case study "premier"

RJR’S EclipseRising from Premier Ashes

Group Members

Madiha Ali

Hafiz Wajid Ali

Maryam Bashir

Aliza Mehmood

Gohar Shaheen

Hira Farooq

Premier Cigarette

Premier purposeA cigarette that would satisfy smokers without threatening their health or irritating others around them.

Target marketSophisticatedUpscale UrbanEducatedOlder(over-25)smokers

Premier Composition

•Complex product to make and to use.

Product

Price•Due to complexity and development cost

RJR priced it about 25 to 30 cents more per pack (about 25%)than other name brand cigarettes.

Place•The company introduced the brand in •Phoenix and Tucson•Arizona•St.louis•Missouri

PromotionRJR launched an expensive campaign.Premier ads contain lots of copy and “just

the facts”.They used the Tag line ,”The Cleaner

Smoke”.Encouraged smokers to try Premier for

one week.Sales promotions offered two or more

packs for the price of one.

Tag Line

Premier Qualities

Cigarette did not burn like a traditional cigarette.

Cigarette did not emit any “side-stream” smoke.

Packages carried instruction booklets that described the cigarette and explained how to light it properly.

Premium’s FailureSmokers didn’t buy it.They did not like the taste.They disliked the difficulty they had in

lighting and smoking the Cigarettes.Rather than sticking with premier for a

week, smokers decided quickly against the brand.

After only 5 months consumers complaints that it smelled like burning lettuce and smoldering tennis shoes.

Eclipse

Eclipse •Despite premier’s costly failure ,

continued to pursue its dream.•They spent $200 million on research and

development to produce a better smokeless cigarette.

• As secondhand smoke became a issue so in 1995 Company announced to introduce a new version called “Eclipse”.

Target MarketAdult smokers(over 35)

People who want to enjoy smoking but who’d rather not smell like a smoker.

People who didn’t want to expose friends and relatives to secondhand smoke.

Target Share•It would capture a 2% share of nations 46

million smokers.

•RJR’s top brand Camel had just a 5% share.

•Virginia Slims , a strong Philip Morris brand had a 2.4% share.

Eclipse Composition

Eclipse Qualities•Cigarette does not burn down.•The tobacco taste simply goes away once

the hot air has burn down its work.•The smoker inhales and exhales smoke,

but upon exhaling smoke quickly disappears.

•It produces little side steam smoke.

First Test Market ResultReynolds tested the cigarette in 20 states

involving 12,000 smokers.It claimed that Eclipse scored well with

smokers and their non smoking friends.80% of both groups say that it was a breakthrough.

Many smokers said that taste was as good as regular cigarettes.

Smokers said that it was reasonable trade off because it was about 90% less secondhand smoke than standard cigarettes.

Cont..In mid -1996 Eclipse entered in the

Chattanooga,tennesse where the smokers were under societal pressure because of secondhand smoke.

The company mailed smokers a 15-minute video in which a female smoker told the Eclipse’s advantages.

Reynolds offered a free carton of Eclipse to the discovery group of 50-100 people.

Eclipse

Price•RJR Eclipse 10% per pack above the price

of Premium brands.

Promotion•Eclipse spends about $110,000 on

measured media in Chattanooga.•Ads showed a steaming teakettle with the

copy “imagine a cigarette that smells like this”.

•Later the ad copy contained lines such as “The smoke disappears .Your girlfriend doesn't.”

Second Test market•In mid-1997 , Reynaldo's added a test

market in Lincoln , Nebraska.

Price•RJR priced Eclipse comparably to other

premium brands.

Place•RJR limited distribution to about half of

the tobacco sellers in Lincoln because the product required explanation.

PromotionNewspaper ad showed a lone smoker at a table of friends with the taglines:

“Smoke that disappears .Taste that doesn’t.”

“Less secondhand smoke .More firsthand pleasure.”

Cont...Billboards encouraged consumers:

“ Enjoy smoking without smelling like smoke”.

“Smoke on your couch, not on your porch”.

“Smell like your cologne .Not your Cigarettes.

Results•In 1998 RJR announced that Cigarette do

not meet expectations.•Some Consumers liked Eclipse flavor and

others panned taste .•Consumers complained that it was so

difficult to light the Cigarette.

International Market•RJR tested the brand in Germany with the

name HI-Q .•RJR licensed the technology in Japan and

Sweden to the Reduced-smoke cigarette tobacco companies .

• In Japan the cigarettes were called “Airs”.•In Sweden the cigarettes were called

“Inside”.