Iauco, David Nicholas
(Senior VP of Marketing at RJR from 1989-2003) David N. Iauco was Senior Vice President of Marketing for RJR Tobacco Development Co. 1988-1989, Senior Vice President of Marketing in 1992, 1994, and Senior Vice President of Worldwide Business Development in 1995. (Source: R. J. Reynolds Summary - RJR Liability Notebook). Senior vice president for marketing, R.J. Reynolds Tobacco Co. in 1994 (NYT 5/13/94. Iauco says that RJR had actually reached the market with a cigarette that carried less health risks than Premier; but the company was constrained in the claims it could make about the product (NYT 5/13/96). He was used as an expert in the Mississippi case.Biographical Information:
David Nicholas Iauco (pronounced eye-ahh-koe) was born in Syracuse, New York, in July of 1951. He entered Purdue University in the fall of 1969 and earned a Bachelor's degree in Engineering, followed by a Master's degree in Marketing Management. Upon his graduation, Iauco joined R.J. Reynolds on June 30, 1975, as a marketing assistant assigned to work on the More brand.After eighteen months he was promoted to Assistant Brand Manager on the Salem brand, beginning a steady rise through the corporate ranks. In January of 1978 he was named a Brand Manager in Specialty Tobacco Products, with responsibility for new and established brands. In June of 1979 he was reassigned and became a Brand Manager who exclusively oversaw new product development.
Iauco left R. J. Reynolds in July of 1979 and spent a year working as Marketing Director of Kubernan, a Winston-Salem computer software firm. But after a year he returned to R. J. Reynolds and resumed his old position. Over the next five years he received a steady string of promotions – to Senior Brand Manager for the Camel Brand in April of 1982, to Group Manager for New Brands in July of 1984, to Marketing Director of Brand Marketing in June of 1985, and to Vice President of Brand Management in July of 1985. After ascending to the vice presidency, one of Iauco's primary responsibilities became an ambitious and top-secret plan to launch the smokeless Premier cigarette. The potentially less hazardous product was launched in October of 1988 amid great hype and was pulled after only five months. According to a post-mortem that Betsy Morris and Peter Waldman wrote for the Wall Street Journal, a "series of missteps" were responsible for "one of the most stunning new-product disasters in recent history."
Iauco himself admitted that the product's abrupt demise had been the result of what Morris and Waldman called "the most basic of blunders – introducing a cigarette that doesn't mix with matches." The Premier cigarette was difficult if not impossible to light with a match, and R. J. Reynolds employees began to refer to unsuccessful efforts to do so as the "hernia effect." Even Iauco, when asked by Morris and Waldman to demonstrate how the cigarette could be ignited with a match, came up cringing and gasping and acknowledged that he "got a bad taste." Worst of all, this critical flaw was not even identified until the cigarette reached test markets. The reason, according to Iauco, was that the project's top-secret nature meant that "we didn't do a great deal of testing among consumers." When the problem was finally identified, the company devised a four-page instructional booklet that explained how the cigarette could be successfully lit by using a "good-quality butane lighter like the disposable Scripto Electra XL." These booklets were affixed to the back of each pack of Premiers, but they were not enough to save the brand from a swift and unceremonious death.
Four months later, Iauco was named Senior Vice President of Marketing, a promotion that made him second in command in the firm's domestic tobacco marketing operation. The Wall Street Journal described Iauco as "one of the key architects of marketing for its failed Premier smokeless cigarette" and offered these comments on the eyebrow-raising choice: "An RJR spokeswoman said Mr. Iauco's involvement in the Premier project wasn't regarded as a black mark against the executive. 'He was involved in a lot of different projects,' she said, noting he had overseen the development of Doral, an inexpensive brand that has done well, and the efforts to revitalize sales of the company's Camel brand. Mr. Iauco, through a spokesman, declined to comment."
In addition to the new responsibilities that came with being Senior Vice President of Marketing, Iauco soon joined the company's Executive Committee. A decade and a half after the failure of the Premier, R. J. Reynolds launched another alternative cigarette, known as Eclipse. Iauco was again assigned to oversee the new brand and this time he did his best to avoid too much hype. "Our expectations," he told a reporter in March of 2003, "are fairly modest in terms of share, and our plan reflects that expectation.."
But even by those standards, the Eclipse brand proved a failure. Soon afterward, David Iauco left his position at R. J. Reynolds and moved out of state.
Sources:
"Biographical Material on David N. Iauco," http://legacy.library.ucsf.edu/tid/tbl65a00.
Allan M. Brandt, The Cigarette Century: The Rise, Fall and Deadly Persistence of the Product that Defined America (New York: Basic Books, 2007).
Martha Brannigan, "RJR Names Iauco To Marketing Post At Tobacco Unit," Wall Street Journal, July 12, 1989, 1.
Richard Kluger, Ashes to Ashes: America's Hundred-Year Cigarette War and the Unabashed Triumph of Philip Morris (New York: Vintage Books, 1996).
Betsy Morris and Peter Waldman, "The Death of Premier," Wall Street Journal, March 10, 1989, B1.
"R. J. Reynolds Tobacco Expands Eclipse Sales; Company Thinks Brand Can Fill a Niche," Winston-Salem Journal, March 5, 2003, D1.
Synonyms
Iauco, DavidIauco, D. N.