LOYALTY PROGRAM TAKES RJR'S DORAL TO NO. 3; TREND FIGHTER: 'DEAD, OLD' CIGARETTE BRAND REIGNITED

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Next month, 10,000 people from 26 states will converge in North Carolina for a private party featuring entertainment from the country group Alabama. Some will make the trip from other states in chauffeur-driven recreational vehicles, doling out interviews to local news shows along the way.

A late-blooming version of Saturn's spring in Spring Hill? Nope. Welcome to Tobaccoville and an event whose down-home appeal to middle-American smokers has helped turn Doral cigarettes into the third-largest tobacco brand behind Philip Morris USA's Marlboro and Lorillard's Newport.

The R.J. Reynolds Tobacco Co. brand is the proud sponsor of Rally Across the Heartland, the motor tour that will end at the company's Tobaccoville, N.C., plant, home to the fourth annual Doral Celebration.

Although it has new bells and whistles this year, the loyalty promotion has been running full steam since 1994. In addition to the annual event, it includes a custom magazine, merchandise offers and focus groups stocked with brand loyalists -- and a $30 million brand ad campaign.

PROMOTION BOOSTS SHARE

The promotion has been so well-received it was named by industry newsletter The Database Marketer as the second-most successful loyalty program of the last decade (Kraft Foods' Miracle Whip was No. 1). More importantly, it has helped boost market share for the brand to 6.6% at a time when the market for other value-priced cigarettes was flat.

"It's not for the tragically hip," said Doug Shouse, Doral VP-marketing. "It's really an attempt to connect on a very personal level. We believe loyalty goes both ways, through constant reward and showing our appreciation."

LOYALTY, PRICE, IMAGE COMBINE

"Doral has been doing very well," added Brown Bros. Harriman analyst Roy Burry. The loyalty program, along with aggressive pricing and consistent brand imagery, has turned around what was once "a dead, old brand," he said.

Value is the key to Doral print ads that carry the tagline "Imagine getting more." Ads from Coyne Beahm, Colfax, N.C., show a cat peering into a tank with a huge fish and a dog who sees giant fireplugs. The company also uses buy-two-get-one-free offers to lure smokers of rival brands.

SENSE OF COMMUNITY

Loyalty program mailings, handled in-house, deliver more of a sense of community. Some feature profiles of RJR employees to connect with smokers. But while the message is folksy, the methods are highly sophisticated; Doral sends its most loyal smokers 10 or more mailings yearly, while less-frequent smokers get fewer deliveries.

"The format isn't as elaborate as Marlboro's. It's more understated and homey," said John Cummings, principal of John Cummings & Partners, which tracks relationship marketing efforts and compiled the Database Marketer ranking.

He said Doral stood out because of "the involvement factor, and the way it interacts with the consumer. It's a loyalty program-plus."

In addition to the mailings, Doral also sponsors the Celebration gathering, an annual event organized by RJR which last year attracted 4,000 smokers from 39 states.

Some facets of the program have changed, mainly due to the industry's settlement with state attorneys general. Doral-branded merchandise, a big part of the original program, was dropped as of July 1. And the roving RVs that will soon

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