“Ever notice how you never notice some everyday things that are always out there? Take tobacco ads for example...”
they might not catch your eye, retail stores play host to
a wide variety of tobacco advertisements and promotional messages.
Point-of-purchase (POP) — also referred to as “point-of-sale”
(POS) — advertising is the tobacco industry's most dominant
force in marketing.
See Spring 2008 Media: Click Here
Gas & cigarettes: Many gas stations post cigarette prices at the pump along with their fuel prices. It's easy viewing for anyone who's killing time while filling their tank, and for kids sitting in the vehicle. Pictured here is a promo for "little cigars" which are not in the same tax bracket as cigarettes, hence the insanely low price.
• Click for more about "little cigars".
• Letter to the editor (3/13/09)
Almost every (97%) CNY retail outlet licensed to sell tobacco has interior cigarette ads, with an average of 17 cigarette ads posted in each store... 56% displayed cigarette ads outside the store, including window signs, freestanding signs, and signs displayed on gas pumps. Those stores had an average of 4 outdoor ads each. Click here for additional details »
Local deli takes out a piece of big tobacco; effort to reduce cigarette advertising at stores gains momentum.
Retailer Pledge to reduce, rearrange or remove POP tobacco advertising.
“Tobacco companies are concentrating their marketing dollars at the point-of-sale to the extent that the store is their primary communication channel with customers. As a result, all shoppers regardless of age or smoking status are exposed to pro-smoking messages. Given the financial resources spent by tobacco companies in stores, this venue warrants closer scrutiny by researchers and tobacco control advocates.” (1)
Tobacco company incentive programs are exchanges that occur between the companies and the retailers.
Incentive programs involve an array of advertising and promotion strategies such as volume discounts or buy downs. In exchange... retailers are expected to follow tobacco company requirements to place products and advertising in specific locations and to advertise special prices prominently.
In many cases the exchange occurs between the tobacco company and the
corporate headquarters of the outlet so that the specific retailer in
your community has no input into the level of promotional activity,
or placement of advertisements.
LAWS to limit or prohibit point of sale advertising have been repeatedly overturned by high courts. Click here to learn more »
Federal Trade Commission (FTC) Cigarette Report for 2004 and 2005
Spending by U.S. cigarette manufacturers for marketing and promotion in the United States totaled $14.15 billion in 2004, and $13.1 billion in 2005. Spending in 2003 was $15.15 billion.
[Click here for much more from the FTC report.]
Promotional Allowances includes 4 categories:
- Price discounts (paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers such as off-invoice discounts, buy downs, and voluntary price reductions).
- Promotional allowances paid to retailers (payments to cigarette retailers in order to facilitate the sale or placement of cigarettes such as payments for stocking, shelving, displaying and merchandising brands, volume rebates, and incentive payments).
- Promotional allowances paid to wholesalers (payments for volume rebates, incentive payments, value added service and promotional execution).
- Other promotional allowances paid to anyone else (other than retailers and wholesalers and full-time company employees involved in the cigarette distribution and sales process, in order to facilitate the sale or placement of cigarettes).
The four promotional allowance categories totaled $11.86 billion for 2004 (83.8 percent of total spending that year), and $10.62 billion in 2005 (81 percent of total spending).
Spending on point-of-sale materials (ads posted at the retail location, but excluding outdoor ads on retail property) was $182.2 million in 2005.
The cigarette manufacturers spends the vast majority of their marketing dollars in stores, where the industry is relatively free from regulation.
Click here for much more from the 2007 FTC report.