Tobacco Wars in India

[Robert Weissman <rob@essential.org>]

6 December 1999
Times of India
Godfrey Phillips to take on Wills with new products 

 MUMBAI: Cigarette-maker Godfrey Phillips India Ltd
 (GPI) is planning to launch new brands in the premium
 kingsize segment. 

 The company plans to invest 25 per cent of its net profits
 into new brand launches in the next two years, general
 manager (marketing) Ranjyoti Barooah said in an interview
 on Sunday.

 In the regular segments, the company is planning brand
 extensions. On Friday, the company launched Four Square
 Gold in the 74 mm mini kings category, in the city. 

 The avowed intention is to take on Wills from the Indian
 Tobacco Company (ITC) stable which is the only player in
 this segment. In Mumbai, Wills sales are around 50 to 52
 million sticks and nationwide its sales are in the region of
 100 to 130 million. 

 Barooah said that in the next 12 months GPI has planned a
 target sales figure of around 10 to 15 per cent of Wills'
 sales adding that in the next four months they would be
 spending Rs 3.5 crore in promoting the brand. 

 The new product, which was two years in the making, has
 an extra long filter of 15 mm and is available at Rs 17.50
 for a pack of ten. 

 Last year GPI launched its largely rural brand, Red &
 White in Mumbai, in an attempt to go in for a brand
 positioning change, Barooah said. 

 In Mumbai, Goldflake from ITC holds the lion's share of
 the market selling 60 million sticks. 

 Four Square special comes second with 55 million sticks
 and Wills is third, Barooah added. 

 Incidentally, the company is planning to discontinue the use
 of film stars and other cult personalities for promoting
 R&W with a view to discourage minors from smoking, he
 said adding that it would replace it with an advertisement
 campaign targeted at adults. 

 This is part of an overall strategy being pursued by the
 company in its commitment to social responsibilities, he
 said. 

 GPI has three major cigarette brands - Four Square, R&W
 and Cavender-which brings in 90 per cent of the revenues
 of the company. 

 Phillips Morris of the UK, makers of Marlboro cigarettes,
 holds a stake of 36 per cent in GPI, the Delhi-based KK
 Modi group has a stake of 33 per cent, while the remaining
 is with financial institutions and the public. (PTI)

6 December 1999
Economic Times

 Four Square Gold starts mega mini war 
 Marion Arathoon 

 MUMBAI 5 DECEMBER 
 WAR clouds are gathering over the mini king cigarette segment
 now that Godfrey Phillips India (GPI) has launched its Four
 Square Gold in Mumbai across 27,000 retail outlets. 
 GPI's debut in long filter (74mm) will take on ITC--which puffs on
 70 per cent of the total market--and its mini king brand Wills
 Navy Cut. Priced at Rs 17.50 for a pack of 10, its trade margins
 too are on par with Wills. 
 The brand's edge is that it offers the ``Quality of Gold Flake at
 the price of Wills. Its filter length is longer than Wills and its
 blend offers a smooth smoke--which is the way the world is
 going anyway,'' says Ranjyoti Barooah, general manager,
 marketing, GPI. 
 He sees the brand notching 13-15 million sticks per month for
 Mumbai alone. An all-India launch will take place in phased
 manner. 
 In 1987, Four Square Kings was on par with Wills. Then the
 excise structure changed and Wills cut its price and changed
 into mini king. This placed the GPI brand in direct conflict with
 goliath Gold Flake, informs Mr Barooah. 
 Mr Barooah claims concerted guerilla marketing tactics from the
 house of ITC since their Mumbai launch on December 1. An
 example: the brand's point of purchase material is being brought
 down in persuasive manner across retail outlets, he says. 
 It's no secret that POPs are the main brand recall aids with
 smokers, who tend to buy cigarettes even two to three times a
 day. 
 Well, ITC seems to have its guard up this time. While Four
 Square Gold has laser perforations, Gold Flake Lights was
 launched a short while ago and vaunts its `laser perforations'.
 And in October, Wills launched a 20s pack--usually 20s are
 seen as enhancers of brand aura; in mid-November it came out
 with a 1,2,3--consumer loyalty programme. 
 Counters from GPI would hardly be feasible given ITC's huge
 muscle and brand arsenal, says Mr Barooah. Says an ITC
 spokesperson: ``It's premature to say if Four Square Gold is a
 threat. Anyway we are aggressively running the Wills 1,2,3 offer
 (and POPs) across the country--not just Mumbai.'' 
 While Four Square King and Four Square Special are smoked by
 the 40-year-plus, Gold aims for the upwardly mobile 25-35-year
 old. 
 Hong Kong-based design consultants, Tony McKnew and
 Nachtigali, have created an ivory white pack with the traditional
 squares in gold underlaid by gold pinstripes which make the
 pack look slimmer. 
 Instead of the usual patriarch advertising of `one ad for parent
 brand', the new ad commercial from Ogilvy & Mather is
 brand-specific. 
 It invites consumers to `Explore the refreshing new taste of Four
 Square Gold.' Frames pan across sea, sky, dolphins. It's shot on
 the Bahamas waters by renowned photographer Stephen Frink,
 the same chap who's done documentaries on nature, marine life
 and yes, the Titanic for channels like Discovery. 
 The storyline unravels a young Indian director who leads an
 international film crew for an adventurous and challenging shoot
 on water. 
 Why water? It cues into smoothness, freshness and possibilities
 for adventure and unlimited action. All these fit with Four
 Square's core brand values of daring dynamism with a spirit of
 outdoor adventure, says MrBarooa.