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Cigarette makers also invested in the desires of current smokers. According to the Attitudes and Behaviors Related to Smoking Cessation survey, conducted by SmithKline Beecham Consumer Healthcare, 53 percent of smokers are puffing non-regular cigarettes, hoping these light, low-tar and ultra-light varieties will satisfy their desire to smoke while doing less physical damage.Last year, R.J. Reynolds, which controls about one-quarter of the U.S. cigarette market, with its Winston, Camel, Salem, Doral, Monarch and Best brands, released the Eclipse reduced-smoke cigarette to select markets in Georgia, Nebraska and Tennessee, hoping to generate excitement for an as-yet untapped niche. The product, which took 10 years and about a billion dollars to develop, has not lived up to expectations, though, representatives said. Eclipse features a carbon tip, which produces less-lingering, lower-tar smoke, but consumers have found it difficult to light and puff despite instructions printed on the packaging. In addition, marketers have faced the difficulty of pitching the product without badmouthing its core commodity-regular cigarettes.

The Big Two typically negotiate for 55% shelf placement. While the actual percentage varies per contract, Philip Morris requires participants in its Retail Leaders incentive program to give its products top-rack positioning. Similarly, RJR asks for No. 1 or No. 2 shelf position for its Retail Partners and, for certain levels of participation, no less than than 12 linear feet of display space for its core Winston, Camel and Doral brands. Window decals, signs over permanent displays and a dedicated area for flagging promotions are extras in both programs, earning retailers more bonus cash and benefits like coupon mailings to drive traffic to specific stores.One Tennessee operator of tobacco outlets and c-stores, who dropped the Philip Morris contract two years ago because of "unreasonable" demands for compliance and signage, was gently coaxed back into the program by a recalcitrant PM. This year, he''s allocating 35% to PM, 40% to RJR and 10% to B&W. But adding Philip Morris, he said, will force him to shrink his offerings of Lorillard and drop his contract with discounter Commonwealth.

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