USC Tobacco Industry Monitoring Project Collection
Position Paper
Abstract
Position papers on many issues affecting industry. Lists issues and possible results, implications, when it will happen and source/rationale. Analyzes issues on health concerns, consumer satisfaction, RJR weakness, distribution, costs and advertising expenditure. Lists key external oriented issues. Analyzes concerns over carbon monoxide, anti-smoking technology, safe cigarettes, low tar cigarettes, government law on high 'tar', graduated cigarette tax, price elasticity, foreign competition, and smoking age population. Charts years and smoking age, population, growth area, black market, and female market. Analyzes market trends, cost of advertising, importance of retail space, issues of warehousing and trends of tobacco wholesalers. Summarizes issues and impact. Discusses youth (14-17) preference for Marlboro, and importance of the under 25 smoker group.
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POSITIO~ P~PER
~,ON~INUED ]HCREASES IN CONSUHER CONCERHS OVER $14OK]HG
AND HEALTH AND THE P~RKET]HG EAPHA$]S PLACED BEH]HD THE
CATEGORY BY RJR ANDOTHER /4ANUFACTURERS HILL SI.~STANTIALLY
ZeCREASE THE
DEHAND FOR LOW #TAR# CIGARETTES.
THE CATEGORY IS EXPECTED TO GROW IN SHARE FROR 15,5~ IN
.1976 TO 25,4Z IN 1979,
COHPANY SALES AND PROFITS ~]LL DEPEND UPON OUR AB[LITY TO
ACHIEVE AN EVER INCREASING SHARE OF THIS GROYfTH CATEGORY,
0NGO]NG,
~ ANALYSES AND FORECAST,
"CONSUHER'S DESIRE FOR SATISFACTION ~N THE PRODUCT AND
THE PRODUCT'S ]I4AGE,
~ONSUHERS HILL ~ECOHE ]NCREASINGLY D]SCRIHINATING DUE
TO FURTHER'IP2ROVEHENTS IN OUR STANOARD OF LIVING A~
INCREASING SOPHISTICATION,I
WHAT ]~ILL BE ITS ]HPLICAT|ON'~
[JNLESS THE COHPANY ADEQUATELY DEFINES AND UNDERSTANDS
SNOKERS~ DESIRES AND TRENDS IN ~rHESE DESIRES, AND UNLESS
NE DEVELOP/R~FINE PRODUCTS A~ ~VERTISIN6 CO~Y - SUPERIOR
TO COHPETITION - TO SATISFY T~ESE DESIRESj NE ULTIHATELY
NILL GO OUT OF ~US]NESSo
OtlGO I
ECONOHIC FORECASTS,, YANKELOVICH MONITOR,, ANALYSIS OF
PREVIOUS MARKETING DEC]S|ONS IN THE CIGARETTE |NDUSTRY.,
IN-HOUSE MARKETING PLANNING SEHINARS/WORI~SHOPS,
POSITION PAPER
RJR's t~EAKNESS VS, PHILIP I~RRIS, RELATIVE TO NAT]ONAL
SHARE OF RARKET, AHONG YOUNGER ADULTS, URBAHIT~S AND
mNE~ VALUESm SHOKERS~ ~," "
PHILIP FIORRIS t~fiLL cowr]NUE TO EXERT HARKETIHG PRESSURES
AGAINST POPULATION SUBGROUPS THAT REPRESENT THE BEST
CHANCE FOR FUTURE 6ROHTit, ,;c,:. "
PHILIP ~RRI~ H[LL CONTINUE TO CLOSE THE GAP ~EEN OUR
S~RE OF ~RKET AND THEIR~5 UNLESS ~E ACH]EVE GREATER
GRO~tTH A~NG THE SUBGROUPS, "
EXISTING,
STUDIES, YANE~OVICH MONITOR~' BUSINESS ANALYSES AND
CENSUS INFOR~4ATIONo
POSITRON PAPER
POSSIBLE LOSS OF MEDIA EFFECTIVENESS PER DOLLAR SPENT
DUE TO AN I~ALANCE IN BOTH COHPANY AND ]NDUSTRY~S
SUPPLY VS,-DEMAND AND/ORCOST I~CREASES. --
~S CO~PETITWE PRESSURES INCREASE,
~ND AS ALL ADVERTISERS
RAKE GREATER AN9 GREATER MEDIA DE~-~NDS IN AN ALREAI)Y
INFLATIOt~RY ENVIRONMENT~ OUR MEDIA COSTS HAY INCREASE
DRAMATICAllY IN ORDER TO MAINTAIN /~I)VERTISING EFFECTIVENESS,
~i~AI:"W~'i'~ B~ ITS IMPt.lCATION?
]}EC['IN~S ~N PROFITS DUE TO SUBSTANT~AI'I~Y HIGHER COSTS',
SOME OF THESE PRESSURES EXIST TODAY~ BUT F~Y ACCELERATE
IN THE NEAR FUTURE,
RECORDS OF CIGARETTE INDUSTRY ADVERTISING EXPENDITURESw
OUR ONN FUTURE PLANS~ MAGAZINE PUBLISHERS ASSOCIATION~
AND ARTICLES FROM TRADE JOURNALS,
PO$1TIOfl PAPER
KEY_LS. F._E
" UNCERTAINW OVER "~HE RELATIVE EFFECTIVENESS AND EFFICIENCIES
OF VARIOUS PROMOTION AND MERCHANDISING TECiffiIQUES IN
ACHIEVING MARKETING OBJECTIVES.-
CON~U~ER PROHOTION AND RETAIL MERCHANDISING TECHNIQUES
HILL BEFORE INCREASINGLY IMPORTANT FACTORS IN THE CIGARETTE
rlARKETING P~OCESS.
THE DEGREE TO HHICH HE UHDERSTAND ~HE COST EFFECTIVENESS
OF THESE TECHNIQUES IflPACTS ON OUR ABILITY TO:ACHIEVE
MARKETING GOALS AT A REASONABLE, COST.
EXISTING, WITH ACCELERATING POTENTiA~ FOR GREATER IHPACT.
CURRENT AND ANTICIPATED EXPENDIT~JRES IN SALES PROMOTION
AND MERCHANDISING,
PAPER
NEED FOR FULL DISTRIBUTION AND DISPLAY OF EXISTING
ANTICIPATED RJR BRANDS IN AL~ APPROPRIATE OUTLETS, "
TNE INDUSTRY WI~ CONTZNUE TO INTRODUCE NEW SRANDS TO
FURTHER SEGI4ENT THE EXISTING H/~RKET. MEANWHILE/ RETAILERS
ARE DEVELOPING GREATER SOPHISTICATION IN DETERRININ6 THE
PROFITABILITY OF ITEMS CARRIED IN INVENTORY. ""
3:
~paT WILL BE Its IMPLICATIO/IL?
It wI~ BE IHCREASINGLY DIFFI'CU~T For RJR TO O~TAIH
DI~TRIBUTION AND DISPLAY OF ITS NEW/MARGINAL BRANDS~
THUS DIMINISHING OUR CHANCES OF ACHIEVING OUR BUSINESS
61~JECTIVES,
EXISTING/ AND WILL LIKELY ACCELERATE IN THE HEAR TERM,
ANALYSES OF INDUSTRY TRENDS~ OUR 01qN FUTURE PLANS~ ESTiI.~TES
ON THE ADVENT AND IMPACT OF UPC AND EXPERIENCEOF OUR SALES
FORCE,
POSITZOti PAPER
1.
NE~--D TO RAX]I'IIZE USEOI~ SALES FORCE 14ANPOt'~ER,
~RRIS'"XCHIEVlNS SALES FORCE ~NPOWER PARIW:
HITH US COU~ S~ERELY "DIRIHISH OUR ~VANTAGE OVER THB4
IN THIS AREA'
THE POTEN:I'~A~oF THE LOSS OF OUR ."~DVANTAGE COULO REsuLT
IN SUBSTANTIALLY HIGHER MANPOHER REQUIREMENTS AND COSTS$
OR~ ALTERNATIVE~,' OUR ADVANTAGE HILL IN FACT "BE DIMIN]SHEO,
AND ACCELERATING,
1976.
POSITIOH PAI'ER
EEY ISSUE It
"2,
"
NEED FOR HIGHEST PRoFIc]ENCY NITH]~ I~[ARKETIN6,
THE RAPID ACCELE|~J~TION AND DIFFUSI0ti:~)F CHANGES IN
CONSUMER TASTES AND I]FESTYLES, ]NCREASING CONPET[T|VE
PRESSURES AND AN UN~ERTA]N ECON(}R]C.O.UTLOOK H]LL CREATE
EVEN HORE COHPLEX i4ARKETPLACE.COND]T|ONS,
WHAT ~]LL 8E |TS ]HpI~ZCATION? . :
CB/~NGE CREATES OPPORTUN[T]ES FOR HEU" .ORGANIZED,
I'tARA~ED AND STAFFED HAR,~ETERS.~ RESUI~TS
THOSE THAT AREN'T,' ..
PROFESSIONALLY
IN BUSINESS DECLINES
WHEN WILL IT "HAPPEN?
ONGO]NG,
°°
YANKELOVIClt MONITOR, SEGMENTATION STUDIES,
' ACTIONS, ECONOMIC FORECASTS AND STUDIES~
CORPET I T] VE
INFORIdATION,
I~EED FOR NORE, BETTER AND FASTER
......... ;.." - ". .~RKETPLACE.. INCREASING IN COMPLEXITY AS NOTED ON
" PREVIOUS ISSUES,
~AT WILL BE ITS IMPLICATION?
WE ~ILL BE UNaBlE TO FORECAST AND UNDERSTAND CHANGING
CONDITIONS AND PROPERL~ ADDRESS THEH UNLESS HE PROPERLY
DEVELOP A~B UTILIZE OUR ]NFOR~IATION RESOURCES,"
WHEN W~'LI~ "IT HAPP~
0NGO]NG,
SAME AS PREVIOUS ISSUES DEALING WITH COMPLEXITY AND
CHANGING CONDITIONS,
POTENTIAL EROSION OF COHPANY PROFIT HARGIN DUE TO
UNFAVOR/~LE RATIO OF NIGN-TO~LOWER COST ]BRANDS.
-OUR HIGHER COST ]~RARDS HII'L TEND TO RETAIN THEIR COST
STRUCTURE AND CONTINUE TO (~UT PERFOR]4 OUR LOI~ER COST
ITEHS,
t~IAT ~ILL 8E ITS ]FtPL|CAT]OH?
THE COMPANY WI~ HAV~ tO ~CCEPT LONER-THAN-STANOAR9 HAeG[NS
OR ]'H~REASE PRICES AT A GREATER RATE AND~OR MORE FREQUENTLY
THAN CURRENTLY PLANNED,
o
WHEN WILL IT HAPPENS.
EARLY ~980'S WITH POTENT|AL TO OCCUR SOONER,
• SHARE FORECASTS AND FINANCIAL AN/iLYs~S,
