Marketing fundamentals and strategic applications

Marketing

Tobacco Marketing: Get Them Young or Not at All

The tobacco industry has been in a battle to capture the youth market for decades mainly because of the degree of brand loyalty that is characteristic of cigarette smokers. Cigarette companies have a lot at stake in making sure that their brand is one of the first tried by the young smoker. In its bid to obtain young smokers, R.J. Reynolds created the Joe Camel campaign with a cool character that youths found highly appealing and the company created fierce advertising, promotional, and sales campaigns to take their message to market. The Joe Camel campaign proved to be one of the most successful bids to capture young smokers in tobacco history. Ultimately, its tremendous success was in part the reason for the campaign's eventual downfall, as public outcry demanded that cigarette companies stop marketing to adolescents and as courts gained legal leverage against the tobacco industry. Today, Joe Camel may be vanquished, but R.J. Reynolds and tobacco companies continue to find more subtle ways to target youths at an early age and have moved on to lesser developed countries where opposition to the industry isn't as strong.

It's ironic that cigarette companies obtain a customer for a lifetime, but that the lifetime of the customer is cut short by cigarettes. Each year, 420.000 cigarette customers die and must be replaced. Thus, young people are the tobacco industry's primary target replacement market for selling cigarettes. And, this target market is working for tobacco companies with three thousand teenagers beginning to smoke every day, amply replacing the number of smokers that are dying. Loss of smokers was an even larger problem for R.J. Reynold's Camel brand than for other cigarettes. The Camel cigarette was originally an unfiltered cigarette that was purchased by older smokers. Therefore, Camel was losing its "lifelong" customer at a more rapid clip than other cigarette brands because Camel cigarettes were more toxic and because they were being consumed by an older age group. Thus the birth of the Joe Camel campaign in 1988 by R.J. Reynolds to win a larger share of young smokers that its competitors.

It's important for tobacco companies to target smokers when they are young because of the nature of brand loyalty. Ninety percent of all smokers begin to smoke before they are twenty one, and sixty percent begin before they are fourteen. Once they choose a brand, cigarettes smokers are very brand loyal because they enjoy the taste of a particular brand. In a survey of one thousand smokers, eighty six percent stated that they would never consider buying another brand on a regular basis. Approximately, forty one percent of smokers in the age bracket twenty five to thirty nine years claim they have been smoking their regular brand for ten years or more.

Of these smokers, only fourteen percent said that they would even consider changing to a different brand in the future. Forty one percent smoke brands other than their regular cigarettes when their brand is unavailable. Forty two percent of the 1000 respondents stated that about three quarters of all the cigarettes they smoke are their regular brand and thirty seven percent stated they would never smoke another cigarette other than their regular brand

And, once a smoker is hooked, the tobacco company now has a long-time customer. According to many experts, the nicotine in tobacco is more addictive than cocaine, heroin, or opium. One survey of high school students who were daily smokers showed that only five percent of them intended to be smoking in five years. But after five years seventy five percent of them were still smoking An occasional smoker beginning at fifteen will be a daily smoker by eighteen. And, even more interestingly, age plays a large role in causing addiction and brand loyalty. Kids who start at the age are much more likely to become addicted to nicotine. The earlier you get them, the more likely they are to get addicted. And, the earlier you get someone interested in a cigarette brand, the more loyal they will be as a customer.

R.J. Reynold's Joe Camel campaign was extraordinarily successful at creating large brand recognition and market share for Camel cigarettes. Studies show that nearly one third of three-year-olds were able to associate Joe Camel with a cigarette and they by age six children were just as familiar with him as they were with the Mickey Mouse logo on the Disney Channel. The Joe Camel character is largely attributable to transforming Camel cigarettes from a brand smoked by less than one percent of smokers under the age of eighteen in the United States to a one-third share of this market and nearly a half billion in annual sales, all in less than three years.

By targeting young smoking candidates, tobacco companies can take advantage of a group that is vulnerable and insecure. Tobacco companies direct their advertisements towards young consumers that promise that smoking will make them either attractive, independent, tough, strong, popular, happy or cool, all crucial needs and desires of adolescents R.J. Reynolds is part of R.J. Nabisco, a company that produces many products that are consumed by children and they certainly know how to get their attention. Joe Camel appealed heavily to the cool category although many campaigns crossed several categories of insecurity. Joe Camel is a high-rolling, swinging cartoon character with a sax, sunglasses, and hip clothes portrayed in trendy social settings such as bars and pool halls. Many anti-smoking critics have accused R.J.Reynolds of selecting Joe Camel for its campaign not only because children will associate with the cool character, but also because children think that cute cartoon characters mean that the product is harmless.

Joe Camel started a trend in the tobacco industry for using cartoon characters to promote cigarettes. Joe Camel inspired other cartoon advertisement campaigns, including a penguin tested by Brown & Williamson, U.S. subsidiary of transnational giant BAT industries. Also, "Willie the Kool," the penguin used to promote Kool cigarettes, has buzz-cut hair, day-glo sneakers, sunglasses, and is very conscious of being "cool."

Marlboro, Camel and Newport are the three most heavily advertised brands, It's no coincidence that eighty six percent of young smokes that bought their own cigarettes purchased either Marlboro, Camel or Newport (see Figure 1 for a comparison of their advertisement messages). Marlboro and Camel control over 90% of the adolescent smoking market. The appeal to coolness coupled with heavy advertising was responsible for Camel's success. Camel was bested only by Marlboro with its Marlboro Cowboy campaign that appealed to a youth's desire for independence, toughness and strength.

Figure 1: Advertising Messages Used To Target Youth

Marlboro Camel Newport

Independent Cool Popular

Tough Happy

Strong

Initially, R.J. Reynolds repeatedly denied that it created the Joe Camel character to target the youth market or that it targets youths in general. The company stated that Joe Camel is no more improper for cigarettes advertising than is other cartoon characters that sell other products. R.J. Reynolds also argued that it was impossible to isolate its marketing efforts for eighteen and over individuals and those under eighteen reasoning that:

Even if tobacco companies did try to tailor their advertising to an older group, 18- to 24-year-olds for example, "there's no way you can draw a sharp distinction between 18 and 17 or even 18 and 16," he says. "Things which appeal to 18-year-olds naturally appeal to 17-, 16- and 15-year-olds, because the younger kids emulate the older kids."

However, the evidence against R.J. Reynolds and other companies targeting young smokers started to mount after their advertising and promotional campaigns were fully understood.

The advertisement mediums and promotional campaigns that R.J. Reynolds pursues show that adolescent smokers are a large target audience as explained in the following summary from ABCNEWS.com:

(Publisher's Depot)

CONCERTS

Look at the kind of concerts they sponsor. It ain't the golden oldies," says John Banzhaf, executive director of Action on Smoking and Health.

WEB SITES

Although they do not maintain Web sites to advertise their products, they do sponsor sites that appeal to teens.

VIDEO GAMES

In many games, particularly driving-type games, players speed past billboards that advertise cigarettes.

PRODUCT PLACEMENT

They sponsor many popular movies, including Superman II (Marlboro) and Supergirl (Eve).

PRODUCT GIVEAWAYS

Giving jackets, posters and other items in exchange for cigarette packages is particularly effective, Banzhaf says, citing a pair of beach sandals that leave tracks shaped like camel hoofprints as an example clearly targeted at kids.

Although only two percent of smokers are teenagers, the tobacco companies spend fifty percent of their advertising money targeting young people to smoke. At the time of Joe Camel, tobacco companies widely used billboards to advertise, a form of advertisement available to all regardless of age. Tobacco companies also made heavy use of advertisements in magazines with high youth readership such as Sports Illustrated, People, Rolling Stone, Hot Rod, Glamour, Vibe, Motor Trend, Spin and Mademoiselle. All of these magazines have readers between the ages of twelve and seventeen that total more than two million and that comprise more than fifteen percent of the publication's overall readership. So, although R.J. Reynolds did not select magazines that only targeted the youth market, it did select media that was heavily consumed by this audience. Even if tobacco companies had not advertised in youth oriented magazines, more than half of all youth are exposed to cigarette advertisements in adult publications.

Another clever way R.J. Reynolds used to keep cigarette brands constantly in front of children and to circumvent restrictions on advertising is known as "brand stretching" that uses cigarette logos on other products. In 1992, R.J. Reynolds introduced the Camel Cash promotion that offered coupons in packs of Camel cigarettes. Consumers could redeem Camel Cash for items with obvious appeal to young people such as flip-flops, insulators for beverage cans, jackets, towels, T-shirts, and hats-- all featuring the Joe Camel logo. Overall cigarette advertising expenditures for these types of promotional items quadrupled from $184 million to $756 million, between 1991 and 1993. Thirty percent of all children between the ages of twelve and seventeen own at least one tobacco promotional item. These items carry no health warnings and are easily obtained by kids.

Most damning to R.J. Reynolds was not its use of advertising and promotions which also reach over 18-year-old readers, but its blatant use of the sales channel as a way to attract young smokers. In a memo written in 1990 and later made public, a RJR division manager encouraged his sales representatives to make calls to stores located across from, adjacent to, or in the vicinity of high schools.

The California Department of Health surveyed 5,773 stores around the state and the results of the survey clearly support the claim that the tobacco industry intentionally targets people under the age of 18. The survey found that most tobacco promotions were placed within 1,000 feet of a school, many displays in stores were placed three feet high and near candy displays, and many more outdoor signs promoting tobacco were located near schools than in other places.

In June 1997, nine years after the Joe Camel campaign began, R.J. Reynolds ended the use of Joe Camel as part of a settlement reached between the tobacco industry and legal opponents suing to recover the costs of smoking-related illnesses. R.J. Reynolds has also been fending off efforts by the Federal Trade Commission to abolish the character and had come under increasing public pressure as well.

1996 poll conducted by the American Heart Association found that the public was becoming frustrated with tobacco industry as evidenced by the following observations:

Seventy three percent believe tobacco ads without pictures and cartoons would make smoking less appealing to kids,

Seventy four percent think cigarette pack coupons for promotional items which appeal to youth should be eliminated,

Sixty one percent of adults believe that the tobacco industry encourages teenagers to smoke,

Eighty eight percent think their member of Congress should support the Food and Drug Administration's proposal to stop the sale and marketing of cigarettes to children,

Forty seven percent said they would be less likely to vote for a local member of Congress who was accepting campaign contributions from the tobacco companies, and Eighty one percent of Americans do not trust tobacco companies to promote voluntary restrictions on the sale and marketing of their products to children.

A spokesperson for R.J. Reynolds asserted that positive consumer responses to a new advertising campaign, not public pressure, led to the decision to discontinue the use of Joe Camel.

However, public pressure did not mean that R.J. Reynolds would stop targeting young smokers, but it did mean that the company would have to change its marketing tactics to appease their opponents.

Studies have found that advertising expenditures for Marlboro, Camel, and Newport cigarettes actually increased in magazines heavily read by young people in the year following the settlement. Tobacco companies spent $58.5 million to advertise the three brands in youth-oriented magazines in 1998 and $67.4 million in 1999. In these magazines, many tobacco companies no longer use characters to sell their cigarettes. For its part, R.J. Reynolds replaced the use of a cartoon character with a new Rated campaign aimed at the youth market that depicted sex and rebellion. In the ad, the father is made to look stupid while chasing his daughter's boyfriend. RJR rates this ad as SS for "Satisfied Smoking," FV for "Farm Violence" and AN for "Animal Nudity." A year later, Phillip Morris ceased using its Marlboro Man in advertisements.

Tobacco companies now make less use of billboards and gear with cigarette brand logos on them. Now, tobacco giants are emphasizing point of sales advertising and give away promotions linked to cigarette purchase. Also, companies are introducing new products that they believe will be appealing to the youth market. R.J. Reynolds has introduced a new line of flavored cigarettes that many critics believe is a blatant attempt to sell to teens. Tobacco companies are also increasing their efforts in developing countries where public outcry and political opposition isn't as strong as in the United States and where they can get by with marketing practices that are outlawed in this country. As a result, the tobacco industry in enjoying huge success in their new target markets. The teen smoking rate in some Latin American cities is now fifty percent and the smoking rate among primary school children in Kenya is more than forty percent.