A Review of Cigarette Marketing in Canada - 6th Edition - Winter 2007

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Canada goes global?
International brands come to town

The Canadian tobacco market has, historically, been isolated from several global trends. Canadians smoked cigarettes that were made in Canada, that were sold under brand names that were mostly familiar only to Canadians, that were made of (virginia flue-cured) tobacco grown in Canada, and that were sold to them by Canadian subsidiaries of multinational companies that made every attempt to appear 'home-grown.' 

Most of the international brands available in other countries -- Lucky Strike, 555, Mild Seven, Pall Mall -- are not distributed in Canada.  Nor is the world's leading brand -  Marlboro - available in its usual form. (A trademark arrangement reached in the early part of the 20th century precluded Philip Morris from marketing its leading Marlboro cigarette in Canada, although a look-alike brand was recently launched).  International brands that are available - Benson and Hedges, Camel, More -- have very low share of the current tobacco  market.

All this may be about to change.  Over the past decade, the activities of Canadian subsidiary of transnational tobacco companies have become increasingly integrated with their parent organizations. BAT, for example, reorganized IMASCO-Imperial Tobacco to gain greater control over the Canadian operations, and to dispose of non-tobacco holdings.  It then closed Canadian manufacturing, and moved it to Mexico, where labour costs were lower.  It also reduced the amount of Canadian-grown tobacco used in its cigarettes sold in Canada at the same time that it moved to consolidate global leaf supply.  Further details on BAT's strategies of consolidating global leaf operations to reduce costs and increase profits can be found in their  "investor presentations".

Recently, two multinational companies (BAT and Philip Morris) introduced international brands to the Canadian market.  BAT launched its discount-priced Viscount, and Philip-Morris (through its subidiary Rothmans Inc), launched Parliament.

   

Neither company has yet supported these new products with direct advertising in Canadian media. Among the advantages of international brands is the ability of tobacco companies to market them across borders through transnational media (internet, movies, magazines and other cultural products).  Such campaigns for these brands have not yet reached Canada.  (Advertisements from other countries are shown below).

An attempt by BAT to launch KOOL cigarettes in Canada with the same marketing campaign used in other countries apparently failed (the brand is no longer distributed in Canada).

 

 
An advertisement for Viceroy in Russia. Charlie Sheet promoting
Parliament in Japan

 

 

 

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