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Kicking Price Prong Habit
R.J. Reynolds Tobacco Co. is eschewing price promotion on the Canal brand in some Midwestern sales regions to focus and the Camel Cash premium Promos and regional programs to wean consumers off price cuts. Putt-priced brands have been hurt by price wars sparked by discount brands. Price promotions have been a way to combat the discount market, which gained a 32% share in the third quarter of 1993, outselling even Marlboro. Promotions boost volume and trial but erode profits. It’s too early to tell if other Reynolds’ brands or competitors will follow this test market. But with price cuts and rebates being bashed in other categories, such as food and cars, other brands will likely dabble with decreasing price promotion and increasing brand-building efforts. A Reynolds’ spokeswoman said the company gave its regions more flexibility in marketing plans about a year and a half ago. Each region creates promotion, so the ides of cutting back on price promotions ties with the region, not corporate headquarters. ‘In some places, sales reps have done promotion with concerts,’ said Peggy Carter, manager of media relations. ‘We’ve had people do tie-ins with lotteries.’ Camel price cuts certainly aren’t dead. One distributor in the Midwest last week offered a three-for-three promotion he called one of the biggest he had seen for a strong brand plummeted 54.4% to $21.5 million under the restrictions. Philip Morris, which is handled by Lev Burnett, ranks eighth among Spenders in the spends $6.3 million in the market and. Agency market eliminated, heads have voiced fears that if tobacco advertising is a precedent could be set for other products. The Hong Kong Association of Accredited Advertising Agencies has advertising by freedom fording a permanent sub-committee to deal with issues affecting. The ban would threaten about 200 of the estimated 4,000 Jobs in the ad industry. The print media, particularly Chinese language newspapers, would suffer the most from lost advertising revenues.