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Memos Highlight Importance of 'Younger Adult Smokers'

Thursday, January 15, 1998; Page A18

Eighty-one internal R.J. Reynolds Tobacco memoranda were released yesterday, many of which illustrate a 17-year effort to make tobacco marketing and advertising campaigns appeal to "younger adult smokers" -- a term some of the documents seem to indicate applied to children as young as 14 years old. Some of the documents had been made public previously. Direct quotations from the documents appear in lighter type.

In a Feb. 2, 1973, memo, "Some Thoughts about New Brands of Cigarettes for the Youth Market," RJR senior researcher Claude Teague wrote:

At the outset it should be said that we are presently, and I believe unfairly, constrained from directly promoting cigarettes to the youth market; that is, to those in the approximately twenty-one-year-old and under group. Statistics show, however, that large, perhaps even increasing numbers in that group are becoming smokers each year, despite bans on promotion of cigarettes to them. If this be so, there is certainly nothing immoral or unethical about our Company attempting to attract those smokers to our products. We should not in any way influence non-smokers to start smoking; rather we should simply recognize that many or most of the "21 and under" group will inevitably become smokers, and offer them an opportunity to use our brands.

Realistically, if our Company is to survive and prosper, over the long term we must get our share of the youth market. In my opinion this will require new brands tailored to the youth market; I believe it unrealistic to expect that existing brands identified with an over-thirty "establishment" market can ever become the "in" products with the youth group. Thus we need new brands designed to be particularly attractive to the young smoker, while ideally at the same time being appealing to all smokers.

Several things will go to make up any such new "youth" brands, the most important of which may be the image and quality -- which are, of course, interrelated. The questions then are: What image? and What quality? Perhaps these questions may best be approached by consideration of factors influencing pre-smokers to try smoking, learn to smoke and become confirmed smokers.

Table 1 attempts to define some of the more important effects expected or derived from cigarette smoking by pre-smokers, "learning" smokers and confirmed smokers. If this incomplete, subjective, simplistic analysis is even approximately correct, there are sharp, perhaps exploitable, differences between pre-smokers, "learners" and confirmed smokers in terms of what they expect or derive from smoking. Let us examine these differences.

For the pre-smoker and "learner" the physical effects of smoking are largely unknown, unneeded, or actually quite unpleasant or awkward. The expected or derived psychological effects are largely responsible for influencing the pre-smoker to try smoking, and provide sufficient motivation during the "learning" period to keep the "learner" going, despite the physical unpleasantness and awkwardness of the period.

In contrast, once the "learning" period is over, the physical effects become of overriding importance and desirability to the confirmed smoker, and the psychological effects, except the tension-relieving effect, largely wane in importance or disappear.

The common thread binding the three groups together appears to be the fact that smoking of cigarettes offers and provides a desired mechanism for coping with the stresses of living, which may range from boredom to high tension and from fatigue to high arousal and hyperactivity. Once this mechanism has been experienced and used, physical and psychological habit patterns are firmly established and become self-perpetuating.

In a Sept. 30, 1974, presentation to the RJR Inc. board of directors, R.J. Reynolds's vice president for marketing, C.A. Tucker, noted of the youth market:

Our paramount marketing objective in 1975 and ensuing years is to reestablish RJR's share of marketing growth in the domestic cigarette industry. . . .

We will speak to four key opportunity areas to accomplish this. They are:

1. Increase our young adult franchise.

2. Improve our metro market share.

3. Exploit the potential of the growing cigarette categories.

4. Develop new brands and line extensions with new product benefits or new personalities.

First, let's look at the growing importance of the young adult in the cigarette market. In 1960, this young adult market, the 14-24 age group, represented 21 percent of the population.

As seen by this chart, they will represent 27 percent of the population in 1975. They represent tomorrow's cigarette business. As this 14-24 age group matures, they will account for a key share of the total cigarette volume -- for at least the next 25 years. . . .

Both Philip Morris and Brown & Williamson, and particularly their fast growing major brands, Marlboro and Kool, have shown unusual strength among these younger smokers. In the 14-24 age category, Philip Morris has a 38 percent share and B&W a 21 percent share. Both companies have significantly lower shares in the remaining age categories.

With strong young adult franchises and high cigarette brand loyalties, this suggests continued growth for Philip Morris and B&W as their smokers mature. . . .

In sharp contrast, our company line shows a pattern of relatively even strength among all age groups and strength in the 25 and older categories, where we exceed both competitors.

Our two major brands, Winston and Salem, show comparative weakness against Marlboro and Kool among these younger smokers. Winston is at 14 percent in the 14-24 age group versus Marlboro at 33 percent. Salem is at 9 percent versus Kool at 17 percent. Again, our brands show competitive strength in the 25 and older age groups.

This suggests slow market share erosion for us in the years to come unless the situation is corrected.

In a Jan. 23, 1975, memo, RJR official J.W. Hind wrote:

Our attached recommendation . . . is another step to meet our marketing objective: To increase our young adult franchise. To ensure increased and longer-term growth for Camel Filter, the brand must increase its share penetration among the 14-24 age group, which have a new set of more liberal values and which represent tomorrow's cigarette business. . . . Presently, almost two-thirds of the Camel Filter business is among smokers over 35 years of age, more than twice that for Marlboro."

On April 15, 1976, RJR executives prepared a 10-year planning forecast through 1987, entitled "Planning Assumptions and Forecast for the Period 1978-1987," which was presented to the board of directors and was stamped "RJR Secret":

Young people will continue to become smokers at or above the present rates during the projection period. The brands which these beginning smokers accept and use will become the dominant brands in future years. Evidence is now available to indicate that the 14 to 18 year old group is an increasing segment of the smoking population. RJR-T [RJR Tobacco] must soon establish a successful new brand in this market if our position in the industry is to be maintained over the long term.

The following March, RJR issued its next 10-year report, under the same title and "RJR Secret" stamp, containing an almost identical passage on expanding RJR's sales among "beginning smokers," which had consistently been used in earlier documents to refer to smokers as young as 14. In the March 1977 document, all specific mention of appealing to youth under 18 had been removed.

A Sept. 11, 1980, RJR memo stamped "Confidential" said executives must change their terminology, even internally, for referring to the target market. The key terms it proposes removing were blacked out as "privileged material." From 1977 on, most RJR documents ceased to explicitly mention attempts to sell to smokers under 18, but they continued to refer to "younger adult smokers," which in earlier documents almost always referred to 14- to 18-year-olds.

RJR memos from the 1980s seem to reflect continued interest in increasing market share among child smokers. In a July 22, 1980, memo to then-RJR Chairman E.A. Horrigan, Gerald Long (then executive vice president of marketing, and soon to become RJR's CEO) noted that Philip Morris's share of the 14- to 17-year-old market was 59 percent, while RJR held less than 20 percent of this market.

Hopefully, our various planned activities that will be implemented this fall will aid in some way in reducing or correcting these trends.

A Sept. 29, 1980, RJR memo, entitled "Younger Adult Smoker Opportunity Analysis -- New Brands," demonstrates the extraordinary depth of the company's research into young people's motives in starting to smoke:

[P]eer group acceptance has a dominant influence on the brand choice of younger adult smokers. Socially insecure, they gain reinforcement by smoking the brands their friends are smoking, just like they copy their friends' dress, hairstyle and other conspicuous things. To smoke a brand no one has heard of -- which all new brands are -- brings one the risk of ostracism. . . . [W]e should place our efforts and our resources behind our established brand names, keeping them young and contemporary through advertising, promotion and line extension strategies.

In a Feb. 29, 1984, RJR marketing department report that exhaustively examines the history of the market appeal of U.S. cigarettes, brand by brand, RJR researcher Diane Burrows wrote:

Younger adult smokers have been the critical factor in the growth and decline of every major brand and company over the last 50 years. They will continue to be just as important to brands/companies in the future for two simple reasons: The renewal of the market stems almost entirely from 18-year-old smokers. No more than 5 percent of smokers start after age 24. [And] the brand loyalty of 18-year-old smokers far outweighs any tendency to switch with age. . . . Brands/companies which fail to attract their fair share of younger adult smokers face an uphill battle. They must achieve net switching gains every year to merely hold share. . . . Younger adult smokers are the only source of replacement smokers. . . . If younger adults turn away from smoking, the industry must decline, just as a population which does not give birth will eventually dwindle.

In a 1986 "White Paper" on "The Importance of Younger Adult Smokers," RJR executives noted that Winston's share among youth peaked in the mid-1960s, just as Marlboro started seizing that market:

Winston's growth and subsequent decline can be attributed to its performance among younger adult smokers.

By 1986, company officials stopped explicitly discussing children under 18. The White Paper says, for example:

The future success of any cigarette brand is driven by its ability to attract younger adult smokers, between the age of 18 and 24.

The White Paper found that Camel was relatively popular with young males because of its brand image of conferring on its smokers a feeling of "independence . . . doesn't follow crowd."

Camel has an opportunity to capture the young adult smoker market.

From a 1987 presentation to senior RJR executives:

"YAS [young adult smokers] are the only source of replacement smokers. Less than one-third of smokers start after age 18. . . . First Usual Brand Younger Adult Smokers (FUBYAS) drive the growth of Marlboro and Newport. . . . RJR is substantially underdeveloped and declining in the share of 18-20 year old smokers."

In the early 1970s, RJR launched ads in a French magazine for youth called Pilote, featuring a Joe Camel predecessor, sometimes called the "funny camel." A Feb. 7, 1974 memo stated:

The French advertisement for Camel Filters is a smash. It would work equally well, if not better, for Camel Regular. It's about as young as you can get, and aims right at the young adult smoker Camel needs to attract.

The Joe Camel campaign, launched in the United States in 1988, drew from this French campaign and may have also borrowed images from a later Canadian study which showed Joe Camel wearing a leather jacket, shooting pool, playing electric guitar and listening to a band called the "Hard Pack."

In 1984 and 1985, RJR tested the Joe Camel image against other possible ads in a focus groups of youngsters aged 18 to 24. According to an RJR market research report on Feb. 1, 1985, the focus groups found that the earlier "French Camel" ads: were well-received due to the fun/humor aspects. . . . The main drawbacks [include that] they may be appealing to an even younger age group.

In the lead-up to the 1988 ad campaign, an RJR official, James S. Carpenter, wrote the following memo to RJR Brand Management, dated March 5, 1985:

This is to advise you that we have no problem with TC [tobacco company] using the design of the "funny" camel used in the past in France for T-shirts and lighter premiums. . . .

I have requested our Paris office to provide some background information for you. However, I must caution that this design was used in France during a time when an attempt was being made to "youthen" the brand: The entire advertising and promotional campaign used at the time was geared to this end, with the "funny" camel playing a key role in the advertising. Indeed the design did help to achieve this end, but at a time when the younger franchise became associated with such activities as the university riots and car burnings on the left bank. When societal values returned to a more normal and status-quo basis, the Camel brand went out with the militaristic and rebellious views of the franchise. And so for this reason, there is implicit a potential danger in using the design and we want you to be aware of our experience. . . . To put it bluntly, we do not want to see this design internationally.

RJR has consistently said its Joe Camel campaign was designed solely to influence adult smokers to switch brands, not to entice youth to start smoking. But the documents suggest RJR officials privately thought otherwise. In the papers, company executives frequently express the view that ads must focus on peer pressure.

On March 12, 1986, the co-developer of the Joe Camel campaign, Rick T. Caufield, wrote an "RJR Secret" memo to RJR marketing vice president David Iauco stating that Camel advertising should be:

Directed toward using peer acceptance/influence to motivate the target audience to take up cigarettes. Specifically advertising will be developed with the objective of convincing target smokers that by selecting CAMEL as their usual brand they will project an image that will enhance their acceptance among their peers. . . .

In a "confidential" December 1990 "Camel Advertising Overview" report, RJR's ad agency, Young & Rubicam, noted:

Historically RJR has been substantially underdeveloped in the 18-34 market vs. PM [Philip Morris]. RJR has identified Camel as the Brand best able to build share against this segment. . . . The introduction of Joe provided the first evidence that Camel could deliver against this objective. The subsequent evolution of Joe continues to build the brand's vitality. . . . [Camel should] appeal to 18-34 smokers, particularly those with an "irreverent, less serious" mindset, gradually breaking down the pervasive peer acceptance of Marlboro.


"Our advertising is not designed to attract new smokers of any age and is not having that effect."

-- Edward A. Horrigan, chairman and chief executive of RJ Reynolds Tobacco Co., in testimony on March 12, 1982.

"All of us agree on one thing, and that is that kids shouldn't be smokers."

-- Walker Merryman, vice president of the Tobacco Institute, in The Washington Post magazine, Feb. 20, 1994

"We don't do research among young smokers because we don't think young people should smoke."

-- Maura Payne Ellis, RJR spokeswoman, in The Washington Post magazine, Feb. 20, 1994

"We do not market to children and will not."

"It's fun, just like Snoopy the Dog sells Met Life Insurance, just like Garfield the Cat sells Embassy Suites Hotels. We're not accusing them of targeting kids, are we?"

-- James W. Johnston, RJR chairman and chief executive, in congressional testimony referring to Joe Camel, April 14, 1994.

"Only adults should ever face the decision to smoke or not to smoke. . . . As a parent, you have a strong voice in helping your child make the right decisions. As the person they depend on most, you need to add your voice to the many others trying to discourage kids from smoking."

-- 1995 RJR ad entitled "How to Talk to Your Kids about Smoking Before Someone Else Does"

"I don't think of Joe Camel as a cartoon. . . . I think of Joe Camel as a person, a person who exhibits a certain way of looking at life, a certain way -- a lifestyle, if you will."

-- Diane Burrows, RJR market researcher who helped develop Joe Camel, in an ABC News interview June 7, 1996

"We all agree we must do something to keep cigarettes out of the hands of children under the age of eighteen."

-- 1995 RJR ad

© Copyright 1998 The Washington Post Company

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