Two areas of particular interest to branded manufacturers are the upscale cigarette market and the women's segment. Despite lackluster performances in 1983--Philip Morris' Players brand attained a 0.7% share, the highest among new brands--producers consider the luxury packs as a fast-growing segment. Following a successful test run in Florida early this year, R.J. Reynolds mounted a major national rollout of Sterling Special Blend in April. Elegantly packaged and sporting a unique 94 millimeter international length, the company is counting on Sterling's upscale appeal to open a new market niche of premium cigarettes at popular prices.
Meanwhile, Lorillard's Satin, which opened with a bang when it was introduced nationally in February 1983, closed the year with a whimper holding less than half a share point, disappointing by industry standards. "We went back to the drawing board and redesigned the package to achieve a higher degree of elegance," says Orcutt, adding that the new look is intended to spur greater sales. Satin, which is targeted toward the women's segment, was reintroduced this past May and is being supported by a major advertising blitz.
American Brands is banking on the women's segment to give its slumping Carlton family of brands a sorely needed shot in the arm when it unveils its luxury-packaged Carlton Slims, now in test markets. Despite dropping into fifth place last year behind Lorillard among the major cigarette manufacturers, American has been marginally successful in rejuvenating its Lucky Strike franchise, which until 1983 had been on a downside for 16 years. The king-size, low-tar filter version, introduced last September, was joined this February by a 100 brand. Lucky Strike Lights is expected to go national this summer.
While brand proliferation won't approach the frenzied pace of past years, retailers will continue to feel the pressure of having to carry an inordinate amount of brand styles. The cigarette makers, for their part, contend the category doesn't get the space it deserves. Retail selling space devoted to the cigarette category has not kept pace with either larger stores or customer satisfaction. To achieve a level of 99% customer satisfaction, today a retailer needs to carry 168 packings and needs a merchandising facility that will accommodate up to 220 rows. In support of this proposition is the fact that the contribution of cigarettes to a retailer's bottom-line profits is substantial when compared to other dry grocery items.
