Subscribe via RSS Feed David on Google Plus Connect on Linked

5 Marketing Lessons from Big Tobacco

October 14, 2013

CigarettesWhen I was growing up, in the 70s, you could smoke anywhere. My parents didn’t smoke, but we kept an ashtray in the house for guests who did.

You could smoke in the church I attended.

You could smoke in restaurants.

You could smoke on airplanes.

About the only place you couldn’tsmoke was a movie theater…

Marketing Lessons from a “Banned” Product

These days, opinions on smoking (and smokers) have changed. And even “tobacco states” like Kentucky, North Carolina, and my home state, Tennessee, have instituted smoking bans.

Still cigarettes are big business and there is a lot you can learn from “Big Tobacco” and how its products are marketed…

1. Know What Your Customer is Worth – Each year, big tobacco spends more than $400 per customer on special promotions, coupons, mailers, and other direct marketing efforts to keep their customers smoking. I recently moved in a new place, where the previous resident had signed up to receive promotions from a tobacco company, and got this in the mail…

Smokingcactus1

Who wouldn’t open up something like this? Not me…

Smokingcactus2

Hey, it’s a cactus! Just what I wanted. And just the thing I need to remind me how cool smoking is…

How do they do it? Because they know how much each customer is worth.

Let’s say the average cost of a pack of cigarettes is $5.00 (not including taxes). A smoker who smokes a pack per day will, on average, spend about $35 dollars per week (or $1820/year). The difference isn’t all profit, but a pack of cigarettes only costs about $1.20 to manufacture, so there is plenty of room for that, even with distribution fees and charging only wholesale.

And there are plenty of people smoking a lot more than one pack per day…

2. Associate Your Product With Fun – There are strict laws about tobacco advertising and the people tobacco companies advertise to must be 21 or older. Because of this, sponsorship by tobacco companies is limited to events for people 21 and over. You know, the fun events like the ones where you can drink and gamble…and smoke cigarettes.

How can you make your product or service more fun?

3. Make It Exclusive – Due to laws on tobacco advertising, most marketing associated with tobacco companies is exclusive by nature. I used to own a big music event in Nashville with tens of thousands of people attending live shows. Because of this, tobacco companies were all up our ass, trying to give us sponsorship money. The downside to me (other than promoting a product that would kill my customers) was the “21 and up” age restriction. You can certainly make age (or other) restrictions a positive thing when marketing your business though.

4. Don’t Apologize – Look at the image in the top right corner of this post. This is a pack of cigarettes from Ireland and you’ll see similar packaging throughout Europe.

When you’ve a “restriction” this bold, which can’t be worked around, you might as well make it an advantage. Who doesn’t want a little danger in his life?

Alive…with pleasure!

5. Start ’em Young – A lawsuit against the Lorillard Tobacco Company alleged that in the late 1960s, company vans were used to make regular trips to housing projects where free Newport cigarettes were given to children and babies. Certainly an ethical issue for a supposedly “adult” product, but also a great marketing lesson when it comes to you and your business.

Why does McDonald’s market to kids? Why do banks market so aggressively to college students? Because, like cigarettes, once you get going with one brand, you’re not likely to switch.

Final Thoughts

I’m not a fan of cigarettes and this is not an endorsement of them. Still, like a Baptist church or a strip club, there are plenty of marketing lessons to be learned. I hope you’ll take this post along with other posts in this series in the sprit in which they are intended.

ABOUT THIS SERIES: Every Monday, I analyze the good, bad, and ugly about the marketing behind a common business or famous personality. See other posts in this series here and, if you have a request for something (or someone) you’d like me to analyze for this series, contact me via Twitter.