RJR TRIES NEW MENTHOL TO WIDEN CAMEL MARKET: LINE EXTENSION LIKELY TO HAVE APPEAL AMONG WOMEN AND MINORITY GROUPS

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As the review for its $30 million Salem cigarette account drags on, R.J. Reynolds Tobacco Co. is launching a new attack in the menthol segment with a national rollout of Camel Menthol.

RJR appears to be shifting its attention from a free-standing menthol brand-Salem-to a line-extension strategy with the rollout. Although RJR wouldn't say so, the new product is almost certainly aimed at drawing women and minorities-the primary menthol smokers-to the Camel franchise.

`EASY LINE EXTENSION'

"It's an easy line extension," said Gary Black, analyst at Sanford C. Bernstein & Co. "It'll provide a good return on investment and is less risky than launching a new brand."

It's a proven strategy; even without a free-standing menthol brand, Philip Morris USA holds a 27% share of the segment, Mr. Black estimates, as compared to about 10% for RJR.

Also, Salem tends to be strong among older smokers in the Southeast, said Mr. Black, while Camel appeals to entry-level smokers, a group he defined as ages 18 to 24.

Advertising for Camel Menthol, handled by Mezzina/Brown, New York, shows Joe Camel and/or his band of dromedaries with the simple banner: "Menthol."

RJR wouldn't discuss spending, but could invest $10 million to $15 million on the launch.

NEWPORT LEADS SEGMENT

The biggest menthol player is Lorillard Tobacco Co.'s Newport, whose share of the total cigarette market in the first nine months of 1996 was 6.1%, up from 5.5% for the same period a year ago, according to Wheat First Butcher & Singer analyst John C. Maxwell Jr. That compares to Salem's 3.6% vs. 3.7% from a year ago and Camel's 4.6%, up from 4.4%.

Largely dormant since '94, Salem advertising recently has been given as project work to two agencies-Earle Palmer Brown, Bethesda, Md., and West/Wayne, Tampa, Fla. They're charged with giving the brand a more youthful image.

An RJR spokesman said there are no plans to introduce a menthol version of Winston, the company's other major brand.

A "No bull"-themed ad campaign supporting Winston's "no additives" tobacco blend continues to be tested in Florida via Long Haymes Carr, Winston-Salem, N.C.

Contributing: Laura Petrecca.

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