Annual Report 2009 - British American Tobacco

Preferred business partner
We regularly survey our international customer
base to benchmark our performance against our
peers and the results continue to place us as the
best overall supplier in the tobacco category.
GROWTH CONTINUED
Pall Mall
68 billion cigarettes sold in 2009
+10% volume growth
Pall Mall continued its strong performance
of the past few years, with significant volume
growth in Europe and the Americas, as well as
market share increases across its key markets,
including Germany, Uzbekistan, Mexico,
Chile, Spain and Turkey.
The brand was enhanced by several
new offerings in 2009: ‘Nanokings’ is our
slimmer king size range in Eastern Europe; a
‘Pocket Edition’ slim variant was launched in
Germany, Mexico and the Netherlands; and
there was a stronger mix of value-for-money
offerings across Western Europe. Each of
these has contributed to significant growth.
Consumer perception of Pall Mall has
strengthened globally as a result of
improvements to the brand’s king size
packaging and communications. Along
with further successful migrations from
smaller, local value-for-money brands,
we continue to increase the profitability
of Pall Mall.
Other International Brands
147 billion cigarettes sold in 2009
+3% volume growth
As well as our GDBs, we also support our
other International Brands, accounting for
some 20 per cent of our volumes in 2009.
Several of these brands saw good volume
growth in the year, particularly Kool in Japan;
State Express 555 in Asia-Pacific Global Travel
Retail; Rothmans in Egypt; and John Player
Gold Leaf in Pakistan, Bangladesh and the
Gulf Cooperation Council countries.
Trade marketing and distribution
Managing business-to-business relationships
with retailers makes up a large part of our
trade marketing activities. We work with our
retail partners to ensure that at all times they
can offer the products our consumers want
to buy, where they want to buy them, when
they want to buy them, at the right price and
quantity, and with the quality they expect.
Customer management
We take pride in the fact that our customers
rate us for the most part as a preferred
business partner. We regularly survey our
international customer base to benchmark
our performance against our peer group
within the FMCG industry overall and against
our competitors in the tobacco category in
particular. The results continue to place British
American Tobacco as the best overall supplier
in both.
For the third successive year in 2009, we were
recognised in the Dow Jones Sustainability
Index as the leading business in the tobacco
category for Customer Relationship
Management.
Key marketing channels
We make a special effort to understand and
develop joint marketing programmes with
our retail partners, who engage with our
consumers in key market channels such as
Global Travel Retail and Global Convenience
Retail. With their enormous spread and reach,
these strategic customers acknowledge British
American Tobacco as a partner of choice and,
during 2009, we received several accolades
from the trade organisations operating in
these marketing channels.
Direct store sales
Where appropriate, we believe that direct to
store sales, or DSS, is the most effective way
of serving customers and building sustainable
business partnerships. DSS gives us visibility
and control over the sales and distribution
process and allows us greater access to both
the market and consumer information. It also
provides a direct commercial link to our most
strategic retail accounts.
During 2009, the proportion of our total
volume distributed through DSS reached
50 per cent for the first time.
16 British American Tobacco Annual Report 2009 Directors’ report: Business review