POINT OF SALE CIGARETTE MARKETING potx

1 POINT OF SALE CIGARETTE MARKETING An important tobacco industry strategy Stacy Carter MPH (Hons) BAppSc The University of Sydney Funded by an Australian Postgraduate Award US National Institutes of Health R01CA87110 Australian National Health and Medical Research Council 153857 Outline ÜSources ÜAustralia and Canada ÜIndustry response to serious marketing restrictions ÜEvidence that the retail environment is important to the tobacco industry ÜImplications Cette présentation a été effectuée le 18 mai 2005, au cours de la conférence scientifique « Enjeux actuels et tabagisme ». L'ensemble des présentations de cette conférence est disponible sur le site Web de l'Institut national de santé publique, à l'adresse http://www.inspq.qc.ca/pdf/publications/387_EnjeuxActuelsTabagisme.asp. 2 Tobacco industry document sources Other sources 3 Australia and Canada "Australia is one of the darkest markets in the world it probably is the darkest, I mean ourselves and Canada fight every month for who’s got the darkest conditions to do tobacco manufacturing and marketing. And one of the things we can offer the world is what we do best, which is how to work, maximize, proactively drive our market position in a market that’s completely dark. Now that takes a different skillset a different type of learning we know we have a lot of expatriates who come down to Australia for learning they can come here and learn these techniques and take them back to Europe or Latin America or to the United States or to Africa " David Crowe, Marketing Director, British American Tobacco (BAT) Australia BATES 2048148837/8989 4 “Within the present restricted marketing environment, we will develop programs to maximise the impact of remaining advertising opportunities and continue to research innovative new techniques.” Philip Morris Asia/Pacific Three Year Plan 1992- 1994 BATES 2500064000/4226 Philip Morris 1991 original budget: Marketing Presentation. October 1990 Bates No. 2504107139A/7171 The priority is continuing to foster relationships between consumers and brands ‘‘Going out and directly contacting our key target consumer is becoming increasingly more important, particularly in light of the upcoming media ban… we must now talk to the consumer face to face…’’ 5 Ü Retail marketing Ü Altering the pack Ü Event promotions Ü Advertising in imported international magazines Ü Sponsorships Ü Brand stretching Ü Lifestyle premiums Ü The development of corporate websites Marketing activities after bans Does retail marketing make any difference? Ü Limited research on the retail environment Ü Effects are difficult to measure because retail marketing happens in the context of other tobacco industry and tobacco control activities Ü Many studies poorly designed Ü Studies associate self-reported exposure to retail marketing in young people with tobacco use or attitudes, studies of opinions of the effects of POS Ü Although marketing research tends to be poorly detailed or very expensive, it makes great claims for effectiveness of retail marketing Ü Thus industry documents provide valuable evidence 6 What do the industry documents say? Ü After regulation of marketing, point of sale marketing became even more important to the industry Philip Morris Australia Aug 1995 Bates 2071284487/4490 7 Other research Ü US: As regulation increases, the tobacco industry puts most of their money into the retail environment (e.g. post MSA) Ü US: Expenditure in the retail environment is growing – approximately 80% of marketing expenditure is retailer incentives Ü Canada: data released under Access to Information by Health Canada shows rising retail marketing expenditures – most recently $90m in the 2003-4 financial year What does the tobacco industry do for retailers? ÜTrade promotional expenditure ÜIn-store display hardware and assistance with POS marketing ÜCorporate advertising and alliance building ÜBrand advertising direct to retailers ÜA new, innovative electronic distribution system 8 Trade Promotional Expenditure ÜRetailer rewards and loyalty programs ÜRebates and price supports Other research ÜUS: Industry spend at retail increases levels of cigarette advertising and decrease prices 9 Display hardware and advice ÜThe point of sale (POS) display has become a life-or-death marketing issue ÜSales reps provide assistance with all aspects of retail marketing, including designing the stock selection and display to match the shop’s demographic, and how to display to increase purchasing ÜSales managers and reps now engage with the minutiae of retail display Bates 2047041415/1432 10 Display hardware and advice “We’ve been pushing retailers to put their cigarettes on the back wall, and we’ve had some initiatives where we’ve block-stocked our products [we oriented the] product towards the consumer rather than having it facing the floor so you see more of the packet [we] changed the packet colours on one brand so that it’s a uniform blue. The aim of the exercise is instant recognition: along with Benson&Hedges, that’s given us full gold and blue blocks on display and that helps our brands stand out.” Australian Service Station and Convenience Store News 1998;May/Jun:38-39. Stockdale B Australia trip: topline learning (highly restricted market) 12 Feb 1997 R.J. Reynolds Bates 518093846/3852 [...]... cultural change will be necessary 16 Conclusions ÜRetailers and the point of sale must be included in any attempts to control tobacco marketing Point of sale marketing is not limited to trademarks: the industry will find ways to use anything except a complete ban on display ÜThere is precedent for the industry paying for the cost of display hardware 17 ... heart of small business Ü Australian innovations which may be rolled out to other markets 15 Conclusions ÜNo doubt that the industry continues to market to consumers however possible ÜNo doubt that the retail environment is a key location for such marketing ÜThe tobacco industry has built deep relationships with the retail sector: cultural change will be necessary 16 Conclusions ÜRetailers and the point. .. ÜCorporate advertising in retail trade magazines 12 13 Brand advertising direct to retailers Ü Rarely provides new information Ü Extensive use of imagery and positioning statements 14 Electronic distribution systems “the importance of the distribution system is growing as more marketing restrictions are placed on the industry” PHILIP MORRIS ASIA/PACIFIC THREE YEAR PLAN 1992- 1994 BATES 2500064000/4226 Electronic . necessary 17 Conclusions ÜRetailers and the point of sale must be included in any attempts to control tobacco marketing Point of sale marketing is not limited to trademarks:. levels of cigarette advertising and decrease prices 9 Display hardware and advice ÜThe point of sale (POS) display has become a life-or-death marketing