FTC Joe Camel Documents
Teenage Smokers (14-17) and New Adult Smokers and Quitters
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July 18, 1980
ii~:' TO':: Mr J R. Moore
iii~i~}i~#JECT: TEENAGE SMOKERS (14-17) AND NEW ADULT SMOKERS ~XmD QUITTERS
:~::ii::i[~}s is the second report relating to teenage smokers and new adult
iiii::ii!ii~kers and quitters. The first report, released in January, prese~ed
spring 1979 data; this report updates that to include Fall 1979 dat~
Similar reports will be provided semi-annually, coinciding with the
semi-annual release of National Family Opinion, Inc. (NFO) data.
ii!::i::ili~ data analyzed in this report was obtained from NFO of Toledo, O~o,
..::WA~ch maintains a panel of adult consumers for the murnose of conduc~-.
inq{ consumer surveys. For the past 15 years RJR has used NFO for
:~::}~i~m6duct testing and regularly tracking adult smoker profiles and
switching information. The data regarding teenagers, new smokers,a~
?-...quitters is a natural by-product of the tracking of adult smokers.
i:~:}~i~i~i~iispecial effort is made to gather this data and it is not to be u~,~,
!i.iiiiil.for marketing strategy purposes.
.~i!~$~tARY OF KEY FINDINGS
i~::::::::~::~:.~ow is a summary of the key findinos based on the analysis of
...... ~enage: ....... : smokers and new adult smokers and quitters.
Smoking Among The 14-17 Age Group/Aging
RJR is continuing to lose share among teenage smokers,
with 19.9% of the teenage smokers in Fall 1979 versus
21.3% in Spring 1979. Both WINSTON and S~LEM have been
steadily losing share among this age group: WINSTON'S
share was 7.2% in Fall 1979 versus 8.3% in Spring 1979,
while SALEM'S share was 7.9% in Fall 1979 versus 10.6%
in Spring 1979. In addition, RJR is losin~ share points
due to aging, which is the natural process of 18 year
olds entering the market and 50+ smokers leaving the
market. RJR's losses are due to a declining share among
18 year olds coupled with a relatively steady share
among 50+ smokers.
CX 63-A RM027421
SUMMARY OF KEY FINDINGS (Continued)
Smoking Among The 14-17 A@e Group/Aging (Continued)
P. Morris continues to gain share among the 14-17 year
old age group, with 62.6% in Fall 1979 versus 58.8% in
Spring 1979. -Marlboro, which had 52.0% of teenage smokers
in Fall 1979, accounts for a large portion of P. Morris'
share among teenagers. However, nearly all of their brands
experienced share increases among teenagers from Spring to
Fall 1979 (B&H, Virginia Slims, Merit, Parliament and
Saratoga all gained in share). P. Morris' larme share
among 18 year olds has made it the only company to realize
substantial share gains due to the aging process.
American, Liggett & Myers and B&W all continue to lose
share due to the aging process, primarily because of
decreasing shares among 18 year olds, and stable or
increasing shares among the 50+ age group. Lorillard
nearly breaks even due to the aging process.
..... ~!~il....::i New Adult Smokers And Quitters
Males and 18-24 year old smokers are the most active
groups in terms of starting and quitting smoking; that
is, relative to their share they have the highest starting
and quitting rates.
There is no indication that the ultra low tar categoby
is walking smokers out of the market: relative to share
the quit rate among ultra low tar smokers is not signif-
icantly greater than the quit rate among either fuller
flavor low tar smokers, or full-£1avor smokers.
RJR continues to lose share due to the effect of new
smokers and quitters. RJR had an increase in losses in
Fall 1979 (-.16 share versus -.04 share in Spring 1979)
due to both a decrease in new smokers and an increase
in quitters.
Lorillard and ~merican both 10se share due to the
effect of new smokers and ouitters. Liggett & Myers
approximately breaks even, while o. ~[orris and B&W
gain share from the effact of new smokers and quitters.
CX 63-B - 2 - RM027422
A. SMOKING ~MONG THE 14-17 AGE GROUP,/AG!.~G
Smoking behavior of 14-17 year olds is analyzed in order to
improve our ability to forecast future trends. It is not
designed to be used as a tool for developing marketina
strategies for this population group.
The analysi~ is divided into two sections:
Share of each-of the six companies and five key brands
among the age group.
Net effect of aging on each of the six company's
franchises and five key brand's franchises, and future
trends.
The previous report provided a demographic description of
14-17 year old smokers, including population, incidence,
rate and volume. Since population estimates are made only
on a yearly basis, this table will be provided once a year
rather than semi-annually (it will be provided semi-annually
if there is a major change in rate per day, which would
affect volume figures).
I. Share of Company and Key Brand ~.mong 14-17 Year Old Smokers
............ WINSTON
:::::::::::::::::::::::::::::::
.... ~:}:::~::~:~:~::~ MO r r i s
...................... ~4arlboro
Table I illustrates share of companies and key brands
among teenagers, and Table II illustrates the mercent
of industry volume for teenagers among companies and
key brands.
TABLE I
SHARE AMONG 14-17 AGE GROUP
Share A~on~ 14-17
Spring Fall
1975 1979 1979
29.9 21.3 19.9
12.5 8.3 7.2
10.6 10.6 7.9
39.6 58.8 62.6
36.1 51.6 52.0
1.2 .3 .8
22.0 8.8 5.2
19.8 6.4 4.2
P. Lori!lard
Newport
7.3 9.7 !i.i
4.3 7.6 8.9
Liggett & Myers
1.3 !.0 .2
Total of 5 Brands
Source: NFO Estimates
83.3 84.5 80.2
-3- CX 63-C
RM027423
TABLE II
14-17 AGE GROUP ESTIMATED PERCENT
OF TOTAL INDUSTRY VOLUME
~iii} I~II~ALEM
P
American
% of Total Industry
Volume
Spring Fall
1975 1979 1979
.88 .43 .40
1:40 .17 .14
.33 .21 .16
1.25 1.18 1.25
1.14 1.03 1.04
.O4 .01 .O2
B&W
.... ~::~::~!~: Lori I ]ard
............ Newport
Liggett & Myers
i:~:~iiiii~!:tal % of Industry
i:.~ ..... Vo i ume
:::::::::::::::::::::::::::::::
:::. ......
.70 .18 .Ii
.63 .13 .08
.23 .19 .22
.14 .15 .18
.04 .02 .00
3.14 2.00 2.00*
Estimates based on number of teenage smokers, rate per
day and share of smokers.
::: :~ ! Because population was assumed to remain the same from Spring
!:~ ......................... ~::: to Fall, 1979 and because rate per day did not change during
/:~::~i~::~:: this time, total industry volume among 14-17 year olds was
!ii::~i~:;i~i~:;::::::~::~i~i~i~ii::i also assumed to remain the same from Spring to Fall. Share
fo.:
.... ~:.i~::ii:::.!i:4i~::~i~:: Fall 1979 is provided to illustrate how share has shifted
:between brands and commanies from Spring to Fall.
- 4 - CX 63-D RM027424
K_ey Findings :
RJR's share of teenage smokers declined from 21.3% in Spring
1979 to 19.9% in Fall 1979.
- Winston's share of teenage smokers has declined steadily
from 1975 to Spring and Fall 1979, with a share of 7.2%
in Fall 1979.
%?:[}:iii}:i~::i/- Salem's share of teenage smokers remained steady from 1975
to Spring 1979 (10.6%) and then dropped considerably in
Fall 1979 (to 7.9%). A fourth reporting period is necessary
to determine whether Salem's decline in Fall 1979 indicates
a significant trend
-
Philip Morris continues to gain among teenage smokers, accounting
}m~:~{~::~!!
Franchise aging is nhe natural <rocess of ,;ounc adult
smokers (18 year olds} enterinc the smokinm nonulation,
and older smokers (50+) leavinc the smoking population.
This analysis addresses the e:&ec~ of this nrocess on
each of the six companies and five key brands.
.......... :WINSTON
iiii::iii!::~:~ ALE M
~Marlboro
ii::i~iiiii~ ri can
B&W
Kool
i:iii~;~ili~!~ i!. Lor i I I a rd
Myers
!<.....SOURCE :
.+:.: ....
il..........ili... ~ I N S TON
!:::~:~::~./~ Mo r r i s
................. Marlboro
!ii::i:;i~::~ r i can
Kool
P. Lorillard
Newport
Liggett & Myers
Source:
TABLE III
SHARE AMONG 18 ~ND 50+ YEAR OLDS
Share Among 18 Share ~monm 50+
Spring Fall Sprin-------~g Fal~
1975 1979 1979 1975 1979 1979
28..0 25.0 23.6 33.3 33.3 32.6
12.8 9.2 8.2 11.2 9.6 9.8
10.5 11.4 10.2 8.1 9.3 8.4
44.0 52.0 54.9 15.3 15.7
16.5
34.6 41.2 42.1 5.0 3.8
4.9
1.4 .5 .9 17.7 17.9
17.3~
18.0 ii.i 9.6 12.5 12.3
12.6_~
18.0 8.7 7.9 4.2 3.8
3.9N
8.0 10.5 10.7 12.3 12.9 14.0~
8.0 .6
6 7 3 75 66 5 9.~
Share estimates based on NFO data. Share among 18 year ol~s~
estimated by trending share among 16-17 to 18-20.
NET EFFECT OF AGING
Share Point Change
Spring Fall
1975 1979" 1979"
-.06 -.i0 -.ii
.00 -.02 -.03
+.04 +.03 +.02
+.40 +.40 +.42
+.40 +.41 +.41
-.22 -.19 -.18
+.06 -.03 -.04
+.20 +.04 +.03
-.03 -.0! -.02 CX 63-F
+.03 +.10 +.08
-.06 -.06 -.08 RM027426
Estimates calculated based on rate per day and share of smokers.
* Spring and Fall 1979 share points are annualized; that is, they represent
the share gains/losses that would be realized for an entire year based
~or the remortinm period.
Key Findincs and Trends:
• RJR lost .ll share points in Fall 1979 due to aging, versus
a loss of .i0 in Spring 1979.
- RJR's increasing losses are due to a declining share among
18 year olds coupled with a relatively stable share among
50+ smokers.
===9====================================== Some of RJR's lo-sses are due to Winston, which is losing
share
....... among 18 year olds, and to Salem, which is experiencing decreases
[!:~!ii::!::{ilili::i!i::!ii::ili::ii in its net gains due to aging.
/:::~i::ii::~i~iii::iiiiii::i::::{i- There are no i~dications that these trends will level off in
iiiiii::!::i::i:~ii::i::::iii:.i::i:.::i" the near future.
!ii::ii:::~i::ii:!i::ii:=ii!i:.~f the six companies, Philip Morris is the only one which realizes
............. ~ubstantia! gains from aging. Philip Morris cained .40
share in @
:::' ":"::::...::i:[:i::':"
~ -
~
!!1 ...... !:<[.Spring 1979 and 42 share in Fall 1979 due to the aging process :
- Much of Philip Morris' gains came from Marlboro, although it ~
appears that Marlboro's share among 18 year olds is beginnina tq
~ ..... stabilize, with only a .9% increase in share from Spring to Fal~
........... ~ The growth of other Phi!Ap ,~orr~s brands &mong 18 year olds wil e
.... iii::{i::i[iiii{::i:!:!i~ .... allow Philim Morris to cont{nue to gain from the aging process
.= Z
even if Marlboro stablJ zes (total Philip Morris' share of 18 ye~r~
olds increased by 2.9% from Spring to Fall 1979, versus Marlbor~'~
!:~ Lorillard nearly breaks even in terms of the aging mrocess. In
.:..i~~:~:~:}:~}~i~gall 1979 it lost .02 share points due to aging, and lost .
01
......... share moints in Spring 1979 While Lorillard is gaining share
ii.:.=.=.:.:.i!i!ii::i.:=@mong 18 year olds, it is also ~aining share among the 50+ age
::~ ........................ group, thus causing the effects of aging to wash out. Newport
i!<"i ....... i~as a positive effect on Lorillard in terms of a~ing (it gained
~:::::::::::::~ ............................. :::~:~:~:::~08 share points in Fall 1979), but
_~t is neutralized by losses
.... ~:}:~ .... from other Lorillard brands.
~::~[[[[[[[[[[[["~erican and Liggett & Myers are both losing share points due to
.... ~}:}~{~%he aging process, although their rates of loss appear to have
..................... ~tab!ized.
Key Pind~ncs snd Trends: (~on~<±nueu~'
B&W, while gaining share in 1975 (.06) due to aging, is now
losing share due to aging, with a loss of .03 in Spring 1979
and .04 in Fall 1979. The losses are partially due to a steady
decline in Kool~s share among 18 year olds, coupled with B&W's
stable share among the 50+ age group. It appears that B&W will
continue to lose share due to the aging process.
- 8 -
CX 63-H
RM027428
B. NEW ADULT SMOKERS AND QUITTERS
:::::::::::::::::::::::::::::::
The purpose of this analysis is to identify trends among new
smokers and quitters, and to estimate their impact on company
and key brands' share. It is not designed to be used as a
tool for developing marketing strategies for these population
segments. ~
The analysis is divided into three sections:
New smokers and quitters by demographics.
• New smokers and quitters by categories.
• Estimated impact of new smokers and quitters
on RJR and competitive companies share.
smoking and quitting rates changed from Spring to Fall 1979,
this table has been omitted. This table <.;ill be provided on
a yearly basis rather than twice a year.
The previous report included a summary table on the number of
new smokers and quitters and their effect on total industry
volume. Because there are no data available to suggest new
:.. NOTE :
t":"-. "ih:::::::::::~ii
i.:.::::i!i~!~:~::':':':':'::i
i! ....
:::::::::::::::::::::::::::::::
::::::::::::::::::::::::::::::
::::::::::::::::::::::::::::::::
::::::::::::::::::::::::::::::
.:.::::: ......
NFO defines a smoke< as a person who has smoked cimarettes ~ =
in the past seven days. The number of new smokers-and quitte~s~
tend to be over estimated since this definition includes
~ -
smokers who "start" and "quit" several times a year. However~ ~
the share of new smokers and quitters across demographic grou~s
and companies is believed to be unbiased. As a result, NFO ~
figures were combined with HEW estimates of the total new ~
smokers and quitters to calculate the effect on company share~
- 9 - CX 63 - I RM027429
i. New Smokers and Quitters by~.Demo~raphics
TABLE V
........ % Of New Smokers
PERCENTAGE OF NEW SMOKERS AND QUITTERS BY DEMOGRAPHICS
AND THEIR INDEX RELATIVE TO THEIR SHARE
% Of Quitters
Spring Fall
1976 1979 1979
57.8 56.6 56.5
42.2 43.4 43.5
Index of New Smokers*
Spring
1976 1979
108
-91 89
Index of Quitters*
Fall Spring Fall
1979 1976 1979 1979
182 190
i01 118
87 82
86 76
18-24 18.4 20.0 21.0 15.4 12.9
13.8
~!-34 27.0 27.8 23.1 28.8 26.6
26.3
35 - 49 iii::~:/.iii[~iig~i 2 25.3 23.1 24.6 26.9
26.6
50 + .... iiii::ii{ii!i~i~!% 4 26.9 32.8 31.2 33 • 6
33.3
NFO Estimates
Source :
108 ii0 ii0 109
92 89 89 ~ 90
188 152 123 ~ 123
84 107 113 ~ 96
75 82 88 ~ 87
{i~ ..... * The indexes represent the percentage of New (Quit) smokers in~
!!i:~:ii~iii~i:i:i~i~i:::i! the demographic break relative to the percentage of total ....
smokers in the demographic break.
i::.:.:~:~:~."Y.. Findings :
i!~i:i:i:i:~...Males are more active than females in terms of both quitters and
::::::::::::::::::::::::::::::::::::::::: relative to what would be expected based on their share.
/::i::i::i:i:'ii!::ii!!i~[n addition, while male's share of the smoking market has been
:~ ................... ~teadily declining, their Dercentage of quitters and new smokers
..... i:i/":..bas declined proportionately, still leaving them more active than
~i~:~:~:~i::i~::::i:::.!~emaies in terms of quitters and new smokers.
/!!ii[::~ The 18-24 year olds are more active than any other age group
~::~}~¢ terms of both quitters and new smokers, relative to what would
be expected based on their share. Their percentage of quitters
did drop in both Spring and Fall 1979 versus 1976, but relative
to share quitting still remained higher than any other age group.
-- i0 - CX 63-J
RM027430
O
