JOHN PLAYER & SONS LIMITED Jacques Nantel Ph.D École des HEC Montréal

September of 1994, Neil pushed the reports to the back of his desk. He had reviewed both Peter’s and Frank’s plans. Peter’s plan was an aggressive approach, aimed at eliminating the rumour through a head-on strategy. Frank’s plan was to utilize the equity of the trade mark and further reinforce its positioning through advertising, never addressing the rumour. Frank felt that discussing the rumour would increase its awareness. Therefore, he concluded, the best approach would be to let the rumour die on it’s own. Peter, on the other hand, felt that anything less than an all out attack would be futile. In Peter’s opinion , the rumour will remain alive until measures were taken to eliminate it.

Neil had the utmost respect for the judgment and abilities of both Peter and Frank, but he realized that a strategical error would be very costly. The Player’s trade mark was the company's most valuable asset. As Neil saw it, there were three possibilities: he could launch Peter’s campaign; he could take Frank’s advise; or he could do nothing at all.
 

ORGANIZATIONAL STRUCTURE - JOHN PLAYERS AND SONS
 

BACKGROUND

In June of 1994, Frank Ryder reviewed the results of a monthly study. This study was designed to survey smokers' behaviors, attitudes and perceptions of various tobacco products offered on the Canadian market. Of particular concern to Frank was the increasing awareness of a rumour that Player’s cigarettes contained fiberglass in their filters. This rumour, completely untrue, was predominant among smokers aged 19-25.

Later that morning, Frank presented the numbers during the companies weekly meeting: nationally, 40% of all smokers have heard that Player’s filters contain fiberglass, up from 35% in 1989.

"Wait a minute, Frank. There must be a mistake!" exclaimed Neil Ford. "We buy our filters from the same two suppliers as every other tobacco company in Canada. In addition, the filter fibers are identical on all Canadian cigarettes. These fibers are made from 100% cellulose acetate, the same basic material found in everyday household products such as facial tissues, cotton swabs, and Q-tips."

Frank replied: "Neil you are absolutely correct. Unfortunately, consumers know very little about our products. Consumers have very few facts to support an argument refuting this rumour, therefore, over time, it becomes increasingly more believable."
 

JOHN PLAYER & SONS MARKET POSITION

John Player & Sons is an established company with a very successful history in the tobacco industry. Through effective sales and marketing strategies, Player’s cigarettes have become one of the leading cigarette brands in Canada. The Player’s trade mark enjoys a national market share of 28.8%. However, with success have come challenges. In the last decade, the brand’s franchise has been slowly but increasingly undermined by a persuasive rumour that Player’s filters contain fiberglass. The fiberglass-in-cigarette-filters rumour is not new. In the 1970s, it was Rothman’s cigarettes which were said to contain fiberglass. Over time, as the popularity of Player’s cigarettes increased, the rumour passed from Rothman’s to Player’s.

Another problem faced by John Player & Sons was that traditional forms of communication were not available in the latter part of the 1980s and early in the 1990s. Government legislation restricted the ability of tobacco companies to advertise to their consumers. This left John Player & Sons at a disadvantage in trying to combat the rumour. Over time, the rumour, which originated in British Columbia, has spread eastward, to the Atlantic provinces.

Table 1 traces how the rumour has, over time, spread across the country among smokers who believe it and associate it with Player’s.

The continued spreading of the rumour about Player’s filters has had a dual effect on John Player & Sons. Firstly, image studies clearly indicate that consumers' perceptions of the Player’s brand have been negatively affected by the rumour. Secondly, Player’s products seemed significantly less appealing as replacement brands when rated by those who believed the rumour. It should also be noted that, despite the rumour, Player’s maintained its dominant market position.

Table 2 ( Below ) presents the results of an image study conducted among consumers across Canada. As it illustrates, in 1994, even with the negative impact of the rumour, Player's was still perceived as a better product than any competing brand.

Besides its adverse effect on Player’s image, the fiberglass rumour also had an impact on the trade mark performance. Since 1989, 6% of the consumers surveyed, reported they had previously smoked Player's but had left the brand because they believed it contained fiberglass. Equivalent statistics were not found for other brands. The rumour had cost John Player & Sons market share, as illustrated by the discrepancy between the share for Player’s family among those who believed it has fiberglass versus those who did not.

Although the market share for Player’s products was still very high and increasing, the long term negative image effects being projected on the brand because of the rumour, prompted Neil Ford to take action. Neil mandated Peter Little, director of communications, to plan a campaign, designed to reduce the negative impact the rumour was having on the Player’s trade mark. As Peter began working on the project, he realized that unlike other consumer-related issues, rumours could not be handled with conventional marketing tools.
 

OPERATION TRUTH

When Neil Ford was promoted to vice president of marketing, John Player & Sons, he realized that a plan to handle this rumour would have to be prepared. It was the opinion of his predecessors that the best response to the problem would be to ignore it. The reasoning was: "We are successful, our brands are growing, why risk the trade mark by exposing this rumour to a wider audience?" Neil, however, was not convinced this was the best response. Neil had seen how other companies had been decimated by the effects of rumours. Neil’s responsibility was to ensure that a similar situation would never occur with Player’s.

In order to effectively counter-act the rumour, Peter’s first step was to state the true facts about Player’s cigarette filters. To do this, he hired the services of Can Test Ltd., an independent firm based in Ontario. Their mandate was to analyze Canadian cigarette filters for the presence of fiberglass.

On September 8, a representative from Can Test Ltd. presented the results of the company's research.

RUMOURS

Unlike other types of "messages", rumours are difficult to analyze for several reasons. First, they often have no known origin. This, combined with the fact that there is often more than one source, makes pinpointing the source of the rumour almost impossible. As well, rumours seem to affect the market leader more than any other brands. Since market leaders are the most known of a product group, rumours regarding these brands usually have the greatest appeal.

Rumors have also been known to have been used by competitors to sabotage the growth of an emerging brand or grab share from an established one.

According to several studies, one of the major functions of rumours is to draw attention to the people who spread them. Hence, rumours are not a question of truth, but rather, a question of entertainment.

For an organization, counter-attacking a rumour is difficult for two reasons. First, rarely can one identify the source of the rumour, thus making it difficult to file a legal suit. And second, various studies have shown that rumours are especially effective because they are spread through peers, rather than an authority figure. Since rumours are generally spread through informal discussions amoung peers (often at social settings such as coffee shops, bars, university campuses, etc.), their word-of-mouth advertising makes them extremely credible and pervasive. (See the article on Rumor by Chip Walker in American  Demographics)

Rumours have been shown to be very effective among younger consumers, often fulfilling the dual role of providing clear information about a seemingly ambiguous matter and improving social contacts among peer groups.
 

TAKING ACTION

Because of the damage experienced to date, the potential for even greater destruction in the future, and the realization that the rumour would not just dissipate, Peter decided to attack the rumour head-on.

The decision was not easy, since he realized such a strategy posed a potential risk. A possible consequence might be that the rumour, predominant only among consumers 19-24 years of age, would be brought to the attention of nearly all Canadians.

However, recognizing that taking no action was an equally dangerous alternative, Peter decided his approach would be to launch a national campaign, which would openly address the issue without using the word "Player’s". The communications program would, therefore, be built around acknowledging the existence of a rumour, stating that it is false, and proving why it is false. In addition, Peter would demonstrate, with numerous examples, how untrue rumours often have widespread acceptance. To achieve this, it was decided that a pamphlet would be devised and widely distributed in retail stores and smoking establishments. (Click on the image to get full pamphlet)

Before launching the campaign, Peter submitted the pamphlet to four focus groups. The results indicated that comprehension of what was being communicated depended largely on the age group. Smokers over the age of 24 complained of a lack of understanding, because, to their knowledge, the fiberglass rumour had come and gone many years ago. The participants 19-24 years of age, liked how the campaign was conducted, especially the slogan, "The Rumour Stops Here!" They felt it was easy to understand and eye-catching. They were not sure, however, if it would have any impact on the way they or their friends thought about the product.

Added to these considerations, Peter had to be mindful that any communication done by a tobacco company in Canada, is always under strict scrutiny by government and anti-tobacco lobbyists. The latest Canadian legislation on tobacco product was adopted in 1996.
 
 

THE DEBATE

Before presenting his plan to Neil, Peter met with Frank to discuss his ideas. "After careful analysis of the rumour, I have decided to launch an all-out campaign to put an end to this once and for all,." stated Pete.

"What do you mean?" replied Frank. "An all-out campaign will make a national issue out of this rumor. If you examine recent market share numbers you will see that Player’s is making a strong comeback. Our share is increasing amoung those who believe the rumor. In time, the rumor will be a non issue."

"You are forgetting some key points, Frank," remarked Peter. "First, the rumor is a complete lie. Secondly, it is effecting the image of our largest trade mark. And thirdly, it is hinderring our ability to gain additional market share. Over the long term, this rumor will greatly affect our over all profitability. Do not forget, Frank, one single market-share point in this industry is worth more than $20 million dollars of revenue."

Frank retorted: "Peter, I am aware of this. However, I feel that the best response would be to focus your plan around reinforcing the positives about Players. Develop materials that will improve our product positioning in terms of quality and popularity. Why spend time and resources focussing on the rumor? You may just increase its awareness to a larger percentage of the population."

"Look at the facts, Peter. Share amoung those who believe the rumour continues to increase. Focus groups stated that the pamphlets weren’t truley effective with the younger or older participants, and currently, the rumour is predominantly amoung only smokers 19-24 years old. Let the rumour run out its course; eventually it will die. In the meantime, we should continue to advertise the benfits of Player’s."

"Frank I respect your position.," countered Peter. "However, I feel that this plan represent the best interests of the company over the long run."

With all the information in hand, it was decision time. Peter presented his plan and the results of the four focus groups to Neil. The decision was now up to him. What had become clear, however, was that rumours had no simple or even predictable solution.