Up until the infamous Joe Camel campaign, Camel cigarettes were not looked upon by consumers as a “hip” brand. Joe Camel changed this perception but did so in an immoral way by gearing their advertisements towards underage smokers. Over the last ten years, Camel has tried to go the more sophisticated route with its “Pleasure to Burn” campaign which took images from the 50s and modernized them. Camel customers can distinguish this brand from its competitors because Camel is the only cigarette to offer a blend of Turkish and domestic tobacco. Customers see Marlboro, Camel’s biggest competitor, as a worthy alternative if Camel is unavailable. During my tenure as a marketing manager, more than 90% of loyal Camel customers surveyed said that their second brand of choice was Marlboro. Henceforth, there is no negative perception at all towards the competition which cannot be said if the situation was reversed. Marlboro smokers in general have an overall negative feeling about Camel cigarettes. The Turkish blend does not appeal to every smoker and there is a stigma about Camel cigarettes being an “old person” cigarette.
Purchasing cigarettes has not changed much over the last 100 years. Cigarettes can still be purchased by the pack or by the carton. They are still readily available at almost every gas station, convenient store, or supermarket, and the smoking age has remained at 18 years of age for a majority of the states. However, there are plans in several states like New York and California to raise the minimum age to 21 (). Another change over the last 20 or so years in regards to purchasing is the fact that you can now purchase cigarettes via the internet. Furthermore, the tax on cigarettes in certain cities has skyrocketed over the last 6 years in an effort to prevent younger people from smoking. This has lead to an increase in the sales of cigarettes at Native American reservations where most taxes are eliminated and cartons of cigarettes can be found at up to a 40% discount.
RJ Reynolds/Camel has a clear understanding of what a customer’s wants and needs are. Customers want a smooth and consistent smoking experience and they need the nicotine that will satisfy their cravings. The one advantage that the cigarette industry has is that their product physically and mentally makes its consumer want more of the product.
The primary market segment that Camel targets are males ages 18-24. Ask critics of tobacco companies and they may say the age bracket is much younger but 18-24 is the unofficial official age bracket. There have not been many efforts to target women of any age even females reportedly represent nearly 40% of Marlboro smokers (). A market segment that Camel has been trying to reach over the last few years is the African American market. Studies have shown that Newport is the overwhelming choice for African American smokers. Camel has tried to counter this market segment with its Turkish Jade line of menthol cigarettes.
Competition
I have decided to deviate from my Marketing Audit Approach and use competition instead of culture. Since the overall culture of a company that promotes such a dangerous product borderlines on the unethical, I have decided that discussing Camel’s competitors may be more informative.
The number one competitor of Camel cigarettes is Marlboro which also happens to be the number one selling cigarette in the United States. Most of Camel’s marketing campaign is focused on converting Marlboro smokers into Camel smokers. The only exception to this would be in regards to menthol cigarettes. Camel’s Turkish Jade was specifically created to compete with Newport. Studies have found that Newport smokers tend to be predominantly African American and Camel launched a marketing campaign to promote Turkish Jade in bars and nightclubs that have an African American clientele. However, menthol cigarettes aside, Marlboro is and has been Camel’s biggest competitor by far. There are many similarities in the marketing and promotion campaigns of both companies. For example, packs of Marlboro cigarettes have redeemable “Marlboro Miles” which can be traded in for certain prizes. Camel has “Camel Cash” which serves the exact same purpose. Both companies had popular figureheads spearing their advertising campaign with Marlboro using the “Marlboro Man” and Camel using “Joe Camel”. Incidentally, both advertising campaigns were scrapped. One campaign was dissolved due to a change in direction and the other for legal reasons.
Camel’s competition has several strengths and weaknesses. One of the few weaknesses that Marlboro has is the fact that during a study in 2002, Marlboro cigarettes have been found to burn 25% faster than the leading brands. Furthermore, Marlboro cigarettes use re-constituted sheet tobacco and processed stems as well as chemicals such as formaldehyde and ammonia to fill the cigarettes (). Camel’s “Pleasure to Burn” campaign, complete with its Turkish Blend series (Turkish Gold, Jade, and Royale), drives home the point that a Camel cigarette is a long and flavorful smoke. The biggest strength that Marlboro has which would be considered a threat to Camel would be the popularity and current control of the market share. It would be difficult for any organization in any field to take over a market lead by a company with such a large head-start. Add to the fact that the field is literally an addictive one and the obstacles become that much harder to overcome. To their credit, Camel has spent millions of dollars on trying to make their brand seem modern and hip while boasting of their premium Turkish tobacco.
Politics
There is perhaps no trickier product to advertise and market for than cigarettes. They are both harmful and addictive and people who do not even directly use the product can be affected by it. The tobacco industry is under constant pressure and criticism by politicians, parents, and the media. Certain states have taken measures to reduce the amount of second-hand smoke that is inhaled by patrons of public places such as restaurants and bars. California was one of the first states to issue a ban on smoking in all indoor venues and New York followed suit a few years later. This was a heavy blow to the tobacco industry because a large portion of their marketing campaign focused on marketing in bars and nightclubs. Before the laws took effect, Camel targeted consumers that were smoking in bars and nightclubs and would approach them about possible brand conversion. Due to legal restrictions, the patron had to physically be smoking because Camel did not want to look like they were trying to recruit new smokers. However, with the new laws in place, the smokers would have to go outside for their cigarettes and it is illegal to promote and give away cigarettes outside. This was the dilemma that the tobacco industry, and most of all Camel, faced in 2003 when several states enforced these laws. The only thing Camel could do in order to adjust to these laws and continue its guerilla marketing campaign was to wait until the smokers came back into the venue before starting the brand conversion process which will be further discussed in the marketing section of this audit. These changes to the promotion process were a complete failure and led to the eventual downfall of the marketing campaign that I was a part of within the next six months.
More legislation is on the way in the attempts of preventing kids from smoking and from limiting the amount of exposure to second-hand smoke. Nancy Pelosi, newly elected Speaker of the House, has already banned smoking from the Speaker’s lobby which is just off of the House floor. As mentioned before and on a much grander scale, several states have already taken the initiative to raise the minimum smoking age from 18-21 years of age. These regulations will have a severe impact on tobacco sales because this is the biggest target audience of the tobacco companies although some may argue that tobacco already targets a much younger audience. After the monumental lawsuit in 1998 marketing to children has been banned although Camel has tried its best to get around these restrictions. Flavored cigarettes ranging from chocolate to vanilla to berry were marketed and promoted heavily while I was employed. Our promotions were always limited to smokers that were 21 and older but you could tell what the true intentions of these cigarettes were by the flavors, the catchy names, and the colorful packaging. It was not until October 2006 that RJ Reynolds agreed to a domestic ban on its line of flavored cigarettes. In the agreement, RJ Reynolds “agreed to stop identifying flavored cigarettes with candy, fruit, desserts, or alcoholic beverage names, imagery or ads”( ). In order to adjust to these new regulations, Camel will have to find a different way to package and name these cigarettes. According to the same article, RJ Reynolds plans to open smoking lounges across the country which would be exempt from all local smoking laws. All brands of Camel would be allowed to be sold in these lounges.
Marketing
Objectives
The main objective of RJ Reynolds Tobacco as a whole is to increase its market share amongst its competitors. They currently have five out of the ten top selling cigarettes in the U.S. Their primary goal is to slowly chip away at Marlboro’s lead in the industry.
Most of RJ Reynold’s other marketing objectives involve responsibility and accuracy. For example, in regards to flavored cigarettes, RJ Reynolds states on its website:
The company voluntarily adopts the following restrictions on all non-age-restricted communication related to its brands and brand styles; the exterior of its cigarette packaging; magazine and newspaper advertising; as well as non-age-restricted point-of-sale. The company will not use:
- The names or graphic depictions of candy as well as the words chocolate, cocoa, cacao, mocha, vanilla, honey, maple, cinnamon, licorice, mint (unless referring to menthol brands and styles), spearmint, peppermint, sugar, candy, sweet, creamy.
- Names or graphic depictions of types of specific fruits (e.g. orange, lemon) or types of fruits (e.g. berry) and the words fruity, citrus, tart and tangy.
- Names of types of alcoholic beverages (e.g. rum, bourbon) and alcoholic drink names. (http://www.rjrt.com/values/flavorCig.asp)
This is not a measurable goal but this can be easily obtained by avoiding the sale of any cigarettes with these words printed on them. RJ Reynolds gets around this by using different words like “Crema” instead of vanilla and uses catchy names like Bayou Blast. The packs of these cigarettes are usually adorned in bright and flashy colors.
Strategies
Since Camel is pretty secretive about its practices, there are no crystal clear strategies in place. However, because of my experience with the company, I can assume they will continue to use guerilla marketing in the states that do not outlaw smoking in bars and nightclubs. An external condition that can affect this strategy would be more state governments imposing smoking bans in public places. However, if more bans do not occur, this strategy works extremely well and I believe Camel will continue along this course.
Camel’s biggest strength is its brand presence and the fact that it is extremely recognizable. Another strength is the fact that they sell an addictive product which means they have many repeat customers. This is also the biggest weakness that Camel has. Because of the fact that cigarettes are so unhealthy, there is a great deal of negative publicity. One has to believe that with all of the negative advertising there will eventually be a severe negative impact on the sales. Camel still has many opportunities to convert Marlboro smokers because of the large amount of money they have spent on marketing and advertising. Their marketing and ad campaigns have been cutting edge for a tobacco company for the past 20 years. The obvious threats to Camel are from lawmakers and from lawsuits. The Master Settlement Agreement (MSA) hit all of the tobacco companies pretty hard. Although the amount of money paid by the tobacco companies in the lawsuit pales in comparison with the money they make on a yearly basis, lawmakers have the power to shut these companies down or at least severely restrict their abilities.
Tactics
Some of Camel’s tactics have changed but there are certain ones that will continue to be used. For example, the guerilla marketing campaigns in states without smoking bans will continue to use the name generation process of taking digital images of driver’s licenses. However, Camel will not give away free cigarettes anymore and will mimic Marlboro’s campaign of giving away items such as Zippos, T-Shirts, and other promotional items. Another one of Camel’s new tactics is to set up smoking lounges in various states where cigarettes can be sold and then smoked inside the lounge which would be exempt from any local laws. This is an innovative idea because there are not many indoor places to go to meet people while being able to enjoy a cigarette. Currently, you can go to a bar but you would have to stand outside in either the cold or the rain in order to have a smoke.
There are certainly mixed messages with some of RJ Reynolds/Camel’s tactics in regards to its marketing campaign. For example, RJR preaches responsibility yet they will still use questionable marketing tactics like selling flavored cigarettes with attractive names and bright colors. This is clearly designed to attract children because most smokers are loyal to their brand and style and do not want to try a cigarette called Basma.
Recommendations
Camel should continue its name generation campaign in order to build its mailing list. The smoker’s lounge is a good idea as long as it markets itself to adult smokers and does not cross any boundaries.
Product
Most of Camel’s current product line can be considered appropriate, considering the controversial industry that they are in. With just over 50 various styles and flavors, Camel has a cigarette marketed for just about anyone. If I were to write this paper just six months ago, I would have to say that the 25 “Exotic Blends” should be discontinued because of how close the cigarettes come to appealing to children. The “Exotic Blends” are the flavored cigarettes with names like Izmir Stinger (apple), Crema (vanilla), Bayou Blast, and Winter Mocha Mint. These cigarettes with their catchy names, “exotic” flavors, and colorful packaging seem like a lawsuit waiting to happen. The infamous Truth commercials, which are ironically enough paid for by the Tobacco companies, have a specific commercial that target these flavored Camel cigarettes. The commercial shows a man in a bright orange booth, set up near a playground, offering colorful and flavorful cigarettes. When the children approach the man, he simply tells them that these cigarettes are for adults only. As I mentioned earlier, RJ Reynolds has agreed to a domestic ban on the sale of these cigarettes so my suggestion, if given six months ago, would have been followed.
Product research is being done but there is no public information on RJ Reynold’s practices. It is not fair to speculate but with a product as controversial as cigarettes there is probably a reason why this information does not leak out.
Recommendations
The specialty flavors need to be shelved because of their controversial nature. There really are not many ways to change their current product. Camel could try and expand their business by producing Camel cigars and cigarillos. The popularity of cigars is rising and for some reason there is less of a stigma attached to cigars even though they are just as dangerous.
Pricing
The price of cigarettes varies slightly from state to state but there has been a sharp increase in the amount of taxes on cigarettes. Bill Clinton decided to raise the federal tax in a measure to dissuade people and especially children from purchasing cigarettes. The federal tax has gone up several times since 1996 but the real increase in price comes from the state tax. Shown below is a chart that indicates the state tax for each state with Rhode Island having the most expensive state tax at $2.46 per pack and Missouri being the cheapest at $.17 per pack. This being said, a pack of cigarettes in Rhode Island can cost upwards of $8.00 per pack while Missouri may sell the same pack of Camels for $5.00. I could not find any records for the amount of Camel cigarettes sold per state but one would have to assume that price does make a difference in the amount of packs sold. Furthermore, with the prices as high as they are, consumers may choose to buy discount brands such as American Spirit which can cost almost $2.00 less per pack.
STATE EXCISE TAX RATES ON CIGARETTES
(January 1, 2006)
http://www.taxadmin.org/fta/rate/cigarett.html
Recommendations
In order to combat the rising state and federal taxes, I believe Camel should consider lowering the prices of their cigarettes. There is not that much a difference in quality where the average consumer would choose to pay twice the amount of a discount brand. Camel probably believes that because of their rich history and unlimited advertising budget that there is no real reason to come down in price.
Place
The distribution of cigarettes is not very complicated at all. There are only a limited amount of retail outlets that cigarettes may be sold in. There are small variations from state to state but there are many consistencies throughout the U.S. Most convenient stores, gas stations, and grocery stores carry and sell cigarettes. Bars and nightclubs that have tobacco licenses (easily obtained through the state for a fee of approximately $50) may sell cigarettes from behind the bar or in vending machines.
Retail outlets realize that selling cigarettes is a profitable business but they also realize the consequences for selling to minors. For example, in New York:
Violators face penalties from both the State and the City for:
- Selling to minors. No tobacco products (including bidis and gutka) can be legally sold to individuals under the age of 18 years.
- Selling loose cigarettes.
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Selling to customers lacking required ID. When selling tobacco products, the customer must have a valid photo ID, which must be either a driver's license or non-driver's ID card issued by any U.S. state or possession, or an ID issued by the federal government or the U.S. armed forces, or a valid passport from any country.
Violations of City tobacco law may result in fines of up to $2,000, in addition to fines assessed under the State law, and the loss of the business’s DCA tobacco sales license.
Violations of State tobacco law may result in fines of up to $4,000, plus a $50 surcharge for each violation. Violations can lead to the loss of the business’s State retail sales registration and Lottery license ()
Recommendations
Camel should continue to sell its cigarettes in retail venues like convenient stores, gas stations, etc. They should also increase their retail presence in bars and nightclubs by having more venues sell Camel cigarettes from behind the bar.
Promotion
Camel has been using the “Pleasure to Burn” campaign for approximately the last six years. The advertising strategy is to blend the style of the 1940s and 50s with a modern twist. For example, one advertisement features a 1950s car-hop wearing rollerblades instead of the traditional roller skates. This advertising campaign delivers a classic message while trying to appeal to today’s youth. There are several promotional strategies that are used at Camel. Up until recently, the promotional campaign was to go into bars and nightclubs, target smokers of 21 years or older, take a digital image of his/her license and a short survey, and hand the consumer two free packs of cigarettes. With these sorts of promotions, the hope is to get the smoker accustomed to a different flavor of cigarette so when they try to go back to the old brand, the cigarette does not taste as well. This promotion went hand-in-hand with the “Seven Pleasures of the Casbah” promotion. There were seven different parties each with its own exotic theme. A different exotic brand was debuted at each of the seven parties. I believe this was a brilliant campaign and it was especially logical. A couple of weeks before each party, the employees handing out the cigarettes in the bars would hand each consumer a small gift pack with an invitation to one of the Seven Pleasures parties. These promotions are funded by the enormous budget of RJ Reynolds who is responsible for 30% of the U.S. cigarette sales.
Camel has had a successful if not controversial run in the advertising department throughout the years. Joe Camel can be viewed as one of the more successful advertising figures of all time. However, there were many people, including the FTC, who believed that Joe Camel was targeting children. Statistics at the time showed that 91% of six-year olds match Joe Camel with a picture of a cigarette, making him as well-known as Mickey Mouse. Not to mention that with increase of awareness, Camel's share of under-18 Market soared from 0.5% to 32.8% in the first two years of the Joe Camel campaign, representing a $476 million increase in annual sales for R.J. Reynolds. Making it so that since the first introduction of Joe Camel, the number of children who smoke increased by a factor of 50"("Hey Joe, where are you going with that gun in your hand? by the students in Mike Bene's class, Portland Community College. ".)
Recommendations
Camel should continue its “Pleasure to Burn” campaign but should stop using drawings of these 50s figures. The backlash against tobacco companies is higher than it has ever been and this is one industry where bad press can be helpful.
Marketing Information Systems
There is obviously going to be some margin of error in terms of the accuracy of surveys but Camel keeps this margin low by asking the right questions. Each survey asks the smoker:
- Which brand do you usually smoke
- What style do you smoke? (Full flavor, menthol, etc.)
- Do you purchase by the pack or by the carton?
- What is your second choice?
- Out of the last ten times that you purchased cigarettes, how many times did you purchase your usual brand?
There is also a male/female box, spot to write an email address, phone number, and current mailing address. An image of this form, along with the smoker’s driver license, is then captured via digital camera and is stored on a floppy disk. Each week, the floppy disks are sent over to RJ Reynolds where they take the information and place the patrons on their mailing list in order to receive coupons and special offers. This system is very efficient and is done in a timely manner. Furthermore, each market would send in approximately 1000 “name generations” per week. This research can then be used to see which brand of cigarettes people of certain ages are smoking the most. They can also see which brands of cigarettes appeal to males and to females.
Recommendations
Camel should slightly alter the “name generation” process by incorporating handheld devices that are capable of swiping driver’s licenses and other ID cards. There is always going to be human error and if an employee takes the license of someone underage and gives that person a pack of cigarettes, there may be a lawsuit waiting to happen.
References
http://www.nyc.gov/html/dca/html/initiatives/preventing.shtml
"Hey Joe, where are you going with that gun in your hand? by the students in Mike Bene's class, Portland Community College. "
http://www.rjrt.com/values/flavorCig.asp
http://www.thesmokinggun.com/tobacco/camelad3.html
