Post on 23-Dec-2015
Why Focus on Stores?
• Stores are used as the main channel of communication by tobacco companies to reach new and current customers
How Many Tobacco Marketing Materials are in California stores? (1999 data)
0
5
10
15
20
25
30
Convenience stores Gas stations Large drug stores Large markets Liquor stores Small stores
Mea
n N
um
ber
Functional Items
Displays
Signs
Tobacco marketing materials in California stores are easily visible to children (1999 data)
5%
30%
41%
77%
57%
29%
4%
18%
24%
32%
23%26%
3%0%
6%
15%16%11%
0%
20%
40%
60%
80%
100%
Conveniencestores
Gas stations Large drug stores Large markets Liquor stores Small stores
Pe
rce
nt
of
Sto
res
Stores with cigarette brand signs below 3 ft
Stores with cigarette displays within 6 inches of candy
Stores with cigarette brand signs larger than 14 sq ft
Tobacco company marketing expenditures 2000
Point of Sale $347 Million 3.6%
Promotional allowances
$3.9 Billion 40.9%
Retail Value Added $3.5 Billion 36.7%
Other (e.g., newspapers, magazines, transit, etc.)
$1.8 Billion 18.8%
Total $9.6 Billion 100.0%
Source: Federal Trade Commission Cigarette Report for 2000
Changes in tobacco company marketing dollars in stores between 1990 and 2000 (in millions)
0 1000 2000 3000 4000 5000
other
POS ads
retail valueadded andcoupons
promotionalallowances
2000
1990
What are promotional allowances?
Promotional Allowances are:
• Volume discounts: the more you sell, the better the deal
• Display allowances: payments to place display racks and shelving
• Buydowns: special sales on inventory
What is “retail value added”?
• Retail value added is a term used in the FTC report that includes multi-pack discounts such as “buy 2, get 1 free” and gifts with purchase such as a key chain or disposable camera
How do tobacco company marketing expenditures impact the store?
Tobacco marketing expenditures dramatically alter the store environment:
• Special sales
• Lower prices
• Displays and shelving units
• Prominent ads and products
Special Sales and Lower Prices
Displays and Shelving Units
Prominent Ads and Products
Everybody advertises - so what?
In-store marketing works:
• POS boosts tobacco sales by 12 to 28%
• 62% of 7th grade students recall tobacco ads in stores
• Youth who report seeing in-store tobacco ads were 38% more likely to experiment with smoking
What retailers have to say…
In focus groups, California retailers say:
• In-store advertising increases sales of products
• Advertising closest to the counter has biggest impact on sales
• Advertising that highlights a reduced price is the most effective
Retailer focus groups (continued)
• Sales on cigarettes increase overall sales
• Price reductions and multi-pack discounts
are the most prevalent and effective
• Sales on packs or cartons are due to “buydown” offered by tobacco company
What retailers have to say…
What can we do to reduce tobacco marketing in stores?
• Raise community awareness about advertising.
• Increase compliance with and enforcement of existing ordinances.
• Require tobacco retailer licensing.
• Stimulate the passage of new policies:Exterior sign lawsSelf-service display bans