Play Meter

'Demo Loading' The key to
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Improving cigarette
vending profits
By Linda C. Delery
Fifteen years ago, a 22-column
cigarette vending machine could hold
80 percent of all brands on the market.
Stocking a cigarette machine was
relatively simple back then . The opera-
tor usually selected from the top
selling brands, filing in other columns
with requested brands or doubling up
on the heavier selling ones.
With brands proliferating as they
have, that same 22-column machine
can hold only about 65 percent of the
total number of brands on the market
today. So it's increasingly difficult for
an operator to choose the right brands
for his clientele.
Add to that a number of price
increases, competition from gas
stations and convenience stores, and a
nationwide decrease in the smoking
population, and the operator can no
longer afford to choose brands by a
hit-or-miss method .
The selection process has become
precise and it involves intricate market
studies which demographically define
the different categories of cigarettes
and pinpoint the specific markets to
which they appeal.
Even though tobacco companies
have been targeting their markets
through the use of demographic studies
for the past decade, only recently have
these studies become especially impor-
tant to operators.
For if an operator wants to make
money in today's market, he must
focus on his specific clientele and pro-
vide them with the product they
demand . "In the last two years , more
than ever, vendors must eke out every
penny they can from machines," says
PlAY METER. July 15. 1985
Mike Shaw, national vending sales
manager for the R.J . Reynolds
Tobacco Co., Inc. of Winston-Salem,
North Carolina.
And because vending machine
sales represent 8 to 12 percent of all
cigarette sales, tobacco companies
such as R.J . Reynolds, Philip Morris,
and Brown and Williamson are
expanding their efforts to aid opera-
tors in their selection process.
Through its field representatives,
R.J. Reynolds makes its demographic
marketing studies available to any
operator who cares to invest the time
toward increasing his profits through
"demo loading."
Essentially, R.J. Reynolds has
broken down cigarettes into four
major categories of styles, which are
broken down even further into sub-
categories. They are as follows:
I. Non-Filter- Represents 6 per-
cent of all vending sales.
2. Full Flavor (16 milligrams of
tar)- Represents 55 percent of all
vending sales. Sub-categories include:
85mm filter, 85mm menthol, IOOmm
filter and I OOmm menthol.
3. Lights or Low Tar (between 6
and 15 milligrams of tar)- Represents
35 percent of all vending sales (same
sub-categories as full flavor) .
4. Ultra Lights or Ultra Low Tar
(under 6 milligrams of tar)- Repre-
sents 4 percent of all vending sales
(same for sub-categories as full flavor
and low tar).
These categories are then linked to
the following demographic groups:
Young Adult - The 18-34 age
group represents the highest consumer
group using vending machines. They
lean more heavily toward imagery and
prefer full flavor and light styles of the
more popular brands in 85 and IOOmm
lengths. They will not smoke non-filter
brands.
Female- The majority of this
group prefers I OOmm cigarettes.
Fourteen out of 22 top brands pre-
ferred by ladies are IOOmm. Slim style
brands have the highest share level.
Machines catering to this group are
mostly found in office buildings,
beauty salons, and shopping malls.
White Collar- Sixty percent of
this group prefers low tar and ultra low
tar brands. Forty percent prefers full
flavor. Non-filter brands are generally
unpopular with this group. A large
portion of machines stocked for this
clientele are situated in office build-
ings.
Blue Collar- Full flavor and non-
filter brands are the most popular with
this group, with better selling light
brand styles included in the load. This
is not a market for ultra low brands.
Machines placed in industrial and
neighborhood locations cater to this
group.
Black- This group has a heavy
preference for menthol and stylish
cigarettes. Sixty percent of sales are
menthols with an alternate choice of
full flavor brands .
Hispanics- This is a non-menthol
group . They like their brands 85mm
and full flavor with little preference for
non-filter and low tar. As if to com-
plicate matters even further, different
hispanic groups have different
choices of cigarettes. For example,
brands that sell well in Spanish
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