Table 1

Definitions and terminology-related tobacco company contracts with retailers

BuydownPromotional or time-limited product price reductions (eg, $1.00 off a pack of Marlboro cigarettes). With a buydown, the retailer lowers the price of the product by a set amount negotiated with the manufacturer and tracks the number of discounts given, the manufacturer then reimburses the retailer at the end of a set period. Stores without a contract or agreement with manufacturers are unable to provide discounted tobacco products to their consumers.
ContractAgreement between tobacco manufacturers and retailers that entails requirements and incentives from manufacturers to retailers (eg, Philip Morris Retail Leaders Program, RJ Reynolds Retail Partners Marketing Plan Contract (RPMPC), Brown & Williamson’s Kool Inner City Point-of-Purchase [POP] Program).
IncentiveRewards (eg, free items, monetary gifts, tickets for events or trips) given to retailers for participating in contracts with tobacco manufacturers and abiding by the requirements stipulated.
Placement*The location where a product is positioned for the consumer.
Price*The amount that a consumer pays for a product.
Product*The specific item or good produced by a manufacturer and obtained by a consumer.
Promotion*The advertising efforts used to highlight a product.
RequirementStandards (eg, 30% of shelf space) or actions expected by tobacco manufacturers of retailers who participate in contracts to receive incentives.
Slotting fee (slotting payment, listing fee)Payments by tobacco manufacturers to retailers in exchange for guaranteed shelf space for new or existing products.
Trade promotionsMarketing focused on wholesalers and retailers, instead of focused directly on the consumer through mass media channels.
  • *Placement, price, product, and promotion form the four ‘P’s’ of marketing.