Barbarians at the Gate by Bryan Burrough, John Helyar Page A
Authors: Bryan Burrough, John Helyar
Ads: Link
line for print ads: “There’s a lot of good between ‘Winston’ and ‘should.’” Bob Anderson compoundedthe problem by yanking Reynolds’s brands off billboards, a crucial source of cigarette advertising.
A succession of ad agencies was thrown at the problem, each with its own ideas, each with a new direction, each doomed to fail. Cigarettes are sold on image, and for years Reynolds executives held their brand images sacrosanct. Philip Morris had gained millions of Marlboro smokers by sticking with the same cowboy image since the 1950s. Now Reynolds tried a macho counteroffensive, with campaigns portraying loggers and sailors. It tried a “working men of America” campaign, trying to celebrate the blue-collar brand it had become. Nothing worked.
Marlboro was also winning the battle on the factory floor. The entrenched traditions that kept Reynolds on top for twenty years now kept it from changing with the times. The reconstituted tobacco long embraced by Reynolds manufacturing executives saved money but sacrificed quality. It produced a hot, harsh taste that was popular with blue-collar workers but that, by the 1970s, was being rejected by more sophisticated and youthful palates. Marlboro, by blending a smoother cigarette, won converts. Philip Morris did it by pouring money into new plants and equipment, while Reynolds stood pat. After dominating the cigarette business for so long, the Reynolds line executives had grown complacent. “Ah, what do those guys on Park Avenue know?” they said, doubting the judgment of anyone that distant from the factories and tobacco fields.
In the mid-seventies both Philip Morris and Reynolds had a shot at purchasing a first generation of electronic cigarette-making machines that would greatly speed production. But many Reynolds mechanics weren’t literate enough to handle them; they chose to stick with older, more reliable machines they knew how to take apart and reassemble. Philip Morris jumped at the new devices. By the time Reynolds realized its mistake, all the manufacturer’s production was committed to Philip Morris plants. It was the final straw. In 1976, Marlboro passed Winston as America’s bestselling cigarette, a position it holds to this day. Reynolds held onto its lead in overall cigarette sales by a hair.
The problems weren’t confined to the old brands, as a new-product fiasco shook Reynolds further. It was a time when “all-natural” products were popular, and shortly after losing the number-one position to Marlboro, the company decided to roll out an all-natural cigarette. They named it Real. As usual, they ignored local skeptics. “What are we doing trying to sell to the health conscious?” muttered one dissenter. “Peoplewho smoke don’t give a shit about their health.” But Reynolds’ executives were so confident of Real’s success they bypassed test markets and took it directly national. They spent millions on ads showing ruddy-cheeked young bucks enjoying a Real and passed out packs by the gross on street corners. Real, of course, was a real disaster.
In the late seventies, Sticht officially became chief executive upon Stokes’s retirement, and Reynolds left its fifty-year-old downtown headquarters for a sprawling, glass-enclosed building erected several miles away. Reynolds, one executive declared, had arrived at “the age of mass, class and glass.” But the intrigues soon spawned within the new building would give it a far more colorful nickname: “The Glass Menagerie.”
His only mistake, Paul Sticht would later say, was that he had gotten too old too soon. He was past sixty by the time he became chief executive, and he no sooner had the job than speculation began about his successor. The early favorite was Tylee Wilson, a man with two years’ experience running the company’s overseas business and the only one of the original New Guard to make it into the 1980s. Sticht named Wilson president in 1979. As Sticht’s number
A succession of ad agencies was thrown at the problem, each with its own ideas, each with a new direction, each doomed to fail. Cigarettes are sold on image, and for years Reynolds executives held their brand images sacrosanct. Philip Morris had gained millions of Marlboro smokers by sticking with the same cowboy image since the 1950s. Now Reynolds tried a macho counteroffensive, with campaigns portraying loggers and sailors. It tried a “working men of America” campaign, trying to celebrate the blue-collar brand it had become. Nothing worked.
Marlboro was also winning the battle on the factory floor. The entrenched traditions that kept Reynolds on top for twenty years now kept it from changing with the times. The reconstituted tobacco long embraced by Reynolds manufacturing executives saved money but sacrificed quality. It produced a hot, harsh taste that was popular with blue-collar workers but that, by the 1970s, was being rejected by more sophisticated and youthful palates. Marlboro, by blending a smoother cigarette, won converts. Philip Morris did it by pouring money into new plants and equipment, while Reynolds stood pat. After dominating the cigarette business for so long, the Reynolds line executives had grown complacent. “Ah, what do those guys on Park Avenue know?” they said, doubting the judgment of anyone that distant from the factories and tobacco fields.
In the mid-seventies both Philip Morris and Reynolds had a shot at purchasing a first generation of electronic cigarette-making machines that would greatly speed production. But many Reynolds mechanics weren’t literate enough to handle them; they chose to stick with older, more reliable machines they knew how to take apart and reassemble. Philip Morris jumped at the new devices. By the time Reynolds realized its mistake, all the manufacturer’s production was committed to Philip Morris plants. It was the final straw. In 1976, Marlboro passed Winston as America’s bestselling cigarette, a position it holds to this day. Reynolds held onto its lead in overall cigarette sales by a hair.
The problems weren’t confined to the old brands, as a new-product fiasco shook Reynolds further. It was a time when “all-natural” products were popular, and shortly after losing the number-one position to Marlboro, the company decided to roll out an all-natural cigarette. They named it Real. As usual, they ignored local skeptics. “What are we doing trying to sell to the health conscious?” muttered one dissenter. “Peoplewho smoke don’t give a shit about their health.” But Reynolds’ executives were so confident of Real’s success they bypassed test markets and took it directly national. They spent millions on ads showing ruddy-cheeked young bucks enjoying a Real and passed out packs by the gross on street corners. Real, of course, was a real disaster.
In the late seventies, Sticht officially became chief executive upon Stokes’s retirement, and Reynolds left its fifty-year-old downtown headquarters for a sprawling, glass-enclosed building erected several miles away. Reynolds, one executive declared, had arrived at “the age of mass, class and glass.” But the intrigues soon spawned within the new building would give it a far more colorful nickname: “The Glass Menagerie.”
His only mistake, Paul Sticht would later say, was that he had gotten too old too soon. He was past sixty by the time he became chief executive, and he no sooner had the job than speculation began about his successor. The early favorite was Tylee Wilson, a man with two years’ experience running the company’s overseas business and the only one of the original New Guard to make it into the 1980s. Sticht named Wilson president in 1979. As Sticht’s number
Similar Books
