Introduction

The WHO's Framework Convention on Tobacco Control1 is one of the most widely embraced treaties in the history of the United Nations, and includes a number of provisions for reducing the supply and demand for tobacco. One of these provisions for reducing demand involves banning tobacco advertising, promotion and sponsorship. Nineteen countries are reported to have ‘complete‘ bans on tobacco advertising, promotion and sponsorship, as of 2009, with an additional 101 countries having comprehensive bans, where tobacco advertising, promotion and sponsorship in traditional media (TV, radio and print) is banned, as is some, but not all, direct or indirect tobacco advertising.2 That 120 countries have wide-ranging controls on how tobacco products can be marketed represents significant progress for global tobacco control, while acknowledging that there are still 74 countries with only partial controls on how tobacco can be advertised and promoted.2 An aspiration for global tobacco control will be to continue to increase the number of residents living in countries with complete bans, with 425 million people already reported to be ‘fully protected against tobacco industry marketing tactics’.2 The problem with these supposedly complete bans is that they do not include branded packaging, even though packaging is well established as a multifunctional promotional and communications tool3–6 and has been used as such by tobacco companies since the late 19th century.7 ,8

While tobacco packaging has long had a key marketing function this becomes more pronounced in countries with comprehensive bans on legal tobacco marketing activity,9 or ‘dark’ markets. Within these dark markets the importance of packaging is accentuated for all tobacco products but particularly for cigarette brands positioned within the ‘premium’ sector, given that globally the cigarette remains the most popular of all tobacco products, and shows no sign of losing its market dominance,10 and premium brands provide higher profit margins for tobacco companies than cheaper brands.11 Indeed, the profit shared between the manufacturer, distributor and retailer after duties, taxes and production costs can be several times higher for a premium brand than for an ultra-low priced brand,11 and packaging can be an important way to help justify the higher price of these premium brands and protect against down trading to cheaper brands.

Convincing consumers and particularly new market entrants of the premium nature of a cigarette brand presents a challenge for tobacco companies when there are few remaining marketing tools available to support its positioning as a higher priced product. This task has not been helped recently by a global recession, the rising number of countries adopting picture health warnings on cigarette packs and the long-term decline of the premium cigarette sector in many established markets. For instance, according to retail journals in the UK, in 2011 the premium cigarette sector accounted for almost a quarter (23.0%) of the total cigarette market, dropping from 26.7% in 2008, 31.0% in 2005 and 35.1% in 2002.12–15 This represents a decline of approximately 4% every 3 years and down trading is forecast to continue in the UK, as in many other markets, due to lingering economic uncertainty, rising unemployment, a decline in household income and higher cigarette prices.16 There has, instead, been growing consumer demand for cheaper alternatives such as value brand cigarettes and roll-your-own tobacco and make-your-own cigarettes.

With the continuing growth of the value end of the tobacco market in the UK the future for cigarettes positioned within the premium category looks bleak. We consider how one of these premium brands, Silk Cut, is faring in these austere times and how packaging, one of the last avenues left to promote the brand, has been used for the Silk Cut house. Silk Cut was first introduced in the 1890s but withdrawn from market in 1910. It was relaunched in 1964 as the first cigarette brand to have a ‘low-tar’ proposition in the UK, and by the 1970s was established as the leading low-tar brand.17 It should be noted that it has since been established that lower tar levels are not an indicator of reduced harm.18 By the early 1980s sales had plateaued19 and the brand owner, Gallaher, recruited advertising agency Saatchi & Saatchi to revive the brand. On the back of their successful ‘Cut Silk’ advertising campaign,20 launched in 1983, which typically showed images of purple silk but without any pack shots, depictions of smoking or indeed mention of the brand,6 market share grew between 1984 and 1990.17 The launch and relaunch of two Silk Cut variants (‘Extra Mild’ and ‘Ultra’ respectively) are reported to have helped stop the brand losing momentum in the early 1990s as other, typically lower-priced, low-tar competitors entered the marketplace.21 The success of these variants stimulated market share growth of the Silk Cut house until 199520 but by the late 1990s Silk Cut was a brand in decline. Although Silk Cut Ultra had helped compensate for this decline, sales of Ultra were beginning to wane.17 The 21st century transformed the tobacco marketing landscape in the UK, as it has done elsewhere. Between February and July 2003 the first phase of the Tobacco Advertising and Promotion Act (TAPA)22 prohibited promotions and direct mail, product placement, domestic sports and cultural sponsorship and advertising on billboards, the internet, cinema, newspapers and magazines. In December 2004 the TAPA restricted tobacco advertising at the point-of-sale (POS) to a single A5 size advertisement and in July 2005 brand sharing and international sponsorship was banned; while domestic tobacco sponsorship ended in 2003, global sporting events which involved tobacco sponsorship (such as Formula 1 and the World Snooker Championship) were given special dispensation until 2005.

The TAPA however placed no restrictions on tobacco packaging or tobacco displays at POS. A number of countries have now banned the open display of tobacco products at the POS, and in doing so have removed the opportunity for packaging to be showcased instore. It is well established in the marketing literature however that packaging has an important function both within and outside the retail environment.23 By sourcing material from trade press journals (Convenience Store, Forecourt Trader, Off Licence News, Talking Retail and The Grocer), we outline how packaging has been used for the Silk Cut house since January 2004, after the first and most wide-reaching phase of the TAPA was implemented. In April 2004 Gallaher became the first tobacco company to launch a new brand variant after the advertising ban, Silk Cut Slims, aiming to make an impact through ‘eye-catching’ packaging (see figure 1) and posters on tobacco displays at the POS, which were still permitted at the time.24 Maximising marketing channel opportunities, in this case posters on tobacco displays, while they are still permitted is a known tobacco industry strategy.25 ,26 This focus on POS and the packaging can be traced back to internal tobacco industry documents from the 1990s. At this time Gallaher predicted that ‘Post ad ban the only way that we will be able to give Silk Cut ongoing brand differentiation from other low-tar brands, will be at the POS, on the packaging itself’.20

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Figure 1

Silk Cut Slims, Menthol (limited edition cellophane), Silver tactile pack, Purple Superslims (limited edition floral design).

In December 2004 the king size range was given a softer feel with new bevel-edged packs, an innovative packaging development at the time in the UK, which Gallaher claimed were better to hold and a more premium offering.27 When bevel-edged packs were subsequently introduced in Canada, in 2005, the vice-president of marketing for Imperial Tobacco added that such packs also help attract consumer attention in a market with limited opportunities for advertising and promotion.28 There were no new variants or further changes to the packaging of the Silk Cut range until March 2007, when Silk Cut Graphite was launched in bevel-edged packs. Although given shelf standout,29 Graphite was subsequently withdrawn from market. The regularity of packaging alterations increased markedly from 2008 onwards. In June 2008 a ‘leaf’ emblem was placed on the side of Silk Cut Purple and Silk Cut Silver packs to reinforce its position as a low-tar brand;30 in advance of the 2003 ban on misleading product descriptors in the European Union, Silk Cut King Size, Ultra Low and Extra Mild were renamed as Silk Cut Purple, Silver and Blue respectively. Replacing descriptors such as Ultra Low, Light or Mild with colour descriptors to communicate tar levels is a widely recognised response to bans on misleading product descriptors.26

In October 2008 Silk Cut Superslims was launched in slimmer ‘perfume’ type packs31 (see figure 1). The compact size Superslims pack, a first in the UK market, represented a radical departure from existing packaging in the UK and experienced 122% growth between 2008 and 2009 according to Japan Tobacco International (JTI), who acquired the Gallaher Group in 2007.32 A number of tobacco companies have since introduced superslims products to market, consistent with international trends where the superslims segment is reported to have grown 10 times faster than the overall market from 2007 to 2011.33 In December 2008 another brand variant, Silk Cut Menthol, was launched in hexagonal shaped packs to bring sophistication to the premium king size menthol sector.34 It featured a limited-edition design on the cellophane wrapper (see figure 1) and was supported, at least on gantries owned by Japan Tobacco International, with an A5 Silk Cut Menthol graphic.35 And in April 2009 limited-edition bevel-edged Silk Cut packs, featuring five designs based on the word Cut (diamond cut, power cut, short cut, precision cut, director's cut) were available for Silk Cut Purple, Silk Cut Blue and Silk Cut Silver.36 Although the use of limited-edition packaging is not a recent trend in the UK, or elsewhere, it has become increasingly common since the TAPA.23 Limited edition packaging can help increase the number and speed of sales, introduce a collector's mentality to the buyer, have a lasting impact on brand perceptions once they have sold out, and in dark markets create infinite relaunch opportunities for brands which cannot be supported by other marketing.5 ,37 ,38

In March 2010 ‘touch’ packs were introduced for the Silk Cut king size range with a textured feel, which was initially communicated by a pack insert with the new ‘touch’ texture and then subsequently via the cellophane with the message ‘feel the new SILK CUT’.39 This was the second example of ‘tactile’ packaging in the UK, following the introduction of Marlboro Bright Leaf in 2009, but the first for a low-tar product. As touch provides an important means of developing an emotional or affective connection with a package, particularly those touched most frequently,40 the use of texturing or lacquering on packs to create a tactile sensation is tailor-made for tobacco products and a number of tactile packs have since been brought to market. Indeed, the use of multisensory cigarette packaging which appeals to both sight and touch, smell or even sound, has started to penetrate the European market within the last few years and this trend looks certain to continue.41 For instance, Lucky Strike audition packs, which make a distinctive clicking sound when the lid is closed, were introduced in Sweden in 2011; a scented Virginia Slims pack was available in Russia in 2009;42 and tactile packs can now be found throughout Europe.

In July 2010 limited-edition Silk Cut Superslims packs with floral designs were introduced43 and in September of this same year packs containing 14 cigarettes (see figure 2), rather than the standard 10 or 20, were introduced for Silk Cut Purple as an alternative to down trading and to boost the range.44 In respect to pack size, Article 16.3 of the Framework Convention on Tobacco Control states that parties should endeavour to prohibit the sales of cigarettes in ‘small packets’, as this increases the affordability of such products to minors.1 For those countries that do not have a minimum pack size, or as is the case in the UK, a minimum pack size of only 10, tobacco companies are free to introduce these smaller packets. In November 2010 Silk Cut Menthol featured packs with three limited-edition designs and green, instead of the usual silver, inner foil.45 Tobacco industry journals highlight the value of the inner foil, regarded as the final part of the brand experience before reaching the cigarettes46 and a decorative enhancement considered to increase overall appeal, heighten brand identity and create higher purchase intent.47 ,48

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Figure 2

Silk Cut Purple 14 pack, Menthol (limited edition design and foil), Blue V-pack, Choice.

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Figure 3

Timeline of packaging developments for the Silk Cut house from 2004 to 2011 (using data from online and print UK retail trade press).

In June 2011 the limited-edition V-pack (figure 2), with an innovative method of opening and inner frame, was introduced for the king size range.49 These previous examples (figure 3) show that it is not only the graphical and structural design of packaging, including imagery, colour, size, shape, texture and style of opening, which has been used to enhance appeal for the Silk Cut house, but also other pack elements such as the cellophane, foil and inserts. In October three limited-edition Autumn/Winter pack designs were introduced for Silk Cut Purple, Silver and Blue, this time featuring an acorn, leaves or an ice cube to represent the changing seasons.50 Most recently, in December 2011, new brand variant Silk Cut Choice was brought to market. ‘Choice’ has a capsule in the filter which can be burst to change the flavour of the cigarette to menthol. Although the first such product in the UK market, it was quickly followed by Lucky Strike ‘Click & Roll’, Pall Mall ‘Click On’, Lambert & Butler ‘Fresh Burst’, Benson & Hedges ‘Dual’ and Vogue Perle ‘Capsule’. Similar products are now available across most of the world, since being first introduced in Japan in 2007,51 but the fact that three tobacco companies released six similar product offerings within 6 months provides an insight into the importance of new product development,52 communicated in all cases via the packaging (figure 2).

Silk Cut's market share within the premium cigarette segment has grown for seven consecutive years, since the ban on tobacco advertising, promotion and domestic sponsorship,53 from 14.7% in 2004 to 15.8% in 2008 and 18.7% in 2011.34 ,54 Based upon the size of the premium sector and Silk Cut's share of this sector, overall share of the cigarette market for Silk Cut declined from 2004 to 2008, but increased from 2008 to 2011. Considering the move away from premium cigarettes in the UK since the mid-1990s20 the fact that a premium cigarette brand, supported only by the packaging, is able to experience any growth is testament to the value of the packaging. This growth in overall cigarette market share from 2008 onwards is even more striking given that the UK entered a recession in the second quarter of 2008,16 is reported to be suffering from the longest economic depression in a century55 and has taxation on cigarettes which is now among the highest in the world.56 In addition, picture health warnings were introduced on packs during this time, although only on the reverse panel of packs, and the UK is regarded as having the strongest tobacco control in Europe.57

The Silk Cut experience, that is the success of a premium brand in an increasingly hostile market, helps explain why a tobacco industry journal alludes to packaging as ‘the last chance marketing saloon’.37 The fact that packaging can be used to successfully promote the most expensive tobacco products in the UK has implications for other countries, whether they have strong controls on tobacco marketing or have not yet reached this point. Australia is an exception as the Commonwealth Government has been the first to ‘call time’, with plain packaging to be fully implemented by December 2012. By introducing such a measure, Australia can lay claim to being the country with the most ‘complete’ marketing ban. However, with only 0.3% of global cigarette sales58 and volumes predicted to decline in Australia,59 the ‘marketing saloon’ remains very much open for business elsewhere.