary information indicates
that it is
not just the poorest sector of the community which
buys
generics, but primarily the lower middle classes.
So far,
despite many rumours, no multiple retailer in the
UK has in
recent times launched his own label cigarette nor
a generic.
In Switzerland the segment has made no impact yet.
It is
known that Liggett & Myers will make their
generics available
for export at only US$ 12.50 per mille FOB.
It seems likely that generics will always have
some consumer
demand but that this will be limited if
manufacturers are
skilful. The greater threat is retailer own label
cigarettes
at a signifiCdnt price advantage over
manufacturers' brands.
C:)
C:)
CD
BAT Industries document for Province of British
Columbia 23 April 1999


11
-.7! Z 9-
MEKMOL SLTER FILTER FILTER
CIGARETTES
CIGARETTES CIGARETTES.
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CIGARETTES
100's
FILTER
CIGARETTES
LIGHTS
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BAT Industries document for Province of British
Columbia 23 April 1999
S- G-.. b-dd gl-fi-


A
12
The new U.K. ROTHMANS
1 :1 OTHN LN N S -TH E
advertising campaign:
highly creative, or
just highly confusing?
V I DDLF T%R
All of us concerned with the effective advertising
of
cigarette brands are only too aware of the
communications
challenges presented by the codes affecting what
one may, or
may not, say or show in pictures and/or words.,
it is all-too-easy to take refuge from the problem
by
adm itt ing defeat, and consequently producing
advertising that
does little beyond blindly conform to the stark
rules, with
no attempt to explore the new areas of creativity
which they
sho uld inspire. Past issues of "Marketing News"
(see those
of December 1977, June 1980 and August 1981) have
examined
some of the brave attempts to inject creative
communication
into su Ch . ituations. They don't all work. But
in general
they do succeed at least in projecting a postive
image,
however obliquely.
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BAT Industries document for Province of British
Columbia 23 April 1999


13
VNS-THE Gr-IF--%T EST NAME IN CIGAP,=rES
CI(iARE-rTES('ANSF.RlOt'Sl-)"DA*,I.%(;L)'OLRIII.Ai
rii
The new ........ and he .1d.
One attempt to communicate innovatively, and
undeniably
effectively, has been the UK BENSON & HEDGES
'Surrealist'
campaign. These original, sometimes startling,
visual
projections have worked well in keeping a market
leader
acceptably in its place. Not all the subjects, one
might
contend, are equally effective. The close
involvement of the
company's and the agency's marketing people with
an effective
campaign can sometimes lead to self indulgence.
The latest
B&H example is, in the view of many, just such an
example.
Here, in a blacksmith's workshop, are isolated
wrought-metal
letters taken from the BENSON & HEDGES logo.
Pinned on a
drawing board, small and in subdued monochrome,
can just be
made out (if you look hard enough) a sketch of the
B&H pack,
and there is a barely discernible .'ghost" pack in
the
centre.
Yet, oddly enough, a non smoking housewife on
being asked
what the ad was for, immediately replied "Ob,
BENSON &
HEDGES". Such is the recognition of the overall
B&H
"Surrealist" visual style. It certainly
communicates
awareness.
The new U.K. ROTHMANS campaign
Probably the most consistently used ad approach
for an
international ly-marketed cigarette brand,
predating by many r%J
years even the MARLBORO cowboy, is that for
ROTHMANS KING C)
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BAT Industries document for Province of British
Columbia 23 April 1999
MIDDLE TAR
CIGARETTES CAN SERIOUSLY DAMAGE YOUR I 1rALTI I


14
The blue background. The big pack. The hand
emerging from a
smartly-cuffed sleeve, usually sporting the 4 gold
bands of
an airline captain. The stylised globe. And the
permutations of the recurrent copy lines- "World
Leader"
(the accepted successor to "The World's Largest
Selling King
Size Virginia"); "The best Tobacco money can buy".
And one of the most consistently used of all: "The
greatest
name in cigarettes".
It is generally held that adherence to this
centrally planned
campaign was imposed by Anton Rupert himself.
Whether or not
this was so, it is true that there has been a
recent
relaxation of this policy. The first sign of a
departure
from the standard has recently (in April 1983)
been evident
in the United Kingdom, with a campaign that, we
understand,
is not intended for use anywhere else.
Now, this campaign brings us back to the opening
comments on
innovative creativity. The new ROTHMANS campaign
bears all
the hallmarks of off-beat communication; but, the
problem to
date is that no-one (outside the Rothmans/agency
team)
appears to have the slightest idea of the message.
The new campaign is based on ads, in double-page
full colour
spreads in the Sunday supplements and other
magazines as well
as on large hoardings, which feature big
illustrations of
space-age structures. There is no pack at all, an
no obvious
visual link with any previous ROTHMANS
advertising, including
lettering styles. Apart from the mandatory Tar
Band and
health warning, the only words carried in the ads
are:
ROTHMANS - THE GREATEST NAME IN CIGARETTES
This copy line is the only link with the familiar
old
campaign which, incidentally, is being run in
single-page ads
concurrently with the new one.
Reactions to the new campaign
The impact of the new campaign, in terms of
awareness as well
as in what it is attempting to achieve, is still
doubtful
after a month or so of exposure. Certainly the
tobacco and
advertising trades are very aware of it, as might
be
expected. But no-one so far as we know - whether
in the
business or a member of the general public - has
voiced
anything but irreverent theories as to what the
campaign is
trying to say.
To us in the BAT family the interest is twofold.
Firstly,
there has been a departure from the rock-solid
continuity of
20-plus years of ROTHMANS advertising around the
world; and
secondly, have they embarked on a new
communications campaign
which will develop into something effective - or
have they
driven into a communications cul-de-sac? r1j
CD
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BAT Industries document for Province of British
Columbia 23 April 1999


15
4 ~, rio,rFi,\IANS-'ri IE (;RFaVFEST NAN I E IN
CIGARE=ES
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BAT Industries document for Province of British
Columbia 23 April 1999
INIAN"-_~` I' I I 1-~ i It I-1. V I' I-' ~-;' I,
NANIF 'R 'AH I .71-1*1."S
111ODLr UR I'16~RETTF1 I ,I SFRI.L'SLVr--E 11OUR
III A LTH
\11-1 I IA. I'll


Marketing Managers confer in Mexico
The Latin American Marketing Managers Conference
was held in
Guadalajara, Mexico in March 1983. The Conference
is
primarily for the Central American, Venezuelan and
Mexican
companies to discuss common issues, review
competitive
activity, and discuss strategy. Observers from
Brazil,
Argentina and Chile have attended similar
conferences in the
past and this year they were Winter Rose, Edward
Grant and
Tony Pereira. The Chairman of the Conference was
Jaime
Garcia Narro, Marketing Director of Cigarrera La
Moderna.
Mike Heath and Hector Arechavala, General Director
of CLM
attended on the final day.
Ian Stewart, Territorial Co-ordinator for the
region, and
Iain Hacking and Geoff Brooks from Millbank's
Marketing
Department, were in full time attendance as were
representatives from B&WIT and RAT(UK&E).
CD
BAT Industries document for Province of British
Columbia 23 April 1999
Geoff 8,ook.. Millb.11k. Mike Heath.
Miflban*. Jaime Garcte N&rro. Mexico.
N-ty, A-h-l.. M-wo. D-d S.-ft,
BAWKE. Wm- R.- 0-d.
ffvzo 8-ch', El Saly&dor. Roberto Dand-Handures.
V.-o L,-.,. C~~t. Ri-0- Di- V.n.1--I-.
Ed G-,. Aq-,... C.- G..hd. M-c.
Wi-, Re- 8-d. J.- M-ic. W-., P--..
1 mri.. Nil-g... Aa-


17
The main issues of the Conference were the impact
of possible
League Tables, pricing strategy, MARLBORO's
development in
Mexico and International Brands. Mr. Heath
presented an
overview of BAT's Marketing Policies and
Strategies. Tommy
Sandefur, Senior Vice President in charge of BWI,
presented
'his new organisation and talked about BWI's
policies relating
to the development of the Group's US International
brands.
The evaluation of MARLBORO's position in Mexico,
and CLM's
options, took the form of a case study which each
delegate
had received a copy of prior to the Conference.
The delegates to this meeting were: Mike Heath and
Ian
Stewart (Millbank), Hector Arechavala (Mexico),
Iain Hacking
and Geoff Brooks (Millbank), David Beecroft and
Paul Viner
(BAT(UK&E)), Thomas Sandefur, Tom Whitehair, Ted
Parrack and
Bill Telling (B&WIT), Winter Rose (Brazil), Ed
Grant
(Argentina), Tony Pereira (Chile), Omar Diaz
(Venezuela),
Juan Mauricio Wurmser (Panama), Vinicio Lines
(Costa Rica) ,
Ian Imrie (Nicaragua), Roberto Danilov (Honduras),
Enzo
Bianchi (El Salvador), Ronnie Burnett (Guatemala),
Raul
Matamoros (Canary Islands), Jaime Garcia Narro,
Cesar Gaehd
and Rolando Sepulveda (Mexico).
Wa rke ting 'App oin tm en ts C& 'rra n sfef -s
P.J. Robertson Chile to Brazil
R.C. Edwards Guatemala to Chile
J.F.M. Morgan Millbank to Germany
D. Yellowlees Millbank to Hong Kong
Brand Group Manager
(March 1983)
Marketing Manager
(April 1983)
Marketing Executive
(April 1983)
Marketing Executive
(April 1983)
C:)
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BAT Industries document for Province of British
Columbia 23 April 1999


19
The STATE EXPRESS CLASSIC
discount promotion in the U.K.
offer a new range of bargains
The October 1982 issue of 'Marketing News'
reported the STATE
EXPRESS CLASSIC Discount promotion being carried
out by
B.A .T (U.K. and Export) Ltd. in the U.K. This
scheme offers
smokers a range of quality items at about half the
retail
price or even less.
A second phase to this promotion commenced in
February
offering the following attractive items: a Hanimex
camera, a
Uni-com money manager and ladies and gents quartz
watches by
Colibri. Special packs of STATE EXPRESS 555 King
Size
cigarettes each contain a Z2 voucher for
redemption against
one of the items.
The Hanimex 11CTF camera has built-in electronic
flash and
telephoto facility. It is available for only 112
plus six
vouchers, whereas the recommended price is L24.
BAT Industries document for Province of British
Columbia 23 April 1999
I"" hIV 4.1-d STATE EXPRESS CLASSIC Dic...,
U-Cm --1 1-19-1 -d Iod- -d g-, q-11 -11hel by
C-b,,


20
The Uni-com money manager is a unique calculator
specially
designed to monitor movements in a bank account.
It comes in
a pure leather case with pockets for cheque book
and credit
cards and is avaialbe for only L9.90 plus five
Classic
Discount vouchers, a saving of ~ElO on the
recommended retail
price.
The quartz watches have been created by Colibri in
slim-line
stainless steel and brass and have Swiss made
casing and
super-accurate movement - With ten vouchers they
are each
available for only X19, a saving of L20 per watch
on the
recommended retail price.
The Z2 vouchers are available in the full range of
STATE
EXPRESS 555 King Size brands - FILTER KINGS,
MEDIUM MILD and
SPECIAL MILD. Less than the full number of
specified
vouchers may be sent off to the handling house
with the
addition of 12 to the offer price for every
voucher cmitted.
Since the Classic Discount scheme was introduced
last October
the response from consumers has been very
encouraging and has
proved a useful loyalty builder at a time when the
brand is
under intense pressure from its competitors in
this market.
ON REPORTS OF MENEEMEN
ONE COMPETITORS' 00111111111
MEN EMENO
on ACTIVITIES NEEMENEEN
C-P-11 1 -1 -
Tobacco
ads come
1111
UP nanin
USU
state ban
S-w,: The New South Wales
Labour G-c'nment h;1, banned
.11 tobacco d%crtising on the
public transport sy%tems: including
railway stati-t. ferrws and bus
stati-s. lndustr% sour- siy the
CD
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U-1
BAT Industries document for Province of British
Columbia 23 April 1999
Cigarette ads in Australia ... new curbs
move ill cost the Go ernment at considering
lodging an appeal
least S5(X).IM in lost ad-tising against the
decision.
revenue. The Government has said that it
The Outdoor Advertising Fcd- will honour all
existing contracts
eration of Australia. in enrijun, for outdoor
tobacco advertising.
tion with other industry hodics. i% but will not
sign any new ones.


27
1983 (U.S. rnarkerl See ./so 'Cairrip.,9", -111.f
BBDO out as Barclay, Camel change hands
By JOHN 1. O'CONNOR
An "timated SI 10 million in ig-
aret d--.ag ir-ed p.,,hr late
last ."k. ar McCann -Erickson re-
"g-i Rrr.%% n & Willi-son's cni,
tro-sial Barclay braiid to take on
Camel'.% -,ldwlde business for
R.J. Rey-lds Tn1bacc, B&W im.
rat,diately moved Barclay to a for.
mer RJR agency-Cigilvy &
I
Mather BBDO. the Camel agency,
~11,,ft without.
A though it still has other RJR
Industries business. BBDO is heil
bent (In getting anolher cigaret to
replace the estimated $70 million
Camel .ccoun t B B DOI ate rna.
tional chairman Bruce Crawford.
,to sir-Rer to blockbuster client
dt7partures and arrivals-e 9 " his
.gen C. v slossa rid Ubsiequent reap.
pointment to the $90 million-plus
Podge account-said the agency
e' pects to be back in the cigaret
business "in the neir future."
Mindful that his agency still has
RJR*, Sea-L.nd Service and Del
Mont I. (H awa nan Punch juice and
drink mixer). M r. Crawford clearly
_, speaking through a muzi!le
when queried about RJR's expla-
nation that Camel walked a mile to
'he McCann agency because of "an
,nability to establish a close rela-
t-ship with BBDO."
All he would sav was that the ac-
count team-largely staffed by
-.iiv, people worldwide who
--re doing . superb job an Camel
advertising--war heing kept in-
tact and e2SI IV could be ars-1.,ted
within the agency if ri-s-v.
RJR and cornoetinR cizaret con,
panies apenly acknowledged that
BBDO*% advertising concept-
"Where a man beiongs"-was an
effective One. The cincept evolved
f of
ram the work Team/BBDO,
Germany. and evenwailly led to
BBDO's getting the brand*s world-
wide advenising.
According to a source close to
Reynolds. the success of the adver-
tiri ng may have played a role in
the split The rource explained that
BBDO developed an "attitude of
aloofness. almost superiority" that
apparently became too much for R.
J. Reynolds Tobkcco president
Gerry Long. a tough-talking. no-
nonsen'e native New Yorker.
The exec cOntinued, "It was
coming since last December. Mr.
Crawford and especially Allen Ro-
senshine JBBDO chairman) never
thought it would happen." Mr.
Crawford admitted the change
came without warning.
Based on RJR's fee system.
Camel will work ,.t to ,bout 36
million to $7 million for McCann.
Or about . 9%.t._10% commission
on the $70 million accounL Media
buying is not included.
OThc %I.irltuiro Cha3engc. sp-stired h% Philip
%lowri% Itir Marlboro
ciI,arctics- iim% It, giw,immcur dri- the ' han.
ioent,, prof-ional
ra-,g 0-1 - -1,01--ppl-won forr- ..It bc d,,mh,,wd
ih-ugh-it
,lie ,,untr~ From th- I -(XXI ..II be in
Ii`%t di- it, be hcld -it Sil-sitiic. l1rinds
Ilaid-nd Thr-0-111 in kli,
.,r,d J.n,. The 20 linjim, ill -, it m .,
proj--,nal
%chtiol. io preritro lor the Ni.trlhoro
Chall,riti,final,- da~ The
%ill retc- a lull sca-ii's Marlhoro %pon-r%hip art
ilic RRSCC Sior or
T.m F-m . la I ,rd ha a, p hip G.-I R,,h ........
0 / 636 6 551
By resigning Barclay. which
spends $40 million. McCann has rid
itself of a thorny problem: What to
do bout Its advertising in light of
the Federal Trade Commisrion's
view that it deliver, . lot more tar
than the advertised I mg claim.
B&W is under intense pressure
from Washington to drop the
brand's Img tar claim- Though the
FTC has yet to bring false adver-
tising charges. it has officially noti-
fied the Louisville marketer that
Barclay's status as an ultralow-tar
cigaret can no longer be demon-
strated by the tar dehvery scores it
gets on FTC's cigaret-te'sting ma-
chine (AA. April 18).
FTC staff attorneys and B&W
last week refused to confirm re-
ports that they have been discuss-
ing interim Barclay advertising
that would run untill a more reli-
able method of testing Barclay's
unique filter is developed.
Ogilvy & Mather. which adds
Barclay (not media buying) to a
B&W overseas auignment, was the
agency for Real cigarets-a disas-
trous Cig2ret introduction In 1976
that RJR execs to this day dread
being asked about in interv-s-
When the brand was pulled off the
market two years later, after more
than $100 million in advertising
and promotion had been poured
into it. 0&M and RJR parted.#
TOBACCO JOURNAL IMT6RNATIONAL
April 1983
Philip Mords test
MARLBORO cigalrette
tobacco
Philip Morris GmbH. Munch. W. Germany.
is p,esently test marketing an American
blend. fine cut tobacco in a Soutri German
aty The product comes in a 50 gr. pouch.
and cost OM 4.50. MARLBORO fine cut
Ps aimed at those smokers who turned
to roli-your-own cigarettes after the steep
increase in taxation of m-factured cjg-
arettes isst June. MARL130RO fine cut
as imported from Belqium. (pb)
N)
C)
BAT Industries document for Province of British
Columbia 23 April 1999
Marlboro Chiillengir: S,,,,, h t--- J.-,., lj-l i


22
CA-AeGN13161-983 (U.K. market)
U-1m tobacco fear looms at McCanns
by Wwd MCGOWM
McC,inn-F-rickson. Icss that, -I
month after surviving a review of
its 111 m. ,, n C.,,e.s Roth...,
international advertising. again
faces the loss of the account after
toba co, account moves in the US
worth more than 150 million.
Top le" I meetings between
McCirins executives in New York
and the management of R.I.
Reynolds .manufacturers of five
cigarette brands including More
and Camel, will decide the future
of London McCanns' Rothmans
busines .the light of account
S In
McCanns' Rothmans business
comes under question following
BritishA icanTobccasubsidi-
"Ier
ary Brown and Williamson's deci-
sion to fire MCC ... sin the US
fro. its L39 million ad account for
the new Barclay brand of
cigarettes.
Within the hour R.J. Reynolds.
with its 116 million account, left
BBDO and moved into McCanns
which immediately created can-
ltjft,. 0w.1 Su- his. capturtid S% of
1 h. ..k.1 1. E.-N..
Sports Sponsorship boosts
RJR's Dora[ in Ecuador
WIN%TON-SALEM. N.C.-An Ecua-
dorian cigarette with a Spanish-
.sounding name that neverthOess
doesn't exist ig the Spanish lan-
guage was one of the most suc-
cessful new cigarette brands world-
wide in 1982.
Durin
,g its seven and a half
morillis in distribution last year.
Dural Suave captured more than
5% of the Ecuadorian market on
unit sales 0 f more than 164
million.
In most markets world-wide,
new brands achieving a I Ole share
are now considered successful.
"We are very pleased with
Dora[ Suave's early success and
view it as one of our most
outstanding international new
brand efforts." says Thomas L.
Ogburn Jr.. marketing director.
Areas 11 (Canada) and III (Latin
America/ Caribbean) for the corn-
pany.
Doral Suave is manufactured
and distributed by Fabrica de
Cigarrillos El Progreso. S.A.-
RJR Tobacc-o International's affil-
i3 te in Ecuador. Marketing efforts
and promotional activity for the
brand have been supervised by
John NI. Wall-c. El Progresu's
marketing direc(or.
"We identified a consumer
desire for a high-quality. char-
coal-filter product with a tastc
significontly milder than that
offered by competitive brands.-
explains Wallace. "in addition.
Doral, Suave is affordable to the
average-income smoker because
it's sold at a price lo,er than the
best-selling international brand."
Wallace believes that several
promotions tied specifically to the
brand's modern. young-adult ad-
vertising campaign have also
contributed to its popularity.
Dora] Sua%e achieved substan-
tial exposure shortly after its
introduction by sponioring local
broadcast coverage of the 1982
World Cup soccer tournament.
The brand also sponsored car
rallies through the streets of
Quito and is currentIv the sole
advertiser for a "top 10" music
show heard on nine radio stations.
"The word *Doral' is becoming
more and more popular even
though it doesn't actually exist in
the Spanish language.- Wallace
adds.
"In fact. a major hotel in
the city of Guaviquil has changed
its name to 'the Doral* and a new
crindominium complex in Quito
plans it) do the simc.-
r1 i
C)
C)
C)
BAT Industries document for Province of British
Columbia 23 April 1999
Barclay. . jE39milfion taken out of.McCamu in
America
flict with the Rothmans business progress. but
McCanns group
held by the London agency. director in London Mike
O'Brien
At the time of going to press the said: "We have
now been asked to
meeting in the US was still in resign any
business.


23
TOBACCO JOURNAL INTERNATIONAL TR-May, 1983 (L/ 5,1
19 A71
U.S.A.: Custom manu-
factured cigarettes to
intemational market
Liggett Group. Inc. a suosidiary of Grand
Met U.SA. and the country's largest
manufacturer of private iabeucuslom -
manufactured cigarettes. Ts now intro.
cuCing this concept to the interrintional
market 7nrough its newly formea inte,
national d,v,s,.n. L-cgell Group. Inc s
making avaiaule to cistocutors %orid-
wide cuslom-des[9,ed and ..n,,fac
rweo American c,garettes I,, od,wn.
cistr,outom are being fle,ed the,, -
custom -manufactured product on an ex,
clus- ln.s~s
Liggett Group. Inc 's private laoelicuslom
- manufactured cigarettes have aready
proven to oe successful in the J S.A.
with an estimated 12 per cent - 1 4 per
cent market share. According tothecom-
pany. 90 per cent of all supermarket
chains in the country carry the product
Custom - manufactu,ea cigarettes retail
for approximately 10 cents - 20 cents
less per pack than name brand cigarettes
in the U S A
Liggett Group. Inc. s custom - manutac-
tured cigarettes use the same blend of
tobacco as L & M. one of its popular
brands in addition. the same rnanulac-
turing equipment and processes are used
for its name brands and custom - manu.
13 ctured cigarettes. Besides manutac-
luring the product. Liggett will clesign a
custom cigarette Package for the distri-
butor Marketing and promotional ams-
lance is also ava-labm
Liggett Group sold ts.nternat,onal rights
to e,tisting brandsana trademarks.aswe
as the name Liggett & Myers Tobacco Cc.
to Philip Morris Inc, in 1978. However.
this agreement did not restrict Liggett
from entering the international market.
so long as it did not use the name L.QQ.tt
& Myers Tobacco Co Therefore, Liggett
Group Inc.. Internavonil Tobacco D-
sion was established this year (ONIDR)
'110 us
Q4
c0
Initial marketing of kreteks
set for college campuses
Sampoerna A. the tobacco and
clove cigarel le from Indonesia I hat
has gained popularity in that coun-
try. is now available in the United
States. The newest krelek offered in
the U.S. is being distributed by two
importers. George Bensen & Son. of
San Francisco. and G.A. Georgo-
pulo & Co., New York City.
Handrolled and featuring a di-
stinctive cone shape. Sampoerna
A's are a combination oi dected
tobacco and cloves. They are man-
ufactured in Bali, Indonesia by the
House of Sampoerna. which has
manufactured and marketed kre-
teks since 1913.
One student from each of four
U.S. universities-the University of
California at Berkeley, UCLA.
Boston University and Boston
College-will win an exotic paint-
ing by a Balinese artist in a contest
sponsored by the House of Sam-
poerna. as part of the product's in-
troduction into the U.S. market-
place.
The contest is being held via a
schedule of full-page adver-
tisements in the student news.
papers at the four universities, with
an entry deadline of May 2.
BAT Industries document for Province of British
Columbia 23 April 1999
"We are placing major emphasis
in these collegiate markets." says
Parlick Browne. sales director of
Sampoerna A's. "because of the
phenomenal growth in sales of
kretek cigarettes in U.S. college
communites over the last several
years."
Camo Filters Hard Pack. a IM-r cili-118 iri A b".
---
d.- .1 R.J. fty-d. T..,. CA. Twq.ted.,,
y-titler... -1.
.--. 1. .- ar- Iyl. its. - d.Ild-ill -1 - ---I
C-Asr
mg. -Cmel Filters HAM PoCk ". 9"d .., it- -. lit.
p-r, -.&I -d- 11-9 Y-unW -"- -sA -9-- -
T-
a..
- 1... 70 P.- .. Al, .... ."I ..... ... ,, ..... .
T.. n- .6'. c-1 t-iV 01 PM-
d..1A 1.


24
- 11-1 ..- .9" in the future it will become a new
t-'s on the world tobacco market
JTS exporting unit to go Competitor for foreign
makers in are Philip Morris Inc. of the U.S.,
up against BAT, PM, RJR international markets.
R.J. Reynolds Industries Inc..
In the past, ITS has been ex- also of the U.S.,
and B.A.T
TOKYO. JAPAN-The Japan To- porting cigarettes,
principally to Industries Ltd. of Britain. The
bacco & Salt Public Corp. is Southeast Asia. In
fiscal 1981, three accounted for 46. 1 Q74 of the
contemplating setting up an ex- it sold 1,538
million cigarettes, cigarette sales volume in 45
na.
port company for actively market- up 39.307a from
the preceding tions in the world in 1980. The
ing its go~crnment-madc cig- year. They
constituted about share of ITS, which has only
arettes, to counter foreign makers ' 0.50% of its
total sales for the year. a domestic market to
speak of.
drives to get Japan to liberalize reaching 307.6
billion cigarettes, ran to 13.4074 of (he world's
total,
its domestic tobacco market. up 1.2%. protected by
its monopoly setup.
Establishment ofsuch a venture However, actual
product ex- Statistics show that in the past
will mean that Japan is intending ports aggregated
only 195 million, seven years, the growth in
aggre-
in the future to become a big with the remainder
sold at stores gated sales volume of the Big 3
seller of cigarettes in the inter- at
international airports in Japan reached 2107o,
with that for JTS
national arena. with other big or aboard ships on
ocean-going being only 7.1ii'a. Growth for
private cigarette makers. Current services. other
private makers and coun-
ITS cigarette sales are virtually This means that
the corpora- tries employing a monopoly setup
limited to Japan. tion's exports are going to
become reached only 0.4%.
ITS has decided to redouble full-fledged with the
formation The private export company
its export efforts as growth of its of the export
company. planned by the corporation thus
domestic sales has turned sluggish JTS at the
outset intends to stands to join the international
with the decline in smoking by cultivate markets
in Singapore. competition with the Big 3. In
young people. Meanwhile. foreign Hong Kong, and
China. It will the case of Hong Kong, the Big
tobacco companies have been place weight on
exporting its most 3 already hold a market share
strongly demanding liberalization popular brands.
such as Mild of nearly 70%.
of the domestic market. Seven (whose single brand
pro- According to the corporation,
Initially, the projected company duction is said
to be the largest the planned company will be
capi-
will aim at promoting exports to in the world),
Cabin, Seven Stars, talized at 550 million yen. It
will
Southeast Asia and China. How- and Hi-Lite. be
almost entirely financed by
"er. there is the possibility that At present, the
Big 3 competi- the corporation.
1 C-~C0--A1-.1-.A-. I.,
Silk Cut campaigns to
retail low-tar dominance
LONDON, ENGLAND-Silk Cut
King Size. the third largest-selling
brand in Britain, is being given
what is described as "a major
boost" through a new national
press and poster advertising cam-
paign. An innovative advertising
theme is being used, and Gallaher
hopes it will be as successful as
the award-winning surrealistic
campaign for Benson and Hedges.
Silk Cut King Size is already
the dominant brand in the lo--tar
sector of the British market.
outselling its nearest rival by
three times. At a time when many
other brands were increased in
price to reflect higher manufac.
turers' costs. Silk Cut King Size
price was held steady prior to the
government's Budget anrcunce.
ment. Special price offer promo-
tions were also mounted at the
beginning of the year as part of
the overall support package for
this brand.
7313ACCO JOURNAL INTERNATIONAL
Aprd 1983
BISON as a factory-made
cigarette
martin Bmkmann AG. of Bremen. West
Germany. the biggest German stppher,
of smoking tobacco and importers of the
'hall-and-hair BISON brand. are at pre-
sent testing two versions of BISON fac.
tory-made cigarettes. According to the
manufacturers. the now BISON is the first
'half-and-hair factory-made cigarette on
the Gerrnan market whom tobacco has
been blended according to original
Dutch formulae. Another innovation is the
f"-layer soft beaker pack The BISON
cigarette has the lavour of the fragrant
BISON smoking tobacco. The new pro-
duct is intended chiefly for all smokers
of 'half-and-half- who roll their own but
who also smoke tactory-,nade cigarettes
(CI)
Adi,ertising Age. May 2. 1983
HAmsuRo-Philip, Morris Inc.'s first step into
Gemany led to
a 4.2% market share in less than seven weeks for
its low-price L&M ciga-
ret brand. Lower-price eigaret brands as a whole
have garnered a 20.7%
share since their introduction early this year.
40
40
BAT Industries document for Province of British
Columbia 23 April 1999


I.
M T Industries document for Province of British
Columbia 23 April T W