Abstract
In this confidential, internal 1966 Philip Morris (PM) report, PM market researcher Myron Johnston, Jr. analyzes the feasibility of introducing a"health cigarette." The report shows that PM viewed medical reports linking cigarette smoking and disease as simply another driver for the cigarette market.
Ignoring the physical devastation their product causes hundreds of thousands of Americans, Johnston coldly observed that the American Cancer Society's conclusion that cigarettes cause disease in women as well as men could result in the generation of a whole new market for a "health cigarette":
"[Young women's] willingness to accept health filters may increase now that the American Cancer Society purports to have found a relationship between smoking and health for women as well as men. This group could provide a market for a health cigarette..."
and
"Women, and particularly young women, would constitute the greatest potential market for a health cigarette."
He suggests the strategy of marketing a "health cigarette" (or one with the illusion of being healthier) only when pressed to do so by authorities:
"My recommendation is that we not introduce a new health cigarette unless there is another health scare or additional restrictive legislation is passed. In the event of another health scare...our entry should be determined by the form of the scare..."
Johnston also touches on the addictive properties of nicotine as he observes:
"A cigarette that does not delivery nicotine cannot satisfy the habituated smker and cannot lead to habituation, and would therefore almost certainly fail.
He discusses the dynamics of smoking initiation among young people, saying,
"...Tobacco flavor is absent or far down the lists of reasons given for beginning to smoke, so it should be theoretically possible for a health cigarette to satisfy the most common reasons (to be like friends, to feel or look older, to combat nervousness, to be rebellious). This is apparently not the case. Young smokers are the ones...least likely to smoke health cigarettes..."
There is no mention in the report of empathy or concern for the fact that their products cause painful illness and early death among consumers, although Johnston states (on page 1000338652) that "Most smokers would rather quit than switch." The concern is clearly only to determine ways to market more cigarettes.
Quotes:
"Women, and particularly young women, would constitute the greatest potential market for a health cigarette."
"Advertising should be directed to both sexes but in such a way as to have the greater appeal to women."
Fields
- Quotes
"A large proportion of smokers are concerned about the relationship of cigarette smoking to health..."
"The anti-cigarette propaganda will probably be more effective in reducing the rate of smoker recruitment than in stimulating smokers to quit or switch."
"The market share of health cigarettes increases rapidly for a brief period during each health scare and quickly stabilizes at a new and higher level of marketing penetration."
"Thus a new health cigarette entry could not rely on increased demand for health cigarettes, but would have to take its place at the expense of existing brands of health cigarettes..."
"Women, and particularly young women, would constitute the greatest potential market for a health cigarette."
"Advertising should be directed to both sexes but in such a way as to have the greater appeal to women."
"My recommendation is that we not introduce a new health cigarette unless there is another health scare or additional restrictive legislation is passed...."
"I have assumed that any health cigarette must compromise between health implications on the one hand and flavor and nicotine on the other. It seems clear from the performance of existing health cigarette entries that flavor and nicotine are both necessary to sell a cigarette. A cigarette that does not delivery nicotine cannot satisfy the habituated smker and cannot lead to habituation, and would therefore almost certainly fail. Health claims alone without flavor or nicotine cannot sell cigarettes--most smokers would rather quit than switch."
The Beginning Smoker
Persons under 25 years of age constitute over one-fourth of the total number of smokers. Of greater importance is the fact that this group will increase by about 18% between now and 1971...Any intensification of the anti-cigarette propaganda will almost certainly be aimed largely at this group. Indeed, there is evidence that the health scare has already had an effect on the rate of smoker recruitment and on the smoking habits of the under-25 group.
...Toacco flavor is absent or far down the lists of reasons given for beginning to smoke, so it should be theoretically possible for a health cigarette to satisfy the most common reasons (to be like friends, to feel or look older, to combat nervousness, to be rebellious). This is apparently not the case. Young smokers are the ones...least likely to smoke health cigarettes...
Apparently the reasons for beginning to smoke dictate the choice of brand as well, particularly for males. They appear to choose cigarettes that produce a proper image. Males under 25 are much more likely to smoke Winston, Marlboro and Lucky Strike...all of which project a male image...This suggests that there is something of a stigma attached to smoking health cigarettes and that a health cigarette would not be well received by young males.
Young females appear to be more willing to accept health filters, and for them the health filter may have more prestige value...With young women, it may be true that the fact of smoking is the major motivation and that a mild cigarette would be acceptable. Their willingness to accept health filters may increase now that the American Cancer Society purports to have found a relationship between smoking and health for women as well as men. This group could provide a market for a health cigarette.
- Type
- Report
- Company
- Philip Morris
- Author
- Johnston, Myron E. (PM Marketing researcher)
- Recipient
- Wakeham, Helmut R. R., Ph.D. (PM R&D VP)
Vice President and Director of Research & Development, Philip Morris
- Seligman, Robert B. (PM VP of R&D c. 1976-82)
Vice President of Research and Development at Philip Morris Richmond, VA 1976-1982. Reported to Senior Vice President of Operations. In 1982 transferred to tobacco technology group. Wanted to share ammonia and other tobacco technology with PM International companies.
- Operation/Project
- Health cigarettes
- Region
- US
Document Images
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Copy No.~~
Issued to,(). 9~11,,>
June 1966
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Special' Report No. 248'
MARKET POTENTIAL OF~+ A,HEA~LTH CIGARETTE
CONFiDENTIAL
Joh
d v_:-;f~
W. L. Dunin, Jr.
Diis triibuti on
Dr. H. Wakeham (10)
Dr. R. B. Seligman
>
~v. F.
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~ C O N T E N' T S
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I. CON'CLUSION'S . . . . . . . . .
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II. RECOMMENDATIONS . . . . . . . . .. . . . , , , , , 3
I I I . AN!Al1Y S I'S . . . . . . . . . . . . . . . . . . . . 4
I A. S&les Patterns . . .. . . . . . . . . . . . . 5
B. The Beginning Smoker . . . . . . . . . . . . 11
C. Potenti al Swi tchers . . . . . . . . . . . . . 14
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APPEND,IX
( EVIDENCE OF CONCERN . . . . . . . . . . . . . . . 17
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I. CONCLUSIONS
As a resul!t of the investigati'ons summarized in this report
I have reached the following conclusions:
1. A large proportion of smokers are conicernied about the
relationship of cigarette smoking to health (see Appendix).
2. The antt-cigarette propaganda will probably be more
effecti ve in reduciing, the rate of smoker recrui tment than
in stimullating smokers to quit or switch.
3. The market share of health cigarettes increases rapidly
for a birief period during, each health scare and q,uickly
stabilizes at a new and hiigher level of market penetration.
4. Thie Surgeon General's Report had markedly less effect on
the demand for health cigarettes than the first health scare
in the 1950's. Any future h1ealithiscares will probably have
even less effect.
5. Thus a new healith cigarette entry could not rely on increased
demand for heal'th cigarettes, but woulld have to take i'ts pilace
at the expense of existing birands of health ciigarettes. However,
6. the health cigarette market is characterized by low birand
l oyal ty, and shoulld be fai rly easy to, penetrate.
7. Women, and particularly young women, would constiitute the
greatest potential
market for a health cigarette.
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8. There is a growfng, willingness on the part of smokers,
particularly women, to accept nontobacco fliavor.
9. Mere red~ucti Qn in ni coti ne and TPM del ilveriies by conven.-
tilonal' methods of fi ltrati on would' not be a suiffi cilent basis
for launching a new cigarette, and, to attempt iit would~ be to
court disaster.
10. The illusion of filtration is as important as the fact of
filtration.
11. Therefore any entry should be by a radliically diifferent
method of filtration but need not be any more effective.
12. Advertiisinig should~be directed~to both sexes but in suich
a way as to have the greater appeal' tolwomen.
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II. RECOMMENDATIONS
Our posture with regard to a health cigarette entry should'be determined by~ anticipated po:litical
and market co:nditi~ons.
All indlications are that 19&6 elections will resu1it iin a
Congress more sympathetic to business anid' less inclined than
the present Congress to pass restri c.ti ve legiiisl ati on.
My recommendation is that we not introduice a new health ciga-
rette unless there is anothier health scare or add'iti'onal
restrictive legislatiion iis plassed. In the event of another
health scare or restrictive llegislatilon our entry should be
determined~by the form of the scare or legisllation.
In the event of a resumption of the tar derby or the passage
of legislation requiring a statemenit of "tar" and nicotine
content on the pack, the de1ayedldilutioin cigarette could be
a formidable entry as a: full tobacco: flavored cilgarette. It
could:compare favorably with any heallth cigarette currently on
the market yet dleli ver ful l flavor throughout the cruci all fi rst
40 mm of the rod'. I am of the opini'on that we should press
development of this concept.
In the absence of legislation or a resumption of the tar derby,
LonigPar wouild probably be the best entry, since it is withiout
questi on a radi cal ly di fferent method of fi l'trati on and can be
made to gi ve the i l l usilon, of fi lltrati on wi thout i mpai ri ng the
tobacco flavor. It is a uniq,ue concept that could~catch on, but
would probably have trouble reachiing five billiioni in the absence
of another healithi scare. '
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III. ANALYSIS
Avaiilabile evidence from surveys shows conclusively that smokers
are concerned about the relationship of cigarette smoking to
health but thiat they do not want to quit smoking. They are,
however, chaniging their smoking habits, generally toward higher
filtration,, even at the expense of a lioss of some tobaccolflavor.
That these chiang!es are health motivated is clear from the timiing
of the shiifts: The boom in filters came on the heels of the
first health scare, and the Surgeon General's Report stimulated
the shift to charcoal filters. The acceptance of inentholl cig&-
rettes ani6Lark indicates a willingness to accept niontobacco
flavor as a substitute for tobacco flavor. There is some evidence
that the antil-cigarette propaganda is more effective in reducing
the rate of smoker recruitment than in changing thie habits of
smokers.
It should be noted that thiiis report is an evaluation of th~e
market potential of a"healthier"' cigarette rather thian a"healthy"'
cigarette. If we couldidevelop a medically and golvernmentally
endorsed! "healthy" cigarette that tasted exactlly like a Marlboroi,
delivered the nicotine of a Marlboro, and was called Miarlbioro, it
wouild probably become the best selling brand. There is, of course,
.considerable doubt as to whether the medical profession and the
federal governmenit would ever endoirse any cigarette.
Since any health cigarette we might develop would have to compete
wi th the allleged "heal th ci garet.tes" now on the market, I have
accepted as a workinig definition, of a health cigarette the defi-
nition commonly used in the R'esearch Center: All cigarettes about
which health claiims have been made or implied~(charcoal filter
1000338651
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cigarettes; Kent_and P'arliament; and minor brands such as Duke,
Life, Saino, and True). L & M is a borderline case: At one
time it was the major health cigarette enitry and iits sales
patterns are des.cribed in this report, but it is not iincl'uded
in the definition of health cigarettes. Similarly, Philip Morris
Menthol and Montclair are not included~inithis definition,,
although they could be considered health cig&rettes by virtue of
their charcoal filters. Since their comb:iined sales constiitute
only 0.6% of the total cigarette market, however, th,eiir inclusion
would in no way affect the anialysis.
I have assumedithiat any health cigarette must compromiise between
health implications on the one hand and flavor and nicotine on
the other. It seems cl!e&r from the perfoxmenice of exiisting
healthi cig,arette entriies that flavor and nicotine are both neces-
sary to sell a cigarette. A cigarette that d~oes not deliver
nicotine canniot satisfy the habituated smoker and~cannot lead to
habituation, and would therefore almost certainly faill. Health
claims alone without flavor or n1ilcotine cannot selll cigarettes-
most smokers would rather quite thaniswitch.
A. Sales Patterns
The health scare in the 1950's was accompanied by a decline in
ciigarette sailies (see Fig. 1), although the health scare was only
one of many reasons for thie decline. Of greater importance,
probably, were the end of the Korean War and the Accompanying:
recession, cigarette tax increases, and changes in the age compo-
sition of the population. The increase in sales of king-size
cigarettes during this period also contributed to the overall ~
decline in sales, siince fewer kiing-s.ize cigarettes are necessaryr
to proviide the same amount of tobacco. The health scare undoubtedly
1000338652
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figure 1
CIGARETTE SALES BY TYPE, 1946-65
7
Health Filters (incl. menthol)
Other Filter (incl- menthol)
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1952 1954 1956 1958 1960 1962 1964
1966
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11,
was responsible f.or the rapid increase in filter cigarette
sal!es, and contributed to the riise in king-size cigarettes
(see Fig. 2). Apparently, however, the illusion of
filtration was more impoirtant than the fact of filtration,
and consumers were still' moist interested in flavor.
It is possible that the tar derby in the 1950's was a major
factor in arousing conicern over the _question of smoking and
health. L & M sales began a marked rise in 1955 after the
favorable coverage in Consumer Reports that year and received
an addi tiionall bolost fromiConsumer Reports in 1957. The most
spectacular performer in the 501's, of course, was Kent, which
iintroduced the "Micromite filter" in July 1957, immediately
after the rellease of the final report of the Ameri can, Cancer
Society study of smoking and hiealth, and received rave reviews
from Reader's Digest in Juily and August 1957 (see Fig. 3). It
seems more than mere co,inci dence that Parl i ament experilenced a
three-foilld increase in sales after favorable reports on thie new
filter iin both Reader"s Digest and Consumer Reports in early
1958. By 1959, smokers hiad apparently become inured to compet-
ing healthl clai'ms and to the health scare iin general. Duke of
Durham and Life were bothi colossal flops, in spite of favorable
reports iniboth Reader's Digest and Consumer Reports, and salles
of Kent*and L & M beg,an toidecline.
The hiealth scare in 1964 was undoubted'.ly the cause of the ci1ga-
rette sales decline, the accelerated shift to filters, and the
126% increase in sales of ch&rcoal filters. The indirect
approval gi ven Lark by the Su!rgeon General's offi ce pxob&bl)WA
helped all charcoial fi lters. Q -
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