Seed to smoke
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Tobacco Associates has evolved into a full-fledged consulting company, offering blending, cigarette design, marketing and advertising.
In the mid-1980s, Tobacco Associates (TA), an organization that promotes U.S. flue-cured leaf overseas, recognized that the tobacco could no longer sell itself. The company saw an opportunity to expand its promotion activities to include more hands-on, technical assistance to its customers incorporating U.S. leaf.
“At that time, U.S. leaf was highly regarded as the world’s best, providing unmatched aroma and taste characteristics. However, given its relatively high price, TA sought to add value to the purchase of our tobacco in an attempt to generate increased demand. Expertise in the usage of U.S. leaf—i.e., product development—was the logical solution,” says Kirk Wayne, president of TA.
The first product development program was initiated in 1986 with Turkey’s State Tobacco Monopoly, TEKEL. The company has been offering product development to companies ever since.
TA has commercially developed and launched products around the world, including Tekel 2000 in Turkey; Marshall in Taiwan; Golden Cup, Aroma and Sunbird in Vietnam; Matrix in Hungary; and Chopper in Thailand.
Henry Mozingo, vice president of TA, says cigarette design can be a challenging field. “Predicting consumer buying preferences and purchase behaviors is nearly impossible, as they are constantly changing. Each consumer has their own reason why they like a particular product over another or decide to buy a particular product … it could be price … it could be image … it could be promotion … it could be taste … it could be the fact that people want to be different.”
TA has seen success in cigarette design, thanks to the methodology it employs to develop brands. Mozingo says, “1) We retain the services of highly qualified consultants; 2) we have sophisticated testing and fabrication laboratory equipment; 3) we use U.S. tobacco as the basis of our product development work; 4) we employ a customized and proven process to product development; and 5) we let our partners guide the development process.”
While cigarette design has become an important element in TA’s offerings, Wayne adds, “Not all of our success can be traced to the commercial launch of a new cigarette brand. The technical expertise we provide in the areas of blending, flavoring, cigarette design, quality assurance and manufacturing has been successfully utilized by many of our customers to improve the quality and consistency of their products. Having said that, all our efforts for any partner, past or present, are directed towards the optimum usage of U.S. flue-cured and to ensure that the final product produced meets customer demand. In order to accomplish this goal, many aspects of technical product development must be addressed throughout the development process.”
An example of one of TA’s successful projects is its partnership with the Thailand Tobacco Monopoly (TTM) to develop the brand Chopper. “The brand we developed for Thailand better showcases our full range of product development and marketing assistance,” Wayne says.
TA and TTM had a history of working together, which led to the partnership in developing Chopper. “Finding the right partner is complex. Consideration has to be given to each particular partner in terms of its objectives, capabilities, resources, level of support and commitment. Market conditions and opportunities are also a major factor in determining an acceptable partner. In the case of Thailand, TA has had a long-standing, close working relationship with the monopoly for decades. It wasn’t until TTM’s market share began to decline due to increased imports that TTM and TA began earnest discussions about developing a new, premium product. Our efforts to assist TTM in this endeavor were seen as a comfortable continuation of other assistance we provide TTM.”
TTM chose to develop the brand with TA for several reasons, Wayne says. “TTM had a need and under-
stood that TA had the ability to fill it. The uniqueness of our objectivity and neutrality is always a consideration to those interested in our assistance; TTM was no exception.”
The first step was developing the blend for the Thai market. “TA met with TTM’s technical personnel to define our target objectives, including taste, aroma, desired smoke yields, processing specifications, local content requirement, etc.,” says Wayne. “Next, TA obtained from TTM samples of all the local tobacco types and tobacco byproducts available for use in the new product. Each tobacco grade was evaluated by TA’s smoke panel to determine its appropriateness for inclusion in the blend. Core blends for each tobacco type—i.e., flue-cured burley, oriental—were developed and evaluated to qualify and quantify the taste-contributing elements found in the cores. Similarly, core blends were developed using available U.S. flue-cured and burley grades.
“Once the desired results were achieved, local and U.S. cores by tobacco type were blended in varying percentages and evaluated. Final blending of all the cores to achieve the appropriate level of taste-contributing attributes from each tobacco type was the final step in developing the lamina portion of the blend. Byproduct cores were then developed and added to the total blend at different levels to determine their effect on the overall smoking characteristics of the blend. Three slightly different blends were then presented to TTM for review and evaluation.”
Tests were then conducted to gauge smoker response. “TTM used both an internal and external consumer panel to determine the impression and ac-
ceptability of the product. In both cases, smokers rated the cigarette as being of high quality and having superior smoking characteristics as compared to the target brands,” Wayne says.
The name Chopper was carefully chosen. Wayne explains, “Consumer research determined the brand name Chopper following nearly one year of preliminary work. Together, TTM and TA defined the target consumer. Brand name concepts were explored and edited. Initial package designs were created and refined. TA then presented the most outstanding names and designs to TTM based on the preliminary market research and defined objectives for the brand. TTM then conducted in-field market research throughout the Kingdom of Thailand. Target consumers selected Chopper.”
TA was closely involved in the package design as well. Mozingo says this is critical in launching a new brand. “In today’s increasingly restrictive environment, the importance of the brand name and package design is often underestimated. The good quality of a cigarette will not be recognized unless the consumer is first motivated to try it. The combination of a strong brand name and package design can create that motivation the consumer needs.”
TA also developed a full marketing and advertising plan for TTM. “TA began by conducting a marketing and sales capabilities assessment of TTM. This provided the basis for recommendations and defined business objectives. Following the mutual commitment to develop a premium product, TA presented TTM with comprehensive launch strategy recom-mendations. Prior to the Chopper launch, TA conducted a marketing and sales seminar for the TTM officials and Chopper task force members. Constant assessment, recommendations and communication continue between TA and TTM as the brand begins to build momentum in the marketplace,” says Wayne.
Advertising and marketing are increasingly challenging these days, especially in Thailand. “Thailand is one of the most restrictive countries in the world in terms of advertising. There is no print or media advertising. The four-color health warning is printed on 50 percent of the pack, and recently laws were passed limiting the sale of cigarettes to ‘under the counter’ product placement only. As a government monopoly, TTM must set the precedent in adhering to all new laws passed and regulations proposed by the Ministry of Health. In this extremely restrictive environment, it is essential that the relationship between TTM, their customers and their consumers be secured and maintained through creative and direct communication,” says Wayne.
The brand was launched a little over a year ago. “Chopper was launched on Christmas Eve [Dec. 24] 2004 with extremely limited distribution,” says Wayne. “A strategic three-month push to customers took place in March 2005. Consumer awareness is increasing slowly but steadily. TTM remains optimistic that Chopper will become a leading brand in their portfolio as creative marketing strategies and their action plan for fiscal year 2006 are put into place.”
TA continues to innovate with other companies. It will launch five new brands in Vietnam in the near future. TA is also gearing up for future projects in Azerbaijan and Indonesia.