REM - CAMEL TTB INITATIVES- 2010 IN-1
- 1. What “WE” Have Accomplished in 2009! INDIANA Projects: (11) 3rd Party Vendors – Circle K Midwest America Display – Dissolvables Re-merchandised/Tweaks WIS – Casey’s – New Fixtures Installations Ririe – Bloomington Division Lighted Signs Installation Ririe – Family Express Lighted Signs Installation WIS – Gas America Re-merchandised WIS/TMs – Pall Mall Pulse WIS – Maintenance Program (Outdoor/Indoor Sign Removal) Ririe – AMPM Re-merchandised America Display – SNUS Fridge Cleaning Project (Indianapolis Division) Gram Washburn – Greenfield Territory Vacancy WIS/TMs KENTUCKY Projects: (11) – Cox’s New Fixture Installations/Removal of Fixtures Lind Retail Group/Gram Washburn – Double Kwik Re-merchandised Gram Washburn – Pall Mall Pulse WIS – Maintenance Program (Outdoor/Indoor Sign Removal) Ririe – Food Lion WIS – Houchens Lind Retail Group – Jr Food Mart Gram Washburn – Kroger's Gram Washburn – Newcomb SNUS Installation/Re-merchandised Lind Retail Group – Rocket Oil Lind Retail Group – Sureway Gram Washburn
- 2. 2 CAMEL TOTAL TOBACCO INITIATIVES Wednesday, January 6, 2010 REM Jared M. Sigler
- 3. What is the CAMEL MSFT Pulse Event? CAMEL is a Total Tobacco Brand A limited time Pulse promotion on CAMEL SNUS and live CAMEL Dissolvables (within the Lead Markets) designed to increase your sales and outlet foot traffic! • January 25, 2010 through March 28, 2010 • Discount rate of $1.00 per tin/pack – both states • Creates a per tin price at $2.96 (INDIANA) & $2.47 (KENTUCKY) • (Refer to MSRP in Expressway – click on icon to the right A CAMEL MSFT Pulse Event is an opportunity worth taking full advantage of! • (* EXAMPLES STATED BELOW ARE EXAMPLES FOR INDIANA and RDA is factored at Option 2 or 3) • Profitability (Mark-up @ 22%) = Cost $3.25 Selling Full-Price $3.96 = .71 cents + .20 RDA = .91 • Profitability (Mark-up @ 22%) = Cost $2.25 Selling (Pulse) $2.96 = .71 cents + .20 RDA = .91 • Profitability (Mark-up @ 22%) = Cost $1.62 Selling Trial Offer $1.98 = .36 cents N/A RDA = .36 • INDIANA MSFT prices below are calculated to be within MSRP @ 104% for Option 1: • FULL PRICE = $4.12 TRIAL OFFER = $2.06 PULSE = $3.08
- 4. Draft. For Discussion Only 4 How Do We Calculate CAMEL – based off of INDIANA St. Min. Website? • CAMEL Cigarettes – List Price $34.14 (includes FET that is shipped to Wholesale) • Indiana State SET - $9.95 $44.09 * 1.045% (wholesale mark-up) = $46.07 $46.07 * 1.08% (state min. mark-up) = $49.76/10 packs $4.98 - discount .15 cents = $4.83 per pack How Do We Calculate PALL MALL – based off of INDIANA St. Min. Website? • PALL MALL Cigarettes – List Price $30.14 (includes FET that is shipped to Wholesale) • Indiana State SET - $9.95 $40.09 * 1.045% (wholesale mark-up) = $41.89 $41.89 * 1.08% (state min. mark-up) = $45.24/10 packs $4.52 - discount .70 cents = $3.83 per pack INDIANA State Minimum Calculations
- 5. Draft. For Discussion Only 5 How Do We Check and Calculate Store Sponsored Multi-Packs and VAP promotions? 1 – Consumer Pricing Fairness (CPF) Example: Single Pack Price= $5.00 Outlet Funded 2-Pack Special Price= $8.50 o ATC buys 2 packs of Camel VAP $1.00 off a pack o Scenario 1: Retailer charges for 2 single packs at $10.00 - $2.00 off= $8.00 o RJRT preferred (not required on this option) method would be to sell the 2 packs at the outlet funded 2pack special minus the VAP offer -- $8.50- $2.00= $6.50 2 – Consumer Pricing Fairness (CPF) & Example: Single Pack Price= $5.00 Outlet Funded 2-Pack Special Price= $8.50 o ATC buys 2 packs of Camel VAP $1.00 off a pack o RJRT required method for options 2 and 3 is to sell the 2 packs at the outlet funded 2-pack special minus the VAP offer $8.50-$2.00= $6.50 3 – Consumer Pricing Fairness (CPF)
- 6. MSFT Pulse Event Details – January 25, 2010 through March 28, 2010 • Products eligible for Pulse discounting include all Full Price CAMEL SNUS and Full Price Camel Dissolvables. • NO Pulse discounting will be paid for promotional products (i.e. Special Trial Offer, Multi-Variant pack, etc.). • Pulse discounting will be paid via AIM Pay based on the state-specific rates listed in TMC 276-09. • Two monthly payments will be made based on actual AIM volume (with no reconciliation payment) during the following weeks: – March 8, 2010 – April 12, 2010 • MSFT Pulse POS kits are scheduled to arrive at all TM Org Material Addresses during the week of 12/21/09 • Additional POS quantities will be available for order the week of 12/28/09
- 7. CAMEL DISSOLVABLES Available Pulse POS and POS Kit Contents CAMEL SNUS Available Pulse POS and POS Kit Contents
- 8. 2010 MSFT Pricing JANUARY 2010 State Sleeve Whlsl Price Total Excise Supplier Markup Supplier Suggested Price Retail Markup Retail Suggested Price Pulse Discount Rate Per Tin/Pack PULSE Retail Suggested Price INDIANA 12.30$ 2.95$ 8.0% 16.24$ 22% $3.96 $1.00 $2.96 KENTUCKY 12.30$ 0.95$ 8.0% 14.23$ 22% $3.47 $1.00 $2.47 JANUARY 2010 State Sleeve Whlsl Price Total Excise Supplier Markup Supplier Suggested Price Retail Markup Retail Suggested Price INDIANA $6.15 1.48$ 8.0% 8.12$ 22% $1.98 KENTUCKY $6.15 0.95$ 8.0% 7.59$ 22% $1.85 CAMEL SNUS SPECIAL TRIAL OFFER PRICING STRUCTURE SUPPLIER SUGGESTED PRICE RETAIL SUGGESTED PRICE CAMEL MODERN SMOKE FREE TOBACCO (MSFT) PRICING STRUCTURE CAMEL SNUS FULL PRICE OFFER PRICING STRUCTURE SUPPLIER SUGGESTED PRICE RETAIL SUGGESTED FEBRUARY / MARCH 2010
- 9. RE-LAUNCH of CAMEL MENTHOL Timeline: Materials due to Kenco 12/4/2009 Shipments begin 12/14/2009 Shipments complete 12/31/2009 Open items to laptop orderable 1/4/2010 Camel Menthol POS Changeover (1Q10) DTS - 1/18/10 Item Description Orderable Item # CAM MEN LG ACRYLIC EQUITY INS 1Q10 (2-S) 680407 CAM MEN LG B4 (24") INS 1Q10 680414 CAM MEN SM B4 (18") INS 1Q10 680421 CAM MEN 1' SMALL (5.5"H) OVERLAY CD 1Q10 680216 CAM MEN 2' SMALL (5.5"H) OVERLAY CD 1Q10 680267 CAM MEN 3' SMALL (5.5"H) OVERLAY CD 1Q10 680311 CAM MEN 1' STANDARD (8.25"H) OVERLAY CD 1Q10 680230 CAM MEN 18 INCH STANDARD (8.25"H) CD 1Q10 680246 CAM MEN 2' STANDARD (8.25"H) OVERLAY CD 1Q10 680281 CAM MEN 3' STANDARD (8.25"H) OVERLAY CD 1Q10 680325 CAM MEN 1' LARGE (11.5"H) CD 1Q10 680209 CAM MEN 2' LARGE (11.5"H) CD 1Q10 680260 CAM MEN 3' LARGE (11.5"H) CD 1Q10 680304 CAM MEN MODULAR NSS HEADER INS 1Q10 680441 CAM MEN 4' SMALL (5.5"H) OVERLAY CD 1Q10 680353 Example only
- 10. 2010 TDM, Coupon Redemption Rates, misc.
- 11. 11 Timeline for POS Changeover RJRT plans to remove and/or replace these non-compliant POS advertisements on or before the statutory deadline of June 22, 2010. New Communication on FDA Ruling
- 12. TOBACCO INDUSTRY PROVISIONS - FDA • Not later than September 30, 2009 (and the last day of every fiscal quarter thereafter) Pay user fees/brand additives Beginning June 22, 2010 • Comply with advertising and marketing restrictions in Final Rule • Ban on “light”, “mild”, “low” and similar descriptors • Prominently display established name on labels and advertisements • Place brief statement of uses, precautions, etc. on advertisements • Smokeless - Place “Sale only allowed in United States” on labels and shipping containers • Smokeless - Place name/address, quantity, domestic/foreign percent statements on labels • Smokeless - Place required warning statements on advertisements and labels Not Later Than March 22, 2011 • Substantial equivalence (SE) reports for products introduced between • 2/15/07 - 3/22/11 (FDA to provide form and manner of reporting) Beginning June 22, 2011 • Pesticide limitations established for tobacco Not Before June 22, 2012 • Comply with any manufacturing restrictions/GMPs promulgated by FDA • Test/report constituents, ingredients, and additives Beginning June 22, 2012 • Submit list of all constituents identified as potentially harmful Not Later Than September 22, 2012 • Cigarettes2 – Place required color graphic warning statements on advertisements and labels • Cigarettes – Place “Sale only allowed in United States” on labels and shipping containers • Cigarettes – Place name/address, quantity, domestic/foreign percent
- 13. Draft. For Discussion Only 13 •The ruling is that we can use color pos with images for all RJRT brands, however the pos for MSFT must carry the new warning label which is 20% of the pos. •Cigarette pos is ok as is in the market with the exception of the category call out - "cigarettes". •To correct this versus printing all new cigarette pos, we can place a sticker in one of the 4 corners of the pos where it does not interfere with other printed call outs. •Stickers will be produced for placement on cigarette pos - Trade Marketing and/or Third Party Third Party Support • We will be delayed by 2-3 weeks in our conversion efforts due to the change to color pos. • Mid to late April is the estimated time frame for conversion efforts to begin. • We will be producing all new SNUS & Dissolvables pos for placement at retail before June-22. • 3rd party will cover an average of 80% of all outlets within our region. •It will be up to the REM to determine the 3rd party or parties for this conversion. • The plan is to maintain TM kits as they will need access to the pos in the balance of their calls not being supported by third party, and to adjust any omissions/errors made by the third party. • Each region will determine which contracted outlets will be selected for FDA conversion. Updates to POS Changeover Q2 2010
- 14. FDA Q2 2010 POS Changeover PLEASE UPDATE MATERIAL ASSETS! • Each Division will determine which contracted outlets will be selected for FDA conversion 3rd Party POS Requirements by Region – REMs – list of new POS sent 1-19-10 • SNUS • Dissolvables • Include ship to location • Due Date: 1-22-2010 – back to David Cook • Contracted Outlets for 3rd Party FDA activity – Region – 80% target coverage • REMs to survey Region and Account Management for drop list and specific activity for accounts. • Format – WDC • List Out to DM’s/TM’s for Survey: 1-29-2010 • Outlet List Revisions – Based on Division/Region/Account management discussion – add/drop outlets - REMs • Revised Final List Due Date: 2-12-2010 – send to David Cook
- 15. CONT…INFORMATION REGARDING FDA POS CHANGEOVER · The scope of work will also involve removal of certain signs - door strikes, security glass decals placed on outside, 1 sheet frame with pricing placed outside on drive through walls, 4 x 2 equity frames (being discontinued). • David Cook is preparing a deck showing all types of signage and action required. ADDITIONAL INFORMATION · Possibility that American Snuff Co. will be hitchhiking onto our use of 3rd party vendors for their FDA POS changeover · Estimated time per outlet for FDA POS changeover 45 minutes includes drive time · Objective is to use 3rd party for 80% of the outlets · REM’s will have the option to order additional POS to a designated location for 3rd party use (the company projects needs at 100-150% over normal usage)
- 16. Family Smoking & Prevention Act – Descriptor Changes for 2010 • We will revise pack, carton & case descriptors on our remaining brand families as listed below: - CAMEL, WINSTON, KOOL & DORAL • All other product details (i.e., taste signature, blend, UPCs, weights, measurements, etc.) will remain unchanged • Since some brand styles sell through at different rates, we anticipate products with the new descriptors could start to flow through between February and March 2010. • Returns are NOT authorized on products with current (old) descriptors at wholesale or retail. • Trade Marketing Talking Points (this is NOT a leave-behind for Adult Tobacco Consumers). Item will be shipped in pads of 50; TM will be shipped (2) pads in mid to late Jan. to their Org Material address Item #709374 (minimal quantities will be available for reorders as needed) • Package tags and carton end labels will be updated in CONNECT no later than January 22, 2010. • Descriptions in CONNECT & Hyperion (i.e. Product Line Numbers, Product Availability, Prebooks, volume reports, etc.) will be updated to the new descriptions on 1/25/10.
- 17. RJRT 2010 Contracts –(CPF) Volumes Report • To assist you and your teams during the 2010 Contract Sell-In Period, the attached tool has been developed to provide you with an easy and efficient view of volume for the seven Camel Priority styles, Pall Mall Box, Camel SNUS and combined Doral, Winston, Salem, Kool and Misty. There are two sheets in each file - one which contains outlet level data based on geography, the other with Account data based on presence. Data contained in these files is STR. • For the outlet level data, all the user needs to do is type the Customer Code for the outlet into the yellow highlighted box and data for that outlet will populate automatically. You will see both average weekly carton shipments (based on the latest 26 weeks) and a 13 week number (the average weekly times 13). • On the presence tab, your KAMs/AMs can filter on either their Org Unit or the L1 Account name to find similar average weekly volume information. Draft. For Discussion Only 17
- 18. 3rd party Tools Draft. For Discussion Only 18