Tobacco Documents Online

YARKETiN6 & SALES RESTRICTIONS MARKETING & SALES RESTRICTIONS I_ QI3JFCCM 1 _ DefeIL's'IVe o Defeat proposed marketing and sales restrictions or bans 2_ Offensive o Introduce legislation prohibiting marketing and sales restrictions or bans. Introduce and / or maintain state and federal preemptions. IL BACKGROUND The anti-smoking movement is attempting to restrict or ban our ability to reach smokers through marketing and sales vehicles considered legitimate tools for virtually all other products. Sales 0 18 municipalities (MN) ban vending sales completely 0 5 states restrict vending sales to offices or adult locations 0 11 municipalities require locking devices or adult supervision 0 44 states impose a minimum age, from 16 to 19 for the sale of cigarettes. 6 states have no minimum age requirement. AdVeYtiSiflg 0 18 bills defeated in 1990. dV ~ o Outdoor bans repealed in Iowa and Boston MA , CTI Go o One state (Utah) prohibits Outdoor Advertising W W 0 0 29 bills are pending in states and municipalities. ~ 0 11 Municipalities restrict Outdoor Advertising

i1ARICETIN6 & SALES RESTRICTIONS 0 17 bills to ban or restrict sampling were defeated in 1990. e 0 21 bills~are pending in municipalities. 0 29 municipalities ban or severely restrict sampling. 0 4 states (CA, MN, NB, UT) ban or severely restrict sampling. ** The Waxman Omnibus Tobacco Bill passed out of subcommittee, September 11,1990. IIL IMPACT ON THE COMPANY 1. Sales: o Restrictions on sales vehicles will cut directly into profits. Also, a "slippery slope" toward the goal of bans on cigarette sales. 2. Maricefin& o Restriction on advertising, sponsorships, sampling and couponing prevent us from maintaining our consumer-base, as well as from increasing market-share relative to other cigarette manufacturers. o "Psychological" impact: Restricting our ability to advertise reduces our public credibility in selling a legal product. There are no legal products where advertising is prohibited. 2

WIRICEfIN6 & SALES RESTRICTIONS IiT_ IMPIXIVIENTATION 1 _ Government Affairs A S#rateQV Demonstrate to elected officials and, pubfic. p°ficy flmh o Advertising, sampling and sponsorship are a form of free speech protected by the First Amendment of the Constitution. o The advertising industry opposes restrictions on tobacco advertising -- as well as elimination of the tax deduction -- because it is viewed as a "slippery slope" to restrictions on other products. o All products legally sold in this country have a right to advertise, whether it be print ads, billboards or through event sponsorships. o The industry its vendors and contractors have implemented a set of voluntary guide-lines for OTC sales, vending, sampling, coupon offers and other marketing issues -- state and local governments should support the efforts of industry and related groups to ensure compliance. o Vandalizing cigarette billboards -- or other vehicles used to educate consumers on our products is illegal and should be prosecuted to the fullest extent provided under the law. Cigarette billboards, like billboards for other products, deserve equal protection. B_ Gwernrnent Affans - Tactics: Re9ouroe LFse ACLU Coordinate activities w/local affiliates in opposition to bans or restrictions (Freedom of Speech) NCSL, ALEC, NGA, GSA Defeat resolutions Prepare testimony/ op-eds 3

YARKETING & SALES RESTRICTIOHS 2_ Constituency Development A S#rateW Stakenxmt Wark with members of ihe advertisang cxcrtniuray armd offierplci~ - - tn te that o Advertising does not cause people to smoke. Over 40% of all the world's smokers come from countries where cigarette advertising is not allowed and where people have never seen a cigarette ad. In some nations where cigarette advertising has been recently banned -- for example Finland and Norway -- smoking incidence has actually increased, as opposed to the U.S. where the number of smokers is declining. o Cigarette advertising as a percentage of net income is lower than that of the retail, automotive, food and drug industries. Also, one percent of the cigarette market is worth $358 million. This is further proof that cigarettes are a mature product and that advertising serves primarily to reinforce brand image and switching. This is particularly true for cigarettes where, on any given day, 15,000 smokers in the U.S. change brands. o As with other legal products, a successful marketing program provides product information to a broad range of consumer groups and tastes. Niche -- and now particle -- marketing are both recognized today as necessary tools to reach increasingly diversified segments of the marketplace (minorities, women, elderly, working families, two-earner incomes families, one earner income families, families with children, etc.). o Restricting advertising in specific segments of the marketplace, particularly minorities and women, is paternalistic because it assumes that these groups are incapable of formulating decisions on their own. o Philip Morris's promotional programs and sponsorships have a significant impact upon individual communities -- banning our involvement will be detrimental to these activities, as well as to the communities in which they are held. 4

YARIgTIN6 & SALES RESTRICTiONS 2 ConsIffuency Developntmt - Tactics: Resauoe Ue € Chambers'of Commerce, Depts. of Tourism, promoters, local advertising groups Advertising Associations: AAAA, ANA, POPAl; OAAAAAF Exp ert s: Burt Neuborne DeWitt Helme (ANA) George Gross (Mag. Pubs) Harold Shoup (AAAA) Louis Maltby (ACLU) Alan Slobodin (Wash. Legal) Civic Organizations Sponsorship Studies -- Analyze impact of brand sponsorships on local economies U.S. Symposium on Imagery and Sponsorships to review use and benefits of imagery and sponsorships for a variety of consumer goods, including cigarettes Forum on Targeting: The use and acceptance of marketing messages for specific consumer segments. Develop arguments to counter anti-smoker's claims on "targeting" Work with advertisers , college marketing professors, and legal community to expand experts for testimony on state and local legislation Coordinate with minority interest groups to reduce opposition on outdoor adv. 5

tiARKETIN6 & SALES RESTRICTIONS 3 & 4 -- Communications & Media: stratM statunent: DeiuxLstrate to our consumers the general public and The mieffia,fliaL o The tobacco industry believes that smoking is an adult custom and does not want minors to smoke -- we have implemented voluntary programs to ensure that minors' access to our products continues to be restricted. o While we strongly support preventing minors from obtaining our products, adults who choose to smoke have a right to obtain our products through all available distribution mediums. A policy to restrict access to minors should not disc?-iminate against adults who choose to smoke. o Parents must take responsibility to ensure that their children know that smoking is an adult practice. The industry has sponsored a series of educational materials that can assist adults in this effort. Ultimately, adult supervision is the strongest way to ensure that minors do not sm oke. o However, when there are attempts to ban or restrict cigarette sales, advertising, marketing or promotional activities, smokers must be encouraged to express their rights to their elected officials. The rights of smokers to choose products is no different than those of non- smokers. 3_ - -om - Tactics R&sauoe Use Speakers Bureau Address community and civic groups on marketing and sales ~ practices Smokers Advocate Alert activists of proposed state and local bans and restrictions ASA & Caucus Develop grass roots lobbying ,/ activities to assist field staff Editorial Services Identify authors for articles on free speech and sales issues 6

ldARICETiN6 & SALES RESTRICTIONS 4_ Media - Tactkx Amacioe USe E LTE's, Op Eds Monitor and place articles in state and local newspapers supporting bans and restrictions Editorial Boards Presentations where bans or restrictions are pending Advertorials Free speech advertorials in government, publishing, and advertising trade press. 7