Brand loyalty ­ but at a price Rothmans (UK) Ltd Oxford Rd Aylesbury Bucks HP21 8SZ Tel: 01296 335000 Fax: 01296 335960 Key PERSONNEL Managing director Ian Muir Trade marketing and distribution director David Kelly Brand marketing director Ralf Wittenberg National account controller Tony Hanning KEY brands Cigarettes · Royals · Marlboro · Raffles · Craven A · Consulate · Dunhill · Rothmans Handrolling tobacco · Cutters Choice Cigars · Lincoln Pipe tobacco · Craven · Dunhill · Erinmore Smokers may be an increasingly fickle bunch, but brand loyalty it is still a huge feature of the tobacco industry. "As many as 41% of smokers say they would go elsewhere to ensure that they get their usual brand," says Rothmans md Ian Muir. "But loyalty depends on the price tier that the cigarettes fall into." Most faithful are smokers of premium and mid price brands, while most precocious are the economy smokers. "But it is also true that economy brand smokers may switch to a premium brand when they can afford it, or as a weekend or social brand," says Muir. So retailers take note. "Research has shown that two thirds of customers purchasing tobacco will buy something else, usually on impulse," says Muir. "This fact, allied to the high brand loyalties enjoyed by products in this category, means that it is essential that the product is always available. A high proportion of shoppers will seek their product elsewhere if it is not available to purchase. This may lead to the loss of other products as well as tobacco, such as newspapers, confectionery and grocery." But profitability can be improved by a number of means. High on Muir's list, though, is optimising the range of cigarettes stocked to offer choice to customers as well as attracting new business. He also urges retailers to avoid out of stocks ­ "Don't give your customers an excuse to go else where" ­ and to sell at the recommended retail prices, saying small price cuts are "meaningless". Meanwhile, Rothmans has been busy persuading retailers to re-think the way cigarettes are displayed. "Traditionally, gantries are laid by manufacturer and shelf ownership. The header indicates domination of brand. "It does not take into account the retailer's needs, rate of sale or customers' wants." Customer choice is determined by a combination of flavour/taste, image/value, brand and pack size, so Rothmans is working with retailers on revamping the fascia. "This helps the shopper as well as ensuring retailers' needs are met," says Muir. "As far as manufacturers go, we need to ensure that our brands reflect what the consumers are looking for. With Rothmans, we have Marlboro family which is positioned in the premium sector ­ the only growing brand within the sector ­ and Marlboro Lights, which hit an all time high of 3.6% in May 2000 (source: AC Nielsen). "In the value for money sector we have the Royals family which includes 24s and 20s, both offering quality cigarettes at a value price. Royals 20s is showing significant growth with it reaching an all time high of 0.9% in May 2000 (source: AC Nielsen)." Muir believes that, should advertising be outlawed, it is in everyone's interest to maintain a price truce on the tobacco shelves. "If price cutting proved an effective way of switching smokers from one brand to another, then everyone would lose, especially the smokers who would inevitably be offered various cheap imports as an alternative to the quality premium brands currently available," says Muir. {{Z SUPPLEMENTS }}