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Tobacco Marketing


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

Tobacco Marketing
  • 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

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

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

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

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

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

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

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

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

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
  • No advertising on websites
  • Vending machines must eliminate branding
  • Only an actual-size picture of cigarette packs
    are allowed in vending machines

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

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

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

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

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

What countries are doing to curb smoking
Marketing (UK)
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

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
  • Health warnings should ideally cover at least
    half of the package
  • Aims to strip tobacco of the cool and glamorous
  • Takes affect after 40 countries have ratified it
    the U.S. is not making the commitment to sign or
    ratify the treaty

Associated Press
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

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

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

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

Adult Numbers
  • 48 million American adults smoke
  • (http//
  • 23 of adults
  • (Washington, 2002)
  • Ninety percent of smokers start in their teens
  • (Washington, 2002)

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

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

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

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

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

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

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

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

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

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

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." . .

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

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

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

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

Top ad icon of the 20th century
Food and Drug Administration Conducts
  • 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

FDA Publishes Proposed Rule - Accepts
  • 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

FDA's Final Rule on Tobacco - Federal Register
- August 1996
  • FDA Will Regulate Sales and Distribution of
    Cigarettes and Smokeless Tobacco to Children and
  • 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

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

FDAs Final Rule - Restricting Access to
  • 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

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

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

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

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

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

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.

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)

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

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

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

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?