Tobacco groups challenge Australia's new law requiring plain packaging of cigarettes. The law aims to reduce branding and discourage smoking by eliminating the attractive effects of packaging. Tobacco groups argue the law will reduce their market share and competitive advantage. One year on, studies show plain packaging smokers find cigarettes lower quality and are less satisfied, increasing motivation to quit. However, tobacco sales have remained stable, with companies adapting to changing regulations. National laws can significantly impact marketing strategies in industries like alcohol, tobacco, and pharmaceuticals by restricting advertising practices.

1. International Marketing
“Tobacco groups challenge Australia’s new law”
Ophélie Toulet
Margaux Mesurat
Emmanuelle Friedlander
Tamara Khismatulina
Christopher Tang

2. Legislation
• Requires cigarettes to be sold in plain, unbranded
packages
• Aims at reducing brand visibility and discouraging
people from smoking
• For the law to be effective, legislators assume that
packaging have an effect on sales of cigarettes
• For the law to be implemented, legislators assume
that tobacco groups do not block passage of the law

3. Reactions from tobacco groups
• Outrage and backlash; legal challenges and
compensation seeking
• Big companies: Worry that the law would
reduce their market share and competitive
advantage
• Small companies: Worry that fewer people
take up smoking
• Other concerns: Counterfeiting, loss of
glamour

4. Implementation: One year on
Psychological Impact
•
•
•
Plain pack smokers were more likely to think their
cigarettes poorer in quality, less satisfying and to
rate quitting as a higher priority
30.6 per cent of smokers using plain packaging
said that their cigarettes were of lower quality
than a year earlier, compared with 18.1 per cent
of those using branded packs.
Plain pack smokers were 26.2 per cent less
satisfied by their cigarettes than they were a year
earlier, compared with 14.9 per cent of brand
pack smokers.
"Smokers have been telling us that our new plain
packaging and larger graphic health warnings are putting
Sydney Morning Herald,
them off"
July 22 2013
Australian Health Minister Tanya Plibersek

5. Implementation: One year on
Sales Impact
• A British American Tobacco spokesman,
Scott McIntyre, said there had been no
initial impact on tobacco sales after the
move to unbranded packs.
• Effects may manifest in the long term as
fewer youths pick up smoking
Sydney Morning Herald,
July 22 2013
''The tobacco market has remained stable. Consumers have not
changed their purchasing behaviour”

6. Marketing conclusions
• Companies always have to adapt to changing legal environments and be
conscious of the changing regulatory landscape in different countries of
operation
• A product’s value proposition is enhanced by the brand image and the
lifestyle/qualities associated with it. Therefore removing any of these results
in decrease in perception of value

7. National laws affect marketing strategies:
Media laws against alcohol and tobacco
•
•
•
•
•
•
Alcohol abuse is a longtime problem in Russia, where more than half of all deaths of people
aged 15 to 54 are caused by alcohol
Led to tightening on advertising laws from 2006 - present
It is forbidden to show TV commercials (advertising alcohol and tobacco) before 10 pm
It is not allowed to include people in advertisements of alcohol
Prohibited from advertising tobacco and alcohol on radio, newspaper front pages,
magazines front pages
Prohibited from advertising alcoholic products with above 5% alcohol content

8. National laws affect marketing strategies:
Media laws against alcohol and tobacco
• Short term reaction: Ad boom
to build brand awareness
• Long term reaction: Move to
digital advertising which is less
strictly regulated

9. National laws affect marketing strategies:
Anti-Gay Laws
•
•
On June 30th 2013, Russia signed into law a bill banning the propaganda of nontraditional sexual relations to minors – in effect an Anti-Gay Law
Individuals, public officials and organizations found to be engaging in the “act of
distributing information among minors that
1) is aimed at the creating nontraditional sexual attitudes,
2) makes nontraditional sexual relations attractive,
3) equates the social value of traditional and nontraditional sexual relations, or
4) creates an interest in nontraditional sexual relations
can be found liable and fined

10. National laws affect marketing strategies:
Anti-Gay Laws
• Reaction: growing boycott of Russian
brands in US
• Brand affected: Stolichnaya (Vodka),
founded by a Russian but
headquartered in Luxembourg
• Stoli controls 2.6% share of the U.S.
vodka market by volume

11. National laws affect marketing strategies:
Russia’s Anti-Gay Laws
Facebook media campaign
CEO’s open letter to LGBT community

12. National laws affect marketing strategies:
Patent medicines and generics
• After 10 years, the laboratory looses the patent, which becomes public.
• Laboratories need to adapt their strategy
•
•
•
•
Lower their prices on patent medicines
Start to sell generics
Change their advertising strategy
Create new formulas