RJ Reynolds as the Second Largest Company in the US - Research Paper Example

Joe Camel Company History RJ Reynolds (RJR) is the second largest company in the US, and it is situated in North Carolina, USA. The company was founded by RJ Reynolds in 1875, and it has since then expanded to be one of the major tobacco manufacturers in the US. The legacy of Reynolds revolved around three generations that used to engage in tobacco farming, and they relied on the labor of slaves to make an efficient tobacco company. The country where Reynolds came from taught him how to purchase, manufacture and sell tobacco, and thus he did not need any help beyond capital to allow him to start a tobacco company (DiFranza & Aisquith, 1995). Reynolds is also popular for being in possession of award-winning advertising skills. After starting up his tobacco company, and advertising it through the print media, he was regarded as the leading innovator by the members of his society. In 1913, Reynolds introduced the Camel brand, which enticed consumers by providing them with a lifestyle that no other cigarette brands did (Gillespie, 2012). RJR resurrected its Camel brand in 1987 and renamed it Joe camel. Joe Camel reflects a cartoon camel that has been pictured wearing sunglasses. A large number of people stipulate that this move was a ploy aimed at enticing young children to start smoking. However, RJR denied the idea and said that Joe Camel was a smooth character whose role was to attract the attention of adult smokers. This criticism was raised by the Journal of the American Medical Association, which stipulated that children who were aged 5 and 6 years were able to recognize Joe Camel than they could with Mickey Mouse (Gillespie, 2012). In this case, it was alleged that the Joe Camel campaigns targeted children to become smokers, regardless of RJR’s contentions that the campaign was researched among adults, and it was directed towards smokers who used other brands. Description of the Scandal In 1988, RJ Reynolds Tobacco Company initialized an advertising campaign to boost the popularity of its Camel brand, which featured the Joe Camel cartoon. Later it was revealed that Joe Camel was rivalling Mickey Mouse in terms of recognition and that children who were as young as 11 years were able to notice the advertisement more than any other person regardless of his or her age. From the time, the campaign was started; the market share for the Camel brand had risen from 0.5 percent to 32.8 percent by 1991 (Calfee, 2000). Because of this, RJ Reynolds realized that it managed to make approximately $476 million sales illegally from Camel cigarettes to young children every year (American Marketing Association, 1993). Though there is variability regarding teenage preference for cigarettes brand on every survey ever conducted since 1989, Camel brand is more popular among children while compared to adults (DiFranza & Aisquith, 1995). This is a reversal of the incident before the Joe Camel was introduced. When the Joe Camel campaign was running for two years, children were more aware of the character of Joe Camel than adults. The illusion for those adults older than 24 years was that RJ Reynolds intended the Joe Camel brand for those individuals who were aged between 18 and 24 years (American Marketing Association, 1993). Older adults aged over 65 were also targeted because the Camel brand was popular among men of that age, before Joe Camel was introduced. Nevertheless, research reveals that Camel’s market share was popular among smokers who were below the age of 18, as opposed to those who were in between 18 and 24 years (DiFranza & Aisquith, 1995). RJ Reynolds stipulated that the Joe Camel campaign was targeted to those aged between 18 and 24. As a result, a careful study was carried out with the goal of targeting those below 18 years and those in the age bracket of 18-24 years. Since the study was carried out in 1994, this means that a person who was under 24 years must have been under 18 years at the time when RJ Reynolds was launching the Joe Camel campaign (Gilpin, Pierce, & Rosbrook, 2004). Given the fact that the Joe Camel campaign has had a significant impact on children and teenagers, it is true that the target group witnessed the same exposure when they were below 18 years (DiFranza & Aisquith, 1995). In 1994, individuals who were aged 11 to 16 were at age 5-10 by the time the campaign was being launched. If at all the Joe Camel campaign was targeted to adults, then it should have hadconsiderably less impact on this age group, most of whom could not be able to read in 1988 (Calfee, 2000). Also, people who were aged between 17 and 23 in 1994 were all underage at the time the campaign was being launched (11-17 years). Though most of these people have since then attained the target age, it is not possible to exclude them from those who were targeted in 1988 (DiFranza & Aisquith, 1995). Those who were aged 17 years were not included with younger children because most of the smokers at that age could have selected their favorite brand. The individuals who were aged between 24 and 30 years in 1994 are the ones who should have theoretically been familiar with Joe Camel, since they were the target group. People aged over 30 years had passed the target group during the launch of the campaign (American Marketing Association, 1993). In this perspective, therefore, it is true that the target group for the Joe Camel campaign was those children who had not attained the legal smoking age. By enticing thousands of teenagers to smoke, the company was able to sustain its market share in the industry, and remain undefeated (Gilpin, Pierce, & Rosbrook, 2004). Though RJR stipulated that it was not their intention to target youngsters, they revealed that if the old product had the same appeal, then they would discontinue advertising the product. However, this move was only intended to ensure that the advertisement remained in existence. When the pressure directed to RJR became intense, they refrained from advertising a product in 1997 (Davis, 2002). Despite the scandal that is affiliated with RJR, Joe Camel is still the dominant brand in the market to date. Ethics Discussion In the business, the issue of ethics is a term that greatly impacts on their performance. While practicing ethics, businesses adopt models that influence the perception of the consumers towards the product. For instance, “Ethical Egoism” is a term in business ethics that organizations adopt to help them understand the nature of the market. RJR believed in the idea that the activities which it engaged in are aimed at addressing its own self-interests. Though the tobacco industry is associated with a large number of deaths, such companies adopt strategies that allow them to keep on generating profits without feeling guilt towards the impact that the product has on the consumers (ABC News, 2002). Addictive products such as tobacco are harmful to those people who use them, and it is because of this that companies, such as RJR are supposed to alert people on the dangers involved once they use the product. However, RJR has not lived up to its ethical standards, and it instead disregarded its responsibility by targetingvulnerable population to be addicted to its product after the release of Joe Camel. This is not in line with the practices that the tobacco industry practices towards to the society, since some companies ignore the standards that are set in order for them to be able to dominate the market (ABC News, 2002). For an organization to be regarded as an ethical one, it should provide its customers with data regarding smoking and the health consequences that result afterwards. Though the tobacco industry requires companies to reveal such kind of information, this was not the case for RJR. The company adopted a scheme that allowed it to promote its products among the youth without caring whether it will impact negatively towards them or not. As a result, the state of confusion emerged among consumers regarding the rationalizations that the tobacco industry emphasizes towards being socially responsible to its customers and the society. As a result, people got the idea that this is the way that things have always been done, and in case one company fails, then another one emerges and does it (DiFranza & Aisquith, 1995). The idea of rationalization rhymes with RJR strategy, which later led it to the Joe Camel campaign scandal. The company opted to ignore the opinions that majority of the people in the society proposed regarding the idea that use of tobacco is not appreciated in most societies. They led people to believe that they engage in their activities in order to meet the desires of their stakeholders, which is to make money (Gilpin, Pierce, & Rosbrook, 2004). Therefore, the activities that RJR embarked on with regard to promoting Joe Camel’s campaigns reflected ethical miscues, which later make the members of the public to suffer. Application of New Business Ideas Tobacco companies, such as RJR are among the most profitable companies in the country, to the government and to their shareholders. In their absence, such sectors would fail to perform optimally, and draw back the performance of the economy. It is because of this that even strong agencies that oppose their operations or the government cannot end their maneuvers. After critics realize that a particular strategy that a company adopts is hurting the interests of the society, a company diverts their attention to something else, only after making sure that they realize profitability from a particular practice (Davis, 2002). After the successes that RJR realized with its Joe Camel campaigns, it is appropriate for the company to aim at developing new methods that will help it to promote its products in the market. This is especially the case since it discontinued its Joe Camel campaigns in 1997. Because of the controversy that it created in the society, RJR decided to adopt a different strategy that would reflect the real business model, and one that would distance it from anything that is related to children. In this case, it is true that RJR abandoned its Joe Camel campaigns in order to refrain from the negative publicity that was associated with it, and allow it to sustain its market share. This scenario is evident in many other major companies, and they do the same in order to avoid losing out on their major markets. References ABCNews. (2002). FTC Takes on Joe Camel. Retrieved from http://ruby.fgcu.edu/courses/tdugas/ids3301/acrobat/joecamel.pdf American Marketing Association. (1993). Joe Camel and the Commission: The Real Legal Issues. Journal of Public Policy and Marketing, 12(2), 276-281. Calfee, J. E. (2000). The historical significance of Joe Camel. Journal of Public Policy, 19(2), 168-182. Davis, R. M. (2002). Advertising and Promotion of Tobacco Encourage Smoking Among Youth: Study. Retrieved from http://barangayrp.wordpress.com/2008/08/17/advertising-and-promotion-of-tobacco-encourage-smoking-among-youth-study/ DiFranza, J. R., & Aisquith, B. F. (1995). Does the Joe Camel campaign preferentially reach 18 to 24 year old adults? Tobacco Control, 4(4), 367-371. Gillespie, M. (2012). Katharine and R. J. Reynolds : Partners of fortune in the making of the new south. Georgia: University of Georgia Press. Gilpin, E., Pierce, J., & Rosbrook, B. (2004). Are Adolescents Receptive to Current Sales Promotion Practices of the Tobacco Industry. Retrieved from http://knowledgetranslation.ca/sysrev/articles/project21/Are%20adolescents%20receptive%20to%20current%20sales%20promotion%20practices-20090821110935.pdf Read More