Tobacco Documents Online

Atlanta isthe pride of the South. But compared to Orange County, California, Atlanta is a po' cuzzin. Both Atlanta and Orange County have about 1.9 million population. But Orange " County has about $530 • million more in retail ~ale,~. • About $2 billion more .in • total buying power. And Here's how the major brands am spending their media dollars as the of the year commences. ;an Brands It's a rather neat balancing act that's gol, r~g'~.on ovei- at Ame~'iean Brands~:" .. " This." ir~ditidnall~, mute -c-orp~ration .~ - found th~ er6sion of its'ifiarket'share "- position was tem~oraril..y .h.a'}tedt "last, for the'acco~mplishment.. " -'. ~'. " ..-. " While its Tareyton, Pall Mall, Silva. a..strong advance. Conseque.nt!y, American Bra~ds t~tal share slipped only one tenth of one percentagd point, .from 1t.7% to 11.6%: Most cigarette market observers don't attribute Carlton's. strong per- formance to. creative s.trategy, but rather to remarks mhde over two yea.rs 'a~ by Dr. Gio G~ri, a scientist work- lag for Hea.Ith Wd'f.are ~a/ad E'di~cation, whiehwere subject to wide eirenla- tion. Dr. Gori implied that Carltons weren't too injurious to h~alth, and th~at they could be smoked at a rate of 10 to l'over the full flavor brands high in tar and nicotine. '~ • According tO the Maxwell Report, Carlton's market share improved by Atlan~a's." " When you're buying Southern. California, ' remember that there's a '. market bigger than Atlanta just south of I~os Angeles. And" reme/nber ~'hat Th'e Register's Orange County - Metro Grotip newspapers dominate the market. Otir 9.40,000 daily subscribers almost 50%, with sales of 15,1 billion cigareties last year as compared with 10 billion the year before. But it must be noted that American "B'~'ands did invest su6s'tantially more in media for C~rlton last year. With an outlay of $25 million in 1978, about .averfige for its bFfffid'sh~6 position that year, AB .apparently decided to go with the momentum, and upped the b.udget 37%, to $34 million.- : The biggest change in the media mix about a $2,000per household represent 64 percent of .~amc in. newspapers, as Carlton'~ advantage in median effective the new p per-reading ." " " ,'•. , ...~i~ S a budget soared from $8 3 mflhon m '79 to $18 4 mflhon last year Magazine , buying income. Last year households. And three out • ' " " " ".. •i ". :!,-~ " , expenditures chmbcd $8 mslhon to $10 Orange County s populhtion of every four of them read' . ." " , . , " " ---w a~- twi-- th~ rate of -^ ~~'~- rt~w ..... - " million. Outdoor incrchscd from $3 .- • . • . . . :~.. mtmon 1o,~3..~. ,mt.lllOl~.. - " " " " " • . " • . " ~ ~ . . Carlton s, magazine expenditures for .j~ ~ h " " • " * " " thd first quarter suggest a budget in- •~ . ' ~h ~¢~.i~ " crease of about 25% over 1979 out. / tt t ~~, ~ ~'~~. Carlton's use of newspapers has range County Metrot.iroUp e~phasized a variety.of ad sizc~, in- I .... eluding two by fours in a single color, Orange County, CA 92711. Represented nationally by Story & Kelly Smith. ...... " - . re, a, on sports pages ano me oacK ,~rces: Sgdd~119~gsar~yofBnsfin/.l~wer D~t~ Serdees: F, ct~ C~ns~id~t ,t~l. l.,os ~l~ ~ ~ pages of tab.loid dailies. " TI05280019

"W~ ~xpect.h tu'~maround, for Kent a~6r the initial impa~t of'Kent.Ill is - absorbed," Tom Mau, vp, adveflising • and brand management, Lorillard. . Creativ~ is simple an~ n~.n pictorial. "" Thelow tar ~tory is told with short copy in _big type;and where space allows,. Dr,_ Gori's asse.ss.ment ihat Carlton could be smoked at a rate of 10 to ~. over full .flavor brands is cited without a specific mention of the HEW ~cientist as the source.. ~. ~ . rown &' Williamson "- .• Getting a new low. tar 6igarettc " through a successful brand introduc- tion has been a major preoccupation ~'or B&W for the past four years. Clearly, the going has been rough. After t.wo'efforts with Fact and a cam- paign based •on the gas content of the brand's smoke that was too arcane and obscure for the smoking p{tbli~ to grasp, B&W tried again last ye~ with Arctic. -. ". Last year Arctic and Arctic Lights picked up two tenths of a share point," and while that may not sound-like much, it's twice the market share achieved by Fact when it wa~ removed from" the market. Brown & Williamson's reasons for trying to build some share with a low tar brand are particularly compelling7 The company's share of the tot.al ciga- rette market dipped from )5.3% in 1978 to 14.4% last year. Of all the B&W brands, only Kool Milds, Super Lights Kings, and Super Lights Longs " expanded market share. Overall, the l~rand' wa~ ddwn.'5.5%.. " -.- " Whil~"B&W's effori" with Arctic isn't a failure, the introduction hasn't b~n'a howling success eitheK A mar- k~t ~h~e of two, tenths of ~pe~ ~een ,~.ge • ' "'point i..s., a.b~ut, the bare minimum nee,.ded to sustai'n ~/brand'.s existence, The distn'bution of ultra-low tar smokers suggests that the introduction will be confined to. major urban cen- ters. A Brown & Williamson corporate .. spokesman, was appropriately cryptic when answering,questions about sup;'~ "." " port forArctic an.d Keel. He said, "At .: this point, we are eyalua.ting ~iff;e.re.n.t..-:..z e~e,ativ¢ op~ion~ for th~ brand a~¢ con:- - _. .tinuin~. to give it effective" regional ~.... . support:~' This would lead ~n oftside.:..'- 0~¢rver to, ~or~d~ ~t ~e b~a~a h~ .~.. 7, of. any cig~.rette brand in the U.S. mar- B&W's position on Keel is that "it .ke.t, $11.4 million. The graphi'cs for will continue to aggressively suppoi-t • this campaign wdreparticularly suited ,~| the brand.'" . for. largetT-than-life presentation. ~kLorillara . . . ,. Moreover, the measured media spend- ~ Th~ last year of the decade was a ing for the new brand was .only very good one for Lorillard as the $6~00,000 less than that for the seven .company expanded its piece of the va~.riefies of B&W's flagship brand, market b~ almost I%. It stands a very 'Kodl.'-' ..... .:, " .- good chance of winning and holding • • :' .Fii'st qu .ayter e?~pendit.ures f~r .1980 . over 10% of domestic cigarette sales " indiea~t~ r_ha.t B&W is cbnti.nuing tq. "by the e.nd of this year./ts twt~.top'sell- suppprt Arctic at expected post-. "ing brand.s, Kent and Golden L.{ght~, intr6ductory levels. The use of outdoor.• each gained .market share thr.ough_ L - is downfrom 1979levels, accordingt0 brand extension, while Newport• dat~-from Leading National Advertis- showed some surprising momdhtum.. er~.' ~ " . , , But in the advertising world, the re- " Th~ campaign for Ko0l did~ f di'ffei: ..- c~ntly introdiaced Triumph• i~ causing ~nuch from Arctic's as thebr~ndran up quite a stir. The commotion was the secondlargest outdoor exp.enditure 'mostly about copy, as Triumph after Arctic. Other media were used-on claimed the b~-and is preferred by. levels consistent with the top spenders - smokers over several othe?s in taste in'the i~dustry: • " " "' ~e~ts. Lorillard is making the most of But B&W isn't giving up th~ fight t~ this" with head t6 head advertising, bring out a new cigarette. In mid- Naturally, the contenders who hav~ September its first ultra-low tar brand," been named in the advertising as being Barclay, was rolled out wiih an intrd- second choice are up in arms, an.d pro-.. ductory campaign in maga.zines, testing the manner in which the test re- . newspapers, supplements, and out.- suits were turned into copy claims. door. The controversy, of course, gets the "- ]3&W says the new cigarette was brand talked about, which may have ~lesigf~ed to circumvent the problems more positive results fdr Lorillard th~n smokers have with low tar brands, lack the"ad~ertising itself. " " "" of taste ,and difficulty in puffing. The In. response to criticism, B&W ad slogan for the new brand is "99% changed the copy from "taste test" to tar free." No one in the industry seems "smokers test." Some aspects of the to know exactly what is meant by that campaign .are now in litigation, claim. . Triumph was rolled out last year Industry experts estin~ate that the with $25.5 million in measured media • cost of a'new brand introduction in ad- dollars, in regular and menthol flavors. vertising is now about $50 milli6h. Its reception wasn't overwhelming but Extrapolating from that figure, and satisfactory in terms of minimumsales figuring in some front-loading for the expectations. But then, no one has roll out, media costs for the remainder been able to duplicate the success of 1980 for Barclay will be in the $17 achieved for Merit by Philip Morris, million to $19 million range, not even Philip M~rris. TI05280020

Last year the Triumph introduction it should have been dispelled by Philip bridge is said to be off to a slow stm't. was most heavily backed in news- Morris. Although the PM name brand Creative for the brand focuses on a papers a,nd outdoor. But the test results has long since slid into obscurity, the visual effort to maximize package reg- dictate a larger share of media dollars company'_s _p.e.q_r_f.or. man ce with istration. The terse copy merely stress- go to magazines,~as t~y a~ thi~ year~.:" Marlbm'o~ which, took thfi top. ~a}es es the low tar content. No doubt, it is Tom, Mau, vp, ad~grfisifig & brartd~" spot aw.~'~..ff~-. R. "J." Reynol~'.. too early in the car~paign t~ play with'___.. Li~ghts alLl~_ :to h~,~e st, ah~lh'~ in,. them,na~ay.sueces~ofi~ l@~6~o,~tar bridge advertisifig, as itstands, verges .. Zati6~ by Kent IlI, ina'o~ldced in" ~nid-~ most i~pr~ssiv'd-~aikeiing "-success -. .. PM '~nanagement" is _.. Merit, ~ieh, eontin~es'~b, w~bran-d ~o~)~ a #~w~art, gmsnmhqg it will .... '~r~om:~past l~ mon~s-ha~e been ~¢f~-'--ga~fff. SfiTes g~//-bv.er the previous year and a difficult period for new product in- • • 'Golden Lights a~e~ cpnfi/mifig .to .t,3ke" in new users, which helps~ offset the losses to Kent HI.'" ' " " "" Golden Lights are advertised na- tionally, with magazines, newspaper and outdoor, while Kent continues, as a • 23.2 billion cigarettes sold.. But in today's turbulent cigar.otto ~n'arke~ much more than aggressive-. hess is.required... Other ne.cessary in- ~redient~ include a big advertising budget;, creativity in positioning and regiofia! brand, .with media rest:tied c~py, and.p~tience. All three of these to l~oca[ $.u~day ~pps'and outdoor:.. W'[il play a big ~oie in ~M'~ latest ~¢ ~~m~@f Kent i~ ~ :taste m~.s:~g~, product i~oduction, ~mbridge, an - If t~'er¢. ~as 6ver any doubt 6at an ~udget estimated within ~e indus~ as aggressive m~kefing ~mnce pays Off, ~ b~ng in ~e .~60 mglion range, Cam, . There ~s more to Georgia than Atlanta=.lhe. GEORGIA GROUP... AUGUST ..A'COLU}~.BUS.',A:~CQ.N~SaVA~ ~AH 'THE I~ATI0N'S N.EWSPAPER GI~OUP BUY' -. P~pulation... 980,300 =. Georgia Gioup Population Would Rank 3st& In The Nation 60% More People Than Charlotte • Total Retail Sales ~ ... $3,602,813,000 ,p Retail SalesWould Rank40th In The N&tion 42% More Retail Sales Than Charlotte THE. " " CHRONICLE & HERALD AUGUSTA THE. TELEGRAPH & NEWS MACON THE • L'~DG~R & ENOUIREr COLUMBOS :IHI~ NEWS & PRESS SAVAN NAH troductions, Competition in the ultra low tar category is particularly fierce, with Carlton's'strong performance ~,nd the build~hg'momentum of RJR's Now. brand. While the categor~ is obviously expanding, getting a foothold on that very narrow marketing ledge is a pre- carious undeaaking. But difficulties not withstanding, Cambridge achieved "four tenths of a share point accord{rig to John Max- well, since its introduction in May. /2ambridge "~lJed -out .'~ith. expendi- tu.res of $2.1 mlilion in magazi.~es and Sunday supps, with/t total of 42 pages, in May; as measured by ~.¢ Publishers Information Bureau. Jim Morgan,-vp-marketing -for Philip Morris U.S.A,, says Cambridge is right "on target" in terms of sales goals since its, introduction four months ago. But he also poin~ out that the ultra-low tar category is a limited but necessary, area of opportunity for the company. • 'If w~-'~'a'n'l~d to continue to grow in sales, we knew we eould.n_'t d° it without an ultra-low tar cigarette. We ~ decided in ~977 that When the ultra- low tar category dccbante~l for 5% of sales, or Carlton reached a 2.5 share, that's when W~ .woul.d enter the low tar chtegory," That p0int.was reached in the spring of 1.980." .. i. Morgan iSescribes, th~ d.ecis|0n" to introduce Cambridge as "'a ~strategie entry"qnto th.e market.."We decided to go in and co. ver,.thr~e basic areas of • that "category; the lowest tar position, 1/10th of I% tar, with'Cambridge box, the I mg. tar king, in soft pack, which smokes like a regular cigarette., and'the 100 ram. 4 rag. tar, a cigarette with more flavor.'" The market for the box variety is the Tt05280021

10% 5% Top 10 Brands Share of Market 1979 brand sha_~ p~'ormancc for a ]~ader. PM's flagship brand, Marlboro, is. no exception to industry performance, 20%. losing share in i~ full flavor v~cti~ while gaining them in lower t~ cxtcn- "" sions. Overall, the brand added to i~ "" ~ sal= leads with a sa]~ inc~e last 15% ~0mpfish~d ~i~ measured m~ia ex-. .:'~ " " pendi~ of just under $~6 million,. ': ..... and ah ap~axenflyag~ess "creatiVe '. store, a d;irect order catalogue of 10%.. western outdoor we~ng parapher- " ' nalia, and invested o~er $2 million ~h "" advertising in magazine doub]~ .... gatefoids. While PM remains mum on ~e subject, the associative rob-off must have a most beneficial effect on -- 5%' brand image aod sal=.. PM's market position appe~s to be secure reg~dles~ of the performance of C~b~d~," wi~ "on17 Parliament ... and Alpine showing declining sh~es. : Media ~xpendim{es ~e substantial but not dispropo~ionate. L - TI05280022

Reynolds etnplo~,~ blue ~ollar appeal for th~ reward of good taste i~ a cigaL rette in its magazine ~and outdoor ads for Winston. Still the king of the" cigare~t'te busi- ness, R. J. Reynolds feel.s increas.ing pressure from Philip. Morris, although the share gap between them is still comfortable. Last year the Reynolds percentage of cigarette sales slipped three tenths, of'a percentage point. One of RJR's ver]'few miscalcula- tions became evident lasf spring when its Rear brand was remo,~ed market. Industry post mortems at,~- bute the demise to inapphapriate initial positioning, with claims of natural- ness, which apparently rwere of no great interest to smokers. The second creative flight for the brand affected a macho image with a burley man in a dune buggy, sort of a beach boy version of the Marlboro man. Potential brand" switchers peared to be equally indifferent to that theme as well. So in a two year period, • Real failed to win that minimal two tenths of a •share •point th~it is the make-or-break line in the low tar brand category. • .. But with its other brands, R JR, is holding its own. Full flavor Winston~ are losing smokers while Lights and Lbng Lights ar8 bu.il.ding share. The s~.mc is true for Salem and Camel,., Some of those smokers moving away from full flavor are buying other brands rath'er than "switching to the brand extension. More and Doral arc gradually building share, and Now is also "edging up.. Overall, R JR holds, 36% of all low tar cigarette s~les, whlc~ is the ordy area of the market that is expanding. So how will RJR move in the 1980"s to consolidate and build industry leadership? Ed Horrigan, new chair- . m~n, president and CEO at Reynolds Tol~acco Co~, recently explained ,_strategy for the '80s." '.'Our marketing ." ao.llar, s, .m-~ripb~er 9n.d pkfiduet dev~l- " opment skills az~ the tools~we will u~e-. .I. hm.lly.'see a. ~-prdfig~d ~pproach in the near future, We intend to reinforce • " ourj~r'esent of leadership in o~ting- b}an-d~s thi'ough impro~"ed advertising execu~tio.ns and ~upport. t. "l think our greatest potential for~ share growth, given the trend of the industry, is with Vantage, Now, and ofir lights line extensions. Wington Lights and Salem Lights lead their re- spective segments, while Camel Lights is showing solid growth. Also, be- cause of its unique position, More is an exciting brand. "I think manufacturers will con- tinue to se~ opportunity, for lihe exten- sions, but it is the respongibility of mahufacturers to spin_ off only from- . stre.ngth. Line extensions shouldn't be an attempt to build on past failures. I see a real need ih the 1980's for the in- du~try to become more aggfessi.ve, more assertive, and more supportive o,f the smoking public," he said. RJR provides substantial media • support .f9r its brands, and is outspent only by Lorillard's Kent. Last year, RJR spent $55.5 million in measured media on Wins,ton, the number two brand'in U.S. cigarette sales. But the $25 million in',/ested in magazines was a hig,h for the industry. R JR is drastically restructuring its media plan this fall, .re.dueing .maga-" zinc space and expanding the use of newspapers and outdoor. Particularly hard "hit by the tighten- ing of.the magazine list were the worn- , en's service books and special interest publications, and t'he newsweek~ies. Magazines had been the benefici- aries of a shift in media emphasis in 1978, when funds were diverted from newspapers. Apparently R JR ha~; de- cided that frequency is more important than was previously supposed, and particularly important at the local leve.l. By Fred Gardner, Senior Editor TIO528G023