sample="quota" bates="508688676" isource="rjr" decade="1990" class="ui" date="19930717" CAMEL/WINSTON EVEN CO-OP PROGRAM EVALUATION 7/17/93 CAMEL EVENT CO-OP PROGRAMS CAMEL GT Fay's Weekend At The Glenn - 6/27/93 Fay's Drug Store received title rights to the Saturday Busch Grand National race in Watkins Glenn, NY. RJR Costs: - Title Rights $125,000.000 - Co-Op Program Costs - Temporary Signage 15,000.00 - Branded Items 5,000.00 - Lodging (Fay's Rooms) 12,000.00 - Press Relations 4,000.00 - Cocktail Party 8,000.00 - Catering 11,000.00 - Miscellaneous 20,000 - Signage Conversion 5,000.00 Total Spending $205,000.00 RJR Benefits - $50.00 for UPM, although promotion capabilities allow an ECD payment of $80.00. Projected Savings Per Year 72,000.00 - Non S/S Rate - using minimum payment of $1.25 vs. $3.00 Projected Savings Per Year 27,5000.00 - TCM/Preferred Presence not being paid - a savings of $225 per store per month Projected Savings Per Year 540,000.00 - 2 check lane displays at 200 stores being covered via Winner Requirements saving $15 (ECD payment) x 200 Projected Savings Per Year 36,000.00 TOTAL PROJECTED SAVINGS PER YEAR $675,500.00 Track signage covered by Winston Cup EPP Contract. RJR Savings Total RJR Savings $675,000.00 Total RJR Costs 205,000.00 Total Savings To RJR $470,000.00 Conclusion: This program pays out tremendously for RJR in total savings of $470,000 per year. In addition to these cash savings, our local sales has been able to work more closely with Fay's because of the relationship marketing this type of program enables us. In addition to the signage Fay's received, Camel retained dominant signage and exposure at the track. Weather or not we continue our sponsorship of Camel GT, I would recommend we continue our co-op program with Fay's Drug Store. CAMEL EVENT CO-OP PROGRAMS CAMEL GT Piggly Wiggly Grand Prix - 7/11/93 Piggly Wiggly Chain received the title rights to the CAMEL GT race in Elkhard Lake, WI. RJR Costs - Title Rights Package $30,000 - Miscellaneous $15,000 - Pit tours - VIP Cloths - Catering - Suite - Tent - Signage Conversion Total Spending 45,000 RJR Benefits - Extend at no cost existing check lane sign agreement for 24 months $45,900 - Implement lane blocker or similar program for multi-pack promotions NA - Force ship 28 additional cases of CAMEL to 26 corporate stores NA - Schultz Sav-O will forgo RJR third Quarter contact payments $30,000 TOTAL $ SAVINGS $75,900 RJR Savings/Losses EPP Contract not included Conclusions: A tremendous relationship was built due to Piggly Wiggly's tie in to the race. RJR was able to entertain 180 of their employees of which Piggly Wiggly paid for 120. In addition, both the President and Senior Vice President of Marketing and Sales were present for introductions, pit tours, pace car laps and victory circle. I feel Piggly Wiggly gained because they were able to tie into an important local event and RJR benefited not only in money saved but in building a strong relationship with an important chain. NOTE: CAMEL signage remained dominant at the race track. CAMEL EVENT CO-OP PROGRAMS CAMEL Pro CAMEL Pro Express Mart Twin Mile - 7/17/93. Express Mart (40 stores) received title rights to the CAMEL Pro race held at the New York State Fairgrounds on July 17 and 18. RJR Costs - Title Sponsorship $10,000 - Co-op Program Costs $2,000 - Banners - Hospitality - Clerk Buttons RJR Benefits - Floor base displays 835.00 - CAMEL Cash Standees (never placed before) 330.00 - Competitive smoker program using clerk buttons - Buy down (RJR .40/EM .10) 330,000PV (1st time chain contributed) 1,650 CARTON SALES ABOVE NORMAL - Store stickered all product NA RJR Savings/Losses PV included in figure Comments NOTE: CAMEL signage remained dominant at race track CAMEL EVENT CO-OP PROGRAMS CAMEL Supercross Terrible Herbst (19 stoves) received a signage and hospitality package for the CAMEL Supercross in Las Vegas, NV on 6/12/93. RJR Costs - Signage $2,000 - Catering Total Cost $2,000 RJR Benefits - Exclusive co-op buy down (RJR .50/th .20) $5,320 (RJR - $13,300) - Placement of full price PCD in all stores - Sales increase for CAMEL's from 11 cartons per store per week to 35 cartons per store per week 364,000 PV RJR Savings/Loss Total RJR Saving $5,320 Total RJR Costs 2,000 Savings 3,320 PV not included in figure. Conclusions: For a low cost co-op program this was a successful one. By placing full price PCD in all stores our Sales Force now has a platform to work future full price promotions. Sales has commented that because of this relationship, marketing the chain has been more receptive to RJR promotions. Does not include sponsor contract. CAMEL EVENT CO-OP PROGRAMS CAMEL Supercross CMS Mini-Mart received signage tickets and a suite at the Pontiac Supercross even ton 4/17-18/93 RJR Costs - Four Banners $1,000 - Catering $1,000 Total $2,000 RJR Benefits - Buy down on all SME CAMEL promotional product (CMS contributed all). - Additional 40.8 cases of CAMEL sold. PV-490,360 - Special CAMEL Supercross displays in all stores - NA - Employee incentive program using suite tickets as incentive NA - Additional advertising in all stores (i.e., pump toppers) NA TOTAL SAVINGS 4,376.29 Does not include sactioning contract. RJR Savings/Losses Total RJR Savings 4,367.29 Total RJR Costs 2,000.00 TOTAL SAVINGS 2,367.29 Conclusion: This program was a definite win/win for both parties. RJR won because of the promotional dollars we saved through cooperative buy downs and chain contributions resulting in increased CAMEL volume. CMS won be the exposure they received through the event in increased store traffic due to special promotions. NOTE: CAMEL signage remained dominant at event. CAMEL EVENT CO-OP PROGRAMS CAMEL SUPERBIKE Holland Oil Camel Superbike Weekend Presented by Dunlop 7/11/93. Holland Oil received title rights to the Mid-Ohio Superbike race in Lexington, OH. RJR Costs - Title Sponsorship $30,000.00 - Miscellaneous 6,000.00 (approx.) - Golf Outing - Banners - Hospitality Catering - Clam Shells - Tickets Total Spending $36,000.00 RJR Benefits - 18 Camel door chimes on PM owned doors NA - 1 temporary floor display per store (2 months) - 2 Camel pasters per store (1 month) NA - 1 banner placement per store (unable in past due to PM maskers) NA - Camel moved to #1 platform position during ticket promotion (PM was #1) NA - Merchandise payment will remain @$110 per store. Approval was granted for $200 prior to co-op. (12 month) 42,140.00 - $.05 price spread between Monarch and Holland Oil Private Label (PM product). Spread previously $.10. NA - B3GE race ticket (4,000 offers) 240,000 (PV) Track signage covered by Camel GT EPP contract RJR Savings Total RJR Savings $42,120.00 Cost to RJR 36,000.00 Total Savings to RJR $6,120.00 PV not included in figure Conclusion This program pays out for RJR in cost savings. In addition, our local sales has been able to implement advertising and promotions which in the past have been blocked due to the PM Masters program. Our overall relationship has also benefited due to the Title sponsorship and relationship marketing tied to the event. For 1994, I would recommend a co-op program with a chain in the Lexington area rather than Akron (1 hour drive). I feel this would be beneficial both to the chain and RJR. The chain would benefit because of local promotions the track runs, and may be more willing to do extra promotions around the event and tie in RJR. NOTE: PM is currently paying $572 per store for Masters Program. HOLLAND OIL CAMEL SUPERCYCLE WEEKEND AT TRACK PROMOTIONS Camel Cash Store SME/Camel Brand tested a Camel Cash Store to liquidate excess Camel Cash premiums. A 30' x 30' tent was rented from the track, and Group III was hired to implement the program. Cash, credit cards and c-notes were accepted for payment. In addition, a pack swap was implemented to convert competitive smokers, and a leather jacket raffle was conducted to generate smoker's names for the data base. Following is a recap of the costs and results of the program. Attendance for race weekend was in excess of 50,000./ RJR Costs Total Operating Budget to Date $17,131.00 RJR Revenue - Cash 2,783.25 - Credit Cards 376.51 - C-Notes/PV 6,480.32 -Name Generation (@$.90 per name) !840.50 - Catalog distribution (1,200) - - Pack Swap (1,148 packs) - - Cigarette tax petition names (3,200 approx.) - Total Revenue $11,480.58 Profit/Loss Revenue $11,480.58 Costs 17,131.00 Loss ($5,680.42) Conclusions Even though RJR incurred a net loss of $5,680.42, I feel this program was a success for the following reasons: - Direct interaction with consumer. - Immediate gratification through direct sales. - Builds Camel Cash exposure. - Cash IV distribution. - Liquidation of excess premiums. - Ability to launch new promotions while not incurring additional costs. - Convert competitive smokers through pack exchange. - Excitement of consumers to meet Team Camel riders through autograph session. Recommendations - Utilize direct mail to increase awareness. - Tie into track advertising to increase awareness. - Evaluate and restructure price listing. - Utilize signage more closely identifiable with the Camel Brand. - Hand out announcement flier with all race ticket purchases.