Lights Cigarettes in the USA

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Summary of Lights Learning

■ Flavour and smoking satisfaction are critical elements for consumers to accept Lights cigarettes because these are elements that consumers are not willing to sacrifice.

■ It is not enough to be an innovator to win in the market. Although it is the manufacturer that develops new products and introduces them into the market, in the end it is the consumer that drives the market when he/she adopts the products.

■ The consumers adopt the products when they perceive relevant additional/potential benefits in such products. Lights cigarettes were adopted when consumers found additional value in them.

■ The innovator is not necessarily the one who takes advantage of the trend toward a new product or product category. In the end, it is the manufacturer (innovator or follower) who presents the most relevant proposition to the consumers who take advantage of such trend. In the cigarette industry, it was Viceroy and not Kent that led the filter segment development.

■ Although Kent benefited from the anti-smoking publications about tar deliveries, the impact on sales was temporary and not enough for the brand to maintain its success. The delivery debate helped Lights brands in terms of trial and awareness but not in terms of adoption. Adoption relies more on consumer satisfaction after trial.

■ The entrance of other manufacturers to the new segment (Mowers) and the brand launch dynamic that this reaction creates are critical elements for the segment to develop. This is especially important if the innovator is not one of the biggest players in the market and, therefore, does not have enough power to drive the market.

■ The USA market gradually moved down in tar deliveries even before the advent of the Lights segment. The SWAT indicates that consumers had started to move down in tar deliveries before the 70s, switching to lower tar brands within the existing portfolio of Full Flavour brands.

■ Given the consumers' perception of Lights cigarettes as tasteless and flavourless, Marlboro Lights' communication strategy emphasizing the parent positioning of a full-flavoured, full-body cigarette was critical to attract a consumer franchise.

■ The threat to downsize the industry by the anti-smoking forces and government regulation made manufacturers focus on Lights products. Anti-smoking publications also sensitized consumers toward Lights cigarettes. Nevertheless, in the end, the brand launch dynamic, the product ability to satisfy the consumers and the manufacturers' focus on Lights brands were the elements that propelled the segment development in the USA.

■ The consumers' attitudes toward light products in other categories (like beverages and food) helped consumers to understand the light concept and accelerate the adoption of Lights cigarettes.

■ A combination of rational and emotional approach is needed when launching a Lights brand. Smokers embraced the Lights brands in the USA not only because of their low tar but also because of the brands' personalities and imagery. In addition to being lower in tar, Lights cigarettes in the USA were the modern way to smoke, aligned to a lifestyle.

■ When Lights were aligned to a lifestyle, the initial consumer base of older and concerned smokers expanded to a bigger consumer base of ASU30 and new career smokers driven by a modern way to smoke.

■ The introduction of the Lights brand is first a strategic issue regarding the consumers' needs, market potential, brand's role in the company's portfolio and long-term goals. The operational and strategic issues of what and how to launch it are second. For Philip Morris, Marlboro was not only the brand with the strongest profile but also the one that best fit the company's plan regarding economies of scale, standardization and internationalization.

■ Cannibalization and its role in the strategy are factors to consider when introducing line extensions.

■ In the evolution of the Lights segment in the USA, both Lights line extensions (Marlboro Lights, Salem and Winston) and freestanding Lights brands (Merit) were able to capture a consumer franchise and grow to top positions.

■ In the USA market, only the line extensions that had healthy parents were able to succeed. Marlboro Red’s image was flexible enough to allow the line extension to present its proposition, support the Lights proposition and not be hurt by it Marlboro Lights reinforced Marlboro Red’s positioning and brought modernity to the family.

■ It is possible to create for a Lights line extension a brand world that is different from the parent's, like Philip Morris did for Marlboro Lights. The critical factor is to maintain only the links that allow the Lights to capitalize on the parent's strengths without damaging the parent's image.

■ To launch a Lights line extension, you may select to differentiate it from the parent or position it close to the parent. All will depend on your objective of avoiding cannibalization versus capturing the parent's franchise. If differentiation is the strategy, the line extension still has to be consistent with the family in terms of attributes and image.

■ A freestanding Lights brand can capitalize on its lower tar characteristic and present its offer with a more rational approach. Merit did not claim reduction of unwanted characteristics. Instead Merit highlighted its benefit: "more flavour for less tar."

■ Marlboro Lights did not need the tar delivery debate or League Table publication to succeed. Instead, Philip Morris maintained a low profile regarding tar delivery changes throughout the brand's Life Cycle. Marlboro Lights seems to remain unchanged in consumers' eyes but, in fact, it decreased its tar content and updated its image to present a more modern appearance.

■ Consumers can be moved downward in tar by decreasing gradually the brand's tar content. This strategy minimizes the impact on the franchise.

■ Although American consumers are strongly sensitized toward tar levels, the USA market has not fully moved to Ultra Lights products. This is evidence that the tar delivery is not the only motivator that keeps consumers switching down in tar deliveries. As cigarettes and consumers moved downward to ultra low tar deliveries, the tar-taste dichotomy becomes increasingly important because of the smokers' desires to retain the smoking pleasure. In the USA, lack of taste has been the major barrier for the Ultra Lights segment to develop further. Consumers of Ultra Lights cigarettes are those who are willing to make a taste trade-off.

■ Key motivators for the consumers to smoke Ultra Lights cigarettes are smokers' interests in attaining more of the characteristics they had come to associate with low tar cigarettes.

■ As soon as manufacturers launched brands in the 4-6 mg. band, the 0-3 mg. band declined and the overall segment consolidated toward the 4-6 mg. band. This is because the 4-6 mg. band offers ultra low tar level with better taste.

■ The success of innovative products beyond Lights will be conditioned to develop new technologies to eliminate the unwanted side effects while maintaining the smoking characteristics in terms of taste and pleasure.