Relaunch: New look for B&W's Kool

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Brown & Williamson Tobacco Corp. is giving Kool's "house of menthol" a new facade with the introduction of new packaging for its flagship brand. The move marks the second new look for Kool since 1997, which is on its third ad campaign since that date.

The bright green or blue monochrome packs aim to complement the urban-focused positioning the British American Tobacco unit launched in 2000 via Cordiant Communication Group's Bates Worldwide, New York. The goal is to resonate with the coveted 21-to-30-year-old target for Kool, the No. 2 menthol brand still in the shadow of segment leader Newport.

The ad effort, which emphasized Kool's nearly 70-year history with the theme "We built the house of menthol," arrested a four-decade share decline for the smoke, which peaked in the 1960s. Stabilizing share is one thing. Gaining ground in the menthol market-dominated by Lorillard Tobacco Co.'s Newport along with smaller players including R.J. Reynolds Tobacco Co.'s Salem and Philip Morris USA's menthol varieties of Marlboro-is another.


"The most important thing to do in the tobacco industry is get the marketing, packaging and imagery right and leave it alone," said David Adelman, an analyst at Morgan Stanley Dean Witter, adding that "Kool has had too many marketing campaigns." Menthol powerhouse Newport, conversely, has relied on its 30-year-old "Alive with pleasure" campaign to maintain its leadership in the segment. Newport's agency of record is Interpublic Group of Cos.' Avrett, Free & Ginsberg, New York.

B&W thinks its latest positioning is working, as evidenced by last year's share stabilization (see chart, P. 3), and believes the packs bring that messaging to the entire marketing mix. "We were trying a lot of things to get it right, and now we know we have it right," said Ludo Cremers, divisional VP-marketing at B&W. The package redesign "generates massive trial behind the New Kool," based on a test in Hawaii, Mr. Cremers said. Print ads breaking in June magazines will highlight the new pack, with the phrase "Look at Kool now. Time to step into the house."

`Room to Grow'

"Kool is doing some pretty good things," said Brandon Donahue, VP of Spokane, Wash., cigarette distributor Burke's Distributing. "They've got a buy-down program and they've got new packaging, so I think they have some room to grow," he said, adding that the menthol segment "is on an upward trend."

B&W, in a distant third-place behind Philip Morris and RJR, hopes to capitalize on that trend. Premium-priced Kool, the company's most profitable smoke, is its primary growth vehicle. "Kool is the No. 1 priority," Mr. Cremers said. "It's our flagship brand. Volume-, revenue- and profit-wise, it's the biggest contributor to the overall performance."

"I think it's their best chance. It's not necessarily a great chance, but they really don't have anything else to hang their hat on," said Prudential Securities analyst Rob Campagnino.

Although Newport remains Kool's biggest rival, there are other players to consider.

Philip Morris does not have a stand-alone menthol brand nor does it give specific advertising support to menthol styles, a spokesman said, but its Marlboro menthol varieties are gaining popularity. RJR's Salem, despite a recent effort to revitalize the brand, has consistently lost share in the past several years, dropping to 2.6% of total cigarette market in 2001 from 3.4% in 1997. Last fall, Vector Group's Liggett Group, launched its menthol offering, Jade.

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