In a series of studies examining the factory-made cigarette product portfolios of major cigarette companies in Australia, Greenland1-3 has described how tobacco companies rely on the use of variant names with colour associations, value-based market segments, and well-established brand names to continue to market their products in Australia’s increasingly ‘dark’ (i.e., highly restricted) tobacco market. Variants are descriptors that “distinguish the particular tobacco products sold under each brand”,1 (p.e65) for example, Blue, Gold, Red, or Rich, Smooth, Menthol. Brand extensions (or sub-brands) are different types of products sold under a main brand, for example, Peter Jackson Hybrid (menthol capsules) is a brand extension of Peter Jackson. Each sub-brand may also have several variants. The brand family, in this instance, is Peter Jackson—the major brand name under which all sub-brands and variants, in their various pack sizes, are sold. A stock-keeping unit refers to each single product presentation, that is, the unique brand (or sub-brand), variant, and pack size combination.
10.9.1 Product ranges within major Australian cigarette brands, pre-plain packaging
Greenland’s first study1 examined the cigarette brand and variant portfolios of the three major tobacco companies operating in Australia immediately before the implementation of plain packaging. This study identified that, on average, each brand family supported an average of 6 variants (Greenland included sub-brands as variants in this study). This ranged from several brands only sold in one variety to up to 13 variants and sub-brands for the brand family Peter Jackson. The 12 leading brands supported a higher number of variants, 10 on average. Use of colours in variant names was high, with only three of the top 12 brands not using colour names. More than half of all variant names of the top 12 brands included specific colours (either just the colour or a colour-descriptor combination, such as Smooth Blue), and a further 8% used descriptors that had colour connotations, such as Night, Clear, Frost. Menthol accounted for approximately 10% of variants among the top 12 brands. Variants (and sub-brand) names that were not colour-related tended to evoke connotations of quality, sophistication, modernity or advanced technology, size, and flavour.
In addition to the extensive range of variants available within cigarette brand families in the Australian factory-made cigarette market, Greenland1 also examined the range of pack sizes on offer, including multi-buys and cartons. An average of 3.6 stock-keeping units per variant were identified (i.e. 3.6 pack sizes per brand-variant combination), with up to eight for the value brand Holiday, Horizon and Pall Mall. Greenland noted that larger pack of 40s and 50s were not usually offered in mainstream and premium brands, instead twin packs of 2x20s or 2x25s were more common.
Greenland2 then examined the major three tobacco companies’ brand portfolios over time, from 2006 to 2015. Over this period, a slight decline in the total number of brands was noted, while the overall number of variants per brand was relatively stable. However, this apparent stability in overall numbers concealed a period of substantial change in brand portfolios, particularly in the years immediately following plain packaging introduction. The variant ranges among the 12 leading brands expanded and the variant names of many products were modified, primarily to include colour descriptors (see Section 10.8.9.3 for a more detailed description).
In a third study examining the cigarette portfolio of British American Tobacco Australia from 2012 to 2014, Greenland and colleagues3 observed that prices were highly dispersed within BATA’s own cigarette range. Four distinct price segments within BATA’s extensive products, from premium to ‘ultra-low’. The recommended retail price of the cheapest (small) product (Just Smokes 22s at $0.72 per stick) was 69% of the cost of the most expensive product per stick (Dunhill 20s at $1.05 per stick). It was further noted that premium brands tended to be offered in only one or two pack sizes (usually 20s and 25s), while budget brands were offered in many more sizes, from 20s up to 50s. Within each brand, price per stick incrementally decreased as pack size increased. Similarly, twin pack offers were cheaper per stick relative to the cost of two single packs. Greenland et al.3 concluded that highly differentiated product portfolios and price options are offered within BATA’s product range, even post plain-packaging. Product differentiation, they argued, is a key strategy in effective tobacco marketing:
“Extensive tobacco product portfolios are differentiated to create maximum appeal for the numerous market segments, which vary according to factors such as demographics, lifestyles, aspirations and smoking habits.”
Greenland et al., 20163 p327
10.9.2 Market segmentation
The Australian cigarette market is highly segmented. Each of the major tobacco companies operating in Australia offer a variety of brand families. These brand families are most readily differentiated into price-based market segments, typically referred to in Australia as value (low cost), mainstream (mid-priced), and premium (most expensive),4 with a newer very cheap ‘super-value’ (or ‘ultra-low’) segment that emerged in the years following a very large tax increase (April 2010) and prior to the implementation of plain packaging.3,5 Most companies also offer multiple brands within each market segment, and even sub-brands within each brand. Each brand or sub-brand may be tailored to appeal to different consumer groups in terms of demographic characteristics, geographic locations, and consumer motivations or values.1 Further, variants within brands can be used to target particular consumers,2,3 including different flavour or sensory quality preferences, or those looking for particular brand attributes. As described in Chapter 10, Section 10.8.4.1, many Australian cigarette brands now offer menthol capsule sub-brands. These cigarettes contain a capsule of menthol flavouring in the filter than can be burst by the smoker to release a menthol flavour. These menthol capsule products were initially offered among premium brands, but have since been introduced more widely as a premium feature on budget brands.6
1. Greenland SJ. Cigarette brand variant portfolio strategy and the use of colour in a darkening market. Tobacco Control, 2015; 24:e65-e71. Available from: http://tobaccocontrol.bmj.com/content/24/e1/e65
2. Greenland SJ. The Australian experience following plain packaging: the impact on tobacco branding. Addiction, 2016; Online first 24 August 2016.
3. Greenland S, Johnson L, and Seifi S. Tobacco manufacturer brand strategy following plain packaging in Australia: implications for social responsibility and policy. Social Responsibility Journal, 2016; 12(2):321-34. Available from: http://www.emeraldinsight.com/doi/abs/10.1108/SRJ-09-2015-0127
4. Carter SM. The Australian cigarette brand as product, person, and symbol. Tobacco Control, 2003; 12 Suppl 3:iii79-86. Available from: http://tobaccocontrol.bmj.com/content/12/suppl_3/iii79.full.pdf
5. Bayly M, Scollo M, and Wakefield M. Tobacco price boards as a promotional strategy—a longitudinal observational study in Australian retailers. Tobacco Control, 2017; Online first: 22 July 2017.
6. Rossel S. Fit to burst. 2017. Last update: Viewed Available from: http://www.tobaccoreporter.com/2017/01/fit-to-burst/.
7. NSW Retail Tobacco Traders' Association. Winfield Charcoal Filter advertisement: Smooth as. Australian Retail Tobacconist, 2006; 66(8):8-9.
8. Scollo M, Bayly M, White S, Lindorff K, and Wakefield M. Tobacco product developments in the Australian post-plain packaging market to 2017. Tobacco Control, 2017; IN PRESS.
9. NSW Retail Tobacco Traders' Association. Price lists. The Australian Retail Tobacconist, 2016; 99(Jul-Sep).
10. Scollo M, Occleston J, Bayly M, Lindorff K, and Wakefield M. Tobacco product developments coinciding with the implementation of plain packaging in Australia. Tobacco Control, 2015; 24(e1):e116-22. Available from: http://tobaccocontrol.bmj.com/content/early/2014/04/30/tobaccocontrol-2013-051509.short