Incoming Reynolds American CEO Delen

Reynolds American Inc., the second-biggest U.S. cigarette company, has aggressively promoted its Pall Mall brand in recent quarters as a longer-lasting, more affordable cigarette as smokers weather the weak economy and high unemployment.

Pall Mall sales are growing modestly despite industrywide declines in the number of cigarettes sold as taxes, smoking bans, health concerns and social stigma all increase.

Reynolds sold 19 percent more Pall Mall cigarettes in the fourth quarter even as the Winston-Salem, N.C., company's overall volume fell 5.1 percent. Reynolds American said Pall Mall gained 2.3 points of U.S. retail market share to hold 8.3 percent in the quarter. And the company has said that half the smokers who try the brand continue using it.

In a conference call with analysts regarding the company's fourth-quarter earnings, Daniel Delen, head of R.J. Reynolds Tobacco Co. and the incoming CEO of Reynolds American, discussed Pall Mall.

QUESTION: As consumer spending and unemployment improve, how is the company thinking about the prospects for the brand in a better economic environment?

RESPONSE: Pall Mall has obviously had a great run over the last couple of years. ... This all comes back to that product differentiation where it's a longer-lasting cigarette, more puffs per cigarette. Yes, pricing might be the thing that gets the consumer to try it out of the gate, but actually they stick with it because of it's a very unique product in the market. ... Looking forward, even if some of the macroeconomic trends in the country change, I believe that the proposition is still correct for the consumers and can continue to grow whether the economy is going well or not going so well.