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Anne Landman's Collection

Kool 10 S

Date: 17 Apr 1985
Length: 4 pages
542004058-542004061
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Abstract

This Brown & Williamson (B&W) marketing document proposes that B&W market KOOL King cigarettes in packs containing 10 cigarette in addition to the usual 20-pack of cigarettes. The packs would be sold at about half the price of a full pack.

B&W's target audience for this proposal is lower-income (or unemployed) black young adult males.

The writer points out that a rationale for selling 10-packs of cigarettes is that doing so

"Will generate purchase when target audience suffers greatest financial need (just before the next pay check/government check arrives.)"

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To: Mr. L.S. Lewis

cc: Mr. R.D. Sharp Mr. L.E. Gravely Mr. D.N. Lapere Mr. J.S. Woods Mr. L.D. Johnson

From: Mr. A.G. Forsythe

Subject: KOOL 10's

Purpose

To recommend development of a KOOL Kings 10's plan for implementation in test or nationally as soon as possible. KOOL Kings 10's would be priced at the same price per stick so as to sell at about half the price of KOOL 20's. Since the focus of communication would be at POP, 10's would be targeted to KMDP and pack oriented outlets. Judgementally, the cost (and risk) of 10's is minimal.

Rationale

--Per the just reported 1984 Black Smoker Study results from Larry Gravely, 10's match the smoking behavior/needs of KOOL's Black/young adult target audience.

--50% of Black smokers consume just ten cigarettes per day)...

The research provides strong indication that a KOOL 10's represents a major need/opportunity for KOOL.

--50% of KOOL smokers indicated they would be very likely (30%) or somewhat likely (19.3%) to buy a KOOL Kings in a 10's pack at about half the price.

--25% of competitive smokers indicated they would be very likely (12%) or somewhat likely (13.2%) to buy KOOL Kings in a 10's pack at about half the price...

--Demographically, the skew for 10's was young, male, full taste, Kings, unemployed, and pack purchasers. This is consistent with the KOOL target opportunity.

10's represents an opportunity to be a market leader and innovator and re-estblish its "in-brand" status.

--Rather than a follow-the-crowd 25's approach, this approach lets KOOL focus on its unique target audience needs.

--The capabilities exist to manufacture a 10's Box (preferred) or a 10's Soft Cup. Judgementally, the opportunity exists to build a personality for a 10's pack positioned for active young adults -- the Action Pack.

KOOL Kings 10's matches the lower socioeconomic capabilities of the brand's target audience and re-establishes a branded price point well under a dollar.

--Protects against generics intrusion.

--will generate purchase when target audience suffers greatest financial need (just before the next pay check/government check arrives).

Makes trial easier and less costly, especially to lower income target audience consumers for whom trial is more risky...

Company
Brown and Williamson Tobacco Corp.
Author
Forsythe, A.G.
Recipient
Gravely, L.E./X
Lewis, L.R.
Region
United States
Type
Memorandum
Subject
Consumer Markets
demographics
Ethnic Groups
Income
Market Trends and Projections
marketing
African Americans

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Page 1: 0000166496
k% Brown & Williamsun Tobacco Corporation INTERNAL CU~SPUN~K~ Mr. L.R. Lewis Mr. R.D. Sharp /M~. L.E. Gravely Mr. D.N. Lapere Mr. J.D. Woods Mr. L.D. Jc~nson From: Mr. A.G. Forsythe Date: April 17, 1985 Subject: EDOL 10's ~e To recc~ development of a }~DOL Kings 10's plan for implementation in test or nationally as soon as possible. ~DOL Kings 10's would be priced at the same price per stick so as to sell at about half the price of EDOL 20's. Since the focus of cc~cation would be at POP, 10's would be targeted to KMDP and pack oriented c~tlets. Judgmentally, the cost (and risk) of 10's is m/nimal. Rationale Per the just reported 1984 Black Smoker Study results from larry Gravely, 10's match the m~oking behavior/needs of EDOL's Black/young adult target audience.
Page 2: 0000166496
-2- 50% of Black smokers co~ just ten cigarettes per day (236 index to the Switching Study- 21%). The research provides strong indication that a EDOL i0 's represents a major need/opportunity for EDOL. 50% of EDOL smokers indicated they would be very likely (30%) or somewhat likely (19.3%) to buy a EDOL Kings in a lO's pack at about half the price. 25% of cc~petitive smokers indicated they w~uld be very likely (12%) or somewhat likely (13.2%) to buy a EDOL Kings in a 10's pack at about half the price. 28% of Newport Smokers (Top 2 Box) 30% of Salem Smokers (Top 2 Box) Demograph/cally, the skew for 10's was young, male, full taste, Kings, unemployed, and pack purc/nasers. This is consistent with the KDOL target opportunity. 10's represents an opportunity to be a market leader and innovator and re-establish its "in-brand" status. Rather than a follcw-the-cr~ 25's approach, this approach lets KDOL focus on its unique target audience needs. The capabilities exist to manufacture a 10's Box (preferred) or a 10's Soft Cup. Judgmentally, the opportunity exists to build a personality for a 10's pack positioned for active young adults - the Action Pack.
Page 3: 0000166496
-3- EDOL Kings lO's matches the lower econc~ic capabilities of the brand's target audience and re-establishes a branded price point well under a dollar. - Protects against generics intrusion. Will generate purr/rose when target audience suffers greatest financial need (just before the next pay check/goverrment check arrives). Makes trial easier and less costly, especially to lower income target audience co~ for whom trial is more risky. On-going every day invitation to trial at lower price (as opposed to limited availability of deals). - Maximizes trial of improved product. Smaller pack will maximize product freshness from drying out after being c~_ned. 10's permit target marketing by focusing distribution to opportunity outlets/areas. - Primary target is EMDP Secondary target is general market pack outlets.
Page 4: 0000166496
° -4- summary The EDOL ~ion Grut~ believes strongly that 10's represent a major long term business building opportunity for EDOL. P~lile there may be problems to deal with (trade acceptanoe, tax stamping), this is a major upportunity that must be at least tested. Iarry Grave/y's research findings cannot be ignored. To_is project is absolutely necessary and critical to ~DOL. ~he volume of 10's is secondary in importance to the trial it generates among early users, f~ protection, and the look of a leader. As Imperial Tobacoo has shown us, we sometimes have to aooept some cannibalization to protect and build our business. But it is better to protect/build cur business than have a competitor seize the opportunity. Next Steps With Management approval, we will start developing a 10's plan for EDOL Kings. Production capability w~uld permit a fourth quar r A.G. Forsythe 0007AFbs O O

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