Case 11.2 - Volvo's Bear Foot Misstep

CASE 11.
2 Volvo’s “Bear Foot” Misstep
The television ad showed a monster truck riding atop the roofs of cars lined up in its path. The
truck, named “Bear Foot” because of its oversized, six-foot tires, crushed every car but one – a
Volvo station wagon. The scene of devastation around the still-standing Volvo vividly illustrated
the company’s advertising message of strength and safety. The TV and print ads both appeared
in October 1990 and receive immediate critical acclaim for their effectiveness. The monster truck
campaign was quickly dropped, however, amid charges of deceptive advertising.
The idea for the ad came from a monster truck rally in Vermont in which a Volvo was the only
survivor of a similar stunt. In recreating the scene at a Texas arena, the production crew
employed by the advertising agency Scali, McCabe, Sloves reinforced the roof supports of the
other cars. When word leaked out, the attorney general of Texas began an investigation that
confirmed the rigging and led to a lawsuit for consumer fraud. Volvo quickly settled the suit by
running corrective ads and by reimbursing the state of Texas for the cost of the investigation and
the legal fees incurred. Scali, McCabe, Sloves also resigned its Volvo account, which generated
$40 million a year in revenues.
In apologizing for the ads, Volvo insisted that the company was unaware of the rigged
demonstration but defended the rigging all the same. The reasons for the alterations to the cars,
the company explained, were to enable the production crew to conduct the demonstration and to
film it safely and to allow the Volvo to withstand the repeated runs of the monster truck that
were required for filming. The claim being made was not false: Volvo engineers had determined
that the roof could withstand the weight of a five-ton monster truck. The mistake was in not
revealing to consumers that the ad was not an actual demonstration but a dramatization of the
event in Vermont.
This was not the first time that Volvo and Scali, McCabe, Sloves had been criticized for
questionable ads. A year prior, an ad was produced that showed a large truck perched atop a
Volvo with the tag line “How well does your car stand up to heavy traffic?” This ad was similar
to one from the 1970s showing a Volvo withstanding the weight of six other Volvos stacked one
on top of another. In both ads, the Volvo on the bottom was supported by jacks. The reason for
the jacks according to the company was that the ads were intended to show only the strength of
the main body; no claim was being made about the tires and suspension system, which, in any
event, could not withstand such a load. The tires would blow out and the suspension system
would collapse.
Case 11.3 The Target Marketing of Cigarettes

Target marketing is taught in business schools as an effective means for increasing sales by
tailoring products to the needs and wants of specific consumers. A widely used marketing
textbook compares target marketing to using a rifle rather than taking a shotgun approach. This
analogy is frighteningly apt, however, when the product is one that kills. As a critic of target
marketing by the tobacco industry observed: “When you target for marketing [of cigarettes], you
target for death.”
The R. J. Reynolds Tobacco Company, a division of RJR Nabisco, was criticized in 1990 for the
development of two new cigarette brands that were aimed at narrow market segments. One
brand, to be called Uptown, was designed to appeal to blacks, the other, named Dakota, was
intended to attract young, blue-collar white women. The introductions of both brands were
scuttled by R.J. Reynolds after protests from outraged civil rights and women’s organizations.
The Secretary of Health and Human Services, Dr. Louis W. Sullivan, who is a black physician,
charged that Uptown was “deliberately and cynically targeted toward black Americans,” and he
urged the company to cancel plans to test-market the new brand. “At a time when our people
desperately need the message of health promotion,” he said, “Uptown’s message is more disease,
more suffering, and more death for a group already bearing more than its share of smoking-
related illness and mortality.”
The development of Uptown was based on extensive marketing research. A light menthol flavor
was selected because 69 percent of black smokers prefer menthol-flavored cigarettes compared
with 27 percent for all smokers. Many blacks open a package from the bottom, and so the
cigarettes were to be packed with the filter end pointing down. Researchers discovered that the
name Uptown, which evokes images of sophisticated nightlife, drew the most favorable response
from blacks in test groups, and the theme of elegance was reinforced by lettering in black and
gold, which were chosen instead of the green that is more commonly used for menthol brands.
The market testing for Uptown, which was scheduled to begin on February 5, 1990, in
Philadelphia, involved print ads in black magazines and newspapers and billboards and point-of-
sale displays in black neighborhoods. The target group for Dakota was young white women,
eighteen to twenty years of age, with a high school education or less, who held an “entry-level
service or factory job.” The profile of the potential Dakota smoker also mentioned that she spend
her free time accompanying her boyfriend to tractor pulls and car races. The test marketing for
this product was planned for April 1990.
The groups targeted by Uptown and Dakota reflect market realities. As more smokers quit, the
tobacco companies can best expand market share by luring customers away from rival brands,
and groups with the lowest rate of quitting are more likely prospects. In 1990, 34 percent of adult
blacks smoked whereas the rate among the whole adult population was 27 percent. In the period
from 1965 to 1987, the number of white smokers declined 28 percent compared with a drop of
only 21 percent among blacks. Although more men than women smoke (32 percent versus 27
percent in 1965), the percentage of men who quit smoking (37 percent) during the 1965 to 1987
period was much higher than the figure for women (16 percent). The decline in smoking among
college-educated people was 52 percent, which contrasts sharply with a quit rate of 2 percent for
high school dropouts. The data show that the best markets for tobacco products are blacks,
women, and the undereducated.
The three largest-selling menthol brands on the market held 53 percent of the black market,
attesting to the appeal of menthol-flavored cigarettes among blacks, but R. J. Reynolds’s product
in this market, Salem, ranked behind the other two brands with a market share of only 15
percent. Another menthol brand could increase Reynold’s share of the black market. The most
popular brand for teenage women was Marlboro, manufactured by rival Philip Morris. R.J.
Reynolds could not easily challenge the dominance of this brand among all smokers, but the
company apparently thought that many women in that age group did not identify fully with the
“Marlboro man” and could be enticed by a cigarette for women only. Thus, the “Dakota woman”
was conceived as a feminine counterpart of the “Marlboro man.”
The marketing of cigarettes (and alcohol) to blacks is nothing new. Ads for cigarettes contribute
between 7 and 10 percent of the advertising revenue in black oriented publications. Inner-city
areas contain more billboards than do suburbs, and more of the billboards in the inner city
advertise cigarettes and alcohol. A 1987 survey in St. Louis, for example, revealed than 62
percent of the billboards in predominantly black neighborhoods advertised cigarettes and alcohol
compared with 36 percent in white neighborhoods. R.J. Reynolds denies that it is attempting to
attract new smokers among blacks and maintains that the company is merely trying to take away
business from its competitors. After canceling the test marketing for Uptown, an executive from
Reynolds remarked, “Maybe in retrospect we would have been better off not saying we were
marketing to blacks. But those were the smokers we were going after, so why shouldn’t we be
honest about it?”

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CASE 11.

2 Volvo’s “Bear Foot” Misstep

Case 11.3 The Target Marketing of Cigarettes

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