Tobacco companies spend more than ever to market cigarretes, but their sales are
steadily falling. They spent billions on advertising and promotions in 2002, which is the last
year that data is availible. There had been a slight increase but it then dropped about 5.5%.
The companies are spending large chunks of their budjet on discounts which were passed
to retailers and wholesalers, who would then reduce their cigarrete prices for their
customers. Over half of the companies budget was spent on such discounts. The
companies also have to pay retailers for shelf space, this and other promotional allowances
took a 1.3 billion dollar chunk out of their budget.The President for the Campaign for
Tobacco Free Kids said that these efforts to reserve shelf space and reduce prices are
aimed at trying to hook young people. He says that the most price-sensitive population are
kids and that the tobacco companies know that.
On the other hand a spokesman for the #2
cigarrete maker says the his company is trying to win over adults not children. He says their
efforts are to communicate with and gain the business of the adults who choose to smoke. I
think the tobacco companies can say that they are trying to gain the busines of adults, but
they know that they are also trying to appeal to kids. Kids who smoke are more likely to grow
up to be adults who smoke, than kids who choose not to smoke. But with this new fall in
sales, that means either more adults are quitting, or kids aren't buying, which in my opinion,
either sounds good.