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Tobacco Marketing

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Tobacco Marketing. Each year smoking kills more Americans than alcohol, cocaine, ... This butt's for you. Who put the men in menthol? Blow some my way. Fake Slogan? ... – PowerPoint PPT presentation

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Title: Tobacco Marketing


1
Tobacco Marketing
2
  • Each year smoking kills more Americans than
    alcohol, cocaine, crack, heroine, homicide,
    suicide, automobile accidents, fires, Aids
    combinedvictims die more than twenty years
    before the life expectancy of non-smokers
  • US Centers for Disease Control

3
Fake Slogan?
  • Brand X, Define Sophistication
  • Where theres a man theres a Brand X
  • Proof with one puff

4
Fake Slogan?
  • Your throat can tell
  • You deserve this
  • We made Brand X especially for women because
    women are generally different than men

5
Fake Slogan?
  • This butts for you
  • Who put the men in menthol?
  • Blow some my way

6
Fake Slogan?
  • Made gentle for you
  • Gee, mommy you sure enjoy your Brand X
  • Available in two healthy flavors

7
Tobacco
  • Non edible leaf
  • Over 4,000 different gasses, particles,
    compounds
  • Tar
  • Nicotine
  • Carbon Monoxide

8
History
  • Pre-Columbian
  • Columbus
  • Mid-16th Century,Jean Nicot
  • 1612, John Rolfe
  • Virginias Largest Export

9
Health History
  • Early 1900s health risks
  • 1930 linked cancer smoking
  • 1938 knew of shorter life span
  • 1952 Readers Digest Article Cancer by the
    Carton

10
Tobacco Use
11
Toll of Tobacco
12
Tobacco Industry
  • First American Tobacco Ad- 1789
  • Continues to Advertise
  • 4 Billion Annually
  • Campaign Contributions

13
What countries are doing to curb smoking
  • European Union
  • Tobacco Promotions Bill
  • February 2003 advertising on billboards and in
    magazines ended
  • May 2003 in-pack promotions and direct marketing
    ended
  • No advertising on websites
  • Vending machines must eliminate branding
  • Only an actual-size picture of cigarette packs
    are allowed in vending machines

14
What countries are doing to curb smoking
  • European Union
  • New EU product directive
  • Effective October 2003, all cigarettes on retail
    displays must have a health warning
  • Warning shall cover 30 of the pack
  • Prohibits the use of sub-brand name
  • Lights, Mild, Ultra
  • July 2005, all tobacco sponsorships across the EU
    will cease

15
What countries are doing to curb smoking
  • England
  • Bans product giveaways
  • Eliminated coupon activity
  • February 2003, advertising on posters and in
    newspapers and magazines banned
  • February 2004, direct marketing will become
    illegal

16
What countries are doing to curb smoking
  • Canada
  • In March 2002, the Saskatchewan province banned
    product displays in public places where children
    have access
  • Not allowed to advertise brands in the windows of
    retailers

17
What countries are doing to curb smoking
  • Ireland and Iceland
  • Also not allowed to advertise brands in the
    windows of retailers
  • Must keep tobacco products in cupboards, drawers,
    or behind the till
  • Currently there is no legislation for moving the
    cigarettes from behind the counter to underneath
    it

18
What countries are doing to curb smoking
  • South Korea
  • Advertisers are banned by law from marketing
    cigarettes to women or young adults
  • India
  • The cabinet recently approved a bill to ban all
    tobacco advertising
  • Parliament is expected to ratify it soon

19
What countries are doing to curb smoking
Marketing (UK)
20
What the WHO is doing to curb smoking
  • The WHO is urging the film industry to
  • Eliminate smoking from family movies
  • Run strong anti-smoking ads with films that
    include tobacco
  • Not identify tobacco brands within movies

21
What the WHO is doing to curb smoking
  • In May 2003, the WHO adopted a sweeping
    anti-tobacco treaty
  • The Framework Convention on Tobacco Control
    provides a general ban on advertising and
    promotion
  • Health warnings should ideally cover at least
    half of the package
  • Aims to strip tobacco of the cool and glamorous
    image
  • Takes affect after 40 countries have ratified it
    the U.S. is not making the commitment to sign or
    ratify the treaty

Associated Press
22
Differences in cultures and brands
  • South Korea
  • Virginia Slims are definitely a man thing
  • A round of golf at a country club
  • Winning an award
  • Japan
  • Young men Lucky Strike
  • Older Men Kent
  • Women Capri and Virginia Slims
  • Russia
  • While many countries are trying to eradicate
    smoking, in 1990 Russian officials asked for 34
    billion cigarettes to be imported to satisfy a
    shortage

23
Switch Brands, Not Start Smoking
  • British American Tobacco
  • Will continue to advertise at the point of
    purchase
  • Says its marketing is designed not to sell
    smoking
  • Instead, BAT wants to retain customer loyalty
    and win from competing brands

24
Switch Brands, Not Start Smoking
  • The industry as a whole says that advertising is
    about encouraging smokers to switch brands, not
    to take up the habit
  • Industry also says that evidence from countries
    that have introduced marketing restrictions
    suggests that bans do not reduce smoking-related
    deaths

25
Classification???
  • Simple Moral Problem
  • Concentrated benefits
  • Dispersed harm
  • Organizational pressure to perform

26
Adult Numbers
  • 48 million American adults smoke
  • (http//www.cdc.gov/tobacco/30yrsgen.htm)
  • 23 of adults
  • (Washington, 2002)
  • Ninety percent of smokers start in their teens
  • (Washington, 2002)

27
Teen Numbers
  • 28 percent of high school students smoke
  • 5000 children try a cigarette for their first
    time every day
  • 2000 will not be able to stop and become adult
    smokers

28
Why is Teen Smoking on the Rise?
  • Children are 3 times as susceptible to tobacco
    advertising than adults
  • Advertising is a more powerful inducement than is
    peer pressure

29
Teen Marketing
  • 2002 Tobacco industry marketing budget 8.4
    billion per year for the United States
  • 2001, Philip Morris sold more than half of all
    cigarettes consumed in the United States

30
Advertising Trends
  • 2000 Philip Morris spent 216 million on print
    ads
  • 2001 Philip Morris spent 114 million on prints
  • Philip Morris USA comprises 40 of the 261
    million spent in magazines last year

31
Internet Marketing
  • Public Health Cigarette Smoking Act of 1969
  • Master Settlement of 1999
  • Forcing Direct Marketing

32
Internet Marketing
  • More than 200 websites in the U.S. that sell
    tobacco products
  • Well over 200 websites based overseas selling to
    U.S. residents
  • Internet tobacco product sales will account for
    14 of the total U.S. market by 2005

33
Ethical Issues
  • More than 88 tobacco companies in 23 states use
    the Web to sell discounted cigarettes.
  • Internet makes low-cost cigarettes readily
    available to kids
  • Internet makes it easier to evade state taxes

34
Government Solution Strategies
  • Tobacco free internet for kids act
  • HR 2914 Sponsor. Rep. Marty Meehan (D-MA)
    Cosponsor. James Hansen (R-UT)
  • Summary. Bans the sale of tobacco products to
    minors over the Internet, and gives the states
    the power to enforce it in federal courts

35
Government Solution Strategies
  • The Internet Cigarette Warning Label Act
  • HR 3007Sponsor. Rep. Marty Meehan (D-MA) Original
    cosponsor. James Hansen (R-UT)
  • Summary. Extends to the Internet the requirement
    that warning labels be placed on cigarettes

36
Prevent All Cigarette Trafficking (PACT) Act.
  • "Contraband cigarettes contribute heavily to the
    profits of organized crime syndicates,
    specifically global terrorist organizations,"
    stated Hatch..

37
Prevent All Cigarette Trafficking (PACT) Act.
  • "It is clear that cigarette trafficking is
    becoming a method of terrorist financing," Kohl
    said. "This legislation will comprehensively
    combat tobacco smuggling. In reducing cigarette
    smuggling, we will simultaneously help deny
    terrorists a needed source of funding and help
    our financially struggling states collect their
    revenue." . .

38
Corporate Solution Strategies
  • Requires prospective buyers to send another
    adult's signature to the company verifying that
    the purchaser is at least 18 years old

39
Corporate Solution Strategies
  • Requires tobacco buyers to send in a copy of
    their driver's licenses
  • Pay only with a credit card when buying online

40
Corporate Solution Strategies
  • Have an age verification request form that
    requires the name, date of birth, driver's
    license number and state in which the buyer
    resides

41
Are Corporate Solutions Effective?
  • PhilipMorris restricts advertising in
    publications that have over 15 youth readership
  • Stopped advertising on the back covers of
    magazines

42
Top ad icon of the 20th century
43
Food and Drug Administration Conducts
Investigation
  • 1994 - FDA Conducts Investigation Lasting Over a
    Year Researching
  • Role Nicotine Plays in Tobacco Products and
    Patterns of Tobacco Product Usage
  • How Advertising and Promotional Practices Affect
    Childrens Decisions to Use Tobacco Products

44
FDA Publishes Proposed Rule - Accepts
Recommendations
  • August 10, 1995 - FDA Proposed to Regulate
    Tobacco Products
  • August 11, 1995- FDA's Proposed Rule Published in
    Federal Register
  • August 12, 1995 - January 1996 - FDA Accepted
    Comments on Proposed Rule
  • Responses Received From Tobacco and Advertising
    Industries, Medical and Public Interest Groups,
    and Individuals

45
FDA's Final Rule on Tobacco - Federal Register
- August 1996
  • FDA Will Regulate Sales and Distribution of
    Cigarettes and Smokeless Tobacco to Children and
    Adolescents
  • Resulted From Agency's Assertion of Jurisdiction
    Over Tobacco Products
  • Based on an Intensive FDA Investigation of the
    Tobacco Industry, Tobacco Use and Its Health
    Consequences

46
FDA's Final Rule on Tobacco - Federal Register
- August 1996
  • FDA Assumed Jurisdiction Over Tobacco Products
    Based on Data Collected About Addictive
    Properties of Nicotine
  • Age at Which Nicotine Addiction Begins and Its
    Consequences Suggested Regulation Needed to
    Protect Children

47
FDAs Final Rule - Restricting Access to
Cigarettes
  • Federal Violation to Sell Cigarettes and
    Smokeless Tobacco if Under 18 Years Old
  • Retailers Must Check ID if Under 26 Years
  • Establishes Minimum Package Size of 20
  • Bans Most Vending Machines (Adult Only)
  • Bans Self Service Displays to Reduce Theft
  • Prohibits Free Samples

48
FDAs Final Rule - Reducing Advertising to Youths
  • Limits Tobacco Advertising to Black White, Text
    Only Format in All Existing Media Forms
  • Outdoor Advertising Prohibited Within 1000 Feet
    of Public Playgrounds or Schools
  • Restrictions of Logos on Promotional Items
  • Sponsorships May Not Include Brand Names

49
FDAs Final Rule - Youth Education on Health
Risks
  • FDA Proposed to Require Tobacco Industry
    Establish and Fund a National Program to Educate
    Children on Effects of Tobacco Usage

50
FDAs Final Rule - Additional Items
  • FDA Proposed to Take Additional Action if
    Significant Reduction of Youth Tobacco Usage Not
    Met Within 7 Years
  • Removed from Final Rule, FDA Will Monitor
  • Federal Laws Preempt State or Local Laws

51
FDAs Final Rule -Implementation
  • Most Provisions Went Into Effect One Year After
    Final Ruling
  • Two Exceptions
  • Within 6 Months, Retailers Enforce 18 Year
    Minimum Age Requirement and Check IDs
  • Tobacco Companies Had 2 Years to Enforce the
    Sponsorships Provision to Honor Pending Contracts

52
FDAs Final Rule -Economic Impact
  • Expect Rule to Produce 28 - 43 Billion in
    Health Related Benefits per Year
  • Will Impose One-Time Cost of 174 - 185 Million
  • Recurring Annual Operating Costs of 149 - 185
    Million

53
Discussion Points
  • Is Ruling Equitable to All Concerned?
  • Tobacco Companies
  • Health Advertising Industries
  • State Local Governments and General Public
  • Discuss Proposed Economic Impact in Relation to
    Other Industries
  • Tobacco Farmers, Distribution Channels, etc.

54
FDA Final Rule - Resulting Legal Decisions
  • April 1997 - Federal Judge Affirmed FDA Authority
    Over Tobacco Products
  • August 1997 - Both Tobacco Industry and US Dept.
    of Justice Appealing Provisions
  • Validity of FDA Jurisdiction
  • Reducing Youth Access to Tobacco Products
  • Marketing Tobacco Labeling Restrictions
  • First Amendment issues for Marketing Restrictions
    (US Supreme Court)

55
Tobacco Industry Legal Settlement With States
  • 1998 - Tobacco Companies Signed Legal Settlement
    with States
  • Settlement Ended Lawsuits Filed by 40 States
  • Tobacco Industry agreed to pay 246 billion over
    25 years and limit marketing
  • Have since increased their marketing expenditures
    by 42 to 9.6 billion
  • Much new advertising is effective at reaching kids

56
Pending Federal Lawsuit
  • September 1999 - Federal Government Filed Lawsuit
    Against Nation's Major Tobacco Companies
  • Legally accountable for deceiving public about
    health risks of smoking
  • Addictiveness of Nicotine
  • Marketing to Children
  • Federal Budgeting Delays - Trial Scheduled to
    Begin July 15, 2003

57
Pending Class Action Legislation
  • Pending State Class Action Bill Would Protect
    Tobacco Companies
  • Could Move State Class Action Suites to Federal
    Courts - People Lose Right to Have Cases Heard
    in Federal Court
  • More Difficult for Consumers to Successfully
    Litigate Class Actions - Clog Federal Courts
  • State Level Class Actions Effective at Holding
    Tobacco Companies Accountable

58
Discussion Points
  • Are the Tobacco Companies Acting Ethically in
    Regards to Their Legal Agreements?
  • Are Consumers, Specifically Children, More or
    Less At Risk From Tobacco Addiction Than They
    Were Ten Years Ago?

59
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