Free Term Paper on Marketing of Alcohol and Tobacco

Alcohol and tobacco have served a variety of functions and played a significant role in the marketplace throughout history. Alcohol has long been used as part of religious customs, as medicine, and as a form of sustenance. Tobacco was used as collateral for loans from France during the American Revolutionary War, as a cure-all, and as a diet aid. However, for the last 200 years or so, alcohol and tobacco have been consumed in a fashion consistent with present-day usage, primarily for pleasure. Regardless of the reason for their use, both substances have been popular throughout most of human history. And both substances and their marketing have become controversial.

Outline

I. Historical Developments

II. The Costs of Marketing Alcohol and Tobacco

III. Aggressive Marketing of Products

IV. Marketing Tactics

V. Should the Marketing of Alcohol and Tobacco Be Limited?

A. Yes

B. No

VI. Conclusion

Historical Developments

Marketing of Alcohol and TobaccoAs early as the Civil War (1861–1865), organizations were formed to protest alcohol consumption. Although alcohol remained popular among portions of the population, independent movements calling for voluntary abstinence and eventually the prohibition of alcohol by law emerged.

Eventually, as living conditions improved and humans began to live longer, the hazards of alcohol surfaced. The public took notice and actions were taken. Prohibition, a result of the temperance movement and which made the sale and consumption of alcohol illegal, began on January 16, 1919. It was abolished on May 10, 1924.

To date, the marketing of alcohol remains largely self-regulated, and legal limitations on marketing and sales have been more lenient than those on tobacco. Nonetheless, the knowledge that alcohol can contribute to health problems and beliefs that it is responsible for corrupting the family unit have led to the establishment of dry counties in various states. In existence to this day, a dry county is one that prohibits the sale of alcohol.

It was not until the surgeon general released a report called “Smoking and Health” in 1964 that the hazards of smoking were officially and publicly recognized. Negative press surrounding tobacco surfaced due to the health concerns associated with the product. This caused many of the major tobacco producers of the 1960s to consider changing the names of their companies and diversifying their range of products. In marketing, names are important because they convey information about the company to consumers. The information communicated to consumers influences how the company is perceived and how it is positioned in regard to purchasing habits. Tobacco companies acknowledged the importance of brand names, and a trend started that saw tobacco companies actively change their names and products to avoid negative perceptions.

In the United States in the 1960s, a company that produced only tobacco products or had the word tobacco in its name was looked upon unfavorably. As a result, American Tobacco Company became American Brands, and Philip Morris bought part of Miller Brewing Company. R. J. Reynolds Tobacco Company changed its name to R. J. Reynolds Industries and ventured into the aluminum industry. (Reynolds Wrap aluminum foil was long part of the R. J. Reynolds line of products.) The government has regulated the sales and advertising of cigarettes and, since 1966, has forced the industry to place health risk warnings on all packaging. Sales of both alcohol and tobacco to minors are limited; these age limitations vary according to state laws.

The Costs of Marketing Alcohol and Tobacco

In the United States, more than $2 billion is spent each year to promote alcoholic beverages (Center on Alcohol Marketing and Youth n.d.). The alcohol industry claims that advertising only affects brand choice and that the marketing of products is done to establish brand differentiation, or anything that positively distinguishes the identity of a company and its products and/or services to consumers from other companies’ products. Popular examples of brand differentiation in the alcohol industry include promotions for Samuel Adams reminding consumers that the company uses more hops for flavor in its beer, and Coors Brewing Company’s description of its beer as shipped cold and made with Rocky Mountain spring water.

While alcohol producers claim that advertising only promotes distinguishing characteristics to consumers, alcohol researchers, the U.S. surgeon general, and the National Institute on Alcohol Abuse and Alcoholism disagree. They say that heavy episodic drinking, or binge drinking, is at least partially fueled by commercial messages (Center on Alcohol Marketing and Youth n.d.). Binge drinking is regarded as the consumption of five or more consecutive drinks by a male or four or more consecutive drinks by a female. National studies have concluded that 40 percent of college students are binge drinkers.

Alcohol consumption among college students has been shown to have an elastic demand. This means that as the price of alcohol decreases, consumption increases. Because traditional college students are around the legal drinking age, marketing helps fuel the desire for experimentation. Of course, many influences other than marketing (such as parenting and peer pressure) factor into one’s decision to consume alcohol. But given alcohol’s accessibility, it is believed that marketing initiatives and promotional measures that constantly bombard people with advertising and discounted prices increase consumption by keeping alcohol financially accessible and on consumers’ minds (Kuo et al. 2003). Unfortunately, increased drinking by college students leads to a greater number of accidents. The National Institute on Alcohol Abuse and Alcoholism reports that drinking by college students results in more than 1,800 alcohol-related deaths each year (National Institute on Alcohol Abuse and Alcoholism 2009).

It is projected that more than $243 million was spent in 1999 alone to sponsor public service activities that combat alcohol abuse and related problems. Nearly $11 million is spent annually to educate the public about the harm of tobacco (Corporate Accountability International n.d.). (The industry has a daily marketing budget of about the same amount; Educational Forum on Adolescent Health 2003.) While both the alcohol and tobacco industries have marketing programs that are intended to educate the public about potential risks, the difference is that tobacco education has federal funding, whereas alcohol does not. Alcohol education programs are funded by institutions such as Century Council, the Beer Institute, the National Beer Wholesalers Association, Brewers’ Association of America, and the alcohol companies.

Aggressive Marketing of Products

Some organizations and activists believe that the products’ aggressive marketing practices have an adverse impact on the long-term behavior of the population. Thus, certain marketing approaches may have a variety of opponents. It is logical to ask why companies in these industries would continue practices that lead to such unfavorable attacks on their businesses.

The answer lies in the nearly 5,000 customers that the tobacco industry loses in the United States on a daily basis (approximately 3,500 quit and 1,200 die) and the estimated 100,000 Americans dying annually from alcohol-related causes (Corporate Accountability International n.d.; Mayo Clinic 2007). In fact, it is projected by the U.S. Office on Smoking and Health that smoking results in more than 5.5 million years of potential life lost nationally each year (Centers for Disease Control 2008). Simply put, in order to replace the revenue from those customers that the industries are losing, new customers must be acquired. This is accomplished through multimillion-dollar marketing campaigns. Campaigns of this magnitude are widespread, encompassing many media outlets. This means that marketing messages about alcohol and tobacco will reach the eyes and ears of youths, regardless of the demographic groups that the messages are geared toward.

Consequently, rules surrounding the marketing of tobacco and alcohol are evolving, and marketing campaigns in nearly all parts of the world are aimed at preventing children from developing these habits. The theory is that preventative measures will translate into an absence of alcohol- and tobacco-related problems and health risks in the future.

Marketing Tactics

When marketing abroad, the alcohol and tobacco industries often attach American themes to their brands. This practice is particularly common in tobacco advertisements; for example, in one ad circulated in the Czech Republic, a pack of Philip Morris cigarettes is seen merging with the New York City skyline, and a Polish Winchester Cigarette advertisement features the Statue of Liberty holding an oversized pack of cigarettes. Others showcase prominent U.S. cities; red, white, and blue color schemes; and scenes that depict an American lifestyle (Essential Action n.d.).

Goldberg and Baumgartner found that the use of American imagery in smoking advertisements works because smoking is seen as an attractive part of the American lifestyle in many countries. Those attracted to the United States and who regard it as a place they would like to live are more likely to smoke. Having decided to smoke because they see it as an important part of the American lifestyle, they are more likely to smoke a U.S. brand of cigarette (Goldberg and Baumgartner n.d.).

R. J. Reynolds found in a 1983 study that marketing using American themes is not successful in the United States. Statements made by study respondents included: “It is too nationalistic,” “America is not that great,” and “It is not appropriate to sell America when selling cigarettes, or at least not in such a directly nationalistic way” (Essential Action 2006).

Nonetheless, the promotion of the perceived customs and norms of a product’s place of origin has surfaced in the domestic advertising of alcoholic beverages. Smirnoff Ice, an alcoholic beverage, employs actors with Russian accents and wearing Russian garb for a television advertising campaign. Beer companies such as Heineken and Becks also proudly promote the heritage of the beer’s national origin.

Another method that has been effective among U.S. consumers is what author Edward Abbey calls “industrial recreation” (Marin Institute n.d.). Often referred to as “wreckreation” or “ecotainment,” the term refers to the utilization of landscape to promote a product. It is argued that such use of terrain in advertising may change the way that the community uses and experiences public space.

Some new marketing campaigns are prompting questions about whether they are bending the rules of marketing. The prevailing rules of marketing rely primarily on codes that are geared toward traditional media. New technologies that utilize both traditional and nontraditional marketing techniques are complicating efforts to restrict and monitor marketing aimed at susceptible groups. These new technologies allow questionable marketing practices, such as cloaking, to go undetected by policy.

Cloaking, or stealth, is an ethically questionable technique employed online by Web sites to index Web pages within search engines in a fashion that is different from the way the page is indexed to other sources. Basically, the technique of cloaking can be used to trick a search engine. Successful cloaking results in higher rankings of inappropriate matches—for example, a search for a word unrelated to alcohol might bring up the sites of alcohol companies, which may lead the user to browse those sites. The logic here is that the more visitors a Web site receives, the more valuable it becomes. Some Web sites that employ cloaking have considerably different content from what the user intended to find and are often of pornographic nature. As such, some feel that the rules that govern marketing need to be revamped to ensure consistency among standards in relation to newly emerging marketing tactics.

Should the Marketing of Alcohol and Tobacco Be Limited?

Yes

Ninety percent of all smokers begin smoking before age 21, and 60 percent of current smokers picked up the habit before age 14 (U.S. Department of Health and Human Services 1989). The American Public Health Association, citing government research, states that every day “an estimated 3,900 young people under the age of 18 try their first cigarette” (American Public Health Association 2010). Clearly, children are the growth opportunity for the tobacco industry. If people do not start as children, they are significantly less likely ever to use the products. Cartoon characters were banned from tobacco advertising in 1991 after Joe Camel, the famous cartoon representative of the Camel cigarette brand, was shown to be more appealing to children than adults. In 2010, the Food and Drug Administration, which regulates tobacco sales, applied new restrictions to cigarette vending machines and barred tobacco companies from advertising at popular sporting events or offering merchandise such as hats and T-shirts. Stipulations such as these are an attempt to prevent the exposure of children to tobacco marketing and, it is hoped, tobacco products.

Possibly the most disturbing of such accusations is the charge that the marketing and advertising firms working for the tobacco industry employed psychologists to better understand children and how to more effectively target them. One of the revelations of the recent tobacco-related court cases was that tobacco companies asked retail outlets to place tobacco products in proximity to external doors in unlocked cabinets. They told the store owners that they would be reimbursed for stolen products. A few stolen cigarettes today can lead to hundreds of cartons of cigarettes sold 20, 30, and 40 years later. Health departments have been quick to encourage stores to discontinue this practice.

The alcohol industry has not seen the same level of concern over the advertising of alcoholic beverages. For instance, the introduction of spirits advertising on cable television was not opposed in 1996, even though, according to the 1986 Nielsen Report on Television, children watch an average of 28 hours of television per week. Ironically, permission to advertise alcohol on television was granted five years after the banishment of cartoon characters from cigarette advertisements.

Currently, 70 percent of the U.S. population is 21 years of age or older. In accordance with industry codes for beer and distilled spirits, the placement of alcohol-related advertisements is permissible in nearly any piece of media that is not specifically geared toward young children (National Institute on Alcohol Abuse and Alcoholism n.d.). The concern is that the messages of alcohol companies are reaching a vast number of youths through the television programs they watch and the magazines they read in their homes. Some argue that seeing an advertisement for alcohol or tobacco next to an advertisement for a prestigious or widely desirable product may still be harmful because of an unconscious association that may be drawn by the reader (Marin Institute n.d.).

The Federal Trade Commission and the National Academies Press agree that there should be a reduction in the exposure of youth to alcohol advertising (National Center for Chronic Disease Prevention 2006). Research shows that limitations placed on marketing initiatives in the tobacco industry, in addition to federally funded tobacco education programs, have decreased the amount of tobacco usage. This suggests that similar actions regarding alcohol would decrease sales and consumption as well as the occurrence of the third-leading cause of preventable death in alcohol-related fatalities in the United States (Centers for Disease Control and Prevention 2003). Though exposure of alcohol advertising to youths has been shown to have decreased 31 percent between 2001 and 2004, children are still more exposed, per capita, than adults (Center on Alcohol Marketing and Youth 2007).

Organizations such as Mothers Against Drunk Driving and the Center on Alcohol Marketing and Youth feel that the alcohol industry should not be the only supplier of education concerning alcohol consumption. They advocate federal funding for alcohol education and suggest that the alcohol industry no longer be permitted to practice self-regulation, as was done with the tobacco industry. Self-regulation of alcohol marketing means that the industry itself helps set the standards of regulation in regard to advertising.

Opponents of alcohol self-regulation were recently disappointed when the viability of Australia’s self-regulation policy, which mirrors that of the United States, was questioned in a series of allegations. Some marketing tactics that were examined were deemed to be sexually explicit or specifically geared toward children. One of the alcohol advertisements that was often singled out featured the phrase “Come out to play” written in ink on the palm of a woman’s hand. It was argued that this advertisement was aimed at children.

The criticism did not bring about a substantial change in self-regulation policy, and this lack of action was felt by many alcohol activists to be a slap on the wrist for a major violation against alcohol advertising regulations and a reminder of the alcohol industry’s power. The alcohol companies claim no wrongdoing.

No

Alcohol and tobacco companies already face advertising restrictions that are unheard of in other industries. The International Code of Advertising, issued by the International Chamber of Commerce, asserts that “advertising should be legal, decent, honest, truthful, and prepared with a sense of social responsibility to the consumer and society and with proper respect for the rules of fair competition” (International Chamber of Commerce n.d.). Yet tobacco and alcohol must adhere to additional stipulations. Tobacco has been the target of a national campaign called “We Card” that requires cashiers to ask for identification from anyone who appears to be younger than 30 years old, and limitations are placed on point-of-purchase, or on-site, marketing initiatives for alcoholic products.

Many products in the marketplace have associated risks, but alcohol and tobacco are among the few that face marketing regulations because of the detrimental effects on their consumers’ health. For example, an estimated 17 percent of children and adolescents in the United States are overweight (Centers for Disease Control and Prevention 2010). Being overweight can lead to numerous health problems, such as type 2 diabetes, hypertension, stroke, heart attack, heart failure, gout, gallstones, and osteoporosis. However, there are no laws limiting fast-food commercials that target youths. A Burger King Whopper with a large fries and a Coke has 1,375 calories, yet there is no surgeon general’s warning on fast-food wrappers (Healthy Weight Forum n.d.). Considering the marketing efforts, availability, and low cost of such restaurants, one would think they would require additional marketing rules, just like alcohol and tobacco. Yet even as obesity is being proclaimed a national epidemic, the post-meal cigarette is still getting all the attention.

The self-regulation policy of the alcohol industry receives much criticism, yet it has many positive attributes. For example, an extensive amount of marketing issues can be attended to without involving constitutional issues of government regulation (Federal Trade Commission 2003). The lack of costly deliberation in high courts concerning alcohol marketing issues saves considerable amounts of taxpayer dollars. A 1999 report to Congress noted that most companies in the alcohol industry complied with the codes of self-regulation and that the culture of some companies causes their practices to supersede industry standards (Federal Trade Commission 2003).

Sports Illustrated is a magazine devoted to sports that is enjoyed by both adolescents and adults. The results of an examination of the alcohol and tobacco advertisements in the last issue for July and the first issue for August from 1986, 1996, and 2006 showed the following:

  • In 1986, there were nine alcohol advertisements and five tobacco advertisements (Sports Illustrated July 28 and August 4, 1986).
  • In 1996, there were five alcohol advertisements and three tobacco advertisements (Sports Illustrated July 22 and August 5, 1996).
  • In 2006, there were four alcohol advertisements, one tobacco advertisement, and one advertisement for Nicorette gum, a nicotine replacement therapy designed to reduce nicotine cravings (Sports Illustrated July 31 and August 7, 2006).

This example shows a decrease in the marketing of alcohol and tobacco over the 20- year period. Also note that the 2006 issues included an advertisement for Nicorette, a product used to assist in breaking the smoking addiction. This is just one illustration of the change that has already taken place.

Conclusion

Ultimately, the burden of counteracting the adverse impact of marketing alcohol and tobacco lies with each of us, as does the decision whether to use such substances. Most organizational and legislative movements do not seek to revoke the right of adults to use these legal substances. The provision of all the facts that will allow individuals to make their own informed decisions seems to be the desire of most groups, regardless of their stance on the product.

The marketing issues surrounding alcohol and tobacco focus on who is really making your decisions, you or marketers? Marketers are trained so well in the art of manipulation that most people fall victim to their messages without realizing it. The most prevalent question about the marketing of alcohol and tobacco is whether such advertising leads the average person (or child) to make poor lifestyle choices.

Should restrictions regarding the marketing of harmful products be implemented to save us from ourselves, and, if so, what should be deemed harmful? For example, is eating fast food on a regular basis harmful? The answer is probably dependent on the individual. Marketing works. It convinces us to buy products that we do not need, cannot afford, and, in some cases, should not use for a variety of reasons. The goal in regard to the marketing of potentially harmful products is to present both the good and bad features and then allow people to decide for themselves.

 

Paul W. Schneider

 

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