RJ Reynolds to Launch new Pall Mall Menthol Cigarettes
RJ Reynolds is seeking to continue its quest to boost sales of its best-selling Pall Mall cigarette brand by introducing new menthol versions.
The tobacco giant has launched Pall Mall Black and Pall Mall White in addition to Pall Mall Green, its flagship menthol cigarette.
Richard Smith, spokesman for Reynolds admitted the black version delivers “a full-flavor tobacco smoke,” and the white version “offers a smoother tobacco smoke.”
Smith added that the new products are introduced to the stores across the country, with nationwide launch scheduled for October.
According to RJ Reynolds , the new menthol cigarettes are added to keep up with the evolving smokers’ preferences and take advantage of the growth in the menthol category.
“We consider Pall Mall became the right product introduced at the right time, since the economic downturn keeps affecting purchasing power of adult tobacco users,” Smith noted.
Sales of menthol cigarettes have slumped in the last several years, from 27 percent of total cigarette sales reported in 2008, down to 22 percent last year, according to the report released by the Federal Trade Commission last week.
“RJR aims to market its new menthol cigarettes to price-conscious smokers, who use buy more expensive menthol brands,” declared Bill Godshall, SmokeFree Pennsylvania director.
RJ Reynolds hopes the new versions of Pall Mall menthol will further boost sales Pall Mall brand, which has emerged to become the third top-selling cigarette brand in the United States, behind Marlboro and Newport.
Pall Mall not only has outdistanced the iconic Camel as Reynolds’ leading brand but also cut away at Marlboro’s overwhelming leadership in market share.
In order to retain its position Philip Morris has launched an aggressive marketing campaign for Marlboro Special Blends, its discount version of Marlboro. Other rivals are also trying to slow down the success of Pall Mall by offering discounts on their brands.
Therefore, Pall Mall lost 0.2 percent of its market share during the second quarter, currently accounting for 8.4 percent share of the cigarette market. Its shipping volume was also down by 0.2 percentage points to 5.6 billion cigarettes versus the same period last year.
However, it is still an astonishing success for Pall Mall, which accounted for just 1.95 percent of the market before RJ Reynolds revived it by making Pall Mall its major growth brand together with Camel in 2006.
Bonnie Herzog, an industry analyst at Wells Fargo Securities, said the competition between could result in a marketing “massacre.”
“Though we think Pall Mall continues to be popular among price-sensitive consumers, the brand has no protection against pressure from competitors and, thus, we are anticipating a slowdown in its growth,” Herzog wrote.
Pat Shehan, who runs Tarheel Tobacco store chain, said it’s evident the marketing campaigns and promotional prices are attracting adult consumers to Pall Mall, Marlboro Special Blend and L&M from the generic brands.