A Review of Cigarette Marketing in Canada - 5th Edition - Summer 2006

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du Maurier, Peter Jackson, Benson and Hedges,
Macdonald Special ....

The Make-Overs

The Du Maurier face-lift


the new


the old


the ostentatious


Bad enough that BAT/Imperial Tobacco's favoured brand, du Maurier, hit the grand old age of 75 this past year (the trade-mark was first registered in Canada in 1930), but her standing as Canada's best selling cigarette was under threat. Restrictions on advertising and sponsorship[1] made it difficult for du Maurier cigarettes to get promotional support for its image as an 'aspirational' 'up-market' brand. Even worse, the price war launched by up-start companies made it harder for this full-price up-scale brand going strong.

With Du Maurier providing BAT/ITL with 40% of its revenues [2], no wonder they were worried.

The solution to this problem, BAT decided, was to give both packaging and retail displays a face lift.  They hoped these presentational elements could convey the image and brand values that had previously been communicated through advertising and sponsored events. The package they chose, an eight-sided flip top box, was radically different than the four-sided slide-and-shell that had been the Canadian industry standard for decades.

With the new packaging came a 'repackaging' of retail stores.  Retail outlets were paid to display the new packages in newly-designed displays.  These displays were also intended to make up for lost advertising opportunities by projecting  du Maurier's brand image as well as providing 'presence' for the brand.  As ITL's chief marketing executive put it: "We decided that in order to leverage the full impact of the Signature Pack and overcome the fact that we are not allowed to do any kind of advertising, we needed to also redesign and refit our in-store displays to mirror the look of the pack. It is pretty staggering to think that we retrofitted close to 2,000 locations with new displays."  These displays were only mounted in provinces where displays were legal (i.e. not Saskatchewan, Manitoba or Nunavut).

The new packages hit the new shelving displays in spring 2005 -- a few weeks later, Ontario and Quebec passed laws banning all displays of cigarettes by May 31, 2008. Ontario's law put an interim measure in place effective May 31, 2006 banning displays like the new du Maurier shelving which used colour and design to promote cigarette brands.
 

For more on this design: see the acceptance speech by BAT/ITL's Jeff Guilner


Peter Jackson gains new colours
 -- and colourful new expressions.

Peter Jackson is Imperial Tobacco's 'up and coming'-est brand, and its major weapon in the current cigarette price war.  Imperial has tried to give it staying power by changing its package in the following ways:

Before After
     

*  a bright orange brand ("smooth" flavour) was introduced to coincide with Ontario's restrictions on retail displays (the bright orange stands out against a plain black background).

* new descriptions appear on the package, different than the old descriptors of 'light' or 'mild', these are almost marketing slogans: "sun ripined. flue cured virginia tobacco. brighter taste. more satisfying flavour." Indeed!

 The law that is supposed to protect Canadians from packaging which creates "erroneous" impressions about health impacts does nothing to stop companies from printing this type of advertising puffery.

* brand names and brand elements (horse on a shield) are now more prominently displayed. Imperial is not the only manufacturer to increase the visibility of brand names on packages following advertising restrictions and larger health warnings. 

*  ITL continues the change to the brand it made a couple of years ago to use colours to communicate so-called 'strength.' Multinational companies use the same coded colours they are using worldwide, i.e.  red=full, blue=light, green=menthol, silver/white=extra-light.

Peter Jackson has become one of Canada's leading brands.  The YCM Report for February 2006 reported that in the previous quarter, it was the most popular brand in Quebec (20%), beating out ITL's traditional market leaders, Player's and du Maurier.



the new


the old

Bolder & Higher
 
brand names

When Benson and Hedges broke with its own king-size only tradition and introduced a 'regular' length cigarette this spring, it also 'joined the pack' in revamping its packages with larger and more visible brand names. 

With the package more and more the marketing vehicle for tobacco companies, can calls for plain packaging be far behind?

Benson and Hedges is sold in Canada by Rothmans, Benson and Hedges, which is 40% owned by Philip Morris and 60% owned by Rothmans Inc, the only publicly held tobacco company based in Canada.

The Benson and Hedges brand is sold by a variety of tobacco companies globally. Gallaher sells the brand in its native U.K., BAT markets it in most parts of the world other than Canada.

The brand used to be marketed in Canada through the Symphony of Fire events in Toronto, Montreal and Vancouver. After these events could no longer be used to promote cigarette brands in 2003, RBH turned to bar promotions, like "Gold Club" series.  In its 2006 Annual Report, the company disclosed that "With upcoming regulatory restrictions on tobacco in the bar environment, RBH recently discontinued its bar program. With dark markets already in place in Saskatchewan and Manitoba and scheduled for implementation over the next two years in Prince Edward Island, Ontario and Québec, RBH’s strategy for long-term success in the premium cigarette category is to focus on growing brands by investing in retail availability programs." 


Cigarette nationalism -- or should that be 'la cigarette nationaliste'?

Canadian history is peppered with "les bleus" and "les rouges."  Only in hockey is blue (Toronto Maple Leafs) given over to English Canada while red (Montreal Canadiens - les Habs) is given to Quebec.  Usually the colours continue the colonial past of  Quebec (French Blue) and Upper Canada (English Red).

Not one to let reconciliation get in the way of a good marketing strategy, JTI-Macdonald dressed its new discount brand, Macdonald Special, in two very different colours and labels for the very distinct Quebec and Ontario markets. 

In English Canada, the English-red package evokes  the Canadian flag and the package boasts that it is a "Canadian Blend" In Quebec, the French-blue package evokes the Quebec flag, and boasts that it is "Faite au Quebec" (made in Quebec).

Which is a more successful approach?  In the last quarter of 2005, the Quebec version had captured 1.1% of the cigarette market (a twelth-place brand, fifth-place among discount cigarettes). In Ontario and western Canada, it had only 0.6% of the cigarette market (a sixteenth placed brand).

A rose by any other name...


Taking advantage of the numbers game.

Tobacco companies have seen a ban on the use of terms like 'light' and 'mild' on the horizon. (Although six years have passed since a Canadian Minister of Health gave tobacco companies "100 days" to respond to his demand to remove these terms, they remain on the packages.).

The companies have repackaged their brands to survive a challenge to brand descriptors.  Some (see above) have adopted a codification of "red, blue, silver, gold". Others are focusing on the numbers or colours to suggest to smokers that they can adopt a brand image and still find a particular cigarette design to suit their smoking style/dosing requirements.

Vantage, manufactured by Japan Tobacco affiliate, JTI-Macdonald, has taken the approach of showing numbers from the machine test protocol required by Health Canada.  The lower number gets preference -- the brand descriptors "light", "medium", "filter", "rich" and "max" are almost redundant. Colour shading and heaviness of font are also used to denote changes in so-called 'strength.'

Vantage was once JTI-Macdonald's low-tar brand. Now it is its leading 'discount price brand.' By introducing choices for 'full-flavoured' cigarettes, it has shown that brand extensions can move up smokers associations of strength, as well as down.  Imperial Tobacco has also experimented with "full-flavour" matinees in some regions of Canada.


[1](Lifestyle and sponsorship advertisements are now banned, and the companies have a self-imposed restraint on using  remaining forms of legal advertising while they are challenging the federal tobacco law in court).

[2] Jeff Guller's acceptance speech for the Barezzi award: 
"du MAURIER has always been THE premium brand in Canada. It is the best selling brand in Canada and accounts for 40 per cent of Imperial Tobacco’s revenue. You can appreciate how important it was for us to maintain this leadership position.



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