Retailer participation in cigarette company incentive programs is related to increased levels of cigarette advertising and cheaper cigarette prices in stores

Abstract

Purpose: The retail outlet is the cigarette companies' major marketing channel to reach present and future customers. Of the $11.2 billion spent by them to market their products in 2001, approximately 85% was spent on retailer and consumer incentives to stimulate sales. This study examines the extent of retailer participation in these incentive programs, and the relationship between participation and the amount and placement of cigarette marketing materials and products, and prices in stores.

Methods: Observational assessments of cigarette marketing materials, products, and prices were conducted in 468 stores in 15 U.S. states. Telephone interviews were conducted with store owners or managers of these stores to determine the details of their participation in incentive programs.

Results: Cigarette companies engaged 65% of retailers in an incentive program. Nearly 80% of participating retailers reported cigarette company control over placement of marketing materials in their stores. Stores that reported receiving over $3,000 from incentive programs in the past 3 months averaged 19.5 cigarette marketing materials, and stores receiving no money averaged only 8.2 marketing materials. In multivariate analyses, participation in incentive programs offered by Philip Morris and R.J. Reynolds was positively related to the number of cigarette marketing materials for each of these companies' brands in stores and the placement of their cigarettes on the top shelf. The price of Newports was significantly lower in stores that received incentives; no price difference was found for Marlboro.

Conclusions: Stores that participate in cigarette company incentive programs feature more prominent placement of cigarettes and advertising, and may have cheaper cigarette prices.