Modern tobacco marketing is driven by consumer understanding
uk bat.com - Modern tobacco marketing
For us, modern tobacco brand marketing is driven by an excellent understanding of the consumer and by sticking to the marketing fundamentals that are appropriate to this challenging product category.
We recognise that most forms of mass media promotion, TV and radio advertising and event sponsorship like Formula 1 now belong in the past.
There has been much debate about whether mass media promotion of tobacco product brands can influence under age smoking. But we say the debate is over. There is discomfort that high profile promotion may ‘splash over’ to the under age and we acknowledge that society is finding it less and less acceptable. With the launch of our International Marketing Standards in 2001, we decided it was time to move on.
We have re-defined our marketing in ways that allow us to continue to satisfy consumer preferences, while responding to reasonable stakeholder expectations of how we should market tobacco.
We see this as marketing for a new era, where product brand communication is primarily based on one-to-one permission marketing to adult smokers, in much more focused, narrower channels, with tight standards for age verification.
Starting with the consumer
Our approach starts with really understanding the different profiles of our consumers. We invest in gathering comprehensive insights into smokers’ preferences and buying behaviour, then invest in developments across the marketing mix that aim to be truly relevant to consumers’ tastes, attitudes, pockets and purchasing patterns.
We aim to be spot-on with packaging, taste and product formats that consumers like, with quality that consumers are willing to pay more for and with availability of our brands in the places where our consumers want to buy.
The ‘5 Ps’
All marketing is based on the fundamental ‘5 Ps’: product, price, packaging, promotion and place. For us, promotion is now much more limited and very carefully controlled. But our strong brand growth in recent years indicates that a clear focus on appropriate marketing based on the other 4 Ps is a clear pathway to success.
Product
British American Tobacco’s first chairman, Buck Duke, said two basics for success were “devise a superior product” and “hire the best people to make it”. We believe that’s as true now as it was a century ago.
Today, we are delivering innovations and refinements to our products across leaf blends, finer cut tobacco, new filters, new formats such as slimmer products and improved tastes in segments such as menthol.
Our ability to innovate while maintaining consistency and quality of leaf, components, materials and ingredients – and also meeting regulatory compliance for our products - is backed by the product science skills of our Research & Development teams.
In our leaf supply chain, our proactive approach to agronomy support for farmers gives us access to responsibly managed sources of quality leaf supply that is unrivalled in our industry.
We also want to offer consumers a less harmful way to enjoy tobacco, and in several countries we are selling or test marketing smokeless Swedish-style snus, which is supported by several independent health experts as significantly less harmful than smoking cigarettes.
Price
Price competition in our business can be fierce. For example, the value for money segment of a market may grow as higher tobacco taxes make premium brands more expensive and some consumers look to ‘trade down’.
We know that one brand doesn’t fit all, and our diversified, segmented global portfolio enables us to offer quality brands at the super premium, premium, mid-price and value-for-money price points.
We are keenly aware of pricing and ready to compete vigorously. But we know that consumers also have a strong interest in quality and every right to expect it. Our reputation for quality is a strong aspect of our competitive offer at every price point and we invest to maintain it.
Packaging
For many years, cigarette packs were hard or soft, but otherwise changed very little. In recent times, consumers have become increasingly interested in packaging improvements, and these can be a strong source of competitive advantage.
We are meeting consumer interest with a stream of packaging innovations, such as compact packs, side-opening packs, packs that open like wallets, waterproof packs, re-sealable packs to keep the contents fresher and packs with rounded edges.
Innovations vary across our brands, brand variants and markets and our approach enables our companies to adapt their offers flexibly to local preferences. Our guiding focus in innovations is on relevance to the consumer, speed to market and being continuously ready to improve.
Promotion
Laws governing tobacco brand advertising and our own restrictions on our companies’ product brand communications mean that promotion now has far less relevance than the other ‘4 Ps’, and that mass media promotion is going or gone.
Instead, we invest in one-to-one or permission marketing, where verified adult consumers have specifically requested or consented to brand information, such as through direct mailing or face to face in age-controlled venues.
This puts tight boundaries around any unintended ‘spill over’ to non smokers and the under-age. It is also a more intelligent form of ‘precision marketing’, enabling us to know better who our adult consumers are and what they prefer, so that any brand communication can be more focused and relevant.
Place
Last but certainly not least is where consumers buy their brands. We want our brands to be where consumers want to buy them, when they want them and never ‘out-of-stock’. We want them to be in the right types of outlets - for example, for our premium brands to be in up-market bars, restaurants and hotels.
In the Fast Moving Consumer Goods sector, getting this right this takes investment in fast and efficient distribution, in order capture and fulfilment, and in excellent trade marketing teams who build and manage our relationships with retailers big and small – from supermarket giants or convenience store chains to individual cocktail bars or neighbourhood ‘corner shops’.
We aim to be a world class supplier to the trade and our trade customers tell us we’re on the right track. In our regular customer satisfaction surveys, our trade marketers are frequently ranked amongst the very best on professionalism and service.
Find out more about this key area of our marketing in Retailer relationships.
