AP NEWS
Related topics

B&W Introduces New Packaging

May 6, 2002

%mlink(STRY:; PHOTO:; AUDIO:%)

LOUISVILLE, Ky. (AP) _ Kool menthol cigarettes are getting a new look as the Brown & Williamson Tobacco Corp. aims at reclaiming market leadership for its flagship brand.

The cigarette itself hasn’t changed, but the nation’s third biggest tobacco company is counting on new packaging _ which bills the Kool brand line as ``The House of Menthol″ _ to appeal to more smokers.

``Our objective for Kool is to become the fastest-growing, full-revenue menthol brand among adult smokers in the U.S.,″ Ludo Cremers, B&W’s divisional vice president of marketing, said Monday at a news briefing.

Susan Ivey, the company’s president and chief executive, said at the briefing, which was transmitted over the Internet, that Kool and Pall Mall are B&W’s top priorities as the Louisville-based company seeks long-term growth.

B&W’s market share has fallen to 10 percent from 15 percent since 1998, when major tobacco makers signed a settlement with the states.

Kool was launched in 1933 and for decades reigned as the market leader among menthol cigarettes. Kool’s market share has fallen from a peak of 10 percent in mid-1970s to 2.6 percent today, putting it behind competitors Newport, a Lorillard product, and Philip Morris’ Marlboro Menthol.

Ann Gurkin, a tobacco analyst with Davenport & Co., said the new packaging was a positive step to try to ``breathe momentum back into the brand.″ Gurkin said B&W has some strong brand names, but the company needs to improve its ``distribution and retailer relationships.″

David Adelman, an industry analyst with Morgan Stanley Dean Witter, said Brown & Williamson picked the right brand to emphasize.

``It’s hard for them to do well without Kool doing well,″ he said.

But Adelman warned that such a change _ meant to pump up a cigarette type _ can present risks in an industry driven by brand loyalties.

``Everytime you change a brand or change the package, you can offend some of your current consumers, and erode the perception of the brand or confuse the perception of the brand in the marketplace,″ he said.

B&W spent 18 months developing the new package and considered 120 designs, Cremers said.

Before its national introduction Monday, the new packaging was tested for about three months in Hawaii, where Kool commands a 17 percent market share, its best anywhere.

In test marketing, the company found the new packaging had broad appeal across age groups, Cremers said. It appealed both to longtime Kool users and smokers of other brands, he said.

Such appeal offers an opportunity to attract new customers because packaging is a ``big hurdle to brand acceptance,″ Cremers said.

``Consumers live with the pack,″ Cremers said. ``It’s a personal badge they carry and display every day. If they reject your pack, they reject your brand.″

The packages feature the Kool name, with the traditional interlocking Os, and come in dark green, blue, teal, silver and ``earth″ colors for various brands.

Brown & Williamson plans extensive promotions, direct mailing and magazine advertising to tout the packaging remake, Cremers said.

The company wouldn’t disclose how much it spent to develop the new packaging, or how much it will sink into the promotional campaign.

Ivey said the packaging change was part of B&W’s strategy to focus on particular brands. The company introduced a new filtered Pall Mall in January 2001, calling it the most successful brand launch of the past decade by the four leading U.S. tobacco companies.

``Brown & Williamson has a very broad range of brands, but we certainly cannot promote or support them all in this very competitive retail environment,″ she said. ``So really part of our road map was focusing in on exactly what brand would lead us to sustainable long-term growth.″

B&W’s other brands include Lucky Strike, Carlton, Capri, Misty and Viceroy.

___

On the Net:

Brown & Williamson: http://www.bw.com

AP RADIO
Update hourly