US Tobacco giant R J Reynolds announced Wednesday it will cease all advertising and promotion for its fading Winston and Doral cigarette brands. But these will remain on retail sale across the US, unsupported by print ads, coupon offers or product giveaways.
The move, coupled with 2,600 layoffs, is part of a massive cost-slashing exercise by RJR. But industry observers wonder if it might also indicate toe-dipping to determine just how well sales hold up without any form of marketing support.
There have been interesting and seemingly anomalous scenarios in the past, such as that in Czechoslovakia during the 1950s, where a government-imposed ban on all forms of tobacco promotion coincided with an increase in consumption of tobacco products.
And analysts point to more recent evidence from stateside sources that, while withdrawal of marketing support causes a cigarette brand to lose market share, the brand nevertheless retains its core customer base.
Says Smith Barney tobacco analyst Bonnie Herzog of the RJR move: “By streamlining, they're clearly increasing their efficiencies and reducing their costs. It makes a lot of sense.”
Data sourced from: New York Times; additional content by WARC staff