Faced With Yet Another Ban, is Tobacco Marketing Burnt Out?

By Hemsley, Steve

Tobacco companies say promotions are an essential way of persuading consumers to switch brands. But as government restrictions get harsher, their products have become practically unmentionable Tobacco is a perfectly legal high-volume * FMCG product. Yet the smoking lobby appears resigned to yet more promotional restrictions as the government’s onslaught on the promotion of tobacco products gathers pace. Current plans include an end to the display of cigarettes in retailers, on-pack branding and vending machines.

In May, the Scottish Executive announced plans to ban the public display of cigarettes and end the sale of packs of 10. It’s expected that the rest of the UK will follow its lead. Meanwhile the government is asking for people’s opinions on its Cancer Reform Strategy until 8 September as part of a consultation on the future of tobacco control.

The legislation leaves the tobacco companies with nothing to spend their traditionally huge marketing budgets on.

Marketers whose job it is to promote tobacco have got used to working with one hand tied behind their backs, so to speak. TV advertising for cigarettes and hand-rolled tobacco was banned in the UK in August 1965 and for cigars and pipes in 1991. Then in 2002, the Tobacco Advertising and Promotions Act brought in a raft of measures including the end of brand sharing, a practice that had allowed tobacco companies to badge products such as clothing.

Massive audience

The government also halted tobacco sponsorship, along with press and poster advertising. In 2004, point-of-sale material was restricted to A5 formats. Bans on global sponsorship deals for sports such as Formula One came into force in 2005. Direct marketing is still available to producers, but only to send details of promotions to smokers who request information.

The various bans on promotions were designed to improve the public’s health and they appear to have worked. Yet the tobacco brands know there is still a massive audience for them to target. Some 22 per cent of over16s are smokers, according to government figures, and they spend more than Pounds 12.6 billion a year on tobacco.

The smoking industry argues that it needs to run promotions as a way of encouraging people to switch brands, rather than attracting new smokers. Indeed, a one per cent shift in market share can be worth millions.

The Tobacco Manufacturers’ Association (TMA) believes a member company should have the right to promote how its brand differs from those of its competitors. “The display of product is essential to enable adult consumers to make an informed choice based on availability, price and brand from a wide range of tobacco products,” says a spokesman. “It is necessary for fair and undistorted competition between manufacturers and retailers.”

The Association of Convenience Stores (ACS) is also worried by the government’s latest plans. Chief executive James Lowman says tobacco typically accounts for 20 per cent of a small shop’s turnover and drives footfall. Smokers make regular purchases and see promotions for other products. The ACS estimates that a ban on tobacco displays would cost the trade about Pounds 252 million.

“The legislation is going only one way so there is no point lobbying for the reversal of any promotional bans, but we would expect the government to present a clear case that these additional restrictions are necessary,” says Lowman. “In anticipation of the new rules, our members are increasing in-store promotions on key growth areas such as food-to-go, like coffee and bakery items.”

Tobacco marketers have always been able to find ingenious ways around any legislation, and they continue to do so. The Glyndebourne Festival in Sussex caused a storm in May when it accepted sponsorship from British American Tobacco (B AT).

BAT exploited a loophole that allows cigarette companies to sponsor events as long as specific brands are not mentioned. Commenting on the deal, a BAT spokeswoman said: “We have a voluntary international marketing code which sets out the marketing activity we think is not appropriate and therefore won’t do, even if it is permitted by law.”

Anti-smoking group Action on Smoking & Health (ASH) claims that BAT did, in fact, break the law at Glyndebourne because the sponsorship carried a link to the BAT website, where there is information on brands such as Dunhill. “The whole point of marketing is to ultimately increase sales, which means more addiction and the potential to attract new smokers,” says ASH research manager Amanda Sandford. “What is clear is that the packs themselves are a means to promote the brands by making the packaging as attractive as possible. We think there is a strong case for taking them out of consumers’ sight.”

Stricter controls

A spokesman for Imperial Tobacco, which owns brands such as John Player Special and Lambert & Butler, admits these are tough times for the company’s marketers. “There is very little we can do because advertising to the consumer is banned, so we are focusing on trade marketing to support retailers,” he says. “This includes educating shops about our brands and the different tobacco categories. We also have a trade website which includes price lists and information on the tobacco industry.”

The stricter controls put in place across Europe have prompted an increase in promotional activity by the industry in developing countries, where the laws on marketing tobacco are less stringent or non-existent.

The World Health Organization (WHO) has responded by urging governments globally to ban all tobacco advertising and promotions. The WHO, which designated 31 May this year as World No Tobacco Day, estimates that currently only five per cent of the world’s population is protected by promotion bans.

“In order to survive, the tobacco industry must replace those who quit or die with new, younger consumers,” says WHO director general Dr Margaret Chan. “It does this by creating a complex ‘tobacco marketing net’ that ensnares millions of young people worldwide.” The danger for the smoking industry is that if the WHO gets its way, an entire global marketing strategy could well find itself stubbed out.

“To survive, the tobacco industry must replace those who quit or die with new, younger customers”

Dr Margaret Chan, director-general, World Health Organisation

CARDS. COWBOYS AND CATCHPHBASES: TOBACCO’S PROMOTIONAL HISTORY

Over the decades, tobacco promotions have been both varied and creative.

Until the 1950s, producers could exploit their customers’love of cartophily, or collecting cigarette cards. One successful marketing ploy was to develop series of these, usually containing about 50 cards each, covering subjects related to sport, music, film and warfare. Popularthemes have included German military vehicles, famous works of art and even seaside resorts. There is now a significant market forthese cards.

Target markets

Promotions to support the Joe Camel brand were initially designed to appeal to young smokers using cartoon images.

In the 1950s, PhIIIIp Morris’s Marlboro Man cowboy became a marketing icon with promotional slogans such as: “The filter doesn’t get between you and the flavour”. Sadly, both for his family and the company’s PR people, Wayne McLaren – the 1970s Marlboro Man from Marlboro country – died of lung cancer in 1992 at the age of 51.

Women became the target audience in the 1960s with brands such as Virginia Slims and its “You’ve Come A Long Way Baby” message tapping into the emerging liberation movement.

Television advertising

Tobacco companies were among the first to advertise on TV because they had deep pockets. They produced some of the medium’s most celebrated commercials until the EU imposed a total ban on small- screen tobacco advertising in the EU in the early 1990s.

Some of the most memorable ads were those for Hamlet Cigars, which used Bach’s Air on a G-String and the slogan “Happiness is a cigar called Hamlet”. Top US sitcoms also used to be sponsored by cigarette brands. / Love Lucy, for instance, was branded by Phillip Morris.

Sport has been another ideal marketingvehicle for tobacco brands. John Player Special promotions were linked with motor racing and the Lotus Formula One team for years, Benson & Hedges sponsored cricket and Embassy sponsored the World Snookerand World Darts championships.

TIME GENTLEMEN PLEASE: IS ALCOHOL NEXT?

With the tobacco industry almost pummelled into submission, the alcohol sector fears it is next on the government’s hit-list. The health lobby has been pushing for stricter restrictions on drinks promotions and seems to be winning the argument with politicians.

The Alcohol Health Alliance, a group of more than 20 health organisations including Alcohol Concern, Action on Addiction and the Royal College of Nursing, wants more tax on booze and tighter restrictions on advertising.

In June the government published the Youth Alcohol Plan to address concerns about teenage drinking and anti-social behaviour. The pub trade argues it is doing plenty through self-regulation. Some 32,000 members of the British Beerand Pub Association (BBPA) have agreed to outlaw offers such as “pay Pounds 10 on the door and all drinks are free”, drinking games and promotions that encourage people to drink too much too quickly.

The BBPA has also issued guidelines to help members run responsible promotions intended to showcase new brands, increase customer awareness of a product and boost business in quiet times. Producer Diageo has an internal marketing code and Punch Taverns has published a “how to” guide for its pubs. However, the drinks industry fears ongoing cheap booze promotions run by the supermarkets as loss leaders could prompt the government to get tough. Everything is on hold until the University of Sheffield publishes its independent report into the link between drinks promotions and anti-social behaviour in the autumn. A spokesman for industry body the Portman Group says: “A formidable momentum has been built up by the health lobby, which has been buoyed by its success in taming tobacco promotions. We could see advertising banned, minimum prices set for drinks, an end to volume discounts at retail and changes to packaging.”

Copyright Haymarket Business Publications Ltd. Jul/Aug 2008

(c) 2008 Promotions & Incentives. Provided by ProQuest Information and Learning. All rights Reserved.