Tobacco Documents Online

PROMOTIONAL ACTIVITY BY CIGARETTE MANUFACTURERS • S • Cigarette manufacturers use a variety of promotional techniques to compete for market share -- things like free product samples, discounts offered through coupons or the dispensing of premiums with the product. • The purpose of promotional activities is two-fold -- ( 1) to introduce smokers to the brand being promoted and provide incentive for smoker to choose that brand, and (2) to maintain awareness of a brand. • The growth of promotional activities is outpacing general advertising by 2- 1/2 times, and that's across industry boundaries. The ratio of promotion to advertising by the tobacco industry is in line with ratios for other industries • Sampling is time-honored method of introducing consumers to products. It is directed toward adult smokers only. Cigarette manufacturers subscribe to a code of sampling practices that prohibits distribution to minors. • Coupons and premiums appeal to existing consumers of a product category. A cents-off coupon is incentive to try a new brand or stick with old. However, it certainly is = incentive to begin smoking. • Tobacco product sampling is directed toward adults who are already smokers. Cigarette manufacturers subscribe to a code of sampling practices that strictly prohibits distribution to minors.

TRADEMARK DIVERSIFICATION of • • Trademark diversi.fication is not an indirect means of advertising; it is a means of exploiting a trademark that has become known and, therefore has value. • It's common practice for a company to "market" new products under a well-known trademark. For example, Coca-Cola has licensed its name for a line of clothing, the Jaguar logo appears on wallets and pens, and clothing designers lend their names to products like perfume, jewelry and bed linens. • These efforts are not aimed at marketing of the "root" product, but at branching out into other product areas using a well- known, recognizable logo as a stepping stone. • Trademark infringement is a problem for any company with a well-known logo, cigarette manufacturers, like manufacturers of other legal products, face unauthorized use of their trademarks, including on products marketed to children. Like other companies, tobacco companies take vigorous legal action to protect their rights. • Some antitobacco activists argue that tobacco companies should not be permitted to use their logos on non-tobacco products. But tobacco companies are makers of a legal product and should not be denied the same opportunity other companies enjoy to capitalize on popular trademarks because of notions that condemn anything associated with tobacco. ~ ® ~ cr~ c,0 ~ ~ ~

S • BRAND AND CORPORATE SPONSORSHIP • Cigarette manufacturers have been long-time sponsors of sporting and cultural events through monetary grants and in- kind assistance; they were one of the first industries to do so. • Sponsorship bans and restrictions intrude on the right of private groups and individuals to freely select their funding sources. • Banning sponsorship of cultural and athletic events would have no effect on s moking rates, b ut would have adverse consequences for sporting and cultural activites. The monetary support provided by corporate sponsorships sometimes determines whether or not an event will be held. • Corporate sponsorship can also provide other benefits -- it's not just money. There often is in-kind assistance in the form of mass marketing experience and knowledge, logistical support, and even the creation of financial management programs to ensure long-term viability of the donee organizations. • This ultimately means higher quality, more professionally managed events, with reduced financial risk to the administrators of these organizations. • There is no basis for claims that sponsorship is a form of advertising that influences people to smoke. It is absurd to suggest that non-smokers may be overcome with an irresistible urge to begin smoking by occasionally attending an event like Virginia Slims tennis, Kool Jazz Festival or Winston Cup stock car race. • In addition, cigarette manufacturers do not sponsor sports or cultural events directed primarily at youth. • The central goa} of most corporate sponsorship is not to advertise a particular brand or product. Corporate sponsorship enhances the corporate image, and is a way to repay the loyalty of consumers and communities. ~ ~ ~ • It also demonstrates a corporation's responsibility to society c~a and its good citizenship; internally, it's a real morale booster ~ and encourages creativity. ~ ct~ O ~

• • If corporate sponsorship were replaced with government funding or earmarked taxes as some suggest, artistic, cultural and sporting groups could lose in-kind assistance, not to mention the threat of arbitrary and bureaucratic decision- making, and official censorship. Look what happened to the National Endowment of the Arts in the United States when the government got involved in determining definitions of art. • Banning corporate sponsorship will have no effect on the incidence of smoking among adults or minors, but it could have a devastating effect on the future of many cultural and sporting events. 0