Marketing TobaccoSlide 2Targeting Youth: The Tobacco Settlement1. Targeting Youth 2. Cartoon charactersSlide 5Slide 6SettlementSlide 8Slide 9Slide 10Flavored cigarettes3. Outdoor advertisingSlide 134. Tobacco merchandise5. Product placement and sponsorshipsSlide 166. Free samples7. Gifts based on purchasesTargeting womenSlide 20Dakota cigarettesSlide 22Slide 23Targeting MinoritiesUptown cigarettesSlide 26Menthol XTargeting consumers in developing countriesSlide 29Slide 30Slide 31Marketing Marketing TobaccoTobaccoTargeting youthTargeting youthTargeting womenTargeting womenTargeting minoritiesTargeting minoritiesTargeting consumers in developing Targeting consumers in developing countriescountriesTargeting Youth: The Tobacco Targeting Youth: The Tobacco SettlementSettlement1998 tobacco settlement1998 tobacco settlement$100’s of millions in damages$100’s of millions in damages•health costs paid by medicaidhealth costs paid by medicaid•smoking related illnessessmoking related illnessesMarketing practicesMarketing practices•Focus on youth marketFocus on youth market1. Targeting Youth1. Targeting Youth2. Cartoon characters2. Cartoon characters1975 memo to RJ Reynolds Vice 1975 memo to RJ Reynolds Vice President:President:•““The Camel Brand must increase its The Camel Brand must increase its share of penetration among the 14-24 share of penetration among the 14-24 age group…which represents age group…which represents tomorrow’s cigarette business”tomorrow’s cigarette business”1973 memo, senior researcher:1973 memo, senior researcher:•““If our company is to survive and If our company is to survive and prosper, over the long term, we must prosper, over the long term, we must get our share of the youth market.”get our share of the youth market.”Other memos describe success of Joe Other memos describe success of Joe Camel in France and subsequent creation Camel in France and subsequent creation of character in the U.S.of character in the U.S.1986 memo noted how US Joe Camel 1986 memo noted how US Joe Camel campaign would utilize “peer campaign would utilize “peer acceptance/influence” to “motivate the acceptance/influence” to “motivate the target audience to take up cigarettes.”target audience to take up cigarettes.”RJ Reynolds had done research on brand RJ Reynolds had done research on brand preference by 14 year olds preference by 14 year olds •Claimed was for planning, not marketingClaimed was for planning, not marketing•stated it never marketed to childrenstated it never marketed to childrenDocument indicated company marketed to Document indicated company marketed to 13 year olds 13 year olds •Claimed was a typoClaimed was a typo•should have said 18 year oldsshould have said 18 year oldsSettlementSettlement1.1.Bans use of cartoons in advertising, Bans use of cartoons in advertising, promotion, packaging or labelingpromotion, packaging or labeling2.2.Prohibits targeting youth in Prohibits targeting youth in advertising, promotions, or advertising, promotions, or marketingmarketing3.3.Bans industry actions aimed at Bans industry actions aimed at initiating, maintaining or increasing initiating, maintaining or increasing youth smokingyouth smokingIn 2000, marketing expenditures increased In 2000, marketing expenditures increased by 42% to $9.6 billionby 42% to $9.6 billionMost of increase was in retail store Most of increase was in retail store marketingmarketingCigarette and smokeless tobacco brands Cigarette and smokeless tobacco brands increased advertising in youth-oriented increased advertising in youth-oriented magazinesmagazines•Sports IllustratedSports Illustrated and and Rolling StoneRolling Stone2002, RJ Reynolds fined $20 million 2002, RJ Reynolds fined $20 million for continuing to advertise in youth-for continuing to advertise in youth-oriented magazinesoriented magazines2004, Attorneys General sued Brown 2004, Attorneys General sued Brown & Williamson (Kool)& Williamson (Kool)•““Kool MIXX 2004” promotionKool MIXX 2004” promotionFocus on hip-hop musicFocus on hip-hop musicFree interactive CD-RomsFree interactive CD-RomsCollectible bags, radios, lightersCollectible bags, radios, lightersPromotions appeared inPromotions appeared in•Spin, Vibe, Rolling StoneSpin, Vibe, Rolling StoneFlavored cigarettesFlavored cigarettesBrown & Williamson recently introducedBrown & Williamson recently introduced•Caribbean Chill; Midnight Berry; Mocha Taboo; Caribbean Chill; Midnight Berry; Mocha Taboo; MintrigueMintrigueB&W claims intent is to lure current B&W claims intent is to lure current smokers from other menthol brandssmokers from other menthol brandsAdvertises in bars and clubs, magazines like Advertises in bars and clubs, magazines like Playboy and Vanity FairPlayboy and Vanity Fair•readership 85% adultreadership 85% adultAdvocates claim virtually all new smokers Advocates claim virtually all new smokers under 19under 19Brands aimed at smokers 21-30 will Brands aimed at smokers 21-30 will influence 12-17 marketinfluence 12-17 market3. Outdoor advertising3. Outdoor advertisingBans Bans allall outdoor advertising, including: outdoor advertising, including:•billboards, signs and placards in arenas, billboards, signs and placards in arenas, stadiums, shopping malls and video stadiums, shopping malls and video game arcadesgame arcadesLimits advertising outside retail Limits advertising outside retail establishments to 14 square feetestablishments to 14 square feetBans transit advertising of tobacco Bans transit advertising of tobacco productsproductsAdvertising and promotions Advertising and promotions increased in convenience stores and increased in convenience stores and other retail outletsother retail outletsTwo-for-one offers and other Two-for-one offers and other enticements particularly effective enticements particularly effective with kids because theywith kids because they•have less disposable income than adultshave less disposable income than adults•are more likely to be influenced by are more likely to be influenced by promotional items in convenience storespromotional items in convenience stores4. Tobacco merchandise4. Tobacco merchandiseThirty percent of kids 12 to 17 years Thirty percent of kids 12 to 17 years old--both smokers and nonsmokers-- old--both smokers and nonsmokers-- owned at least
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