As reported in The New York Times, "A Cigarette Campaign Under Fire," by Anthony Ramirez, in a Special to The New York Times, published on 12 January 1990 -- Here in the root and stalk of tobacco country, everyone knows that marketing something that carries a health warning from the Surgeon General is bound to provoke an argument. Mix in race and you really have a shouting match. Just ask the R. J. Reynolds Tobacco Company.
Last month, in a first for a cigarette maker, Reynolds said it would test-market a cigarette that it expects will appeal ''most strongly'' to blacks. The proposed brand name is Uptown, a menthol cigarette. The multimillion-dollar test market, scheduled to begin Feb. 5, is in Philadelphia, which has a large black population.
If successful, the campaign for Uptown cigarettes - with their narrowly focused market, packaging and menthol taste - is sure to prompt Reynolds's rivals to try similar explicit marketing campaigns to blacks and perhaps other minorities.
Marketing cigarettes to minorities is not new; saying so is. Billboards, newspaper advertisements and promotional circulars have featured black and Hispanic models for years.
But critics, like the American Cancer Society, see the Uptown campaign as an alarming escalation in cigarette marketing. They believe the campaign exploits blacks, especially the ghetto poor. [In Philadelphia, representatives of 30 black and Hispanic religious and community organizations agreed Thursday to organize a protest of Uptown's sale. [''We want to halt it before Feb. 5,'' said Patti LePera, vice president-marketing and communications for the Philadelphia branch of the American Cancer Society. ''We want R. J. Reynolds to know we don't want it here.''] Mary L. Clarke, the president of the Charlotte-Mecklenburg, N.C., branch of the National Association for the Advancement of Colored People, said: ''With the poor health among black folks today, we do not need anything else to cause even more health problems. R. J. Reynolds's targeting of blacks is unethical.''
Black publications find themselves in the middle. The Philadelphia Tribune, a 105-year-old newspaper with a circulation of 108,000, plans to carry Uptown advertisements next month. ''We don't have the right to make a choice for our readers,'' said the newspaper's president, Robert W. Bogle. ''What we're doing is not illegal or immoral.''
Black magazines are also caught in the crossfire. They often depend on cigarette revenue to a greater extent than black newspapers.
''R. J. Reynolds has been an advertiser for a long time,'' said Jeff Burns, vice president of Johnson Publishing, parent of Ebony and Jet magazines, which are scheduled to carry Uptown advertisements. ''This is just another product.'' Publishers Information Bureau estimates that for the first 11 months of 1989 Ebony received about 7 percent of its $35 million in revenue from cigarette advertising and Jet about 10 percent of its $16.4 million.
'Tough Business Decision'
Taking such advertising is ''a tough business decision,'' said Barbara A. Britton, national advertising director for Essence magazine. ''But it's advertising that is treated like any other advertising.'' The Publishers Information Bureau estimates that Essence received about 9 percent of its $18 million in ad revenue from cigarettes for the first 11 months of 1989, but Ms. Britton said the estimate was ''slightly overstated.''
''It's unfair to single out minority publications on this issue,'' she added. ''Given the health issue in America, this is a question that should be posed to the white media as well.'' Indeed, most newspapers and magazines accept cigarette advertising.
Because of the health issue, cigarette makers are hobbled in selling to blacks, said Jerome D. Williams, an assistant professor of marketing at Pennsylvania State University who studies ethnic marketing. ''The irony is that if R. J. Reynolds made shoes or shirts and specifically marketed to blacks, they would probably be regarded as progressive and socially positive,'' said Mr. Williams, who is black.
A Shrinking Industry
For its part, Reynolds says it is only following the Darwinian dictates of the cigarette market. With the industry shrinking a further 6 percent last year, the business has long been a struggle of clawing customers away from competitors rather than wooing new smokers. The result is a vast proliferation of cigarette brands aimed at narrower and narrower market segments: There are more than 350 brands and styles (low-tar, filter, box, menthol, 100-millimeter versions and so forth) of cigarettes. Lorillard, for example, is test-marketing Harley-Davidson cigarettes, named after the motorcycle, for men aged 21 to 35.
Reynolds, the unit that must provide much-needed cash flow for debt-laden RJR Nabisco, had a 1989 market share of 28.6 percent, said John C. Maxwell Jr., a tobacco analyst with Wheat First Securities in Richmond. The company lost 3.2 share points last year, partly because it discontinued ''trade loading,'' which is the shipment of more units than distributors can sell, thus inflating sales. But it also lost share because of competition, mainly from Philip Morris, the market leader with a 41.9 percent share.
Nearly 44 percent of black adults smoke, compared with 37 percent of whites, according to the Simmons Market Research Bureau. Although blacks make up only 13 percent of the 58 million adults who smoke, or about 7.4 million, many cigarette marketers believe blacks are fiercely brand loyal and thus make ideal cigarette customers.
Stakes Are High
''Everything we do is going to be assaulted and picked at by the anti-smokers,'' said David Iauco, senior vice president-marketing for R. J. Reynolds, who was not surprised by the controversy. ''But taking away business from our competitors is the only thing that Uptown is about.''
The marketing stakes are high for a cigarette maker. While Reynolds will not disclose marketing costs for Uptown, it estimates that a typical test market costs $2 million to $10 million. Such expensive testing is necessary since a nationwide cigarette introduction can cost $100 million to $150 million.
In a business where market shares are measured in tiny slivers, a single market share point is worth $358 million. The industry is immensely profitable because cigarette manufacture has become so efficient. For example, the huge Reynolds factory near Winston-Salem can produce more than 475 million cigarettes a day.
It is difficult for manufacturers to determine how to appeal to smokers. They are not quite certain, for example, what women prefer. Marketers know only that women like long, thin cigarettes. Philip Morris's Virginia Slims, the dominant women's brand, was introduced in the late 1960's; no other women's brand -including those that smell sweet, taste lemony or are ultra-long and thin - has been as successful.
Hispanic smokers, who make up 15 percent of the market, show no special preference, buying such mainstream brands as Philip Morris's Marlboros and Reynolds's Winston.
Asians, like Hispanic consumers, are diverse in ethnicity and nationality. making marketing programs difficult.
Marketing campaigns for blacks are easier because of their preference for menthol, which has never been explained. According to Reynolds, 69 percent of black smokers prefer menthol, compared with 27 percent for smokers over all.
There are three major menthol brands: Salem, Kool and Newport. Mr. Maxwell, the tobacco analyst, said only the Newport brand, made by Lorillard, a unit of the Loews Corporation, is prospering. Reynolds's Salem is losing substantial market share, with 6.2 percent in 1989, down from 7.3 percent in 1988. Brown &Williamson's Kool is flat at 6 percent.
Newport Gains Market Share
Only Newport saw its market share grow: to 4.8 percent from 4.4 percent. Newport's unit sales grew as well, to 25 million in 1989 from 24.8 million a year earlier. That is not much, but both its rivals experienced declines in cigarette sales.
Those three brands constitute 53 percent of the market for black smokers, but flip-flopped in ranking, with Newport on top at 22 percent, Kool at 16 percent and Salem at 15 percent, according to R. J. Reynolds.
Newport's secret may be the menthol recipe. The cigarette has the least menthol of the three brands; Salem has the most. To appeal to blacks in the ages of 21 to 34, the company planned a cigarette with less menthol flavoring, 19 milligrams of ''tar'' and 1.3 milligrams of nicotine - not a low-tar brand, but not especially strong either.
'A Classy Sounding Name'
Development of the new cigarette began in late 1988, when Salem was clearly losing ground among blacks. Trone Advertising, a Greensboro, N. C., agency, developed a list of about 20 names, later narrowed to 5, for the new cigarette.
The name Uptown scored the highest in consumer surveys, Reynolds said. Uptown was not selected because it suggests the Harlem section of New York City. None of the other four names had any ethnic character to them either, the company said.
''Uptown was meant to be a classy sounding name, that is all,'' said Timothy C. Harris, director of special markets.
To appeal to blacks seeking a less pronounced menthol taste, Reynolds decided against using green, the traditional color to signal menthol, on the packaging. Instead, it used black and gold, the colors of luxury European cigarettes. The typeface, Onyx, was chosen for its ''classic, stylish look,'' Mr. Harris said.
In the narrowest bit of marketing toward blacks, Uptown cigarettes are packed with the filters facing down, the reverse of the usual arrangement. Market research indicated blacks opened cigarette packs from the bottom, possibly to avoid crushing the filters.
To test the cigarette, Reynolds picked Philadelphia, which has about a 40 percent black population. The test will last at least six months. Much of the company's marketing funds will go to advertising, which will be carried in black newspapers, The Phildelphia New Observer and The Tribune, as well as such national black magazines as Ebony and Jet. It will also be used for billboards, posters inside buses, and point-of-purchase displays where cigarettes are sold The ads represent typical cigarette marketing, with beautiful models enjoying urban nightlife and smoking cigarettes. The slogan is ''Uptown. The Place. The Taste.'' Despite the heavy marketing to blacks, Reynolds does not say that Uptown is a cigarette designed for blacks. Rather, the company says, it is a cigarette for the entire market but which is likely to attract a disproportionate number of black smokers. (source: The New York Times)