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Tobacco Industry Strategies To Promote Its Hazardous Tobacco Products

The Tobacco Industry

The top three main transnational tobacco companies (TTCs) [1][2], in Malaysia are;

  • (i) British American Tobacco (Malaysia) Berhad (BATM);
  • (ii) Japan Tobacco International Berhad (JTI) and
  • (iii) Philip Morris (Malaysia) Berhad (PMM).

BATM, the largest tobacco company in the country, was established in 1912. It dominates about 64% of the market share and is among the top 25 companies on the Malaysian Stock Exchange (MSE). Dunhill, its flagship brand, captured about (40-47)% of the brand share. This is followed by PMM holds 18% domestic market share through its leading brands, Marlboro and L & M.

Since Philip Morris International (PMI)’s acquisition of Sampoerna in 2005, the Indonesia-based kretek cigarette manufacturer has controlled 65.5% in kretek manufacturing in Malaysia. Its brands include Sampoerna and Prescott. While JTI holds (16-18)% market share with its leading brand, Winston. There are also other local tobacco manufacturers or traders including Aneka Karya Jaya; Golden Glode; Aktif Warni; Tai Chong Tobacco and Hiap Seng Trading.

The three TTCs formed the Confederation of Malaysian Tobacco Manufacturers (CMTM) in 1980, aiming to help in managing various issues between the cigarettes companies.

Tobacco industry engages in marketing strategy

Tobacco use is public health’s growing concern. It is the single most preventable cause of disease. Millions of smokers will die from tobacco-related diseases yearly. It was estimated about 6 million people were killed in 2011 due to smoking. Eighty percent of these deaths are occurring in low- and middle-income countries. [3]

The ASEAN countries including Malaysia tobacco use accounted for almost 10% of these deaths, responsible for one in five deaths. [4] Tobacco industry on the other hand, actively engages in a comprehensive marketing strategy to give an impression that tobacco use is acceptable and widespread around the globe.

They have invested millions of dollars on cigarette advertising and promotion yearly. About USD 9,941 million was spent through various marketing strategies worldwide in 2008. [3] These include;

  • Price discounts and coupons paid to retailers or wholesalers to reduce the price of cigarettes ($8,263.7m or 83%)
  • Promotional allowances, such as payments to retailers or wholesalers for stocking, displaying, and merchandising particular brands ($931.2 million, or 9% of total marketing expenditures)
  • Point of Sale Promotions ($163.7m or 2%)

All these marketing investments are aimed to:

  • recruit new smokers particularly among young people to replace those who quit or die from tobacco-related diseases
  • maintain brand loyalty among current smokers or to keep them addicted to cigarettes
  • increase use among current smokers
  • diminish a smoker’s willingness to quit
  • encourage former smokers to start using tobacco again
  • normalize the habit of smoking

Evidence shows that generally tobacco marketing demonstrates three main themes [5]:

  • (i) Providing satisfaction (taste, freshness)
  • (ii) Reducing fears about the dangers of tobacco use (mildness)
  • (iii) Creating associations between tobacco and desirable characteristics (social success, sexual attractions, thinness)

Status of tobacco advertising, promotion and sponsorship ban in ASEAN

Tobacco industry continues to strengthen its marketing and promotion strategies despite a complete ban on tobacco advertising, promotion and sponsorship (TAPS) came into force in most ASEAN country. Seven out of 10 ASEAN countries have implemented comprehensive ban on tobacco advertising, promotion, and sponsorship (Brunei, Cambodia, Malaysia, Myanmar, Singapore, Thailand and Vietnam) (Table 1). This is in line with the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) Article 13.

Table 1 : Tobacco advertising, promotion, sponsorship ban in ASEAN countries,[4][6]

Country Direct advertising Point-of-sale (POS) display Promotion Sponsorship Corporate Social Responsibility (CSR)*
Brunei Darussalam Ban Ban Ban Ban NA (No CSR)
Cambodia Ban No Ban Ban No
Indonesia Partial No No No No
Lao PDR Ban No Ban Ban Partial
Malaysia Ban No Ban Ban No
Myanmar Ban No No No No
Philippines Ban No Partial Ban No
Singapore Ban No Ban Ban Partial
Thailand Ban Ban Ban Ban Partial
Vietnam Ban No Ban Ban Partial

*Corporate Social Responsibility (CSR) refers to contributions from tobacco companies to any other entity for “socially responsible causes” [7]

Prior to the enactment of comprehensive ban on all forms of Tobacco Advertising, Promotion and Sponsorship (TAPS) in 2004, Malaysia’s major tobacco industries had aggressively advertised and promoted their deadly products through

  • the mass media;
  • sponsorship of cultural and sports activities;
  • trade diversification [8]

It is through the passage of the Control of Tobacco Product Regulations 2004 (CTPR) [9] that restricts the capacity of Malaysia tobacco industry from expanding its marketing efforts. The banned was applied on almost all forms of advertisements with the exception of the cigarette packs and point-of-sale (POS) displays. The tobacco industry has swiftly adapted to the restrictions and loopholes by shifting its focus to the POS and cigarette packaging. These are the two key remaining venues for tobacco industry to promote its deadly products.

Power wall at POS

POS refers to retail shops, checkout counters in shops, or other locations where tobacco products are sold (Figure 1).

Attractive cigarette packs when placed together form what is called a power wall at POS. It bears the main burden of keeping cigarettes in the public eye (Figure 2). Moreover, cigarettes packs are highly visible and strategically placed to form prominent display items on the shelves.

Individual cigarette packs were placed together to advertise brand names at POS

Figure 1: Individual cigarette packs were placed together to advertise brand names at POS.

Mini display shelf ‘refrigerator’ was used to promote new cigarette brand was placed at child eye level

Figure 2: Mini display shelf ‘refrigerator’ was used to promote new cigarette brand was placed at child eye level.

Since the advertising ban at POS, the industry has exploited the retail environment, the last marketing domain for promoting their tobacco products. They have started to invest heavily on elaborate POS displays using brand colors and company logo to communicate with the consumers (Figure 3). Display of cigarette packs also normalizes tobacco use in the public’s mind besides to entice potential customers to buy.

Display counter sponsored by BATM using brand colour (etc. red refers to Dunhil brand)

Figure 3: Display counter sponsored by BATM using brand colour (etc. red refers to Dunhil brand).

Similar strategy can also be observed in most of the neighbouring countries in the absence of POS ban. For example:

Vietnam- Mobile POS pushcart with the brand colours to promote its own brand.

Figure 5: Vietnam- Mobile POS pushcart with the brand colours to promote its own brand.

 

Indonesia- Whole building is painted with brand colors and display of brand logo to advertise Djarum Black cigarettes.

Figure 6: Indonesia- Whole building is painted with brand colors and display of brand logo to advertise Djarum Black cigarettes.

Philippines- Tobacco industry flaunts advertisements at cigarette booth, considered as POS

Figure 4: Philippines- Tobacco industry flaunts advertisements at cigarette booth, considered as POS.

This is exceptional to Thailand where a comprehensive ban on advertising and promotion at POS including display of cigarette packs. Thailand is the only country in ASEAN that has implemented POS display ban since 24 September 2005 [10] (Figure 7).

A maximum fine of 200,000 Baht (RM19,810) if they display tobacco products or if the products can be seen as stipulated under the 2005 Directive Procedures for Distribution of Tobacco Products. [11] The retailers are only allowed to place a label which reads “Cigarettes are sold here” in Thai language (Figure 8).

After the ban Cigarette packs are kept behind the shelf prohibiting from display. A sign on top of the cabinet stating “Cigarettes are sold here”.

Figure 8: After the ban: Cigarette packs are kept behind the shelf prohibiting from display. A sign on top of the cabinet stating: “Cigarettes are sold here”.

Before the ban Cigarette packs are openly display at POS

Figure 7: Before the ban: Cigarette packs are openly display at POS.

Cigarette packaging

Phillip Morris describes the role of a pack: “The primary job of the package is to create a desire to purchase and try”. [12] Tobacco industry also capitalized on cigarette packaging as the key remaining promotional vehicle to promote its products to billions of the world’s smokers and future smokers (Figure 9).

Peter Stuyvesant produced a series of packs with sleeves depicting scenes from three different cities

Figure 9: Peter Stuyvesant produced a series of packs with sleeves depicting scenes from three different cities – San Francisco, Hong Kong and Venice – to associate them with the quality of its tobacco (sold in 2007).

Innovative and colorful packaging designs were used to appeal specific segments of the population such as youth and women. They are strategically displayed at POS to create a significant in-store presence. It helps to promote tobacco initiation among children and non-smokers.

Cigarette packs indirectly act as a form of advertising to increase exposure to its target market. It was designed in a pocket sized mini billboard to make it handy to carry to anywhere by smokers. Tobacco industry also uses the packs to communicate a brand identity to its consumers. POS advertising and cigarettes promotion are very powerful means in influencing buying decisions.

References

Canila C, Rahman H, Velasco,M. (2011). Malaysia Tobacco Industry Profile. Bangkok: Southeast Asia Tobacco Control Alliance (SEATCA).

  1. (2008). Status of Tobacco Use and Its Control: Malaysia Report Card. Bangkok: Southeast Asia Tobacco Control Alliance (SEATCA).
  2. Eriksen M, Mackay J, Ross H. (2012). The Tobacco Atlas. Fourth Edition. Atlanta: American Cancer Society, 2012.
  3. Vietnam Steering Committee on Smoking and Health (VINACOSH) and Southeast Asia Tobacco Control Alliance (SEATCA). (June 2012). The ASEAN Tobacco Control Report.
  4. The National Cancer Institute (US). (2009). Monograph 19: The Role of the Media in Promoting and Reducing Tobacco Use. Available from: http://cancercontrol.cancer.gov/tcrb/monographs/19/index.html.
  5. WHO Report on the Global Tobacco Epidemic (2011). Available from: http://www.who.int/tobacco/global_report/2011/en/
  6. World Health Organization. (2011). WHO Framework Convention on Tobacco Control: guidelines for implementation Article 5.3; Article 8; Articles 9 and 10; Article 11; Article 12; Article 13; Article 14. Geneva, Switzerland: World Health Organization Press.
  7. Mary A, Simon C. (2004). A mire of highly subjective and ineffective voluntary guidelines: tobacco industry efforts to thwart tobacco control in Malaysia. Tobacco Control,13: ii43-ii50.
  8. Ministry of Health Malaysia. (2004). Food Act 1983, Control of Tobacco Product Regulations. Kuala Lumpur: Percetakan Nasional Malaysia Berhad (PNMB).
  9. Foong K, Yong C Y, Tan Y L. (2008). Fatal Attraction: The Story of Point-of-Sale in the Philippines, Thailand and Vietnam. Bangkok: Southeast Asia Tobacco Control Alliance (SEATCA).
  10. Ministry of Public Health Thailand. (2005). Directive Procedures for Distribution of Tobacco Products. Bangkok: The Office of Non-Communicable Diseases Control.
  11. Arthur D. Little. (14 Oct 1963). Development of cigarette packaging. Liggett and Myers. Bates No. T130729022–9058. http://legacy.library.ucsf.edu/tid/yiq76d00.

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