Liggett & Myers Tobacco Co.

George S. Myers and John Edmund Liggett created Liggett & Myers Co. in 1873. Until the early 20th century, Liggett & Myers was best known for its chewing, or plug, tobacco. In 1899, two years after the death of Mr. Liggett, the company was acquired by James Duke's American Tobacco Co., which came to be known as the "tobacco trust." In 1911, a year after Mr. Myers' death, the U.S. Supreme Court ordered the trust dissolved. L&M was one of four companies that emerged, along with R.J. Reynolds Tobacco Co., Lorillard Tobacco Co. and a new American Tobacco Co. The tobacco trust's various brands were divided among the new sibling companies, and L&M received the Fatima, Piedmont, Favorite and Oasis cigarette brands, each of which had its own, generally regional, niche. Oriental pedigree Despite its regional orientation, Fatima was the best-selling cigarette in the U.S. from 1910 to 1920. Fatima contained a blend of Turkish and domestic Bright tobaccos, but the product was marketed to project an Oriental pedigree. Its label, featuring a veiled woman flanked by a Maltese cross and the crescent and star, evoked the exotic East, a fad popular in the early 20th century. From 1917 to 1919, the Frank Seaman Agency created Fatima advertising aimed at an educated, prosperous consumer who read such publications as Town and Country. Ads, tagged "Distinctively individual," claimed that Fatima cigarettes were always appropriate after an elegant meal or a fashionable evening on the town, and they were available for 15� for a package of 20. Like its rivals, Liggett offered premiums to purchasers of Fatima, a strategy intended to attract smokers of all classes rather than just the sophisticates represented in its print ads. Two developments pushed Fatima to the sidelines toward the end of the decade. First, the Turkish fad fell victim to politics as the alliances of World War I made the East seem less mysterious than treacherous to Americans. Second, Camel cigarettes came on the market in 1913. N.W. Ayer & Son handled the introduction of Camel, which was a runaway success, and by 1925, Camel had won 40% of the market and RJR led the industry. To counter Camel, L&M in 1915 revamped the Chesterfield brand it had introduced three years earlier and developed a distinctive package for the "new" brand, presenting Chesterfield in a white paper-and-foil cup with the Chesterfield name printed in fine gold lettering. The package, which remained virtually unchanged for decades, appeared in all print advertising for the brand from the mid-1920s onward. In 1920, Newell-Emmett Co. took over Liggett & Myers' advertising, retaining the account until 1949. The agency created a simple but winning slogan for L&M's new Chesterfield flagship brand: "It satisfies." In 1925, Chesterfield was a strong second behind Camel in 1925, with 25% of the market. First to target women In 1926, L&M became the first of the Big Three to market cigarettes to women with posters and magazine ads for Chesterfield that carried the tagline "Blow some my way." The ads did not show a woman even holding a Chesterfield, much less smoking. Initial ads showed a couple in the moonlight with a woman asking her date to "Blow some [smoke] my way," linking women, sex and cigarettes in a way that other cigarette ads, many of them also peopled with women, had not, suggesting for the first time that women smoked, and that they might want to smoke L&M product. American Tobacco, however, proved the big winner in the female market and in the overall market. Its "Reach for a Lucky" campaign, inaugurated in 1928, spoke directly to women and catapulted Lucky Strike to brand dominance and American Tobacco to industry dominance by 1931. Camel and RJR slipped into second position, and Chesterfield and L&M were relegated to the No. 3 spot, where the marketer remained throughout most of the 1930s and 1940s. During those decades, L&M's advertising was characterized more by consistency than by innovation. The company did take advantage of the relatively new medium of radio, most famously sponsoring the "Glenn Miller Moonlight Serenade" series beginning in December 1939. But while its range of media expanded, L&M's message changed less dramatically. The dignified white Chesterfield package remained the same. Newell-Emmett varied the images and fine print, but stuck to the tried-and-true "They satisfy" slogan. World War II created millions of new smokers as the U.S. government made cigarettes part of every soldier's "kit," and sales soared when those men returned home after 1945. Loyal customers knew that Chesterfields were the "satisfying smoke," but Newell-Emmett created a fresh campaign to teach new customers the "ABCs" of smoking: "Always Buy Chesterfield," the brand that is "Always milder, Better tasting, Cooler smoking." Toward the end of 1949, Newell-Emmett was dissolved and reconstituted under its senior management as Cunningham & Walsh, which continued as L&M's agency. During that period, the Korean War was under way, and C&W created a campaign with a military theme, "Sound off for Chesterfields." The 1950s: New advertising challenges In the early 1950s, health claims about cigarettes began to trouble the public and the industry's bottom line. In December 1953, two physicians, Ernst Wynder and Evarts Graham, published a scientific study in the journal Cancer Research that linked smoking to cancer. In 1953, L&M had introduced its own L&M brand of filter cigarettes. In 1954, the new L&M brand surged ahead of Lorillard's Kent, although it remained a distant second to Brown & Williamson's Viceroy, available since 1936. Filtered cigarettes accounted for one of every 10 sales industrywide. The cancer scare of the early 1950s ebbed, but it transformed the context in which cigarettes were advertised, leading companies to invent fresh approaches. C&W created brashly reassuring ads offering purportedly "scientific evidence" that smoking L&M and Chesterfield cigarettes was safe. In 1953, L&M was touted as "Just what the doctor ordered." A year later, actresses Barbara Stanwyck and Rosalind Russell appeared in ads to sing the praises of L&M's alpha cellulose filter. In the wake of the Wynder/Graham study, such advertising aroused the attention and ire of the Federal Trade Commission. In 1955, the FTC laid out guidelines for the tobacco industry that disallowed ads that implied in any way that the medical profession approved of smoking or endorsed any given brand; broad claims about the beneficial effects of smoking on one's nerves, throat or energy level were similarly disallowed. However, the FTC had little enforcement power, and the 1950s were a decade of peak earnings for the cigarette industry. In 1956, Liggett & Myers dropped C&W and split its account, with Chesterfield going to McCann-Erickson and L&M to Dancer-Fitzgerald-Sample. Difficult times In 1961, the tobacco marketer dropped DFS and McCann, and consolidated $27 million in combined Chesterfield ($10 million) and L&M ($17 million) spending at J. Walter Thompson Co. In 1963, JWT oversaw the launch of Liggett's Lark, a cigarette brand with a charcoal filter. Lark did well overseas, but it could not compete in the U.S. with B&W's Viceroy or RJR's Winston, launched in 1954 and soon the sales behemoth of the filter market. The 1960s proved a difficult decade for the whole of the tobacco industry. Just when it seemed that filter brands such as L&M would be the salvation of the industry, U.S. Surgeon General Luther Terry issued a damning report in 1964, specifically linking cigarette smoking with disease, especially lung cancer. On the basis of this new report, the FTC moved again to restrict cigarette advertising and to mandate strong health warnings on cigarette packaging. The tobacco industry, however, joined the Advertising Federation of America and the National Association of Broadcasters to lobby Congress for an "end run" around the FTC, which in 1965 resulted in the Cigarette Labeling & Advertising Act. The act required mild health warnings on packaging but blocked state and local actions against the industry and prevented federal agencies from taking action to regulate tobacco advertising. In 1968, L&M reorganized, changing its name to Liggett & Myers. Between 1960 and '69, L&M fell from the No. 3 position with 10.7% of the market to No. 6 and less than a 7% share. In 1970, following the lead of Philip Morris and its Virginia Slims brand, L&M introduced its own brand marketed to women, Eve, in both regular and menthol versions. While Eve enjoyed moderate success within the women's cigarettes segment, it never approached the popularity of Virginia Slims. The industry again avoided stringent federal oversight when tobacco marketers determined to withdraw voluntarily from radio and TV advertising by January 1971. L&M shifted its ad spending from broadcast media (which had accounted for 80% of industry spending) and back to print and outdoor advertising. By the time the voluntary ban on broadcast advertisements went into effect in 1971, L&M had slipped badly in terms of market share and had begun to distance itself from the tobacco business. In 1973, Liggett dropped JWT and again split its business, returning to Cunningham & Walsh and adding Norman, Craig & Kummel. Three years later, the company changed its name again, to Liggett Group, with Liggett & Myers Tobacco Co. as a unit. In 1977, Liggett introduced Decade to the low-tar market, already dominated by Philip Morris' Merit brand. Acquired by Grand Metropolitan L&M's continuing troubles with the timing of its new-product lines were exacerbated by troubles with advertising, and in 1980, it was acquired by Grand Metropolitan. In 1981, the company turned to the only sector of the market not yet dominated by any of its rivals, the generic market, which by definition eschews advertising. As a result, in the 1980s and '90s, L&M's premium brands suffered from indifference and lack of attention. New ads for Chesterfield in 1992 were hailed as part of the first revival of the brand in 20 years and the repackaging of Eve and Lark in that same year made news. However, L&M did not launch another media campaign for four years, when the new, longer Eve was introduced with the sly query, "Who says length doesn't matter?" Publicis-Bloom handled the advertising for Eve. In 1983, Liggett Group changed its name to GrandMet USA, and three years later Bennett S. LeBow purchased Liggett from Grand Met. In 1990, Liggett Group was again reorganized, becoming a unit of Brooke Group, a holding company that was also controlled by Mr. LeBow. In 1997, L&M broke ranks with the rest of the tobacco industry, offering a settlement to 22 states attorneys general that involved a wide-ranging deal on health-related lawsuits and public acknowledgement that tobacco caused cancer, is addictive and is marketed to teens. The agreement made L&M a pariah among its industry peers, which worried that the FTC would want to see the papers L&M provided, which reportedly included lawyers' notes of conversations with other tobacco companies. In 1998, L&M signed the tobacco Master Settlement Agreement with states attorney general, which further restricted the company's marketing options. However, L&M used less advertising than its rivals, principally producing generic smokes. The following year, L&M sold its Chesterfield, L&M and Lark brands to Philip Morris Cos. for $300 million, leaving Eve the only premium brand produced by L&M. In 2001, L&M introduced the Jade brand, and the following year was reorganized as Liggett Vector Brands. In 2002, L&M was merged with the tobacco interests of Vector Group, the name for Brooke Group since 2000, forming Liggett Vector Brands.

Liggett & Myers Tobacco Co.

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