sample="quota" bates="464002536" isource="bw" decade="1980" class="ni" date="19830527" CIGARRERA LA MODERNA, S. A. DEG V. / APARTADO 384 / DIRECCION CAB LEGRAFICA 'CIGAMOD' AV. F.I. MADERO 2750 FTE / C.P. 6400 / TELEFONOS 47-22-00 / MONTERREY, N. L. MEXICO Monterry, N. L., May 27, 1983 MR. TOM WHITEHAIR BROWN & WILLIAMSON INTL. TOBACCO 3000 FIRST NATIONAL TOWER 101 SOUTH FIFTH ST. LOUSVILLE, KY. 40202 U.S.A. Dear Tom: Attached please find four copies of the Marketing Managers Conference 83, held in Gaudalajara in March 14-16, 1983. I will appreciate you turning one copy to Tom Sandefur, one to Ted Parrack and one to Bill Telling. The Minutes were prepared with the material given by the speakers as well as with the notes given by the moderators of each theme. Nevertheless, it might be possible that any of the participants would like to make corrections to them and if so, I am asking them to make the proper changes sending one copy to all the delegates to the conference. . JAIME GARCIA S. NARRO MARKETING DIRECTOR Best Regards, JGSN'mjsh. Encls. 4 RECEIVED MAY 31 1983 T.E.W. MARKETING MANAGERS CONFERENCE MEXICO - MARCH 14TH-16TH, 1983 DELEGATES LIST U.K. MR. MIKE HEATH MARKETING DIRECTOR B.A.T. MR. IAN STEWART TERRITORIAL COORDINATOR B.A.T. MR. IAN HACKING MKTG. PLAN. OPERATIONS B.A.T. MR. GEOFF BROOKS PRODUCT PLANNING B.A.T. MR. BEECROFT INTL. BRAND GROUP MANAGER BATUKE MR. PAUL VINER INTL. BRAND MANAGER BATUKE U.S.A. MR. THOMAS SANDFEUR SR. VICE-PRES. INTL.MKTG. BWIT MR. TOM WHITEHAIR AREA V.PRES. LATIN-AM/F.EAST BWIT MR. PARRACK VICE-PRES.BRANAD MANAGEMENT BWIT MR. BILL TELLING DIR. OF MKTG.LATIN-AM/F.EAST BWITBRASIL MR. WINTER ROSE MARKETING DIRECTOR SOUZA CRUZ ARGENTINE MR. ED GRANT MARKETING DIRECTOR NOBLEZA PICCARDO CHILE ME. TONY PEREIRA MARKETING IDRECTOR C.I.A. CHLENA DE TAB. VENEZUELA ME. OMAR DIAZ MARKETING DIRECTOR CIA. CIG. BIGOTT PANAMA MR. J.MAURICIO WURSMER MARKETING DIRECTOR TAB. ISTMENA COSTA RICA MR. VINICIO LINES MARKETING DIRECTOR REP. TOBACCO NICARAGUA MR. IAM IRMIE GENERAL MANAGER TAB. NICARAGUENSE HONDURAS MR. ROBERTO DANILOV MARKETING MANAGER TAB. HONDUREÑA SALVADOR MR. ENZO BIANCHI MARKETING MANAGER CIG. MORAZAN GUATEMALA MR. RONNIE BURNETT MARKETING MANAGER TAB.NACIONAL CANARIAS MR. RAUL METAMOROS MARKETING DIRECTOR TABACANARIAS MEXICO MR. HECTOR ARECHAVALA GENERAL DIRECTOR CLM MR. JAIME GARCIA S. NARRO MARKETING DIRECTOR CLM MR. CESAR GAEHD BRAND PLANNING MANAGER CLM MR. ROLANDO SEPULVEDA MARKETING SERV. MANAGER CLM OUTSIDE SPEAKERS MR. ENRIQUE GIBERT CREATIVE V. PRESIDENT MAQUEDA GILBERT ING. JOSE G. CARRILLO ADMIN. PROCESS DIRECTOR SYNKRO MARKETING MANAGERS CONFERENCE GAUDALAJARA - MEXICO MARCH 14-15-16, 1983 AGENDA MARKETING MANAGERS CONFERENCE GAUDALAJARAGAUDALAJARA - MEXICO MARCH 14-15-16, 1983 INDEX MARKETING MANAGERS CONFERENCE GAUDALAJARA - MEXICO MARCH 14-15-16, 1983 MINUTES I. INTRODUCTION J. García opened the conference with a Welcome to all Delegates, in behalf of the CIGARRERA LA MODERNA, S.A. De C.V., host company and started the works of the MMC 83, reminding that the main purpose of these meeting is to have the opportunity of interchanging experiences among all the participating countries of the most relevant themes in the current marketing, trying to detect the opportunities that those themes represent and establishing strategic actions that should be taken by the Group and by each one of the companies. II. OBJECTIVE The main objectives of the Conference were: 1. Review of the current situation of the marketing of Low Deliveries products, in relation to the League Tables publication and the technical development of these products. 2. Review the last events on marketing in a restrictive environment, knowing of the last experiences the countries have had, and discussing the suggestions made in BATUKES's document: 'Aide Memoire '. 3. To determine the area needs in courses for the development and training of the marketing personnel and knowing the courses planned by Millbank. 4. To get to conclusions on the strategic planning roll in marketing, as part of the planning process of the company. 5. To discuss Mike Heath's document on "Pricing/Value for the Money Brands". getting to conclusions and recommendations on this theme. 6. Review the obtained progress in relation to the development of the Sales' Force, in the same terms dealt with the prior conference. 7. Apply the experience and the use of strategic thinking in the Malboro Case in Mexico, recognizing that what is happening today in Mexico can happen in any other country. Malboro, as the Market Expansion Document states it, is the originator or responsible of the competitive weakness of the BAT Group. ## . . . . . . . 2 8. Know the BAT Marketing Policies and strategies, the sales results in the area during the last year, as well as the main strategies that the competition has followed in the area. 9. Review plans and strategies of the Virginia International brands VATUKE and the U.S. Blend International Brands from BWIT. III. MARKETING LOW DELIVERY PRODUCTS 1. Impact of League Tables. .A presentation of some of the conclusions to be included in a report concerning League Tables was given, starting with a brief history of the development. In summary, the main points raised during the presentation were as follows: Summary of the Case Studies from Operation Companies a) Pre-Positioning It is of prime importance to be placed as lowest or next to lowest brand in the league table if there has been no publication to date The examples both in the case studies and elsewhere are numerous; Silk Cut in the UK, R6 and Krone in Germany, Kent and Hallmark in Australia, Kent and Boule d'or (fortuitously) in Belgium, Capri (Extra Low and Extra Smooth) in New Zealand. It may also be important to be placed at the lowest end of the projected tar bands, groups or consumer recognisable segments. b) Distribution and Support Pre-positioning will only be of longer benefit if the brand is both available and visible when the league table is published. In New Zealand we see the penalty paid for lack of sufficient product to meet demand, poor distribution and the absence of advertising and merchandise support: the Capri brands rapidly increased sales on publication of a league table which put them in 1st. and 2nd. place, but very soon declined for lack of support and distribution. c) U.S.P. Brands with a strong USP tend to sustain share longer. The USP is very often of a technological nature as seen in the U.S.A. with Vantage (cross-flow-filter) and Doral (baffle filter); Australia with Hallmark (dual filter) or Switzerland with Select (Magnesium silicate/carbon SELEX 4 filter) and recently Barclay in the U.S.A. (grooved filter). The USP can also, of course be less tangible as with Kent. d) Acceptable Smoking Characteristics Except in the short term, products which have noticeably poor smoking characteristics rarely achieve success. Hence, Ransom (original product) in Australia and Embassy Extra Mild in U.K., despite appearing as lowest brand, did not benefit in the longer term. The acceptability need not be restricted to satisfaction since the "wrong" taste (e.g. Gauloise Filter, a dark air cured in the German Blended Market) may also cause rejection. e) Media Coverage of League Table Publication The effect of the publication appears to be directly proportional to the level of media coverage given. This is clearly demonstrated in the Australian Case where the league table was given much more exposure in Victoria State than in the rest of the country. The resulting sales of the same lowest tar brands were much higher in Victoria than the other states and persisted longer. GROUP C Ted Parrack gave his group's conclusions and recommendations with the followling speech: The problem that a lot of companies have is focusing on brands rather than smokers. It is very easy to talk about brands' positions and brands' packing size and brand advertising, but those are only relevant if they are meeting the needs of the specifically identifies smoker target body. So we think that the first question that next go for that matter, any market should ask itself, is what the needs of their smoker consumer. No, that is not one consumer, that is many groups of consumers. For example, in the United States, we did a study of smoker needs and our smoke market broke-down into nine distinct smoker populations, each of which has its own attitudes and beliefs in life styles, and some excuse of age and sex that went with them; but they were secondary to the needs' steps. What we found was that there was a strong correlation between what attitudes people have and what brands they chose to smoke. We all believe that. It isn't fact true. So the first question to ask it is need not be a research project, it is what are the needs of various groups of smokers on your market. Those are nor groups by age or sex, but by attitudes, social habits, and images. And by images I just mean those ideas the consumers chose to associate themselves with. A cigarette product is a badge people wear and it expresses something about the wearer to the people around them and it says: here'st I am, here's't I want to be. Tony Sandefur calls that "the me I want to be". There is a lot of clues that tell you what images are effective in the market, not just what cigarette brands so well, but brands in categories that deal with similar needs. I would ask in any market that I cam to for the first time, what advertising sells clutching, what advertising sells beer, what advertising sells cosmetics, what advertising sells cars, what records people listen to, what movies do they see, what television programs are the most popular. After an expert in the market, which is really anybody who lives here and is in our business, answers these questions, you begin to get a picture of what motivates people. The second question is that if you are going to get a profile of the image needs of your smokers, divided-up as seperately and discreet as you can, the next question is of your existing brands. Which brands meet which needs and, since we are talking about established existing brands in the market place, they have districts, just like people have districts, they've personalities, The issue then becomes what smokers needs are met by the brands we got now. That means a certain number of positions in your market place are currently occupied by brands that you already sell. The next question obviously is what needs are not met by the brands I currently sell? I would ask next, are any of those needs possible to meet with my current brands, because those are my properties, that's what I got in my bank, are slight, no major, slight modifications in the presentation of my brands going to expand the number of people they appeal to, because that says I can take an existing brand, an existing property like Raleigh or Viceroy or the other brands in the market place, and include more people in its appeal. When I've looked at that issue, there would then be gaps in the market place where I don't have a brand. Those, in my judgement and our judgement as a group, represent the new product priorities of the company, whether they'd be local brands or international brands. The final question is then, do brands that exist within the group, whether they would be U.S., international brands, brands sold in other countries they've been successful or British international brands, have images that meet the needs of those smokers our current brands don't reach. When you've exhausted that option, you've identifies true product needs, where a brand needs to be created. The feel a consumer needs it is not met by your existing brands, by the international brands offered by BAT or by other companies of the group. Since non of us is expert in the mexican market, but the people who work here is really the people who live in the market and control it, that can best answer those questions. And that would be that list of questions that I would recommend we consider as the way to examine the needs of any market and to set-up priorities of established brands and the development of new products. Strategy : 1. The Kool Family will be positioned primarily in image, not product, terms. The brand's international development depends on association of Kool with the leading edge of trends among hedonistic young adult smokers. This will be accomplished through the brand's association with music in traditional and non-traditional forms of communication to the prime prospect. 2. The objective of the marketing strategy is to make Kool the leading U.S. international menthol family in all established menthol markets and to position Kool to create and lead the menthol segment in markets where it is not yet a major factor. 3. Line extensions of Kool Parent, specifically Kool lights and Kool ultra, will be introduced as required by market conditions. Kool milds w-ll be restricted to U.S. Military and U.S. caution notice markets. 4. Kool's prime prospect will be make (not to the exclusion of females), 21-30 years old, urban, hedonistic, socially active and aware of and wanting to participate in new trends. 5. Retail pricing will be at the parity with the leading U.S. international. Product strategy: Filed products worldwide which match Kool's unique U.S. taste characteristics. Packaging Strategy: Field package designs that are identical to U.S. Domestic Kool. Contract manufacture and general export Kool Super Lights will undergo a pack and name change to become Kool Lights. Kool Super Lights will continue to be marketed in Japan because of the special circumstances of that market; until such time as the Super Lights pack and the name can be changed to Kool Lights. Advertising Strategy: Utilize the "Music" property to convince prime prospects that Kool is the only brand for young adult trend-setters who desire the refreshing taste sensation unique to Kool. As part of his presentation, Ted Parrack gave a wide explanation of BWIT Line Management description, attached as Appendix No. 3, and in which the main qualification factors of the international brands are presented in an objective way, in relation to its Product Image, User Image and Focus of Sales. B. Telling continued with the international brands presentation, establishing the opportunity available to develop in an international level the menthol cigarettes category, and how the Kool brand offers a great potential to achieve it. Additionally, the Kool campaign was presented, after which M. Wurmser presented the adaptation made to this campaign for Panama's market. This campaign satisfied the delegates, who judges it as excellent. The delegates will consider, in their future brand strategies, the possibilities that Kool can offer in their markets. As part of the theme of the International Brands, Ted Parrack presented the Viceroy campaign, International Man, presented by BWIT. Eventhough the campaign was conceptually considered as appropriate by the interested delegates, the performances were rejected since the James Bond Style used in the past was considered as inappropriate since it was incredible and not real. Moreover, it was an advertising reprise of 12 years ago. It was agreed that BWIT prepares new performances and that, in a parallel way, Mexico and Panama who are the main users develop an alternate campaign with the Mexican Advertising Agency O&M. T. Parrack will send to Mexico, as soon as possible, the brief used by the Gray Advertising Agency, so it can be taken as a basis for the brief given to O&M. All this activity will be coordinated with B. Telling. Finally, B. Telling presented a promotional video-tape of the Olympics which will celebrate in U.S.A. in 1986, and which is being negotiated. The delegates rejected the idea of sponsoring it, considering it has no interest in their countries and the production has no attractiveness. XI. CLOSING THE CONFERENCE AND CRITIQUE It was the delegates opinion that the conference met its objectives, so it can be considered a success. The participation of 25 delegates, representing 14 countries, permitted that the experiences contributions were greater. Mr. Heath's attendance was considered as very productive and relevant, judging that it will be very convenient if he could attend future conferences. It was agreed to ask Venezuela if it could be the Host Country for the MMC 84, which will be celebrated in March. At the moment of writing these minutes, O. Díaz confirmed officially the acceptance of Mr. P.J. Rombaut so Bigott hosts the next MMC 84, in March. The delegates agreed that the next conference's structure should be: First Day: Millbank Input. Second Day: Area matters. Third Day: International Brand Strategies. Finally, comments were made in realtion that Millbank is responsible for coordinating these meeting, with the collaboration of the Host Country.