Market Segmentation and Targeting

On the Edge

Advertising Death to Kids?
Because they end up killing 4 million of their worldwide custom- ers each year, tobacco companies like R.J. Reynolds have to keep recruiting new smokers.67 Few people start smoking after they reach adulthood (88 percent of smokers start before they are 18), so new recruits have to come from the ranks of children. As an internal report by a cigarette company stated: “Today’s teenager is tomorrow’s potential regular customer, and the over- whelming majorityof smokers first begin to smoke while still in their teens.” So in spite of a 1998 legal settlement prohibiting cigarette promotions aimed at children, R.J. Reynolds (RJR) has run large multi-page ads promoting a “collaboration between Camel and independent artists and record labels” in Rolling Stone magazine whose readers include more than 1.5 million teenagers.
The tobacco ads featured cartoons of animals, monsters, aliens, and space ships and references to “an alternate dimension where everyone wears Black Converse.” RJR has marketed Camel ciga- rettes flavored with tastes of cocoa, Asian mint, sweet apple, and toasted honey. An internal RJR memo suggested making “a ciga- rette which is obviously youth oriented . . . for example, a flavor which would be candy-like but give the satisfaction of a ciga- rette.” RJR has also promoted a new product, “Camel No. 9,” packaged in a pink wrapper, in women’s magazines whose read- ers include a high percentage of young girls. The number of teen girls who now say Camel ads are their favorite ads has doubled since the promotion began.
RJR and the other cigarette companies also heavily advertise e-cigarettes, whose vapors contain formaldehyde, heavy metals, and nicotine. Several studies have shown that smoking e-ciga- rettes ultimately encourages users to begin smoking ordinary cig- arettes. The legal restrictions on advertising of regular cigarettes
do not apply to e-cigarettes, which are advertised with the same marketing tactics earlier used to advertise ordinary cigarettes. The cigarette companies have developed e-cigarettes with flavors that are designed to appeal to youngsters. RJR, for example, now sells crema-, chai-, berry-, and mint-flavored e-cigarettes.
The tobacco companies are spending more money (now a record 90 percent of the $12.5 billion they spend on tobacco promotions) advertising in retail stores and other places where their ads will be visible to children, placing them at children’s eye level or next to candy shelves. At least once a week, most teens (75 percent) visit retail stores, 80 percent of which post tobacco ads inside, and 60 percent of which post tobacco ads outside. Advertisements for those cigarette brands most popular with chil- dren reach 80 percent of children an average of 17 times a year. According to the U.S. Surgeon General, cigarettes are known to injure nearly every bodily organ by inducing deadly cancerous tumors inside the mouth, lungs, throat, larynx, esophagus, blad- der, stomach, cervix, kidney, and pancreas, and by causing emphysema and heart attacks. Joe Tye, an industry critic, argues that cigarette advertisements are the most deceptive of all adver- tisements because they use “images of independence” to pro- mote products that cause “profound dependence,” images of “health and vitality” to promote products that cause “disease and suffering,” and images of “life” to promote products that bring “death.” Numerous studies show banning cigarette ads would significantly reduce teen smoking. However, tobacco companies oppose ad restrictions. They argue that ad restrictions violate free speech; that cigarette ads are not deceptive and smokers know the risks which are on every pack and ad; that people have a right to smoke and to have information about cigarette brands; that cigarette ads do not make people start smoking or smoke more but only keep smokers from changing brand; and that ciga- rette ads do not intentionally target children.

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What, if any, are the ethical reasons why RJR should change its promotions and what, if any, changes should it make? Are any of the arguments tobacco companies make in their defense legitimate? Explain.

What would each of the three views of a manufacturer's duties to consumers imply about RJR's cigarette promotions?

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