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Cigarette Market Structure and Brand Leverage Study Management Presentation

Date: Jul 1985
Length: 252 pages
2501027519-2501027770
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Abstract

This 1985 marketing document prepared for Philip Morris International (PMI) reports on the results of interviews with West German smokers. It frequently employs the phrase "young adults," but respondents to the interviews were as young as 16 years old. The document discusses the need to create "youthful" brands for "entry level smokers" in Germany. Pg. 247 (Bates No. 2501027765) says the "current positioning of Marlboro Lights/Lights 100s is somewhat disturbing" because it appeals to "feminine" and "health conscious smokers." It laments that this positioning could "potentially weaken the masculine image of Marlboro," and discusses re-positioning the brand for "health conscious/ sports conscious smokers, i.e, promoted by tennis players, hikers, etc.". Page 249 (Bates No. 2501027767) highlights the importance of vending machines as a source of cigarettes for young smokers: "Vending machines are a very important sales outlet, particularly for young smokers." It further suggests that "Marlboro should therefore keep flexibility in pricing and number of sticks offered in order to continue to compete effectively in the vending machine for the younger market..."

A section entitled "A Younger Cigarette Brand" (Page 250, Bates No. 2501027768) also worries about the erosion of Marlboro's appeal to "very young smokers" and proposes a remedy for the problem:

"There is some evidence that as the Marlboro franchise grows...its specific appeal to very young smokers may lessen. There could be a significant opportunity for a new young masculine full flavor cigarette that provides an image of easy carefree living."

This document makes clear the emphasis placed on youth for the purposes of marketing cigarettes.

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Quotes

[From Page 8, Bates No 2501027526]:

"A national random sample of 964 personal interviews were conducted in all the key market areas of West Germany in March 1985. To be eligible for interview respondents had to be between 16-45 years of age and smoke at least 3 or more cigarettes per day."

[From Page 232, Bates No. 2501027750]

"Conslder the development of a new youthful brand to capture young entry level smokers and prevent the expansion of Camel among new smokers."

[From Page 243, Bates No. 2501027761]

"...However, Camel shows some strength among younger smokers, particularly students for:-

- Having a youthful, attractive pack - Being a youthful brand - Being a brand for free spirited smokers

While Marlboro should continue to stress that is is a young contemporary brand with these image benefits, it is probable that as the brand grows and provides the needs/benefits of total smokers, this image area wlll be harder to support. To counteract Camel's strength among entry level smokers, a new youthful brand could be developed to protect Phillp Morris total market franchise in this area..."

[From Page 246, Bates No. 2501027764, "The Future of Marlboro"]:

Marlboro lOOs appear to be poised for very successful brand development...It also generated a high level of concept interest among younger smokers and women. Thus It appears to have good development potential - it could be positioned as a younger more upscale version of Marlboro... to help keep the total Marlboro image franchise young and dynamlc."

[From Page 247, Bates No. 2501027765]

"The current position of Marlboro Lights/Lights lOOs in the German market is somewhat disturblng.

Both Marlboro Lights and Marlboro Lights 100s have the image characteristics common to all light cigarettes

- Feminlne - For health conscious smokers

They are viewed as more modern, upscale and fashionable than the more tradltional light brands and are positioned close to the feminine brands Eve and Kim. In this position they could potentially weaken the masculine image of Marlboro. It is therefore recommended that they be repositioned to develop brand image that is more in line with the total Marlboro franchise image. Such a positioning could emphasize that they are the choice of more health conscious/sports conscious smokers i.e. prmoted by tennis players, hikers, etc."

(From Page 249, Bates No. 2501027767):

"Vending machines are a very important sales outlet, particularly for young smokers...Marlboro should therefore keep flexibility in pricing and number of sticks offered in order to continue to compete effectively in the vending machine for the younger market..."

[From Page 250, Bates No. 2501027768, "Younger Cigarette Brand"}:

"There is some evidence that as the Marlboro franchise grows and its appeal broadens to include all smokers, its specific appeal to very young smokers may lessen. There could therefore be a significant opportunity for a new young masculine full flavor cigarette that provides on image of easy carefree livlng."

Company
Philip Morris
Author
Norsearch International, Inc.
Recipient
Philip Morris International, Munich
Region
West Germany
Litigation
Stmn/Produced
Named Organization
PMI, Philip Morris International
Smoker Group
Type
MRRT, MARKET RESEARCH REPORT
CHAR, CHART, GRAPH, TABLE, MAPS
Subject
youth
target market
Target/Women (Target Groups)
Target/Young Adults (Target Groups)
Target/Youth (pre-18) (Target Groups)
brand image
marketing
marketing research
marketing strategy
health belief

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Page 1: nxj49e00
s CIGARETTE MARKET STRUCTURE AND BRAND LEVERAGE STUDY Management Presentation Prepnrea for: Phlllp fbfrls' In[ernorlunul, Mu/llC11 PreOareJ Uy, Morseurcn Inrernorlonal, Inc. Q July, 1985 6tWotasz
Page 2: nxj49e00
1 CIGARETTE MARKET STRUCTURE AND BRAND LEVERAGE STUDY Management Presentation Prepared for: Philip Morris international, Munich Prepared by: Norsearch International, Inc, July. 1985 '_1 E OZSROtOW
Page 3: nxj49e00
i Background and Object i ves
Page 4: nxj49e00
Background and Objectives . The German cigarette market has returned to a period of stability after tax increases and a competitive price war radically affected the structure of the total market. Although total market volume remains generally static, current market trends indicate that:- Traditional brands are recapturing some of the share they lost to low priced brands Light and non filter brands continue to decline The "prestige" and 100mm market sectors appear to be good growth segments The tobacconist share of market is declining and the food trade growing zzWo[Osz
Page 5: nxj49e00
. These recent market events have affected the position of Philip Morris in the German market and provided the company with a series of problems and opportunities for their different brand franchises in the market today. Particularly ;nii:ortant are:- The future developmer:t opportunities for Marlboro now that it is the brand leader in the total market The problem Marlboro faces, competing with Camel among younger smoke rs The future growth of Marlboro 100's The positioning and development of Marlboro Lights and Marlboro Lights 100's, particularly in relation to the l ight cigarei te market If
Page 6: nxj49e00
v The problem of the continued decline of L & M and its possible market repositioning The positioning and development opportunities for Philip Morris Light American The potential effects of renewed price increases, particularly the effect on Marlboro Opportunities for new products/positions, particularly: new price/size combinations pre8tige market opportunities opportunity In the female market sector • opportunities for new brands ariong younger smokers This study was therefore designed to provide the company with detailed information to address each of these key issues, . f
Page 7: nxj49e00
Methodology . A national random sample of 964 personal interviews were conducted in all the key market areas of West Germany in March 1985. . To be eligible for interview respondents had to be between 16 - 45 years of age and smoke at least 3 or more cigarettes per day, . The data was weighed by age/sex/profession to be statistically representative of the total German smoker population, All data therefore is statistically projectable to the total West German smoker market. . In order to examine snecific brand franchises in more detail, users of the following brands were auamented to provide statistically viable bases on which to examine the profiles of these brands: P1a r l bo ro L& M Camel West , . In addition to standard data analyses, the data in th1s study was subjected to a series of multivariate statistical analyses, ` 9ZSLz0 t OSz
Page 8: nxj49e00
III Overview of the Smokers in the German Cigarette Market Heaviness of smoking Perceptions of smoking levels Quitting behavior Purchasing behavior Brands smoked most often Brand switching and occasional brand usage
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Heaviness of Smoking Total Male Female Younger smokers Mid-aged Older smokers smokers smokers smokers smokers 16-24 25-34 35-45 Smoke more than one pack a daY 19 ~25 14 13 20 25 Swoke one pack a day 39 43 33 40 42 35 Smoke less than one pack a day 42 32 ~ 53 j ~ 47 ; 38 40 . Males and older smokers smoke more heavily than women and younger smokers, BZWat0Sz
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I-ieav i ness of Smok i ng Total smokers White collar smokers Blue collar smokers Housewives Students ~ % % % % Smoke more than one pack a day 19 23 25 12 9 Smoke one pack a day 39 39 46 32 31 Smoke less than one pack a day 42 38 29 56 6 . Blue collar workers are heavier smokers, housewives and students the li9htest, ;f 6ZSRQ l QSZ

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