Thursday, 30 January 2014

Day 207: Today's guest is Mr. Lance Newman

It was back to some unfinished business at the Montreal tobacco trials today**, with the morning spent concluding the cross-examination of the last fact witnesses for the defence.

A true marketing man

Before he was sworn in for his morning's testimony, Lance Newman looked at Justice Brian Riordan and gave a hearty "Glad to be here."

"A true marketing man," the judge smilingly replied. Given the way plaintiff lawyer Philippe Trudel had treated the director of strategic insights for Japan Tobacco International like a chew-toy during cross-examination two months ago, Mr. Newman's ability to exude both comfort and confidence deserved some recognition.

This time it was Mr. André Lespérance who was asking the questions. He did so in such a relaxed style that the interview felt more like a radio chat show than cross-examination in a many-billion-dollar lawsuit.

This choice of style, matched with the marketers' comfort in explaining his craft, made for an interesting hearing. After almost two years of trial, much of which has been spent pulling evidentiary teeth from former marketing executives at Imperial Tobacco, Mr. Newman unabashed description of the consumers' mindset felt like a breath of fresh air.

Young adults, shaping who they are

One of the first documents Mr. Newman was asked to look at was a 1996 positioning statement for the company's only major brand, Export A. (Exhibit 571B) It described the customers the company was seeking as those "who are in the process of shaping who they are" and who were motivated to smoke through feelings of "rebelliousness" and a desire for "a way to fit in."

Mr. Lespérance invited Mr. Newman to reflect on his own experience as a father, and to see that these feelings would be as stronger or stronger in high-school age teenagers as compared with the "young adults" were were the stated target.

Mr. Newman said that these factors were true for consumers of all ages - and across all products.

"At about any age everyone is looking for some way to define themselves to the world. So, teenagers, 19-34, smokers, non-smokers; everyone, in every brand choice that they make, is looking to define themselves."

"Everything that they buy is, in some way, a manifestation of their personality, how they want to be viewed in the world, how they dress, the car they drive, the cell phone that they use, where they live; these are all manifestations of you as an individual."

He did not see that there was "a higher, stronger drive to define yourself" as a teenager than as a young adult, although the drive might be different, the relative strength might not be.

Mr. Lespérance showed him a previous positioning statement (from 1987, Exhibit 989.14), which gave an almost identical characterization of the "prime prospect", but which defined the target market a year younger (18 - 34 year olds). Mr. Newman explained that the age was adjusted to reflect the changes in the legal age for purchase.

Compete!-ing for customers

Mr. Newman worked at RJR-Macdonald at the time it established its s Extreme Music and Extreme Sports series, but said today that he had not been involved in the "sponsorship properties." He was not, therefore, sure about what was being sought by the objectives of this promotion to "Target people's attitudes and beliefs towards Export 'A'! Promotion created memorable exposure of Export 'A's new image. ... conveying a new image that can not only appeal to the mature consumer but, more importantly to the younger consumer of tobacco."

But he comfortably acknowledged that such promotions were a combination of advertising, point-of-sale, in-bar activities.  "Promotion, in its widest context, encompasses most of the elements in the marketing toolbox."  

Mr. Newman did not describe how the company created "memorable experiences" at these bar events -- but my mind immediately went to the high-octane, lots-of-pretty-girls, party-hearty events that appeared on the Extreme Music and Extreme Sports web-sites. (These promotions were eventually outlawed by the federal Tobacco Act.)

These photos of Export A bar events were circulated by JTI-Macdonald on its now-defunct web-site.

Lifestyle promotions

Mr. Lespérance tried to engage Mr. Newman in an explanation of why the industry abandoned the right to put people in its ads when it adopted a new voluntary code during the years between the collapse of the federal Tobacco Products Control Act (September 1995) and the implementation of the Tobacco Act (April 1997).

Mr. Newman said he could not answer this question (he said he had not participated in the drafting of the code), but he did acknowledge that people were excluded from ads out of "concerns" about lifestyle advertising and the "calculation ... that people equals lifestyle."

Later, in response to a question from counsel for JTI-Macdonald, Catherine McKenzie, Mr. Newman said he felt that lifestyle ads could be created with or without people in them, and that the portrayal of people did  not necessarily make an ad a "lifestyle" ad. 

The company's decisions on lifestyle advertising, he said, were driven by the rules that were set and by the "conservative" attitude of the firm. "we're very careful about what those rules are, and we are always very respectfully compliant to those rules. So if the rules say, "No lifestyle," we don't do lifestyle. If lifestyle is defined as excluding people, we exclude people. It's just that simple."

At the end of a cordial morning, Mr. Newman concluded his time at this trial. Again JTI-Macdonald's witnesses had emphasized that everyday-ness of tobacco marketing.

** this post was written on February 1st, but back-dated to provide continuity in indexing