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Excerpts from MARLBORO FIRES UP MARKETING CAMPAIGN
IN TRIANGLE BARS

by JOEL B. OBERMAYER, Raleign News and Observer [07/28/98]

Never mind the debates in Washington, the lawsuits, the criminal investigations and the bad publicity. It's party time in Marlboro Country.

The folks who make the world's best-selling cigarette brand have been holding Marlboro-themed parties at trendy bars and beer dives around the Triangle and in 40 cities nationwide.

They drive up in a caravan of macho, red pickup trucks - clean-cut young men and long-haired young women in red and black Marlboro regalia. They unload boxes and barrels full of Marlboro banners, T-shirts, hats, cameras, binoculars and fly-fishing rods - freebies for bar patrons.

But one thing you won't see is Marlboro cigarettes.

They won't hand out any. They don't have any for sale. In fact, team members aren't even allowed to smoke themselves. The logos on their goods are downright diminutive compared to past years. And they check IDs more closely than the bars do.

Since 1995, Philip Morris has toned down some of its so-called "event marketing," even in tobacco-friendly states such as North Carolina. And more changes have come this year, even as the company has launched its biggest, most elaborate bar promotion yet. The main idea, analysts and observers say, has been to try out innovative, aggressive marketing techniques but in ways that are less offensive to some politicians, consumers and public health officials who can make the industry miserable. The reasons are the same as those for R.J. Reynolds Tobacco's official retirement of Joe Camel last year.

"They've been behaving like a kid right before Christmas," said John F. Banzhaf III, executive director of Action on Smoking and Health, a Washington-based anti-smoking group. "That's when kids are supposed to be on their best behavior."

"It's a rarefied air right now," said Roy Burry, an analyst with Brown Brothers Harriman in New York. "I'm sure [Philip Morris] is trying not to open itself up to criticism."

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Last frontier or last gasp?

What the industry wants is a broad $200 billion settlement with the remaining 36 states that are suing the industry over the costs of smoking-related illnesses. With the congressional tobacco deal dead for now, such a move would handle the biggest threat hanging over the industry. But there's also the danger of more federal and local regulation later. The companies hope their experiments will yield marketing methods that might still be available to them.

But the bar parties, too, may be on their last gasp. The Minnesota settlement of a huge suit to recover smokers' health costs forces the companies to stop giving away logo-emblazoned items. It's a model for future deals elsewhere.

Philip Morris suggests some aspects of the parties would continue, but many people, including Banzhaf, are offended by any kind of tobacco-sponsored bash. Some bar patrons don't approve either.

"It's just another promotion to get people hooked on cigarettes," said Pete Peters, 46, who owns a small Cary company that makes countertops. Peters, who caught a recent Marlboro party at the Upper Deck, a sports bar in Cary, took a drag on a cigarette and said he wished he could quit. "After everything that's been happening, I'd think the industry would be backing off big time. And they should be hanging back. But they're just exploiting the drug."

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Strategy is to avoid teens:

Cigarette companies have been holding parties in bars for the better part of a decade. For years, they also handed out cigarettes at rock concerts and even on street corners. Anti-smoking groups have argued that those giveaways glamorized smoking to the young and the cigarettes often ended up in the hands of teenagers.

But with criticism rising, the companies have stuck more and more with bars. There, they are more likely to get young adults who can be lifelong Marlboro smokers, without getting the underage smokers they say they want to avoid. Events have tended to be in bigger, hipper cities such as New York and Chicago. Moving to smaller markets is a more recent phenomenon.

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Marlboro Man still has critics:

Theoretically, all the care they take is supposed to immunize them from the long-standing charge that Philip Morris markets to kids.

But Banzhaf and others say it's not so simple. Promotional items worn around town keep the Marlboro name in front of youngsters.

The types of people who hang out in bars "tend to be the people that youngsters look up to. ... When they see more and more people with Marlboro stuff on, the signal is that it's cool to smoke and it's cool to smoke Marlboro," Banzhaf said.

Richard Daynard, director of the Tobacco Products Liability Project in Boston, added: "Don't think they've been converted. If the [state] tobacco settlements fall apart, they'll go back to their old ways, ... and meanwhile they've been looking for ways to get around future regulations."

Indeed, Marlboro doesn't need to hand out cigarettes to make the connection to smoking.

"They are keeping the brand vital and offering a linkage to a lifestyle," said Don Stuart, a partner with Cannondale Associates, a marketing and sales management consulting firm in Wilton, Conn. "They have an image that can survive without seeing a product. People make their own connections to smoking."

Still, Marlboro has another good reason to do what it's doing, marketing experts say.

It wants to push as much as it can, before more restrictions kick in, to gather names and addresses of smokers.

That way, even if all advertising and giveaways are halted because of state settlements, they can still reach smokers by direct mail. That method is relatively private and far less likely to cause objections than virtually anything else they can do, said Alan Brew, a partner with Addison, a San Francisco marketing and brand identity firm.

"They're keeping the Marlboro name there in a way that's acceptable," Brew said. "They're going from mass marketing to direct marketing. To some extent it's because those are the tools available to them.

"Once they have addresses, it becomes a powerful way to maintain their market share or even build the brand. I honestly don't think it's an issue of bracelets, matchbooks and ranch parties. I can't imagine this being a last feeble attempt to keep the logo alive. Far from it. Don't write them off."

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