A core tenet in retail marketing is to include, somewhere in it, the product that is being sold.
While it’s common practice in advertising for the alleged features and benefits of any one item (particularly compared to those of a competing brand) to be exaggerated, that behavior — short of a company flat-out lying about what its offering(s) can or cannot do — has more or less come to be accepted (if not exactly admired) by consumers, chalked up as collateral (in the U.S., anyway) of free-market capitalism.
What’s harder to process is that a consumer-facing company would remove from its branding the name of the very product that it sells, in an effort to sell more of it.
We’re not talking about changing the proper name of a company here — that happens all the time, for a variety of reasons; and we’re not talking about keeping a yet-to-be-released product a secret as a means of building up anticipation for it. We’re talking about a company hiding, within in its own branding, the specific good that it has, for over a century, openly manufactured and put out into the world for human consumption.
In what scenario would a company ever do such a thing?
When it sells tobacco.
That’s precisely what the fourth-largest cigarette company in the world, Imperial Tobacco Group, announced last week, changing, after 115 years, its name to the thing-it-sells-free Imperial Brands.
The new moniker (which the above-referenced Bloomberg story notes is subject to shareholder approval at the British company’s annual general meeting on Feb. 3), according to a statement from Imperial, “better reflects the dynamic, brand-focused business we are now."
While that portion of a vetted statement from a large corporation unsurprisingly contains a whole bunch of open-ended (one might even argue meaningless) jargon, the phrase “brand-focused” does reveal (albeit perhaps unintentionally) a bit of substance. It’s likely not so much that the name change indicates that Imperial is focusing on its individual brands (which include Winston, Kool and Cohiba, among others), but more so that the company is seeking to protect its overall brand, distancing it — if only in name — from a product that has seen a tide of popular opinion rise against it.
The arguments against tobacco products — both from a public health perspective and with regards to the industry’s marketing tactics — are myriad: Smoking cigarettes causes lung cancer, chronic obstructive pulmonary disease and heart disease, just to name a few life-threatening illnesses; the tobacco industry has a long history of marketing its addictive products to children, viewing them as “replacement smokers."
One can see why Imperial found itself worried about being associated with a “bad brand,” as it were. But that brand is also one that is undeniably profitable.
According to a Credit Suisse report released early this year, tobacco has been the most successful industry in America over the last 100 years, with the single most successful company in the last 50 years being the tobacco conglomerate Altria.
If the name Altria is unfamiliar to you, that might be because it was known until 2003 as Philip Morris. If you know that name, you more than likely associate it with tobacco, and that’s why Philip Morris, similarly to what Imperial is doing now, changed it.
An article published in the American Journal of Public Health (shared by The Wall Street Journal) alleged at the time that the company believed “a name change might solve a multitude of problems,” because the public perception of Philip Morris “was almost entirely negative, associated only with tobacco."
How can one industry be so loathed by the public that the companies involved in it are compelled to essentially hide that fact in their branding, yet at the same time so financially successful?
It goes beyond the fact that tobacco products are addictive, as The Motley Fool — writing in response to the aforementioned Credit Suisse report — explains. The two major drivers of the tobacco industry’s success, the story attests, are that the industry does not innovate (because it does not have to), which keeps costs down, and the widespread dislike of the tobacco industry — which results in people’s avoidance of investing in it on a large scale — is greatly beneficial for those who do invest in it, as low valuations beget high yields.
The (extraordinarily depressing) lesson for retailers here is that they can totally succeed in selling a dangerous product that the majority of consumers despise. The key, apparently — as companies Philip Morris and, now, Imperial have demonstrated — is to not mention that product at all…