Tobacco Marketing - Types of Advertisement & Advertising Expenditures - Marketing Research Project

1. MARKETING
RESEARCH PROJECT
TOBACCO MARKETING
TYPES OF ADVERTISEMENT AND
ADVERTISING EXPENDITURES

2. it is not the strongest of the species that survives
nor the most intelligent that survives.
it is the one that is the most adaptable to change
i found out that if you are going to win games
you had better be ready to adapt
“
“

3. despite restrictions on cigarette advertising from
federal legislation adopted in 1969 and
from the 1998 Master Settlement Agreement (MSA),
cigarette marketing expenditures have increased substantially
in 2005 the expenditure on tobacco advertising and promotion in the U.S. was
$13.5 billion (in 2006 USD)
since 1981, even though cigarette consumption and sales in the U.S. have declined,
tobacco industry expenditures on advertising and promotion have grown 10 times
shifting dramatically from traditional print advertising to promotional activities
(primarily price discounting)

4. tobacco industry mastered and previously dominated
nearly all forms of communications media
during the past 100 years

5. The Importance of Tobacco Advertising
TOBACCO MARKETING
the extent of tobacco advertising and promotion is important for several reasons:
2. may affect social norms
concerning tobacco use
impact might be measured as:
 brand recognition
 attitudes toward smoking
 smoking behaviour
1. is likely to correlate with
the impact of media communications
the pervasiveness and wider exposure of tobacco advertising and promotion

6. the ubiquity and familiarity of tobacco advertising and promotion may
contribute to an environment in which tobacco use is perceived by users
to be socially acceptable, or at least less socially objectionable and
less hazardous than it is in fact
“

7. Types of Tobacco Advertising and Promotion
audiovisual
direct mail
internet other
company
website
magazines
endorsements
and
testimonials
newspapers
outdoor
price discounts
promotional
allowances
retail
promotional
allowances
wholesale
public
entertainment
adult only
public
entertainment
general
retail value
added bonus
tobacco
products
retail value
added bonus
non-tobacco
product
sampling
distribution
specialty item
distribution
branded
specialty item
distribution
non-branded
sponsorships
telephone
sampling
distribution
television
and
radio
transit
coupons
point-of-sale
advertising
other
classification system of advertising and promotion expenditures (with particular reference
to the tobacco industry) developed by the FTC in order to avoid double counting of expenditures

8. INDIRECT MARKETING

9. Indirect Advertising
brand sharing or brand stretching
refers to the application of cigarette brand names, logos, or other distinctive
elements of cigarette brands (and their ads) to nontobacco products
TOBACCO MARKETING
a form of trademark diversification often used by manufacturers
where partial advertising bans are in force
 Camel boots with virtually identical ads to Camel
cigarettes were introduced after a cigarette advertising
ban in Norway (1975)
 Camel boots were introduced in Finland after a ban on
direct tobacco advertising (1976)
 Camel Trophy “adventure boots” were introduced in
Turkey, after a ban on tobacco advertising (1997 )

10. BRAND STRETCHING

11. Established as Marlboro Country
Store, the brand later changed name
to Marlboro Sportswear, then became
Marlboro Classics and MCS in 2013.
Marlboro Country Store (magazine advertisement)

12. abstracts
Marlboro Country Store Launch Review (1994)
source:
http://tobaccodocuments.org/pm/2041850118-0331A.html?start_page=1&end_page=870

13. abstracts
Marlboro Country Store Launch Review (1994)
source:
http://tobaccodocuments.org/pm/2041850118-0331A.html?start_page=1&end_page=870

14. abstracts
Marlboro Country Store Launch Review (1994)
source:
http://tobaccodocuments.org/pm/2041850118-0331A.html?start_page=1&end_page=870

15. Camel store (before rebranding)
Marlboro store (before rebranding)

16.  Camel scooters
 Benson & Hedges Bistro
in Kuala Lumpur, Malaysia
 Marlboro and Camel lighters
 L&M and Pall Mall matches
 Bastos cassettes (introduced in
Belgium after the enactment of
advertising ban in 1982)
other examples

17. links to TV commercials
http://youtu.be/x5DsX0oYREg ; http://youtu.be/dIp1FE41tpE;
http://www.ina.fr/economie-et-societe/vie-sociale/video/PUB3784066093/peter-stuyvesant-travel-voyage-marque-cigarette.fr.html
Peter Stuyvesant Travel
was launched in France following the tobacco advertising restrictions in 1976

18. links to TV ads:
http://youtu.be/qLjaWjLL-fM;
http://youtu.be/cRzbNASFs1E;
http://youtu.be/IEItOBG0r2g
the TV advertisement employed the same imagery and the same
actor as the cigarette brand commercials with the prominently
displayed logo of the tours resembling the cigarette label
Camel Adventures
travel tours in Sweden, after tobacco advertising was restricted in 1979

19. Logo Licensing
TOBACCO MARKETING
R.J. Reynolds (RJR) France documents
“Communication Strategy and Strategic Plan 1992–1996” and
“Worldwide Brands, Inc. Strategic Plan 1993–1997”
describe how to circumvent legal restrictions by promoting nontobacco
products and services bearing the Camel and Winston brand names
“Compared to most competitors, RJR France seems better
prepared to successfully confront the new legal restrictions
thanks to a larger number of available logo licensing activities
(Camel Trophy watches, Camel boots, Camel collection/shops,
Winston wear) allowing a satisfactory communication
continuity behind [the] Camel and Winston [brands].

20. Davidoff brand branch out
The "Oettinger-Davidoff Group" informally
designates a number of Swiss-based
companies that all have in common the use
of the Davidoff trademark. While the group's
parent company is Oettinger Imex AG in
Basel, its center of gravity is the Geneva-
based Davidoff & Cie SA tobacco
company, which manages the Davidoff
trademark on behalf of the group's
members.
After its acquisition of the Davidoff cigarette
trademark in 2006, by far the most
important asset of the group, for over half a
billion Euros, the multinational Imperial
Tobacco has become the driving element of
the group, although its profile within the
group is kept very low scheme that very
effectively promotes the Davidoff so as not
to attract attention to a trademark promotion
and diversification brand worldwide.
source:
http://www.davideathswissindoors.ch/index.php?option=com_content&view=article&id=19&Itemid=41&lang=en
“

21. Davidoff brand branch out
Davidoff brand
Imperial Tobacco acquired the worldwide Davidoff Cigarettes trademark from its owners,
Tchibo Holding AG for £368 million in 2006. Imperial Tobacco Group had been the licensee
of the worldwide Davidoff Cigarettes trademark since its acquisition of Reemtsma in 2002.
the Oettinger Davidoff Group owns the worldwide Davidoff trademark for tobacco products
other than cigarettes. Davidoff cigars continue to be produced in the Dominican Republic,
under the direction of cigar blender Heinrich "Henke" Kelner
beyond tobacco products, Davidoff has expanded to include under its brand such items as
pipes, humidors, watches, neckties, wallets, briefcases, pens, cognac, coffee and cologne
link to slide presentation related to Davidoff Brand Stretching:
the content to be double-checked: http://www.slideshare.net/OliverKuhn/davidoff-a-lifestyle-brand
Zino Davidoff brand

22. alibi advertising
brand stretch into lifestyle categories
source: Davidoff Strategic Brand Review
http://www.davideathswissindoors.ch/docs/20020000-bat-davidoff-strategic-brand-review.pdf
link to slide presentation related to Davidoff brand stretching:
http://www.slideshare.net/OliverKuhn/davidoff-a-lifestyle-brand
successful Davidoff TMDs such as
Cool Water and Goodlife fragrances as well as
Davidoff Coffee were developed to create alibi
advertising opportunities for the brand.
these have made ATL market communication possible
even in dark markets such as Germany and Taiwan
“
“

23. source: Davidoff Strategic Brand Review
http://www.davideathswissindoors.ch/docs/20020000-bat-davidoff-strategic-brand-review.pdf
abstracts
Davidoff Strategic Brand Review

24. Davidoff perfume
print advertisement
Davidoff brand stretching
Davidoff cigarettes
print advertisement
similar imagery, tones and style shared across
tobacco and nontobacco brands
the sophisticated cursive Davidoff logo was
used for both tobacco and non-tobacco
products until 2005, when the Davidoff group
separated the two branches. A new, Roman
letter type, logo was introduced for the non-
tobacco products, probably to make it less
obvious that the non-tobacco products were a
marketing device using brand stretching for
the promotion of the Davidoff cigarette
trademark, as is stated in the BAT report

25. the brand expanded into perfumes, leather
goods and accessories in the 1980s.
the first fragrance introduced by the company
was Davidoff for Men in 1984
Cool Water later advertisement version
Davidoff brand stretching
Cool Water earlier advertisement version
earlier version later version

26. Davidoff brand stretching
similar cigarettes and coffee packaging (see the link to the strategic brief referenced earlier)
coffee
cigarettes

27. Zino Davidoff (website screen shot): product categories
Davidoff brand stretching

28. similar cigarettes and coffee packaging (see the link to the strategic brief referenced earlier)
Davidoff brand stretching
Davidoff cigarette packaging
Davidoff cosmetics giftbox Davidoff perfume advertisement

29. similar concept in packaging design and advertising across the different product categories
Davidoff brand stretching
Davidoff cigarette packaging
Davidoff cosmetics giftbox Davidoff perfume magazine advertisement

30. Lifestyle branding and brand immersion
Davidoff brand stretching
Davidoff Lounge, Shanghai Davidoff Lounge, Beijing
Davidoff Shop

31. facts
initial research shows that the nontobacco product or service advertising
is consistently seen as advertising for the sponsoring tobacco brand,
while 15-year-olds’ awareness of brand stretching is
independently associated with being a smoker
thus, indirect advertising serves as a powerful tool for
maintaining a product brand identity,
particularly in the absence of traditional promotional channels

32. PACKAGING AS A MARKETING TOOL

33. Advertising on the Package
The visibility of cigarette packaging makes it an important advertising vehicle
because:
 it is not discarded after it has been opened, but is opened each time
a cigarette is removed.
 smoking often occurs in a public place and is part of the smoker’s self-image
 it does not fall within any of the FTC’s categories of advertising and promotion thus the
expenditures for this marketing vehicle are not reported to the FTC
TOBACCO MARKETING
the “face” of the product being sold, packaging is and has always been an
important part of advertising and promotion considerations

34. the value of packaging
The primary job of the package is to create a desire to purchase and try.
To do this, it must look new and different enough to attract the attention of the
consumer.”
Liggett & Myers report (1963)
Some women admit they buy Virginia Slims, Benson & Hedges, etc.
when they go out at night, to complement a desire to look more feminine
and stylish.…
Women are a primary target for our innovative packaging task.
Philip Morris’s comment
regarding its efforts to target women
“
“

35. cigarette packs designed to resemble bottles of perfume or
with lids that flip open like a lighter aiming to draw attention
and make the act of smoking more attractive

36. Designer Packaging
Vogue Ephemere’s packaging
spring-summer collection 2009
by Etienne Bardelli aka Akroe,
launched in Russia
the packaging uses distinctive
visual illusion patterns
Etienne Bardelli aka Akroe is a French
postgraffiti scene artist and designer
www.etiennebardelli.com
TOBACCO MARKETING
there has been an increased number of collaborations with designers for
launches of special collections or limited editions packaging designs

37. previous art edition of Vogue Ephemere Azur &
Vogue Ephemere Topaze created by the
French designer Jean-Pierre Ollier
http://www.atelierjpollier.com/
the packaging was inspired by
an African safari motif
TOBACCO MARKETING
Designer Packaging

38. ‘Unveiling an inspiration’, a limited edition
range of Vogue: Bleue, Lilas & Menthe,
launched by BAT (2007)
the packs featured the paintings of Russian
modern artists: Maria Pogorjelskaya, Anna
Platonova, and Olga Polikarpova , thus linking
the brand to associations with modern culture
and fine art
TOBACCO MARKETING

39. Pall Mall Nanokings
BAT’s new brand offer
on the Russian market
revamped Dunhill packaging by BAT
(2009), initial launch in Russia
4 versions:
Dunhill Red, Dunhill Blue,
Dunhill Gold and Dunhill White
the relaunch was to be supported
in press, instore and by on-trade initiatives
TOBACCO MARKETING
new refreshed design for Pall Mall Super Slims
packs by BAT (2009); first market Russia
4 variants: Blue, Amber, Menthol and Aromatic

40. Sobranie brand, JTI new line of
cigarettes
first presented at a special event
Sobranie Millionaire Fair (2009)
Kent promotional packaging received
iF Communication Design Award 2009
the promotional cigarettes pack was
designed for BAT Hamburg and aimed to
promote the brand on the Austrian market

41. colours on packaging,
like the colours in traditional advertising,
contribute to brand image
the hue and density of the colours applied within a brand family
follow a natural spectrum of intensity,
with the lightest colours matched to the ‘lightest’ brand cigarette
package design can be an important feature of in-store advertising

42. Packaging Accessories
TOBACCO MARKETING
packaging accessories provide yet another channel for advertising imagery
Philip Morris introduced a plastic
outer cover for Marlboro cigarette
packs in Hong Kong, featuring a
series of images of the Marlboro
cowboy
special packaging cigarette tin can
with a zipper for Gauloises Gauloises
Blondes (an actual pack)

43. facts
tobacco packaging has been shown in general to both
reinforce brand imagery and reduce the impact of health warnings
it plays a role in product branding and
is used effectively in policy interventions designed to counter the desirability of smoking
conversely, when fewer brand image cues appear on the packaging,
adolescents are able to recall non-image health information more accurately.
thus, plain packaging limits the ease with which consumers associate particular images
with cigarette brands and significantly influences smoking behaviour

44. VIRAL MARKETING

45. Viral (Stealth) Marketing
the advertiser creates an environment in which
the idea can replicate and spread like a virus and
does the work, not the marketer
TOBACCO MARKETING
tobacco marketers have been increasingly used
viral (buzz, stealth, guerilla) marketing strategy
examples
 pay people to talk to their friends
about a product
 infiltrate a chat room
 commission footpath graffiti
 create web sites or sponsor events that support
a product but without overt brand imagery

46. as a marketer, you hope to have
your consumer do your marketing for you,
it is credible, less expensive, and enormously believable
Sharon Smith
Director of Lucky Strike
“

47. examples
“Lucky Strike Force” was developed by Brown & Williamson Tobacco Corp. and Bates ad
agency to reinvigorate the brand and create buzz
with a teaser ‘Send Up a Smoke Signal, and We’ll be There’ the concept for the initiative
was based on attractive couples working trendy neighbourhoods such as Miami’s South
Beach, New York’s Soho, and Santa Monica, California, offering hot coffee and cell-phone
calls to shivering smokers in winter or iced coffee and lounge chairs in spring and summer.
British American Tobacco (BAT) developed an independent web site featuring BAT retailers
who appeared to offer independent advice on nightlife to young people; the youth are
directed to bars, clubs, or restaurants where BAT cigarettes are being sampled or promoted

48. Trend Influence Marketing
alternative press: free periodicals with “hip credibility” distributed in trendy nightclubs, stores
and coffee houses frequented by the club crowd
a sampling of two prominent alternative weeklies (San Francisco and Philadelphia) found
a dramatic increase in tobacco advertising from 1994 to 1999. the number of ads increased:
 from 8 to 337 in the San Francisco weekly
 from 8 to 351 in the Philadelphia weekly
in addition, smoking “hipsters” were recruited clandestinely (from the bar and nightclub
scene) to surreptitiously sell tobacco products to unsuspecting young adults in bars
and elsewhere
TOBACCO MARKETING
part of viral (stealth) marketing, this approach involves an alliance among the
tobacco industry, the alternative press, and bars and nightclubs

49. source: Camel Cigarettes Trend Influence Marketing Program document
http://legacy.library.ucsf.edu/tid/hgz82d00/pdf;jsessionid=92B18F79AE88AE14A2D5A8BAA4BBAC07.tobacco03
abstracts
Camel Trend Influence Marketing Program

50. INTERNET MARKETING

51. Internet Marketing
TOBACCO MARKETING
expenditures associated with
advertising on any of the tobacco
company’s Internet Web sites
1. COMPANY WEB SITE 2. INTERNET OTHER
expenditures for Internet advertising
other than on the company’s own
Web site (incl. World Wide Web,
commercial online services, and
through electronic mail messages
FTC requires tobacco manufacturers to report to the agency their expenditures on
advertising and promotion, according to several categories, two of which pertain to the
Internet

52. 1996-2001 there was only one (combined)
category for Internet expenditures in the U.S.
the major cigarette companies’ expenditures
for Internet advertising during that period were:
$432,000 (1996); $215,000 (1997)
$125,000 (1998); $651,000 (1999)
$949,000 (2000); $841,000 (2001)
Stark Statistics
TOBACCO MARKETING
U.S.A.
the proportion of Internet users reporting
exposure to online tobacco product advertising
increased from 6.9% (2001) to 15.6% (2002)
to 17.8% (2005)
a survey of New Jersey adults
Russia
27% increase in the number of protobacco
websites on the Russian-speaking Internet
since 2004 (most of these violated advertising
norms such as age restrictions)
13th World Conference on Tobacco or Health (July, 2006)
the companies reported a 285% increase in
spending for advertising on company websites
from $940,000 (2002) to $2,675,000 (2005)

53. VIDEO GAMES

54. Video Games
the average gamer is 29 years of age, with younger audiences, in particular, regarding
video games as a more important form of entertainment than television
 males aged 18–34 years now spend as much time with video games as with television
(Nielsen Media Research data)
 in 2003–2004 there was a significant drop in television viewership among young males
seemingly in favour of video games (Nielsen data)
 video games have become a significant part of the advertiser’s media planning
strategy attracting such brands as McDonald’s, PUMA, P&G, AT&T Wireless, Nokia,
Coca Cola’s Sprite, etc.
TOBACCO MARKETING
sales for some of the popular video games surpass the movie box office

55. MSA bans:
payment or other consideration to promote tobacco products in any motion
picture, television show, theatrical production or other live performance, live
or recorded performance of music, commercial film or video, or video game
however, some games have incorporated or featured tobacco products:
TOBACCO MARKETING
 The Chronicles of Riddick: Escape from Butcher Bay (rated M), cigarettes are used
as a reward, with each pack revealing some aspect of a new related Riddick movie.
Cigarettes are made to seem “cool” and the cigarette warning labels are mocked
 in Halo 2 (rated M), one of the most popular video game for the Xbox game console
for almost two years after its debut in November 2004, a character named Sergeant
Major Avery Johnson smokes a cigar and discarded cigars are featured
“

56. a survey of gamers 12–36 years of age found that 70% thought ads in
video games would greatly enhance the quality and realism of the gaming
experience and indicated they would feel more positive about a brand or
product advertised in a video game
a 2004 Activision and Nielsen Entertainment survey of nearly 1,000 males
aged 18–34 years found that 52% of “heavy gamers” like games to contain
real products and 35% of male gamers agree that advertising in video
games helps them decide which products to buy

57. PAID PRODUCT PLACEMENT

58. Paid Placement of Tobacco Products in Movies
this can occur in exchange for:
 promotional fees (product placement) or
 as an artistic (non-commercial) decision made by producers
TOBACCO MARKETING
the portrayal of tobacco use and the appearance of tobacco products,
brand names, and brand imagery in movies and other entertainment media
research shows a strong link between the placement of cigarette products
in films and on television with adolescent smoking

59. Philip Morris products were placed in more than 191 movies between 1978 and 1988:
 48 were rated PG
 10 were PG-13
 91 were R (nearly one half)
 1 was G (The Muppet Movie)
among these were hits like Grease, Rocky II, Airplane, Crocodile Dundee, Die Hard, etc.
Philip Morris paid $350,000 exclusive placement of Lark cigarettes in License to Kill and
£ 20,000 for a placement of Marlboro in Superman II
examples

60. R.J. Reynolds executives:
Our primary objective will remain to have
smoking featured in a prominent way,
especially when it is tied to celebrities.”
Cigars. General Cigar Company, Inc. placed its’
products on the television shows Friends,
Baywatch, Mad About You, Spin City, Suddenly
Susan, and Third Rock from the Sun for
$27,000
examples
“

61. Restrictions on Cigarette Placements in Movies
1990: the Cigarette Advertising and Promotion Code introduced a voluntary ban
on paid product placement in the United States; however, the ban did not
include a prohibition on providing free products, signs, or other props
the MSA provided legal backing for the ban on paid product placement of any
type, including paid placement in motion pictures and commercial films or
videos
TOBACCO MARKETING

62. Taken (2008)
(incomplete and incorrect Marlboro logo)
The Last International Playboy (2008)
(blurred label – similar logo and colours)
Domino (2005)
(some of the box labelling is missing)
The Departed (2006)
(no visible label)
examples

63. a study on tobacco scenes appearance in movies
released during 1990–2002 found
 62 brand exposures in 395 high-revenue Bollywood movies
 16%, each exposure occurred in a different film
another similar study in a random sample of 110 Hindi movies
released in 2004 - 2005 found that:
 98 (89%) of the movies contained tobacco scenes
 74 (67%) showed the main protagonist using tobacco
 30 (27%) trivialized or mocked the dangers of tobacco use
 45 (41%) of the movies displayed a specific brand of tobacco or
included a verbal mention of the brand name
 more than 90% of brand appearances were for cigarettes made by
Philip Morris (Marlboro) or ITC (Wills and Gold Flake)
circumstantial evidence suggests that paid placement of tobacco products is occurring
in India, which has the world’s largest motion picture industry (including Bollywood) and
in Nigeria, whose film industry (Nollywood) has become the world’s third largest
the increase in brand exposures in movies released in 2004–2005 suggests
the tobacco industry efforts to circumvent the Cigarettes and Other Tobacco Products Act,
2003, which banned all forms of direct and indirect tobacco advertising as of 2004

64. Stark Statistics
the movie exposure reach in India:
 produces about 1,000 films a year (1/4 of the global film production by volume)
 in more than 8 languages
 seen by more than 188 million persons each year
 15 million people watch a Bollywood film each day
 cable and satellite TV feature more than 10 movie channels showing movies
 4 of these channels show 5–10 movies per week reaching 60%–70% of the cable and
satellite audience each week
 pirated copies in India are viewed an estimated 230,000 people each day
 mainstream Indian films target an estimated 250 million youth in India, and the films
appeal to millions of diaspora Indians abroad
TOBACCO MARKETING
tobacco scenes exposure and movie industry reach

65. Shift in Emphasis to In-Store Promotion
tobacco industry has shifted its resources from advertising in measured media to
promotion in and around stores, particularly convenience stores.
about 60% of all cigarettes sold in the U.S. are purchased in convenience stores
a national U.S. study covering 3,000 retail outlets examined the presence of tobacco
point-of-purchase advertising in 1999:
 92% had some form of tobacco point-of-purchase advertising.
 80% (4 of 5) had interior tobacco point-of-purchase advertising.
 69% had at least one tobacco-branded functional item
(e.g., counter change mats or shopping baskets)
 36% had self-service cigarette pack placement
 25% had multipack discounts
TOBACCO MARKETING
importance of convenience stores to the cigarette industry

66. SHIFT IN ADVERTISING EXPENDITURES

67. TOBACCO MARKETING
Expenditures on Advertising and
Promotion for Cigarettes
from 1940 to 2005, the tobacco industry spent about $250 billion on cigarette
advertising and promotion (in the U.S.) averaging more than $10 million per day
in 2005, the last year for which figures are available in the study used,
the industry spent just over $13.5 billion or $37 million per day

68. CIGARETTE ADVERTISING AND PROMOTIONAL EXPENDITURES IN THE U.S.
1970–2005 (IN MILLIONS OF USD)
since the MSA, the rate of increase has climbed
dramatically, with the total almost doubling
from $7.1 billion 1997 (just prior to the settlement
coming into effect) to $13.5 billion in 2005
Figure 1

69. CIGARETTE ADVERTISING AND PROMOTIONAL EXPENDITURES IN THE U.S.,
2005 (IN MILLIONS OF USD)
the marketing expenditures
(advertising and promotional)
based on the definitions
provided earlier are detailed
in the table
“price discounts” category
accounts for the most part of
the percentage of advertising
and promotional expenditures
77.3% (2004); 74.6% (2005)
Figure 2

70. Why Discount is Effective for Cigarettes
 smokers’ are sensitive to cigarette prices (especially the young population groups)
 the price elasticity of demand for cigarettes is –0.3 to –0.5, (a 10% increase in price
will reduce overall cigarette consumption by 3%–5%)
 studies indicate that adolescents and young adults are 2 to 3 times more sensitive to
cigarette price than are adults
 there is evidence indicating greater cigarette price sensitivities among low-income
persons, less-educated persons, and minority populations
TOBACCO MARKETING
the predominance of price discounts among the cigarette industry’s marketing
activities is due to following reasons:
price-discount promotions (make cigarettes more affordable) tend to increase cigarette
sales and undercut the impact of cigarette tax increases on cigarette consumption

71. CIGARETTE ADVERTISING AND PROMOTIONAL EXPENDITURES IN THE U.S.
1995–2005 (IN BILLIONS OF USD)
Figure 3

72. CIGARETTE ADVERTISING AND PROMOTIONAL EXPENDITURES IN THE U.S.
1970–2005, WITH EMPHASIS ON ADVERTISING VS PROMOTION (IN MILLIONS)
there has been a dramatic shift in the pattern of marketing expenditures: from 82%
(1970 ) allocated for advertising in “measured media” to almost 0% (2005).
the percentage of marketing expenditures devoted to promotional activities increased
during this period, from 18% to almost 100%.
Figure 4

73. ADVERTISING-TO-SALES RATIOS (EXPRESSED AS PERCENTAGES) FOR
SELECTED PRODUCT CATEGORIES, 1975–2006
the relatively low ranking for
cigarettes is likely related to
the cigarette industry’s
movement of its marketing
expenditures into
promotional activities during
the past few decades
Figure 5

74. other cigarette companies were not among the 100 leading national advertisers in 2005,
probably because of:
 the shift of the cigarette industry’s marketing efforts from advertising in measured
media to promotional activities
 the increasing market share and advertising “share of voice” of Altria/Philip Morris
in 2005, Altria Group was
the 20th leading advertiser in the U.S.,
spending $1.49 billion on advertising that year
($1.53 billion in 2006 dollars)

75. since 1976, Philip Morris has consistently committed
more than $100 million per year to advertising for
Marlboro, the industry’s dominant brand
the Marlboro brand had 40% of the market and Philip
Morris brands overall had 50% of the market (2005)

76. GLOBAL BRAND EQUITY FOR LEADING BRANDS
2006 (IN BILLIONS OF USD)
another metric in measuring the success of the
advertising and promotional efforts for Marlboro
in 2006, the Marlboro brand was estimated to be
worth $21.35 billion in brand equity:
the 12th most valuable brand worldwide
Figure 6

77. BRANDZ TOP 100 MOST VALUABLE GLOBAL BRANDS 2011,
MILWALD BROWN
Marlboro brand was ranked as the 8th most valuable
brand worldwide in a report in the BRANDZ Top 100 Most
Valuable Global Brands in 2011
Figure 7

78. SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY, 2005 (IN MILLIONS OF USD)
FTC’s 2007 report provides detailed data
on expenditures of the total amount spent
on advertising and promotion of smokeless
tobacco in 2005: $258.9 million:
 price discounts ($102.9 million, 40%),
 coupons ($29.5 million, 11%),
 sampling ($29.1 million, 11%).
 point of sale ($21.4 million, 8%),
 magazines ($21.7 million, 8%).
Figure 8

79. MARKETING RESEARCH PROJECT
TOBACCO INDUSTRY
TYPES OF ADVERTISEMENT AND ADVERTISING EXPENDITURES