Marketing Responsibly
Advertising
Sponsorships
Marketing Events, Programs and Promotions
How Philip Morris USA Verifies Age
Philip Morris USA's (PM USA) marketing activities include cigarette brand advertising; a brand sponsorship; and marketing events, programs and promotions.
The tobacco settlement agreements, signed in 1998, fundamentally changed the way cigarettes are advertised, promoted and sold in the U.S. The settlement agreements impact every aspect of our marketing practices. In this section, we highlight some of the limitations the tobacco settlement agreements imposes on our marketing activities, followed by a brief description of how we market our cigarettes responsibly to adult smokers while complying with the letter and spirit of the settlement agreements.
Advertising
The tobacco settlement agreements prohibit participating manufacturers from taking any action, directly or indirectly, to target youth within any settling state in the advertising, promotion or marketing of tobacco products. The settlements bar the use of cartoons in advertising, promotion, packaging or labeling of tobacco products. They bar most forms of outdoor advertising, including billboards and stadium signs. They ban transit advertisements such as those on taxis and at bus stops. The settlement agreements also prohibit advertising in the form of the distribution of apparel or merchandise such as caps, shirts and backpacks bearing tobacco brand names and logos. Examine these restrictions in detail by reading a summary of the settlement agreements.
Given the restrictions imposed by the settlement agreements, how does PM USA responsibly reach adult smokers with brand advertising?
In every case, we strictly comply with the settlement agreements. In many cases, our marketing standards go beyond what the settlement agreements require. We believe that going over and above what's required by the tobacco settlement agreements is an essential component of being a responsible marketer of tobacco products.
Magazine Advertising. The tobacco settlement agreements do not have any specific bans or restrictions on brand advertising in magazines, but it does have the general restriction prohibiting the targeting of youth through advertising, promotion or marketing.
PM USA does not direct our advertising to underage smokers. In the spirit of the agreements, we made it our goal to lower the overall profile of our tobacco advertising. To achieve that goal, we voluntarily: - Discontinued advertising on the back covers of all magazines in 2000;
- Adopted youth readership standards proposed by the FDA in 1996;
- Decreased annual magazine advertising spending by more than 94% from 1998 through 2003.
Advertising at Retail Stores. PM USA's Retail Leaders merchandising programs provide retailers with financial incentives to take certain actions including specified ways to place our brands within their cigarette displays that help PM USA communicate with adult smokers at retail stores.
Retail Leaders also includes several features that reflect our responsible marketing efforts. Retailers who participate in this program must restrict the placement of their interior point-of-sale materials and the size and number of their exterior point-of-sale materials. PM USA interior cigarette signage must be located on or near the cigarette category regardless of the location of competitive cigarette signs. Retail Leaders also does not require the placement of PM USA exterior signs in the first instance and, for retailers that choose to post exterior signage, limits PM USA cigarette signs to a maximum of three locations.
Retail Leaders also provides incremental merchandising payments to retailers who agree to post and maintain We Card signs and items or their functional equivalents, train cigarette-selling personnel using We Card or equivalent training, display Youth Smoking Prevention materials, merchandise all cigarettes in a non-self-service manner and who agree not to place cigarettes or cigarette advertisements on or in the space directly above the principal selling counter.
The Progressive Merchandising Option (PMO) of the Retail Leaders program provides a financial incentive for retailers, who are not bound by the terms of the state settlement agreements, to agree to abide by certain of the settlements' marketing restrictions in advertising PM USA cigarettes. For example, the settlement agreements bar participating manufacturers from placing signs larger than 14 square feet outdoors where tobacco products are sold or outward-facing signs larger than 14 square feet in windows at retail establishments. The PMO requires retailers to abide by these restrictions in their advertising of PM USA brands. The PMO also prohibits retailers from distributing or displaying any non-tobacco items (e.g., change mats, open/close signs, clocks, shopping baskets) bearing a PM USA brand name.
PM USA reduced its spending on point-of-sale advertising by more than 28% from 1998 to 2002.
Direct Mail. The settlement agreements bar the use of direct mail or any other means to offer or distribute any apparel or other merchandise that bears a brand name or logo. This prohibition does not include tobacco products themselves or materials that serve to advertise tobacco products.
PM USA voluntarily ceased distributing cigarettes through direct mail in 1995. The Company uses direct mail to communicate with adult smokers who have requested information concerning PM USA promotional events, merchandise and information about our products. Direct mail that contains cigarette brand advertising is sent only to smokers who have certified that they are 21 years of age or older and provided their signature and date of birth. Back to top Sponsorships
The settlement agreements limit each participating manufacturer to a single brand-name sponsorship in any 12-month period. They prohibit manufacturers from engaging in brand-name sponsorships of concerts, events in which minors are a significant percentage of the intended audience, events in which any paid participants are minors or any athletic event between opposing teams in any football, basketball, baseball, soccer or hockey league. For the 2007 season, PM USA will sponsor Team Penske in the Indy Racing League (IRL), but will remove the Marlboro name from the cars, uniforms, support equipment and promotional materials visible to the general public. This is consistent with the company’s efforts to reduce the overall profile of its cigarette brand marketing to the general public. Adult smokers on our mailing list and trade partners will continue to be invited by the Marlboro brand to IRL races around the country to support Team Penske. PM USA’s support of IRL racing will continue to be conducted in compliance with the MSA restrictions on brand name sponsorships. Back to top Marketing Events, Programs and Promotions
The agreements distinguish between open venues like concerts and football games and closed venues located within adult-only facilities such as bars or other facilities where only adults are admitted. Manufacturers are permitted to conduct marketing events in adult-only facilities. Similarly, manufacturers are permitted to conduct programs and promotions for adult smokers. Although the agreements restrict participation in promotional programs to "adults" (defined as 18 years of age and older), PM USA voluntarily restricts such programs to adult smokers age 21 or older.
PM USA conducts a number of different kinds of brand-related events. All such events are conducted in adult-only facilities. These events may include breakfasts, spa-days, antique appraisal feasts and bar nights. Before adult smokers are admitted to the event, age is verified with a valid government-issued I.D. If a smoker brings a guest, the guest must also be 21 or older.
The tobacco settlement agreements permit the distribution of free samples of cigarettes in adult-only facilities, but PM USA voluntarily stopped providing free samples of cigarettes to smokers in 1995.
The Company also conducts cigarette brand continuity programs where smokers aged 21 or older may redeem universal product codes (UPCs) for merchandise offered in branded catalogs and direct mail offers. In accordance with the settlement agreements, PM USA's continuity programs only offer items without brand names or logos. Adult participants must submit a copy of a valid government-issued I.D. and sign a statement certifying that they are a smoker 21 years of age or older in order to receive merchandise. Back to top How Philip Morris USA Verifies Age
Before adding the names of smokers, age 21 or older, who wish to participate in cigarette brand continuity programs, PM USA first verifies age. We verify age by obtaining a legible copy of government-issued identification that clearly displays the smoker's name, address, date of birth and signature, the validity of which must be certified by the adult smoker. Back to top
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