A class act
“I believe that the channel is all about premium,” says Neil Lovett, managing director of BAT GTR (Global Travel Retail). “The last thing we want to do is make tobacco a commodity, as has tended to be the case in duty free in the past. What we should be doing is premiumising the whole category – it’s what travellers and retailers are looking for.”
This core philosophy underpins the tobacco giant’s entire approach to travel retail, a channel in which a considerable proportion of its efforts during recent years has been directed into the development of the avowedly premium Dunhill brand. Supported by some classy promotional materials and effective in-store activity, Dunhill has also been boosted by the introduction of TR-specific brand extensions, of which My Mixture (also referred to as Tribute) is only the most recent.
Devised to mark Dunhill’s centenary this year, My Mixture 100th anniversary limited edition combines a choice of three special blends – Mediterranean, Bahia and Fire-Cured – with some surprisingly contemporary packaging. While intended as a duty-free exclusive, the offer’s rapid rise to hit status has prompted BAT to rethink its position.
“We’ve been almost surprised at the success of My Mixture – particularly in Asia Pacific – so much so that we’ve been forced to launch it in some domestic markets now,” admits Lovett.
The success of this offer in Asian markets has been particularly discernible to Lilian Lee, who works for BAT in Taiwan. “The launch of Dunhill Tribute early in 2007 has given Dunhill growth considerable volume, market share and image momentum,” she says.
The focus on My Mixture will continue throughout 2007. “It is the key campaign for this year and understandably so – 100 years is a milestone for the brand and we want to celebrate with consumers,” says Eduardo Lannes, BAT GTR’s head of marketing strategy. “Apart from this unique campaign we are further expanding the presence of Fine Cut to other airports, improving visibility and showcasing.”
Further TR-exclusive Dunhill brand extensions are on the cards for 2008. “We will be aiming more towards exclusive offers,” reveals Lovett. “It’s a result of what travellers – and retailers – are telling us they want.”
Away from Dunhill, BAT is also continuing to broaden the reach of Kent brand extension Kent Nanotek. “That is fairly innovative in terms of what it looks like, how it smokes and its packaging,” says Lovett. “That has been particularly successful in some domestic markets and it’s only right that we should roll it out in duty free.”
Factor in a continued focus on Lucky Strike (“we’re investing in Europe, Asia and Latin America”) and you have a broadly-based offer to duty-free and travel-retail consumers that is set to take BAT into 2008 and beyond. “I don’t think there’s much chance that we’re going to be concentrating on any other brands at this stage,” admits Lovett. “We’ve got quite enough on our plate.”
Relaxed about the possible implications for BAT of ongoing consolidation elsewhere in the tobacco industry and the pan-European trend for restricting smoking in public places, Lovett nonetheless believes that greater dialogue between supplier and operator will be essential if travel-retail is to remain a core component of category sales. “I do think that we, as tobacco companies, need to work more closely with airport operators to try to convey the importance of smokers, who represent 20% of airports’ customers,” he says. “Approaches are being made, but the message has not been entirely heard yet.”
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