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Brown & Williamson

History and Key Trends in the U.S. Cigarette Market

Date: Oct 1979
Length: 434 pages
670306009-670306441
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Page 1: 0000238573
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Ken'Events and Ideas Influenc&n6 Evolution ofthe E.~e. CisurettoMarket This document contains narratives describing £he evolution of the U.S. cigarette market in recent decade~. It also contains sevgral pieces of basic research and analyses of smoker needs Rrld aititlldes. It is our hope that th~s d~r~eut can help ra~rkelers ~n other ~-AT co~x~ie~ " ~o ~i~ an understaDding of our experience ~l%d that, out of thi~ unde~- ~slacl~T~, *~ay come insights infe the dynafnic~ of and oppo~'[unities offered by other marketplaces whcre the B-~T l~r*rnpetes. We Offer one caution to the re&d~r, which will becorae selfLevident &s • you read through the attached paper. The stimali operating ih the U~S. ' market and the consumer response to theD~ ~re prob~bl~ ~nlciuo; the con ditions here are unlikuly to be exactly duplicated anywhe~'e else. In ~h[s light, the differences belween our ~larket and yollrs are pr6bably at least &s 11n[Jur[atlt as the similarit[es. • x~ql&t we do hol)e to offer is a clear presentation of two pfvat~l ideas ~hat help raake our market's behavior underuL~ndable. These are: I. The trend to f~iter arld, ~ate~. low 'taz"r Cigarettes hos been drive9 by ex~erl2~l, con£1]rner, strtd reg~latury folyees. We hRve riot c1"e'± atcd the issues; we have on2y created ~r0dlIct~ and positions to an~[- ~i~tte or re&~t to ex~ern&1 pres~ure~, 2. The kay to our market lies in uuderstanding consumer attitudes and needs. AS manufacturers, we otter, fall into the trap of thinking in terms of produois. To be effective, w~ r~u[~; rerne~b~ ~o ~h~i~k ~n terms of people. NO single histnry or piece of research can adequately enlbr~ce and i11umi- natc so conlpl~x a tupic. Cleon!y. tb~s conlp~ndlum i~ not exha.stive. ]t will Paise r~ore questions than it answers. |*~ is, however, ~ st&~'~, point of reference, for the d~&lo~ue and exchange of ~dea~ we hope will follow. Pl~e take this last as a challenge. If you find the germ of an i~leR or two in what fellows~ we will gladly accept pa~rnent ir~ kind, We have far to go before we can be ~atistind either with ~r understsnding ol the znarf ~.~ ket or our ability to deal with it effectlvety. Any help and insight yo~ can offer will be greatly appreclated, E. T, Parrack ViC~ F :'e sident Brand l%lana gem ent ETp '.t~e 101o0179
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( ( q I. U.S. Cigarette Hia[or[ The accompanying documents are intended to provide an cxtcnsive look at the history of the I/.9. cigarette industry, its dynamics, and the moti- vations fer changes In product offerings and smoker behavior. Painicular en~phasis is placed on the evollltion of low liar' sty]e~ With each docu- ITlen~ i~ a brief Imanagement summary outlining llJ~ contents of the l'epol~t. The following reports are included: A Study of the Majux'Trends in Cigarettes 1950 to 1977 (;vlarketinggciencc Associales~ Inc, ) An overview of the history and developr~ent of non-menthol cigarettes through 19~7, It include~ dlscusslon of the filter revolution of the 1950'~, the emergence of high fil~ratlon {low delivery) brands, ~nd the growth of lot%g styles, It ~Iso disc~ISSeg current high filtrationtrcnds and their ~'e- lalion to pas~ ~rcnds, 7[ Thc Growzh of Menthols 1933 to 1977 (Marketing Scietlce Associates, Inc.) Ill. IV. study of lhe development of the nqenthol category from fhe introduction of ~(3L in 19Z3 i~ the ~nenthol hi-fi's of today. It ex~i1~s the early ~e~rs • KOOL, the rise of Salem in the '50's, th~ rise of I<OOL in ~he '6O's, and the %%roli~ion of ~ne~thol ~tyl~s in th~ '7c~'~. The Gro~vth of Men~ho~ and Msjcr Trends in Cigarettes provide rr~ny examples of thc ~a, ay ciga~e=te rn~.nul~Iurers hc~ve l~c~ctad %Q ~lu~.rlges in the~F lIlaI~g~tit%g envirorlr~en~. A~Ccnsunler A~a*'~nes8 of and Attitudes Toward 24 L~adin~ rette ~rands (McCann-Erickson 1977) A study of the key factor6 thai deiermine sales success of cigarette bralnds: I'Top -of -l~iild u ~wal-eyl~ ~ ~ conversioI1 of ~v;a, rene~ to brand use brand loyalty ~rand imagery New Brand Development for Cigarcttcs: An Exan~inatlon Of the Marketing Oppor~.unitins b~,' Smoker Attitude ~egments (2~cCsnn-Erickson 1977) -~ Thi~ repurt examines smoker concerns by various demographic and attitudi- ~,~ nM segments, ~nd the implications of these ~ttitl]des for ~lew product devel- opment. II 8.180 p]c~e~eilt~ ~. psyeho~raphie profi[e of smokers ~n various attitude groups.
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V. SrnokerProblem S%ud~ (K, G. Kelly, Brom~n & Willi~.n~son) VI. ¥111 An investigation of the relaliv¢ importance of social, person~%l, and produc~ problems experienced by various segments of the smoking pnpu- lotion. A Brief Look at the D~narnics of th~ Cigarette Tnfustr2- (Post-Keyes- Gardner 1977) This report discusses in dctail three fundamental d~nan.ics in the ciga- rette industry. Jt exarnln~s these dyn~rn~ -- consumer trend~, product dynamics, a.nd adv~I'±i~illg d vilai1~i~ - - at various Stages over ~he 1~st 25 years arld propose~ the fi1~ure direction each trend will take. VII. Industry DTnamics, Par~ II (Post-Keyes-Gardner 1979) This repo-t introduces '%~'ave Thoory'r as a model of inausiry dynalnics. Wave th~or?~ incorporates eonsun3~r attitude trends and ~rodnc% trenc~ ~n%o ~ dyn~rni~ con%in.urn. ]% ~inpoin~s th~ iu~iun o~ variouB rn~l'~et segments on a Co~l~inullrn "ronn high '±~r~/low health concern strokers to low 'tar'/highly concerned smokers, and explains expected shi~s in thes~ seglnents ~!ongth~s continuun3 inihe future. rowth snd Overview o~ the U.S. 1~igh Filtration ,~e~ent (Broxvn & ~Villian*- on 1979) This overview of 10w ~tarr development i~the U.S. Identi~ns ~hree gene- rations of hi-fi development, emphasizing produu[ ~h~n~s, ne~ product Dtferi~l~S, and their historical n2ark(!% sh~re development. <_ Fioh~'t ~. Chnmbers September 21, 1979 /tac
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I f-, ~[.090~0L9
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( ( <_ L A Study of the Maior Trends in Cigarettes 1959 to 1977 Filters The growth of filters took place in four cycles. The folio%ring is an outline of those cycles and fhe events that led to thegn. A. 1950 to 1961 -- The R~aders Di[esi Articles The first cycle of filler gr~w±h came on the heels of a pair of l~eader~ D~ articles relat[nE ±he hazards of cigarette ~mok ln~. Filtered ci~reites de]iverhlgl~ss 1tar'began to creep xnto the market in the early 195fl's. Then in 1953, many brands he,an cutting ~te~*' drasllca~y as a z*eaciton to extern~ pres- sures created by the ~ ~rtlcles. (Kent, for example, de- llvcred only 2 rag. ~tar~ and .5 Ing. nicotine.) Fo~" a pez~n~ from 1953 to 19~1. a period known as the "Tar Derby," these l~wcr 'tar~ brands helped p~ue the iilter segr~e~- to ~ g~n of 51 share point~. Filler share was 53% in 1961 when the FTC put ~n e~d to ~ T~r Derby. ~ ~n ef~r~ %o stop ~e pr~Iif~ra tlon of un~ubs=an~ialed 'tar' figu±'~ in ~dvertising, the FTC I~. 19~2 te [96~ Th~s cycle cer%ered around the Surgeon General's z'~port of 19~4, As overall cigarette eonsurnpticn de.lined, filters grew at an increasing rate until 1968, when [h~ pace slowed. C. 1969~o 1974 TV ca*~npaigns a~ains~ sn~oklng began to have an effect; and as total cigarette consumption declined agaln, filters experienced further share growth. D, 1975 to 1976 During this period, ul~filtered cigarettes continued to be crowded out ~t an inere0.sing ra~e, corresponding to a[] ine~'e~.s~ in pu[f~i¢ corlu~r~ aboklt th~ danEers of smoking E. Filter Brands In the rnid-~50's, older, plain-end brands llke KOOL, RALEIGH, T~reyton, ~d Old Gold w~re quick to introduce filter ~tne ex- tensions; bu~ sharp declines in non-filters hampered industry growth pote~ti~h KOOL and RALEIGH ~ere able f~ maintain ¢b ¢z
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2. ( ( t share through %he first cycle, bul Tareytcn and Old Gold lost drasfically. While all these slyles were ~uppor%ed by filtra tiorl claims atlrlcd ~t con~un,~r heallh ¢Jon~ernsj Wills~on came on the m~rket with a fl]ttr in i 99¢ using good taste as its iher~c, o~fer~ng a solution iu |he problem of low rtar' -- ]e~s taste. ~y 1221, W~naton had a 12.1% sh~e of the cigarette market. As a segment, filter brarlds irlcreased ~hetr share of r~rket :tom .6% tu 1959 to ~2.2% iu l~b. II, Gvo~,ih of Hi-Fi A, Hi Fi i Kent, th~ lowest 'tar' filter br&nd, was the ~ret truly hi-fi bran~. Cap:ia:izing on a 1957 Readers Dige~tarficle citing K~nt as the Icwesi 'tarr cigarette, Kent catapulted to ~n 8.4% share in i~58. Parliarnerll and Lark entered soon aner as low tar~ brands, but made no significant impact as hi-f~ market share stabilized in the late '%0's, th~ declined through the r~d-'~(/~s ~:ter %he government ban on use of 1tar' numbers in advertising. B. Hi-Fi 2 Csrlton and True appeared in 1964 and 1~66, respectively, f~- lowed by Dotal in 19~9 ~nd Vantage in 197~. Togethcr they took share fro~ older hi-fi b~'ands but gamed no significant new b::si- C. Line ~×ienslons Lights and milds versions of full-taste brands pz'vliferated in ~he early '70rs~ aenount~ng for 31.6% afh:-fi busines~ hy i~75. Light line ex±ensions, on average, accounted for approxirnate:y 7% of parent bland vOlur~e in 1976. Order of Entr~ First braDds on ±he ~narket h~ve not secured an~ prot~ted a ,larkct niche fDr themselves. Cornpetifive entry has been rela- tively easy for brands offerthg good ~as~e and low 'tar. ' ~a
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( Growth of Longs A. The Trend ]Benson & Hedges, introduced in 1965, became the first sl~ccess- ful 100ram cigarelte aad p~ced the 2rawth of ion~s to a 20% share of the filter market by 1979 1O0ram styles havc continued to gain, although lese dr~zlJattca]ly, CO 25.7% of all cigarettes in 1976. At that t~e, llne extensions accounted for xrJore than 22% of the long market. ( (_ "O
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A STUDy OF THE #IAJOR TRE~'DS CIGARETTEs 1950 1977 &T090£0~9 7?7 Th~r,~ A~en~,c ~w Ynrk, N y 10017
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TABLE DF EONTENTS TTtTe Page "INTRODUCTION ...................................................... I OVERVIE~ OF MAJOR TRENPS I~D - l~77 .............................. 3 GROWTH OF FILTERS A. Tren~ ................................................ 2~ B. Line Extensions vorsu$ New Brands ........................... 27 E. Brands ................................................... 36 G~OWTH OF HI-FI A Trend ............................................... ~1 B. Line Extensions versu~ New Br~n~s ........................... ~8 C, Brands ................................................. ~2 GRCWTH OF LDNGS ~. Trend .................................................... 59 B, LF~e Ext~nsicn~ v~rsus New 3re~ds ........................... S~ C. Brands ............................................... 59 G~O~-H OF MErITHOL5 ................................................ ~ S[090 0 9
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INTRODUCTION The ~re~th of cl9~rette$ ~th :Br ]evels les~ than I0 m9, with Qrea%er taste than h~s been ca~mo~ to ?~¢v]a~ Hi-Fi c~gaFette~ raises ~he po~sTh]]ity =hat we ~re ~ the beglnnTn9 OF m~jor new ~nd ~n t~ m~rket. Not only ~re =he ne~ ~ra~u~t$ lo~r in tcr iev~I ~ut ~omc ~- s~¢c~cal]y Her]t and Real-- 5e~ to be one,hie ~f attF0ctFn~ some 5nl~kei~ from the Fuji taste segment, thus ~r~t~¢aTIy chon~n~ the te~lls of ~he b~sic ~radeof= b~tw~en ~te a~d Io~ tar ~n e~fect ~or 25 y~ars, If [~[s i5 i~deed true, ~uch cFgarett~s m~y ~^ ah]¢ to capI~F~ ~ ]aV~¢ ~rt Of th~ total Accovdng]y, all ~mrett~ manu~acturer~ are ~Fy~n~ ~0 c~plt~i~ze upon ~he n~ potemt~l ~por~n~ with pFo~t i~pr~'~em~n~, l~n~ ~x~ns~o~ ~n~ ne~ pr~d~$, ~o~ Fa~t ~ill the new io~ t~r/h~hcr f!~vor ~¥pe Of cigarettes gra~? At what level wTll it ~op out? What $~are oF its volu~e will come from line extensron~ versus new ~roducts? How can ~ ut~l]z~ ~ur umdeFst~nd~n~ of the ~rh~t s~men~ ~nd the ~va~]~ble re~ovds oF past :r~nds to ~mprove ~ofc~astrn~? This report ~na~yzes an~ pr~s~n:s d~ta on th~ introcu~tion and growth tffencs o~ ~st major =rend~ ~n the market wTth r~sp~ct to t~e ~bov~ r~ues, Four m~jov ~ovclopments di~ studl~d: I. The Vil=er RcvolutTon (1350 - 1977) 2, The E~argemce and Trends of Total Hi-Fi (1957 - 1377) ~.d Rt-FI Z (1964 - 1977) ]. The Growth oF Longs (~959 - 1977) 4. The Growth o~ Hen~ho]s (19~4 - 1917) This report ai~o presents dCt~ on th~ new¢~ ]ow-tar segmen~ and com~en~s on it in relattom G 090 0 .9
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0~090{~0£9 • i
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6703060 1 'pa~aadxa aq ~A!6 e~p ~£ "Su[s~o~ou! pue 6u!~laa~n uaaq ~eN ~!3!~qnd 6u!~o~-!~ue ~o ~Jnss~Jd ~ ~8l - 0~6L
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Starting Tn I~53, filter ~igar~Lt~s began ~ meteoric r~se~ growing 44 share points in flv~ years. The pace OF change re~chcd its peak in 1957 and b~an to slow down to a I~ lewl ~n 1961. By th~n, f~ter~ hod ~ 53~ ~harc. ~n ;957, fol]o~-Jin~ two ~u~cessTve Reader's O~ge~t ~r~i~Te~ ~n July ~d ~ugust, Kcn~ ~el~s le~pcd wTthTn n~ty days r~cm 3CO miIITon to 3 billion ~er mont~ to mak~ Kent a leadln bra~d - al ~hc ~am~ tlme ~c~ting up ~e fundamental ~cgment~]on o~ ~he mar~e~ ~nto ~-~ ~nd Full Taste ~hich per~i~t~ t~1] ~od~y. Frcm I~ ~hrcu~h I~75, the Hi-Fi s~gm~nt has accounted for aE~t 20~ of Fil~cr cigarettes' volume, FuT¸ T~ste about 80~. The ori~in~l ~li~Fi's {currently' ¢aITed "per:~wd HI-~'~") ;ed by Kelt, P~rl~e~cnt, ~nd Lar~, b~cd their app~l~ on their ~It~r~ (l'r~icron;~" "u}latU~l,'~ ~Ido~ble f~l~r~tion," ~t~.). ~b~ ~f~re~ a ]olver level of ~aste - but one l~hich ap~ea]e~ to a ~egm~nt of the m@rk~t~ ~ncI~dlng ~n aEov¢ aver0~ ~umber Of ~omen. ~i-F;rs ('rH~-Fi 2") emer9ed. The~ br~d5 ~mph~51zed ~h~ir lo.ver ~ar leveTs (typically eleven ~o four~1 m~.), ab~uL on~-third ]ol~,er than the Full Taste brand~. D~-~] ~pear~d in ]~69 and ~r~nt~ in 1970, just before ~he end o~ TV ~dver~;ng for cT~rctt~s. From l~ through accounted ~n I~7~ for 32~ of Hi-FI 2 voPum~ a~d 3~ in 197~ T~e L~ht/~ild I~e e~tcr~ion~ of the major Fulr Ta~t~ brands ~yFT:a}ly a~co~nt~d for 7~ ~f ~h~ ~r~nt brand's total volume in 1976. T~I~ s~co~d gener~tFcn of Hi-Fi's increased ~he ~ize of th~ total Hi-fi ~egment bV very litt;e, m~Tnly di~lacing Hi-Fi I. Hr-Fi P~rcent of All Cig~r~tte~ t96~ ~97s D~f.~ Hi-Fi I 18.0 9,8 -~.2 Hi-Fi 2 '~ 9.~ +9 - 4.4 2 090 0&9 ~ Less than .05~
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Hi-FI 2 brands were characterized by a low taste leveT - significantly lower than the Fu?l T~5~e brands and cvcr lo~cr than Hi-F~ I. The foilow~n9 tabl~ 5hews the contlnucd davelopmen£ Of lower tar cigarettes ~,lit~ more a=ceptabfe t~ste in recent years. P~rcent of Cigerett~ VoIJm¢ by Tar Level 19-20 _1-12 II-T5 16-1~ + Unk[ 21÷ ~971 .30 3.73 24.~5 ~1,91 20.06 1972 .36 4 16 2~,66 53.20 ~7,62 ~973 ,77 7 24 38.~6 ~9,93 ~5.6~ 1974 1,80 8,45 39,86 39,91 "4,d2 IS75 1.12 8.45 49.66 29.88 12.8£ 1376 ~,66 9,97 47.84 28,77 !1.76 July 1977 1D.54 13.16 50.3~ 14.34 :1,91 Note the StlO11~ growt~ in markeL sher~ or brend 5~y1~ b~lgw ten nlg. tar b~tween 1976 ant 1977, th'. growth in share of brands below sixteen m_c. tar between 1972 and 1974, and the declire Tn tar levels below nlnt:cn m9, be:~..ccn 1972/79 end 1974/79. The ~ent~one piu~ mg. tar Iev~ls now as-~ocia~ed prTmarily with non-filc~r bran~s has declined thro~ghou~ ~h~ past -~ix year5 frnm a 2N f)6,~: share Of market in 1971 to 11.76% Tn 1976. In ~dditlon to the Hi-Fi trend, two other important trends must he mentioned - merthols and longs. Mentholated cTgarettes have grown From less than 3~ of the cTgarette market [n the ear y ~O's to 29~ today. Salem, ~ntroduced ~s a king s'ze in Hay I~, was th= firs~ filter tip menthol. Kools, ~hc only signi=icant menthol cigarette in the early 50's, added a king size non-fil~er in I~54 ard ~ king s~ze F~l~er in ~ep~emher 195&. "through the firs~ ten years of the filter revolution, Ko~I~ h~Id ]:~ marke~ ~her¢ of abou: Lhr~ p~'ni.~. ~uL m~n~hol~ grew ~herpIy due to the entry between "956 and 1960 of nevl menthol brands, partlcularly Salem] which in 1962 had 8,9 share points and h~s h~ld at oEout 8,5 ever since. Total menthol share in 1962 was 1~.8, and has roughly doublet since then. I OgO£O&9
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In 1~3/6~, K~ls began a~ upward march in share, passing $~lem in 197Z to become =he third larg~t c[oarette brand wlth a recent share of ten. Kool~, ~trongly m~ntholated, ha~ a scale- .hat different app=al en~ Gu~tomcr than Salem and mo~t other menthols which ~¢nd to ha~¢ relatively strong appeal to w~e~. Kools tends to be masculine and is exceptionally s~ro~g wi=h ~lecks. "~The major m~nthol brand~ now constitute 3~ of th~ Full Taste ~egm~nt. The h~pothesls ha5 been a~vonc~d that menthol ha~ prov~ ~ r~an~ fOF aJd~n~ taste to Cigarettes at a t~me ~he~ the ~o~a~co ~este was being reduced, It is not ye~ clear how the new !o~-~a~s will affecL menthols. The ne~ ]ow-~ar ~g~re~es offer a ne~ ~a~e alterna~iv~ which m~y ~ffec~ Lhe ~ales -~of menthol, Virtually ell recently introduced brands er~ made avarla~le in both menthol and non-menthol s~y]es. The menthols typically account for about 30% of brand volume. The gro~vth of long fllteF crgaret~s (IO0 mm.) ~taF~ed w~th SpF[ng T~ 195~j but really be~am~ important in the middle and 1aLe 60's w~h Pall Mall 'n 1965, Sensor, and Iledg~s in 1965/66, and Winston in 19~. Narlboro~ Sale~ Kools~ V~ceroy, Ke~t, Tareyton~ and L & M ~lso added 100 ~, line ex~¢nsiors i~ 19~7. Silva Thins was introduced es e new female brand in 1967~ follo/~ed hy Virginla Sllm~ Tn 19~8. The trend h~s recmn~ly ~een boo.ted by the ~ntroduct~on~-~::O~ of th~ super-long 120~s. J The length of ci9~rettes has 9town in conjunction wlth the growth ef F~Iter£ and taxes. Share cf Cigarette Volume by Length jom BO-85mm IOOmm 120mm 1932 I00.0~ .08 ,0~ .08 1937 98,9 I.I ,0 .0 1987 93.8 6,2 ,0 .0 1952 76.2 =21.8 ,0 ,0 ]957 40.1 59.9 .2 .0 196Z Z5.3 74.7 .3 .0 1967 13.8 76.5 r 9.7 .0 1932 7.6 ?0.7 J"21.? -O July ]977 4.4 67.7 '.,,26.2 ~ 1.7 090 0&9
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The recent growth of lolgs bears a resemblance to the growth OF klrg-slze unfiltered cigarettes, particularly Pall Mall, during the late ~0'5 and ~g's. Pall Hall, Indeed, continued to grow all through th~ 5O's ~h~n all other u~filtered cigarettes were dropping catastrophTcatly, to reach its peek share of 14.6 in 1962. Since then, its share has dropped by hell but it still ~ccounts For the bulk OF unfiltered vclum¢. Long fJ]tered clgar~ttes grew rapldiy in the late 6gis and reached 27.~ of cigarelte volume by Ju y 1977. ~ome OF these Lrends are as~ocTatcd ~tb th~ ~en~ral growth of female s~oking, Fcmele5 have b¢~n historically more oriented to Filters, m~nth~ls~ longer styTe~ and lower tar brand~ than have maleS, ~i~c2 i~carl~ ~t~rterLL d~ continue to ~ow ~ tr~d to~r~ ~r~er Fe~ale $~o~i~g~ It ~e~ likely that th~a bren~ ~yl~ ~r~nd5 will co~inJe in the Future.
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SUM~AEY 3F MAJOR FINDINGS In th[5 summary, we vJTll touch or Lhr~ main poTrts: I. £orec~sting by 5eg~nEs . 2. Line Extc~$~cm$ v~rsu5 Nc~ Br~rrd~ versus Product Impro~e~lents 3. Orde~ OF Entry q 9 090£0&9 8
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670306027 LN3~ A~ ~NILSV33~03 "t
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The rea~ problem is the Ful) Taste segment where th~ taste of the ¢Igatett© Is fsr more crucla~, Up ti]I now, fu]Iof1~vo~ s~okers hays resisted the ~Ta~d~hm~nts OF Hi-FI becaus~ they wer~ ~sked t~ ~cccpt ~ shs~Iy ~Q~r t~s~ l~v~l ta qet tsr l~ve~s |n ~h~ 11 - I~ m~. range. No~ th~ ~r~ be~,~g Offered eve~ lower t~ revels aMd more I~porta~tj ~OF~ t~ste, The sltua~o~ ~s In many ways pa~al]el to that prevailing in ~He e~r]y ~Dt~, Then too, s~.oker~ were ~$ge~ to ~v~ up the t~ste ~F a IIre~J clc~retteqt ~ and ~o~t r~sist~d. ,~Th~ ~ar]y ?{l~er br~dl, Su¢~ as Viceroy, L ~ M, Par]iamont, on~ K~n~ o$c~II~ted ~etwe~n claims ~$ to efficacy of theft ~i]ter~ ~n~ assurances Lhdt their C~rettes had ~$~e, Wln~to~ ~de the br~thrcu~h usFn9 tast~ as its m~i~ pl~y. Jn Varch I~, 'JJn~ton ~ ~ntroduc~d w;th th~ • 10~ 'IT~c ~a%eT5 Of Co~I~ present ~er~c~Is r~¢~¢~t ~nd b~gt t~ti~g C!g~Fette," Jn 1955, ~t ~It ~as u~doub~edly helped ~y having adequate ~eIIu]ose Fr]ter capaclt~, Vi~cfuy ,,v~s on alia- .cat,on ~nt]l October 195~ e~ght mo~tHs after '#~rlSL~N ~S in~roduce~.) Th~ key to t~e Success oF tMe new br~r~ is their ~il~ty to offer ~ull T~ste smokers ~ viable taste ~l~r~at~ve, To for~c~$~ ?o~ the Fu]] Ta~ ~ent, ~e need to ~ocu5 on that se~ent ]~ ~h~ r~seB~ch - in t~ sa]es ~nd co~s~e~ tr~kino, B$ w~]i ~$ i~ co~$umcr r~se~?c~. ~e ~Iso h~ve t~ ~ttempt to deIin~ate ~h~ i~gort~n~ sub-se~ment~ ~]tbi~ the Full T~te ~egmen~, ~e h~vo idon~iFicd ~he ~ain segments ~nd their trends ~ve~ pa~t years rM the ch~r~ ~nd ~a~]~s on the fol]o~i~ p~ges. $o~e inte~tin~ poTnts; ~- Full Taste non-men~hol ~arket $~BF¢ p~aked in T97~, FUTT Taste nent~o) in I~75, Jn terms oF s~rc o~ f]]tcr c~g~r~tt~s, ~u]T Taste no~-menthol ~tart~ ~o~n~i~rd in I~70 ~nd h~s dro~ped ?r0m 57.0~ to 5~.4~. In 797G, HI-F~ 2 bf~nd~ gained 4.1 shar~ points wh~le H~-Fr I 1o~t 2.G - a net gain for both com~{~ o~ 1.5 ~hs~ goi~ts. $ 090C0 9 I0
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- Hi-Fi 3 brands obtalned 2.5 shar~ points. - In ]~7~ buIT Taste menthols dropped I,~ share polnts - aTm0st as much as th~ ~ll T~L~ non-menthels, - Altogether, Full Tasce rTl~ere~ and u~fil~ered 10s~ ~our s~re points in %~6, ~h~ ~ l~-ta~ b~a~d$ ~ i~ ~te. ~I~ a~al~ ~q~l~7 a~ th~ ~IId~ ~a¢~ ~ ~I~ti~ tast~ [evel~. ~ rccom#Icnd d~vidTn~ the~ ~ ~ated In th~ F~ll~ ~u~g~d ~efFrition Of b~-Fi ~. D~rlr, T~on} o~Hi-Fi 3 - Introduced I~7~ o~ later~ - bes~ ~n TO m~. tar (~r~ Lhe 85 mm, length~ - Has a taste ~e~el ~HTch; ~lass A. C~r appe~l to ~ers o~ full t$st~ brands llk~ ~]ns~n an¢ Marlboro (~rTt and ~cal arc ¢and~cdte5 for tb~s ~la~s~. Class B. Can ~pp~al to s~okcrs of H~-~ ~rands like ~ent~ Lark, Be]ow is a t~nta~ve classification of ~ ~i ~ b~rlds a~d their 5ai~s trends $0 ~ar: 6 090 0L9 . 11
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Clas~ A H~r~t Real SubEo:al III FI 3 5hare of All Cigarettes t976 ~77 Ma. Ta" ]~t Hal: 2nd Half Ist Hal: o ,.~ 1,7~ 2.26 .~_~ 1.14 1.71 2.6D Class B Kent Golden Li#hts Sale~ Lon9 L~97ts SuGtotal 8 .St t.36 ~ .72 9 ~ .33 .76 ,51 1.69 2,48 Grand TC:~] ].65 3.40 5.08 0£090£0&9 12
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CIGARETTE MARKET SEGHENTS {Percent of Total Cigarottes) NON'FILTER 7O's 70 60 50 40 30 2O NON FILTEE K~NGS FULL TASTE NON "IENTtlOL FJLL TASTE HENTHOL
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61GAR[TT[ M&RKET PRIMARY SEGMENTS (Percent of Tota; Cigarettes) Non-Fil=ers Fillers ~Full Taste Non-Henthol Menthol Hi-Fi I & 2 Hi-Fi 1 Hi-Fi 2 Hi-FI 3 Class A Class B Total Filters Total Cigarettes ~96o 47.7 ~l1.8 30.8 11.0 10.6 10.6 52.~ 100,0 1965 1970 1971 T972 1973 1974 95,9 2c.8 18.2 16.6 15,3 ]L,2 52.8 66.3 67.5 68.5 69.3 6~.7 36,6 ~5,3 46.0 /a6.2 46.3 45.8 16,2 21.0 21 .6 22.3 22.9 23.9 11.7 13.1 14.5 19.0 18,6 16.2 10.3 9.6 9.8 9,9 9.z 8.7 1.4 3.5 4.6 5.5 6.4 7-~ 1975 12,9 11,8 70.0 67.1 45.8 4~.4 2q,2 2Z,8 17.0 18.5 8.1 8.5 g.9 13.0 2,5 1.4 1.1 86,2 100.0 64.5 7~,5 B].8 83,4 84.7 ~5.8 87.1 100.O 1OO O 100.0 100.0 1OO.O 1OO.0 1OlD,O X976 1977 090 0&9
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+ • CIGARETTE NARKET PRIMARY SEGMENTS PEHCENT OF TOTAL FILTERS FILTERS 196{3 19~55 197{) 197.___LI 197Z 197~ 197~ t97~ 197& Fu]l Taste 79.B 81,9 83.5 02.6 02.I 01.B 81.2 80,5 76.2 Non-Nent hol 58.7 56.8 57.0 56.} 55-3 5h,7 5~-~ 52.7 50.~ Nenthol 2 ~ I 1 25 + l 26.5 26.3 26. B 27. i 27.8 27.8 25.8 Hi-Fi {I) 6 (2) 20.2 IB,l 16.5 17.4 17.9 18,3 18.8 19,5 21.0 HI-FI (I) 20.2 15.9 12.l II.8 If+) lO.9 '0,2 9.) 5.3 HI-FI (2) 2.2 ~.4 5.6 6.6 7.4 8.6 10.2 15.7 2.8 - 1.6 Clas~ A Class B , - 1,2 TetaT FiTters ]00.0 I00.0 100.0 10O,O lOC.o 10O.O 100.0 100,0 I00,0 090 0&9 .I 5
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.... /:% 2. LINE EXTENSIONS - HEW BRANDS - PRODUCT I~PROVEMENT~
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In th~ RuN Taste market, bowever~ t~e pro~ulgatlo~ of a new brand 0frcrlng a n~w, hlgh~r ]cv¢I Of tast~ in a low-tar Is Bn event Of m~jor 5ig~]ficance - nore appropriate for the n~w brand approBc~. ]~ is to be e×~ect~d that new bra~ds l~ill pl~y a rela~vD]y larger role ~n • this s~gme~t. Line e~ten~]on~ by ~nsto~ an~ M~rrEoro ~h~n t~e next two or ~hr~e y~ars m~st bc e×pect~. 7 T~/ ~ill cac~ haw th~ dra,vback tha~ th~, ~i]l ~aste ~Tfferent from th~ par~n~ brand. They will also run Tn~o established ~ttTtudes. Under ~hese c~nd]t~on~, n~w brands o~erln9 ~ood t~st~ ~n~ Io~ tar ~lI recelve a bTg~ level of trial. EF ~ccep~bT~, they m~y draw signifi- ~ant]y Fro~ th~ I~rge $e~me~C. The Fo]Io~]~ cornmen~s may b~ mad~ F~9~idlrl~ I~n~ excen$1ons' expe~Eed shar~ Of th~ ne~ type of ]O~-c~r ¢Fg~ret~es: A H~flburo Super Lights by Philip Morris utl]izing ~erit's ~echno]ogy to produce a stronger tasting ]ow-~ar c~rett~ shoul~ obt~Tn ~ re]~t{wly hlgher sh0re of brand Yolu~ than the 7~ obtained by H~rlboro LTghts in I~76. H~ rnuc~ ~ore may be ju~g~d by comp~rlng ~erit'~ success w~th that of HT-~I 2 brands, LQo~ng at ~hares Tn ~h~ year foIIo~ing ]~troduction. True obtained a 1.6 share in 1967, Doral ~ 1.2 ~h~re ~n 1970. an~ Vantage ~ I.D ~hare ~n 1971. NerTt ~as done better ~ far in I~7~. - ~{nston is under pressure to put ou~ a Super LTgh~s and ~s the ~a| tecknolog~, Vo do not h~w enough d~ta on R~I to ~valuate i~'s Bppeal. At this poin~ ~e ~o~]d expect that it too w]]] e×ceed WJ~ston [~htI~ ~h~re oF brand tot~]. - 8thor brands wil] probably arso obtain higher shares with thelr Super Lights - if ~he~r t~ste con~t~tute~ a sufficient ~ttr~ct~on ~r t~ir segment, If ~]] the leod~ng ~u]] Ta~t~ brands p~t ~ut n~w 1o~r ~ar ]I~ ~x~e~sion$, we ~ouId ~xpe¢~ that ]T~e extensions would account for a substant]~l]y h~g~r share o~ the new ~eg~ent~s volume ~han ~be I~ sh~re of cot~I f~Tt~r~ that the f~ur'~]tcr Iin~ extensions g~t in I~61. 17
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- Line extensions' share of Hi-Fi 2 - about 38~ in 1~76 - is oqe guide. Hov~ever. we shnuld t~ int~ aCCoL~nt th~ slo~ pac~ of new brand introductions foIIoL~ing th~ ~nd of TV advertising in I~70. All th~ major ma,~ufac~u~ers a~ tha~ t}~ fe{c ~Fey dared not introduce new Drands. They put out the Light ~nd M[{d 'line e×tenslons instead. Th~ welgh~ed t~ odds in Favor of Ifne extensions. - In the FuTl Taste. no~-m~nthol se~,lent, the pa~t trends in fiit~r~ and ~n Hi-Fi 2 tend t~ ~gg~st teat moF~ than ~ half of the s~okeF~ who shift to the new 'ow-tar c~ettes m~y constitute ~ potential for ne~., brands. ~uch ~ili depend. Df Course. on t~ s~ee~ ~th which n~L~, brands an~ ]~ne extensions error the ~ar~et and the qu~iiL~ u~ lh~ pr~dJ~l~ arid Lh~F mark~tlng ca~pa'gns. In the Full Taste ~enthol s~m~nt. ~here ~y b~ r~Tat{v~i~ more FOtCnt{~I For I}n~ e×tension~ dJe ~o ~he sFecia] condition5 affecting ~his ~arkec Se~t. Amon9 present H~-F~ I ~n~ ~ Er~n~s~ ~e ~ust ~ntTcfpBt~ that ]{n~ c×t~ns{on~ ~nd produc~ improvements wil] b~ ~xtr~m~ y stlonO. They 0r~ ]{keIv t~ a~count for the buTk of ~he ~orm~r HI-FI voIu~e that Flo~.s to the ne~ Ion-tar clgarettes. For e×~mFI~~ Kentls ~olden L~g~$ obtained OVer ~e-~hird of tot~l K~nt volu~ in the first half eF 1977. 18
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g~D~ ~F ENTR~ ktnong :hi trends s~rveyed~ the f~rst brand d{d not always end ~p ~om?n~t~g ~ts m~r~et segment although ~t was an ~ or a~, " l~ Cha fii~~ r~volu~lon~ W~ns~on ~on over Four prior ~ra~ds and two others that entered ~n the ~nme year [1954). - ~ong menthols, Salem bes:ed Ko~ls although KooIs fTlters followed Salem by ~nly fo~r months (S~pt~mber versus H~y 1956), - In the ca~e ~ the emergence of gl-Fi, Kent, th~ ~ir~ bran~, did ~chi~ve ~h~ - In th~ development of H~-Fi 2, Vantage (1~70) became the leader evem though It was preceded by ~cral (1~6~) and True (~9G6~. " Th~ first ~on9 c earette ~as Spring in l~ - bu~ i~ goC nowhere. ~Fo be first is not enough, What ~atters is to be f~rst with the rlsht product, one th~ • cl~s~Iy Fits Eh~ n~eds or des~rcs of a large segment of consg~rs ~rld the right marEet~ng , approach ~t the t~me when tke narke~ ls rlp~. ~he ~v~dence inSTcaLes tha= once ~ preduc~ appears Uqat ~cklcvcs thiS, it tends to block off that avenue to all late" aspirants a~d to be e~tremely hard ~o dislodge. All of the ~rcnds sugg~s~ ~hat t~mellness is extremely importen~ that the door i~ open For major ne~ brands for a limited time only end that the brands that fail to ~e~ in durTng thac period with the r~ght product and the right marketing a~proach will have a very herd ~ime lale~, & O90 OZ,9
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The or~3inal growth of fHters illustrates the kinds of d]fflcultTes ~hlch ~tand in th~ ~ath of th~ ~ly ~ntrant~. ~arllamcnt, Viceroy, Kent, ~d L 8 M all preceded Winston Into the filter market - y~t all • were out-distanced by ~nston. T~e narket for f~lt~rs was expan~Fng rapldly ~n t~e thre~ ye~ following J~nuary 1~5C w~en the R~der's 0iges~ article "Ho~ H~rmful Arc ~igarettcs?t' ATI cigarette ~anufactu~ers ~ere ~ckeylng ~or posi~Ton. Brown ~ ~i]liamson ha~ Vlc~r~yj introduced as a c~k Lip fil~r in Hay 1~3~. In 19S0, Tts sales j~mped 70~ t~ reach 1,2 bill~n~ clgaret~es ard continued t~ ~row to 6 billion In 195}, and 14,8 billion in 19511, and 20.1 b~11T~n in 1~ - ~hen Winston passed it. L ~ M ~n~e~ in 7~3, r~ched 11.7 ~lli~n i~ 1~3~. K~r~ enterc~ i~ 7~5~ ~u~ ~aln~ ~aT~ s~l~s volu~t~ ur~t~ 1~57 ~hcn ~e ~ead~r's ~st named it the I~le~t tar brand. Amon~ t~e tr~ble~ of t~m early entrants ~e~e: - T~ey all started as premlum pti~ed bran~s, taste t~y o~fered. - All stressed th~ir filtration while also clai~]n~ ~hat t~ey of~er~ ~od te~te. - One (viceroy) had to go ~ allocatio~ f~ 1~3 through ~¢t~ber 19~4 b~caus~ of Tna~equate Fi!ter capacity. - All g0~ i~to t~o~ble with the FTC dJe to ~heir fll~er claims an~ h~d to ~a~g~ their adverti~. f ~nston chose not to attempt to prove ~nyth]n~ aBOUt filtersj leavi~g the o~hcr~ t~ f~t e~¢~ other ~r ~h~ ~ilt~r oriented s~gment. Instead~ ~t app~aI~ to the taste segment. AI$~ it's ~rlc~ was standard and Tt had ad~qua=e fi]~er capacity ~d all.cared h~e'~y ad and ~arketi~g 2O
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G R OLq'F q O F F ] L T E R S
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ThE FILTER BEVCL~TION A. TRE~D Between I~0 and Ig~l, ~he ~rend of f~lrer c~g~re~tes d~c~hed an g~curve. Wh~l~ ~r~h ~ speedin~ u~, rilL~s by I~52 s~ill a~countc~ for orI~ I~ of th~ marke~. In I~53 ~d I~54, the markst reacted t~ the im~ct of ~nt~moking publi~iLy in tw~ w~ys: - To~al eonsump~;on of ~ig~rettes declined ;n 1~E3 and 7~E#, sc,mething ~hich had l~t u~cu~red ~ geacetlm~ i~ the depth5 af the depress[cn in 1937. - Ovar ~he n~xt five y~s, 1953 to 1~38, filtere~ cigarettesI s~are rase an ~verage of nine share points a ys~l. After I~58 the hectic pBC~ Of gro~h of filters began to slow to re~ch a ~w in 1~61i Unfiltered cigare:tesI volu~e held stea~y from I~5~ through I~61 ~Fter its grcvious pre¢iplto~s ~rop. Thu~ the period 195g through l~61 can be regarded as constituting a cycle, The next cycle in ~he ]row~h of fil~ers began in le6~, Th~ central event w~ th~ $urg~on Gene~al~s report in I~64. Cigarette c~nsump~ion acain declined in that year; a~d again fIIL~F~ ~nt~ed ~nath~r c~cle of growth~ reacbTng a peqk ir 1~7 and slackening ~n ]~8. The next cycle be~n in I~ before the prevlo~s on~ d~ed ~way. The TV campaigns ~g~inst cig- arettes ~hlch preceded ~he ban on clg~tte adv~rtlslng h~d their effect, and total consumption ~eclined again. Again, a surge in f~lter growth followed t~e consumption drop~ re~chin~ a p~k in 1~70/]1 ~nd de~linlng to a low ~n 1~7~. [~ 1~ ~n~ 1~7~ ~e se~ wh~t appears to he ~math~r a~celera[io~ i~ the fate of decline of un- filtere~ c~garett~s. The a~nual r~l~ af chang~ ~n tot~[ ¢onsumptlon and in the non-filter share of total ci~arettes pravlde ~hat is vlrtuaily a fever chart of ~he pressur~ on ~he Indu~try. 22
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jo S~OLll]B 9L61 - O~GI S~I43~vD~ Iv±01 5~$~3A ~3±13HV5~3 ~3LllJ 30 HiffO~
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THE GROLwrfH OF FILTERS' SHARE OF THE TOTAL CIGARETTE MARKET 19S0 - 1976 iOO ~ 6oB°I U,rILTE~EO ~ 4o YILTEREO 1~50 IS55 196o 19G5 197o 1975 2~
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F ~:~" D[CLINE OF UHFILTERED SH~,RE OF C]GARETTE~: 19S0- 1976 (logarithmic scale) '~. ~ \ \~. ' X, C G 1:2 * I..I + +; \ \ \ \ \ \i {. ~W
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# # ARNUAL RATE OF DE~LINE IN UNFILTERED SHARE OF CIGARETTES 1950 - 1976 # # @ 1~t,090~0£9
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THE FILTE~ REVOLUTION B. LINE EXTENSIONS ~ERSUS NEW BRhN)£ None oF the ~hr~e le~dlrg unfiltered brands introcuced "in~ extension filters dLring zhe first L~rl y~cs of th= ~mt~r r~voIut~on. Two smaller bra~ds - Tareytoq {~ith ~b~ut three share points) and Old 6olds (with about six share points) - entered the market hl I~54. Kools (three 5hare ~olnts) entered in 1956 and RaIe~gh (tw~ share pnlnt~) h I~58. In each of =l~ese years, filter brands gained OV~F eighL ~h~rc points, Th~ results wer~ as goI1o~qs: Filter Lin~ Extensions' Market Shares £1 090£0&9 I@52 ve-sus I~61 - :95Z - Non-Filter Tareyton 3.2 Old Gold 5-5 KOOiS 2.9 Raleigh 2.~ Total 14.1 ........ 196~ ......... NOD- Filter Filter Total .6 2,2 2,8 -7 1.0 1.7 -7 2,2 2.5 .7 1.4 2.1 2.7 6,8 9,5 its sha'e, and O]d Golds Ko31s and Ralelgh held their overall shares, Tareytor lost over 10% of dropped 70% of its share. 27
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8~ 670306046 "pa4~e~s -un F~5~wa sPlouX~~ A[uo +~no ~soI ~55!7 pum uo~Jou~j _ ~noJ ,~J~e~,, ~q~ ~oq~ He A~ql aq~ pue . s~s]qoueJ~ J!~ql uo ~4 ;q6!~ s.a~[!j ~45 ~e4~ :~j~ aq~ o~ se sJec~ Aq ~qnop ou p~a~p ~m ~a41 ~JeaA 3!Sem ~4~ 6u~np ~eJj ~q~ p~u!a[ peq spue~ ~o~e~ ~41 J! ~e4~ ~o 3no s~ape~[ ~Je~ JgwJo~ aq~ 4n9s ALaA!;~a~+ Ae[~p Je~A-ue~ ~9~ ~eH~ ~eOLn £~:o~ ~! ~nN~ • s~u!od OI ~o~ s~unonoe £[oa~ 4~!q~ JO - ~Je~A ~u~3~J u1 gluto¢ ~g lnoqe uaaq se4 suo[su~x~ aU!L ~q~ ~a aJe4s Le~O~ a91 -e~n[o~ Le~ol ~SFU~Jq ~sa4~ osoq~ pip ~se3 ou Ul "~96L pue ~9~L ua~oq s~om Jl~q~ opeo XLieU!~ s~l]j+uou ao~eo m41 "pueJq qn?~ ~o ~unlo^ te2ol aq} ~llen~:]^ Joj ~unon3e s~l!~ A~FO1 "~ou]m A~u~ plo9 9[0 pue 's?ue~q 8uip~aI ~ou ~nq ~ue~Jcd~[+q~igte~ pug uo~A~e2 ~pUelq ~Suo[ p~[q~ a4~ aLoo~q 02 g[oo~ f)~A!AJn~ ~Aeq JnO~ [[~ '~Jeqs [lea~Ao u]e~ute~J o; ss~u!snq aa~L!~ 45nou+ dn po~o]~ pe9 46]oi~ Fue sto~~ kiuo pue ~s~u!snq paJ~t[~un ~[aq~ ~sot XL0~e[ ite ~e4 spueJq asa4~ +snq± '~nloa ~1!~-uou ~o ~J~qs ~', e ~noge peN q~ !saa;Ll~ ju ~eqs O'~ e A[uo pue ploo P[O ~ue ~eq~ 0'~ e p29 q6!~le~ "doap s}~&eJp e . ~snu[snq J~l!j-uoo ~q~ ~o s2w[od ~Selu0~a~d ~'| o~ O'L ktuo ~nq ssau!snq ae~l!~ e4~ jo s3u!od ~6e~ua~aad ~.~ ~oge £e4 N~eo uo~k~JeI pue s[oo~ • aloqm e se aa~Jem ~q~ JoJ ~ o~ p~ecmo~ - 19~1 u! sp~e~q ~no~ aq~ Jo omnlo^ ~4~ }o ~0B ~ ~09 aoj pa;uno~ s~l!~ .~ ............ -+ .... , ,, , +++ ,+-.. ,.++++ :+..., ++.+~ .~i+.+ ~_
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- Late e~try with a Hne exte~siom is not likeIy to b~ ~u~ccssful Tn r~scuTng d~G] i~irEg bran~s, - It i~ possible for br~nd~ to take ~dvantage of a trend with tTmely ]~ne e~te~~ sions which ~ay u]t]mat]~y tak~ over most of t~e support of the brandr$ 5hare - Thcc¢ m~ be danger to the regular line~ The pre~ent sltu~t~on i~ ~ot comp]et~IY 0na]agou~ ~0 tP, at prevailing in th~ ~0ms. It seems th~ ]~al ti~e ~ay be dur]nq the next t~vo or ~hrc~ y~f~, 29
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j ExhlbTt THE ?llTER REVOLUTION A LTne Extenslons~ Share of Total Filt0rs ho~ 30~ 1950 20~ I0~ ~PO90~O&9 ,3! f m | I 1975 50 YEAR
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FILTERED LINE EXTENSIONS 9F UNFILTERED BRANDS Year ~f Entry Tareyton (Amerlcon) Old Gold (Lo~Tllard) Kool (Brown & Williamson] ~al~gh (Brown & Will~amson~ 1954 1954 1956 1958 Phil~p Morrls (PhTIip MorrTs) Lucky Gtrlk~ (kmcrTcan) Pall Mall (A~erlcan) Camel (R. 3. ReynoTds) ChesterFieI~ (Li~get:) 1964 1964 1965 1966 I~67 ; 090 0&9 • 31
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GRDWTH OF F]L~E~ LINE EXTENSIONS OF UNFILTERED BRANDS 1950 - 1951 (% of Total Ci~orettes Brands 1950 1951 1952 1955 1954~ 1955 Kocls - Total 2.~ 2.8 2.~ 3.0 3.3 3.5 Filtered F~ltered Tareyton - Total I.~ 2.7 3.Z 3.5 3.h 2.9 2.3 1.7 Filtered .h .9 .9 .7 % Filtered 1956 1957 1958 sc. 3.3 5.1 3.1 .4 1.6 2,0 11.5 52.3 12.O 31.8 40.0 ~3-7 I~5~ 1960 1961 49.9 82 3 53.2 3,0 3.1 2.9 Z,0 2.3 2,2 65.0 67.5 73.2 74,6 1,7 2.3 2.5 28 .9 1.7 1.9~ 2.5 53.3 72.D 77.5 80.7 Old Gold - Tota! 5+4 5.B 5.9 6,2 5,5 3,7 d.7 3,8 2.9 2,0 1.6 1.7 FI tiered ,l 1,3 I+9 1.6 1.3 l,l 1.0 1,0 filtered 2.5 22.2 32.8 41.9 43.9 53.8 G4.9 60.$ Ralelgh - Total Filtered FNtered 2.1 2.1 2.1 2.0 2.0 II~ 1.8 1,6 1.7 1.8 1.9 2.1 .7 .9 1.2 1.4 41.6 50.0 62.1 67.0 32
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CR3WTH OF FILTER HNE EXTENSICNS OF UNFILTERED BRPN)S 1964 - 1976 (% of Total Cigarattes) Brands 1964 1965 I~66 IS67 !96B 19S9 1970 1971 137Z 1373 1374 1975 1976 To~al ~ilters 61.4 6~.5 ~8.6 7z.4 74.4 76.8 79.5 81,8 83.4 84.7 83,B 87.T 88.2 Ko~l~ - TuLdl 3,0 4.5 5.D 5.4 6.1 7,0 B,C 8.2 8,9 9,7 10.3 0,3 8.~ FiIt~rod 3.2 3-9 4.~ 4.9 5.7 6.~ 7,7 7 ~ B g 3.4 I0.I la,3 8;7 ~iltera~ ~4.7 87.5 88,7 31.1 ~2.9 94.2 9~,7 96.4 96.9 97.4 37.3 39.8 38.3 T~re,tton - Tat~1 3.6 3.8 3.8 3.3 4.1 ~,3 4.2 8.7 3.5 3-3 3.2 3.0 2.7 Filtered 3,2 3.5 3.6 3.7 3.8 43 4,1 3,4 3.4 3.2 3.1 2.9 2.6 Filtered B3.9 32,8 34,O ~4.1 95,~ 99.5 96.8 97.O ~7.4 37,4 37.3 37.8 98.1 01d Gold - Total 1.2 1.1 I.O 1.0 i.l l.l 1.0 l.O I.O .9 ,8 ,8 .6 Filtered .9 .8 .B .8 .9 I.O -9 ,9 .~ .8 -7 .I .5 Filtered 7T.9 74.1 78,2 80,0 83.1 87.7 90,6 90.7 32.9 92.3 ~1.8 ~,2 ~4.~ T ogo o&9 .33
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........ t 4h ,\ GRO!,'TII OF FILTER LINE EXTENSIONS OF UNFILTERED BRANDS 1964 - I~76 (% of Totel Cigarettes) Brands 196~ ;965 196~ 1967 196--8 1969 1970 t971 1972 1973 1974 1975 T976 Total Filters 61.4 64.5 68.6 724 7~.l+ 76.8 79.5 81,~ 83.4 54-7 85.~ 57 ] 5B+2 Lucy S~rik~ - Total 6.4 6,/4 5.5 4 6 4.2 9-7 3.I 2.~ P.4 , 2.2 2.C 1.7 ],.4 F] Iterecl .1 hO ,5 1.3 1,4 .2 .2 ,I .2 .2 .2 ,2 .2 % Fi Itered ].O ]5,5 ]4,2 27.3 93.3 6+3 5,6 5.l 9,8 ]l.O 11.9 13.9 13,4 Phil p Morris -TotaI I.3 II1 ,9 .5 i7 Fi lte rec~ . I .6 ,5 .4 .3 Filtered 42.0 52,9 51,5 44 9 49.3 Pall MaTI - Total 14.4 14.2 14,(3 13,1 12.7 11.9 11.1 10.Z ~.6 9,1 8.7 8,3 7,7 Fi lt.ere~ .9 1,6 2.2 2.t 2.3 2,Z~ 2+4 2.4 2,4 2.5 2,4 2,1 F~ltcred 1.8 11,2 16.9 16.4 19.0 2l.G 23.1 ~5.2 26.0 26.2 28,5 27.6 Chesterfield - To~al 3.4 3.0 2.9 218 2.2 2.1 2.1 I,~ I',& 1,4 ]-3 l.I 1.0 Filt~re~ ,2 .2 .2 .2" .2 .2 ,2 .1 .] ,1 .i ~; Filtere4 8.5 8.5 l].l 8.4 11.2 10.6 10.1 ~.8 10.5 11,6 9.8 - : 090 0&9
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GROWTH OF FIL-ER LIFE E×TENSIONS OF UNFILTERED BRANDS 1964 197~ (~ 6= Total Cigarette,) Brands 1964 1965 1566 1967 1968 196~ 1970 1971 1972 ]9]3 I9/ff 1975 I}76 Tct~1 Filter5 61.4 ~4.5 GS.G 72.~ 74.4 76,~ 79 5 81.8 83.4 84.7 85.8 87.: ~8.2 Camel - Total 10.7 9.7 9.2 8.4 7.7 6,9 6./~ ~.o 5.5 5.2 4 9 4.6 4.3 Filtered ,5 .7 .6 .8 .7 1.0 I.D ],0 1.0 I.I I,] Filtered 5.6 8.0 8 4 13.9 10,6 16.7 18.2 19.9 21.0 23.3 2~.4 090C0&9
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,~r ( THE FILTER REVOLUTIOE C, BRANDS The FolIowlng table show~ 1961 brand shares o~ the brand~ ;n order o~ entry into the filter market s~mc~t, V[c~r~)y~ with a lon~ I¢~c~ over WlnsL~np ranked 5i×l:h. Kentt introduced in 19~2~ Sot nowhe~ until Reader's DT~est catapulted It to Fame, It was 3rd. L ~ H, vshich ~nter~d in 19~3, dld fairIy ~e11 wlth fourth place - but it did not get the ~rass rln9. Winston~ emt:etlng in 195L~ along wlth the two line extension i,iTtzrs, and therefore fightirg five Tmpor~nt filter brancs, walked av.ay with Tt, Marlboro (1955), in fif'th place, w~s doing re,at: vely ~e11 and was gaining. ~a-lem (195G) was the i,lrs~ lightly mentholated i,~Iter. It was a ne~ brand - an( it out- classed Kools which follol~'ed i~ by f~UF m~nths. It hlt an unmet consumer d¢~i~e and apparently so squarely :Fat it }e~'t: I itt]e room for its imitators - Newpori~, Oasis, Spring~ Alpine, end BeIalr, ~ach of them go~ a progressively smaller ~hare. The maln Tssue then was the beliei, a~ona many consumers that fi][ered ci~are~'ces could not: ~asre as good as unfiltered and that i'ilters ~ere efi'~mlna~.e, appropriate only for women=s clgare~tes, The winning filter brands approached thes~ ob~°-ctions characteristically. Reynolds ~hich owned Camels, ~he l~ader (o strong-tastlng~ hlgh-~ar, mascuIlre-oriented cigaretee) emp~asized taste. ("winston tastes good like a cigarette should,") [ 090 0 .9 . 3~
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g-" :~i~," Philip Morris, which had buiI: ~he fourth lar~est branJ in :h¢ markmt b~ mean5 of a |on9- ru~g T~age ~ampalgn ('ICalllng Phillp ~orr]~" with Jo~ny, the bell boy), agaT~ opted for an Image appr~d~h. #t r~d~c~lly redesTgn~d Harlboro'~ d¢IIc~t~ F~ncy p~kage ~nd went ~o th~ op~o$1~ extreme wlth Ch~ "super-~ascu]in~ r'~rlboro M~n11 ~ampaign, Re~nolds, with Sale~ ch~ a~proach~d ~ ~]Ider t~st~ ~e~nt ~Tth a n~ ~dea - a ]~ghtly mentho'a~e~ ¢ig~et~ - w~ ha~ ~ special Bppeal to ~m~, It ~y be note~ that these thre~ brands have be~n able to s~tlsfy ~ ]arg~ ~r~po~t~on o~ th~ taste r~qu~ro~e~t~ of the Full Taste se~men~ - just ~ C~m~]~, Lucky Stri~e, ~nd C~esterfTeld had $~tTsfJ~d mo~ ~on-filtere~ smok~r~. IfThT~ su~e~ ~h~t i~ the ~merg~9 ne~ Ion-tar ~e~t ~Ty ~ rel~tlveIy ~all nu~er of bra~ i m~y b~ n~eded to s~tiSfy t~e ~Ik of Full T~e smoker~. .,- The dBta i~dicace: • \ - M~relT ~Tn~ f~r~ is ~ot onoug~. I~ f~ct~ t~ere may be a ~is~dv~ntage i~ ~e~ng ~oo ~erly. Th~ e~'Ty e~tran~s nay ~k~ mTs~akes ~h~t I~r ~i1e5 ~n avoT~, ~' y' - The w;nners are ITk~ly to ~ th~ fFrst brands thet accurately m~et t~e need~ and d~s~res ~ major se~e~t~. - The door is open for only ~ ~hort c[me. In ~h~ ca~¢ of filt~r~ all th~ ma~or brand~ tha~ were to do~]n~te t~e Filter mar~t h~d entered by I~6. 0901 0 9 37
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New Fiker Brands 1947 - 1961 Date oK Entr~ Market SEares 1961 Viceroy 1936 3.7 Kent ]552 7.2 L & M 1553 5.3 ~lnston 1~54 12.1 **Tareyton 1554 2,B ~,~O]d Gold 1554 1.7 **~Harlboro 1555 5.0 Salem {M) 1556 8.5 ~Parli~ent ~556 1.~ *~ooI (M) 1556 2.~ Newport (M) 1557 1.9 Oasis (~) 1557 * *~KaleTgh 1958 2~1 Sprln~ (M) 19~S ,2 ~l~Tne (M) 1959 .9 L~Fe 1599 .~ E~l~ir (M) 1~60 .I (M) Menchol ~Less than ,05~ ~*LTnc Z~tenslon 3~
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1950 51 5hBre o~ FilLer ~rands (~ of all cigarettes) 52 53 5~ 55 56 57 5B 5~ 60 61 TOTAL FILTERS Viceroy Kent L&M ~[nston ~aneyto~ Old Gold,', ~arlboro Salem ~arl i amont KooT* Newport OaMs SFnln9 Raleigh': Alpine Life Belair .6 .7 • 3 .5 l,O Z.6 • 7 I.G .l .8 .I 10.9 20.4 4.0 5.3 l I .4 19 3.1 2,0 5.8 ,4 .9 ,] I0 1.6 30.0 }9-6 4(.4 45.9 52.3 53.2 519 5.1 4.7 4.5 3.7 3,6 • 9 3,7 6.4 8m Z Bm 0 7,2 5.2 6.4 5'9 %B 5.5 5'3 8.6 9.8 9.7 :O.I ll.O 12.1 • 9 .7 .9 I 7 1.9 2.3 1.5 1.6 1.3 1.1 1.0 l.O 3.6 4.8 4.8 4,5 4.G 5.0 1,0 2.~ 4,4 ~.2 7.4 8,5 .2 ,5 1.5 2,0 1.9 1.9 ,4 I .6 2,0 2,0 2.3 2.2 .2 .6 ~.l q .1 1,5 .2 -3 .3 .2 ,Z ,2 .I ,2 .Z .7 .9 1.2 1.4 .2 .5 .5 .3 A +'+:~ .2 .T ÷Lhe Excersions ~*Le~s char .05~
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67030605~ 13 - I H dO M I NO~9
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"SPLI~ pue s~qS!] ~q~ . $Ua!¢u~x~ ~!L ~no ~nd o~ aso4o s~lu~dwoo ~o£~ ~43 'A£ jo ~1 ~4~ ~q p~ud~ap '~o~eoJ~4£ "OL~i pue G9gl u! p~Ja3u~ ~e~ue~ pue ieJoo "S,!3-!H ~0 uo!3eJ~ua~ ~u e 6~!puno~ 'L~dde J~+~ol e 93!~ pa~e~dde ~nJ£ '99~t uj '~L~u~od~t ~o~ pu~ 'UO~L~e3 '~9~X ~1 "s,OZ ~q~ qSnoa4~ gSgL ~noqe moJ~ (aa~qs ~u!U!lO~p~ pu~) s~Ies ~o ~Io~ ~]~LO~qe 3ue~uo~ ~ p~4 dna~5 e ~e Sm!3-!H ~4~ 's~uea3u~ ~ou ~H~ ~Id~' ~I!~ ou++ .+uo!~ca3t!~ 45i% p~n ~L tJ! q~lq~ ~u~me!l~ed ~a~ kaoS~+~3 I~-!H a43 u! os{~ "Jood ~J~ S~l~S ~snE3~ (.]Ua~ ~0 a]s~ • q3 $do3 5u]q%CN,r) 9S6L kq sleedd~ e3se% o3 p~4:~!~ pue JO~el~ p~J=Ul peq ~nq _ (,,J~ pue ~u!~o~lu aJom s~ml~ ue^~s s~^o~o~+,1 ~G~L u! s~!R[o a~]tl~ ~uO~;S pa!~ peq 3~a~ 'kLPP0 o1 ~u ~nop ou se~ eJa~± ,~=ua3sj~a o~ut Eu!~d~ ~ 5u!3!~ se~ ~a~e~ aq~ qSno~ sa se~ 31 puooos a4~ ~mo~q 04 ~'~ ~o aJe4s ~ p~^a!flo~ P~4 8~G[ kq ~ue s[41 t~o p~ZIl~!d~o kial~!pa~ ~GI ~sn6nv pue kLnf uI ~s~6~0 s+Japgo~ u! g~l~!~Je ~q a~ua~s]×a o~ut pallnde~e~ se~ ]:m!H 670306059 0N3~£ 3H~ "~ I~-I~ 30 H£~OW~
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BasTcally, Hi-FT 2 recouped t~e losses of HT-~'I 1 but mad~ no sTgmTf~can~: lnroads Tn:o the <" ~j, ~, t. , _FoH Taste 5c~mcnt, 09090 0 9
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GRO~/TH OF III-FI ArID TOTAL FIL"EP, S 1550 " 1576 &oc SOO TCTn~L C ]C~ETTES 2oc%°°!} ~~L FILTERS ~.c 3Oe z TOTAL FILTERS --~ -- HI'FI l , ~ , ~I-,'~'- i i i r i i i f t i "t i I I i I Yeer: 'SD '51 '52 '53 '5~ '55 '~6 '$7 '58 '59 '60 'gl '(~2 '63 '64 '65 '66 '67 '6~ '69 '70 '7I 'IZ '73 '74 '75 '7~ TgOgOI~O&9 ,, si-r~ 3 Q3
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GP, O'ATH O~ FLILL TASTE A,[O HI-FI FILTEEED Ci, ;~ETTES (Percent of All Cigarettes) 8O UKFILTFRED FULL TPSTE - FILTERS
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TOTAL HI-FI CIGARETTE S~LES VO_LME B]]l~ons cf Cigarettes 1952 - 1576 w • z 0 Ye~r~ ...... Total HI-Fi 120 Hi-Fi I HI-F," I 110 !00 £0 80 70 HI-FI 2 . ~4o 3o 2o lO I I l T I 1 r I ! r I I I I I I I f I f r t I 1 '5,~ '53 '54 '55 '56 '57 ~58 '59 %0 '61 %Z %3 '~4 '65 'OG '67 %8 '69 '70 '71 '72 '73 '74 '75 '76 9090£0&9 45
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HI-FI CIGARETTES: SHARE or ALL FILTERS 1952 - 1976 2O u r~ Q i-- t79090£0&9 1955 l~Eo YEAR 1965 1970 1~75 q6
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THE GROI~TH Or HI FI 2 ArID 3 25 20 U ol O O = 5 [ I I = I f • I I I 1 ~55 I ~60 ! / / ! ! J J J f NI-F] 2 8 HI- B ~FI 3 1965 ]970 1975 ~9090~0&9 YeAR ~7
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/ , ' G~Q~,4TH OF HI-FI B. LINE E×TENSIONS LTghts and Mi]d~ ~rew as ~ proportTcn of total Hi-FI I in ~ach year slnc~ th~ ~¢r~ Tntroduced, !As • rer~nt n~ each brand's t~t~] Volume, the Lights and M~ld$ Introduced b~Fore I~75 amounted in I~7G t~ 7~ F~ each of t~c mojor Full T~st~ ~nds except f~r V;~eroy (for which it ~as 5~). IC se~d t9 m~k~ l]tt}~ ~]ffercnc¢ tha~ ~rlbor~ ~a~ introduced thr~ ¥~ar~ ~oFor~ ~]nsto~. T~e g~l~m LTgh~s introduced in I~75~ hc~vcr, obtained I~ of br~n~ volume. K~n~'~ Golden L~ghts~ ~n I'undcr |0" product (~hTch we cl~ss~fy a~ H~-Fi 3)0 obtained 2D~. 99090~0&9 48
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HI-FI 2~ TOTAL LIGHT~ 6 MILDS' SHARE ~ ~I.~ TOTAL Hi-Fi 2 TOTAL LIGHTS ~ HILDS SHARE YEAR (btI11ons of cT~arettesi (billions) (~) 1971 23.8 .3 1.3 197~ 29.4 4,5 15.3 1973 35.0 7,0 2C.3 1974 42.9 II.7 27.3 1975 51.0 16.l 31.6 1976" 68.5* g6.l 38.I 1976.:~ 83.3~,~ 32.8 39.4 ~E~cludlng Hi-FI 3 brands, namely Herlt, Kent Golden Light, and Salem Long LIgh~ **Includlns Hi-FI 3 6rand~, a~ abcve &9090 0/'.,9 49
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H:-FI 2~ LIGffTS AND MILTS' SHARE or TOTAL II~-~] Tota] Lights & Nild5 Share. Narlboru Lights Kool Milds Lucky 1DO's Ralei~ Lights Viceroy ~]ld~ Winston Li~ht~ Salem L~ght~ 1971 1972 1973 1.3 ~5,9 2O.0 1.3 B.2 8.6 ~.4 8.o 3,7 3.~ 197~ 1975 1976 27.} 31.6 36.1 9,G 10.4 lO.E 7.5 7.1 6,I 2.8 Z.O .c 2.1 1.6 1.3 I .6 1,6 1,2 3-7 7.6 9.3 I.L 9.1 890901 0&9 50 i
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LIGRT/~ILD LINE EXTEffSIONS SHARE OF BRAND ~OLUHE %. BRAND ~ " YEAR OF TAR STYLE V ENTR~ (mg) Benson 6 Hedges M/F- 1969 12 Marlboro Lights 1971 12 Kool Ill lds I~72 14 Rale]gh LI ghl:s I$73 l~ ~in~ton LigHt~ 1~7~ 12 Viceroy Mi Ids 1974 l~ OF 1976 BRAI~D VOLUblE S~lem Lights 197~) 11) Long Light 1976) 9) ~~ IC~ I Ken: Golden Lights 1976 ~ l~\~x~\x~x.~\'x,\'~.~ 20~ GgogoI O&9
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.v ~RO~H OF H-FI ORDER OF ENTRY Kent is ~n example of the ?irst brand b~coming the leadTng ~rmnd in its segment. But the case I~ Hardly a usu~I one du~ :~ ~h~ intervention o~ ~he Reader's D~g~t. In the cas~ of Hi-Fi Zj it ~r~s ~he four.h bTand; VBm:agej ~hich became the leader, ~eatlng out Dor~Ip Tru~ ~nd Car1~on.¸ -- __ ...... ~ ....... ____ ,~ ~. E THere ~s ?~ttle evrdence OF ~ny Of these bra~ds berflg a JJsnug ~tJg ~nto a mar~t n~cN~ ~n~ ;~ :'~¢los]n9 off entry by comp~tors. The h~Id that HI~Fi brands Have On thelr us~r~ i~ to . " ', ..!'i ~ rear ext~t deper~t on Lh~ir be~n~ p~FC~V~d aS belng ~ ]~w-t~r brand ~'hlch 0ffe~s a reas0n- .~,~." , . r~~' ~ble emoumt oF taste, Any s;gnlf:~Bntly lower t~r brand will attract these smokers strongly. Merit and Real. The growth oF Hi-Fi 3 raises ahO~I a Fundamental question; - If a s~0ker wlm=~ ~ ¢ertaim ~mount or qJ0t8 of ~atisfactI~n from a cigarette - ¢~m~ in part from t~e ~mount 0f nic0ti~e ~F tar he Ibsorbs. ~e mTg~t react to th~ n~w ]o~ ~aFS ~y: a. Incr~aslng the rum~er of cigal'~ttss he smokes - i.e.~ llghtlng a~thc~ one ~m~d;~tely ~t~r tNe first. .. 52
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67030GOTI
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Hi-fi ~oLal K~t R~gular 1~01s Menthol IO0's To~BI Parl[~n~nt Regulor IO0's ~pring Alpine To~a] L~rk Regular lODes Total Silva Thlns Regula" ~em~hol I BF, ANDS: S~ARE OF TOTAL CIQARET~ES BY YEAP OF ENTRY Year of Entr~ I~6.~ Share 5.8 195Z 5.8 {1967) {1970) I._99 1956 1,9 [1968) 1959 .2 1979 .6 Z.7 1963 1.7 (1972) •967 (195BI }976 Shark 2.3 1.2 .l 1,0 .I .2 ~6 .._66 ~4 ~2
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Hi-FI 2 BRANDS: SHA~,E OF TOTAL CIGARETTES IN I~76 BY YEAR OF ENTRY YEAR OF ENTRY BRAN..~D Carlton I~G~ 19~6 Tr~e Dotal 19G9 Benson ~ Hedges MultTr~Iter 1969 1970 Van%age 1971 Marlboro Lights 1972 iceberg ] 972 Kool 'lilds Lucky lO0's 1972 ~979 Raleigh Lights ~974 Viceroy tll]ds ;974 Winston Lights 1975 Salem Lights 7 1979 Fact "'~ 1975 NBW Total HI-FI 2 1976 SHARE I ./4~ 1.5 t,0 ,3 2,7 1.3 .1 1.0 ,I .I .I 1,2 1.2 .2 1.0 13.Z~ 55 - -----~._--~-" --r ,~ IlT--~'-]~r
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0RAND SHAffES OF HI-FI BRANDS (Percent of All Cigarettes) .i HT-Fr I Kent Parllameq[ Spring Alplme La'k Silva Thins Total H~-F~ K~Rt Parliamcn[ Spring Alpine Lark STI~ Thins T¢~al Hi-Fi &O~O£O&9 1952 1953 1954 1995 • I ,8 1.1 -5 5-9 5.8 5.8 5,7 1.9 1.9 1.7 1.7 .] .z ,2 .2 .) .6 .5 .5 i.5 1.7 1.5 1.5 .I ,5 10.2 10.2 9.8 10.1 1956 1957 195~8 I~59 1960 1961 1962 1963 196% .9 3.7 8,4 8.2 8,0 7.2 7.4 6.9 6.2 .2 .5 1.5 2.0 1.9 1,9 2.0 2.0 1.9 .2 .I .2 .2 ,3 -9 .3 .2 .5 .5 ,5 .5 .5 .3 1.9 1.1 4.2 1g.1 10.5 10.6 9.8 10.2 I0.0 IO.8 1969 1970 IS71 ~97Z 1973 1974 1975 1976 5.3 5.2 .%5 5.3 5.Z h.9 4.5 5,6 1.6 1.6 !,7 h7 1.7 1.7 1.6 1.5 .I .I .I ,1 .I .I .I " .5 .4 .4 .3 -5 ,3 .2 .Z 1,5 1.3 1.2 1.2 1,1 I,U 1.0 ,9 .9 .9 .8 .8 ".B .B ,8 ,7 9.9 ~.5 9-7 9.4 9.2 8.8 E.Z 7-9 Less that .O£Z 561
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196~ 1969 HtFi 2 O~rl~on .3 .2 True Dotal B~n$on & Fedg~s~ Ventage Harlboro L~ghts~ Iceberg Kool ~11d5~ L~ky 100's~ Raleigh L'ghts~ ~ ~[ceroy HTlds* ~ ~instoa Lights~ Salem L~ght~ Total H~-FT 2 -3 .2 BRA~D S~ARES OF ~i-F[ BR~N~S Percent o= Total C~gare~e~ 1966 1967 196~ 196~ 197~ 197_ I /97Z 1973 1974 1975 19; J 2 " ~ ) 2 I2 I 2 I3 • 5 1.6 Ii~ I-9 1,4 1'5 .6 Ii2 ; ,2 • 5 .5 .9 .2 1.0 .I ,7 118 1"9 ~ I 8 1 I-9 1.5 1.9 1,6 I.I 1.0 1.0 1.0 IZ1 1.3 1.6 2io 2 i4 .5 .7 -9 .2 .2 .2 .2 .~ .5 .6 .2 .2 ,2 .Z .I .I -3 -7 ,I 5~2 6,.o 7.2 8.7 57 , ,-~ ,4,,-~ .
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GTO30GOTG S~ N Ol 20 }11~0~ 3
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6S GTO30G077 SNOLSN3±X~ 3N17 "8 ~o~6 ~6u~ 'j~o ~l ~Ual ~eq~ S,00L ~npo~u! sabp~h pue UO~U~ U~ ~L II~ ~ou se~ ~j 'p~!~ouun F~ss~d ~nq - 6~Gi u! s~B~e6!~ 6uaI ~po~u! ~u!adS Oh3~ 3H1 "V •, ~] SONO1 ~0 H£~O~
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GROWTH OF LONG FILTERS (1OO mm +) 1959 - ]976 (Percen~ of ~1l Filters) ]GO OF TO[AL FILTERS ~&0901~0~,9 6O 4O 2O ~959 RECULAR LO#IGS ]~65 197o 1975 Year 60
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LONGS: 100, I10, ~rd 120 HillTmeter Cigarettes 1959 " 1976 1999 6D 61 62 69 6~ 55 66 67 68 6~ 70 71 7~ 93 74 75 Total IOOIs (billions] 1.0 .4 .8 -9 1.4 116 2.9 11.5 48.5 69.0 79.3 96.8 107.5 IZO,2 131.5 1~1iI 148,3 T }lOis and ]20Is (biT[ions) ~.6 Total Longs hO .4 .8 .9 1.4 1.6 2-9 11.5 48.5 69.0 79.3 96.8 107.6 120.2 131.5 141.1 1549 I~ (81lllons] ToCa[ Longs as of total (;&090C0 9 611
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) ~EW BRARDS "" 19&4 Spring* -3 Benton ~ Hedges 1.1 Silva Thins Virginia Slims Eve Twist Lemon Saratoga More TOTS1 New Brands I,~ Line Extenslon5 Grand Total 1.4 OS090RO&9 GROWTH OF LONB ~IGARETTS$ Percent of Total Cigar~tt~s 95__L • 3 ,2 .2 .2 .I .I 1.3 1.8 3.O 3"I 3.0 3-3 .1 .5 .9 .9 .Z .9 1.0 .I 197._ 2_2 197~ ~ 197~ 197~ .1 ,I .I .1 .I * ,B ,8 .8 .8 .8 .7 1,0 1.1 1.3 1,4 1.5 1.9, .3 .3 .5 ,9 .9 .9 ,I .2 ,I • 3 .4 ,B .9 1.6 2,0 3.3 4.0 h,9 5.4 5.7 6.3 3,3 11,1 13,1 It~.5 1.6 2.D 9,6 13.3 IG.o 18.5 2D.2 Spring - 1958 .2 1961 ,2 I~59 .I 1962 .3 1960 .2 1~63 .3 5,I 6,6 7,I 8.3 8.1, 15.9 16.2 16.9 17.5 17.6 Zi.6 zz.8 Z4.0 55-8 25,7
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I! A II
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4. ( I, The Growth of Menthols 1933 to 1977 Early Hi~tnr~¢ -- 19~ to 1955 A. KOOL's Earl~" Years KOOL was the first menthol cigarette. Until 194~, it was posi- ±~otled as an o~c~gion~l~use ci~rette to ease throat trr~atlon. it was a premiurn-pricefl coupon br~.nd the~lj and achieved a 1.4% share o~ market by thc cnd of this period. It was th~ only B, 1940 to 1949 With the introduction of a new slogan, "Switch f~orn Hots to KOOLs, " KOOL shar~ gl-ew to 2.3~ in 1543 and remained there ~o~" the filtration ~ the ~r. KOOI~ sha~e teI1 ~o 1.5~ in 1947, a~ which lime advertising focused on "Willle" the KOOL penguin who encouraged smokers to "Smoke KOOLs, Smoke KOOLS." ~hare again peaked at 2,2~ in 1~49, C. 1950 to 1955 A Headers D~gest article on the danger~ of cigarette smoking, co~plcd with KOOL's quasi~n~edical appeal of le~ throat irrita- tion. he~pe~ b~o~t KOOLt~ ~hare to 3.0% in 195~. Pall Mall was the only other norl-ftlter brand gadding shar~ as health con- ceI"ns c~u~ed a trernerldous growth in titter cigaretl~s. A new ki,~-s~ze length KOOL, in±roduced in 1954, boosted KOOL share to 3.4% it* 1955 -- af a tinge when tln~ non-f~ter category was declining 10% per year. II. New Competition A. Salem In ] 956, R. J. Reynolds inlroduced Salem, the first menthol f~lt~r, ~ld achieved a i. 0~ sh~r~ ~r~ ~ n~onths, Whereas KOOL w~ positioned ~s an occasion~l-us~ product, Salem was for all occasions. ~alem ~v~s ~ mi]de~ r~en~hol~ a ~oderate ~lie:vn~- t~ve for ~hose who flldn~t like the highly lrmnthol~ed KOOL. KOOL fell imrn~diate]y to 3.0~ sh~re, where it remained until 19~2. in th~ s~n~e pet'iod, Salem share ro~e to 8~ ~
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5. ( ( t Th~ ~ar Derb)- was a ~najor f~ct~r ~ ~ieraP~ growth, Salem Wa~ perceived to h~ve more inste ih~n competitive offerings, which resulted in the coincldent growth. S~lera growth ended W~t the T~P Derby as no~-menlhol full-iasle styles rEtlsed 't~trI coIl~e~t. Newport and BELA~R Newport, introduced in 1957, also grew dl~r~n~ the ~far Derby lo a peak of 1.7% share itl 1962. It slowly declined for the re- rnalnder of fhc 1960's, I-Iowcver, BELAIR, a 1960 entry, had low share through 1962. It rose to 1,7~o sh~tr~ later in the '60's, aided h5 ~ coupo.n cam- p~tgn. IlL KOOL's Gro,~<h Phase A. 196S to 1977 Salem had created a vast rnarkel potenfial for menthol, ~nd KOOL had retained its taste, while brands in the Tar Derby hRd dropped ~tarI ~nd taste. This put KOOL in a good position to capitalize ur~ two emerging rn~rket~ -- the blacks and younger wh~e smokers The pos~ war baby huom had~ by this time, sw~led b~h popu~%10ns; ~nd KOO!~ ~s pos~i~on~.d to t~ke ~d- v~ntRge. ~'hile KOOL ws3 l~rir~arily ~ black ~nd/or eountercul~ure ciga- rette, ~t a[~o had many adul~ white sn~okers s~eking more t~ste, These new ~cnthol ~n]ok~rs were ~he Stlsti~c~inn for m~ny men- ~hol line extensions ~nd companion styles. While the new men° thols accounted ~r nearly half of the menlh~] ~egrnent's 9 share point growth d1~vin~ this period, %h~ h~d no significant effect o~ the per~ormaace of KOOL. ~3y I ~s74~ KOOL had captured 36% of the menthol ~egment ~nd I0. ~% of the total ct~rette ~arke~. IV. Menthol ~i-Fi During %he Tsr DerbT, xn~n~hol s%yles were percei~;ed ~ he~l%hier low 'tar~ ~mokes due to the qu~si-~nedic~ heal=h cl~irn~ in n~e~thol ,,~ advertising, With the exception of a few insignificant brands, thc first tru~ menthol hi-fi ~ Tru~ Green, introduced ia 1967. M~ny other brands cntcred the hi-fi menthol segment as cornpanion~ to non-menthol~'~ hi-fi brands. Thi~ ~ventually cleared up consurrer perceptions that ~) ail men6hols were low 'tar. ' By i~74. menthol hi-fi styles had a ~7% GD sh&re of the hi-fi category -- clo~e to the proportion of menthols to all styles.
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G~3WTH OF NENTHOL S 17~0901~0".0
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TIlE GRONTH OF MENTHOLS INTRODUCTION ...................................................... REVIEW OF THE HISTORY ............................................... A, I, I If. 3 The OveralT Trend 3 Th~ Phases .............................................. IO 1, Ea+ly HI~Lory of ~ools 1933 I I~9 ............................. IO 2, The :[lters and Entry ~f ~aPem Tg~ - 1~62 ..................... I++ 3, The Growth of Kools ..................................... 25 4, The Low-Tars l~75 to 0ate ...................................... 3S Ill, FREE STANDING BRANDS, LINE EXTENSI3NS AND COHPANIONS ................... 37 IV. HI-F, AND MENTI40L ............................................. 54 V, MENTHOL, TAR AND TASTE LEVELS ......................................... 62 Vl. APPENDIX ............................................................... 70 090f 0 .9
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670306086 NOII~QO~NI . L~¸ ~'' J
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This report covers essentTally the developments through 1976. Th~ more recent trends will be d~alt w~th in Phase I1 of this study, Therefore, we ~111 reserve our comments on the latesr trends ~nd the implications for L~e future fop that r~poPt,
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.F--¸ • RE/IIE~ OF THE HI$TC, RY THE OVERALL TRENC Before 1956. Keels ~as. re- all if[ants and purposes, the only menthol eigmrette. It was introduced in 19]~ and by ]~3~ h~d attalned a 2•2~ silare o~ all cigarettes. Thereafter. it5 ~hare deciln~d to i.~ in 19gC. rose to 2.3% in 194° decliner aqain to 1.5% in 1947 and ended up in 1~49 back at Z.22 wlere it had been in 1)35. In 1~Sg, with the heightening awareness of the dangers cf smoking kicked off by the J~mJarv, I~O Reader'~ Digest article, lIHow Dangerous are C[garcttc~?n, a new phase seemed tO begin• Koois, still tim only menthol, rose to a 2,6~ share~ exceeding i:s previous peak. SinGe then~ menthols have gained in share every )car w~thout exceFt~on to reach a l~vel of about 28~ in 1~76 - a gain of 25 share points in 26 years. As shown by the chart on PentholJs Share of Cigarettes, there was a slow upward tr0nd unti] 19~6 and a sharpe~ rise s~nc¢ thcq• In terns of share of filters, the pattern i~ more dramatic, Im 6 year~ from the introduction cf mentbo] ~[lters in 1956 to 1962, menthol5 rose to 25~ of all filter~, In th~ ]4 yea-s following through 1976, it rose only another 6 points to about 31~. These apparun~ly s~#o~h uverall curves mask startling changes in the brand trends, particularly the trends of the two leading mentqol brands - Kcol and Sale~. As ~hnwn clearly by the char~, there are distinct phases in the hi~tory of menthol~ ~in¢¢ 1950~ phases with dlfF~iel~L braad ~rends. Until 1962, Kools market ~hare shows remarkable constancy while Salem's leaps up~ard, Thereafter, Salem's ~rend becomes flat while Kools' rises steadily until }97~, exceeding Salem. In ]97~ a n~w tr=nd ~ets in, with Kools flaLtenlng, gO90 O&9 3
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Accordlngly we have divided the history of menthols into the following phases: I, Thc Early ~storV o~ It~ols I~33 I~55 If. The Rise of Sa]e~ ~ ]~56-1962 ill. The Kcol Growth Phase ~ 1963-1974 iV. The Growth of Low Tars - I~75 to date Each of ~e pha~es ~ll h~ d~cL~sscd in deta~I.
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E:} ' t,~=l 6DO SO0 ~00 30O 200 I O0 Total Cigarettes • -------- Total Menthols E~h;biL GRO~TR OF MENTHOLS UNIT SALES (B~ll~ons) "YEA~ 50 S} 52 53 5c 55 56 57 58 59 &O 61 62 63 64 65 GG G7 60 69 70 71 72 73 7a 75 76 77 0E;090 0 9
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TDTAL ME~ITHO~ SflARE O~ ~LL CIGARETTES F- U cd w o.
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TOTAL FILTERED ~IEYTHOL SHARE OF TOTAL FILTERS ZS,0 I. 2o.0 ¢1 15.0 IC.0 5.0 ~O--O~O~.49 I~ ~ I t I , ~ t ~ T r t r r r I I f~ YEA8 5O 51 52 53 5~1 55 ¸.'56 57 58 5~ 6O 61 ~2 63 04 ~5 (~6 67 68 69 7O 71 72 73 74 75 76 77
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GRCWTH OF MAJOR MENTHOL BRANDS - I SHARE DF TOTAL CFGARETTES -- TOldl KOO1 .... Total Salem ,~ ..... Tota] Lrne Extensions '--' TotBI Comoan~ons i,. LU U C!. L,J O,. 12.0 PHASE I I0.0 8.0 6.0 4,O 2,O YEAR ~0 ~)I 52 53 54 55 6090 0L9 PUASE II PIIASE I I I
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GRO~,ITII OF HAJOR MENTFOL BRANDS - II SflArRE OF TOTAL FILTERS -- Total Koo] .... Totml Salem ....... Total Line Extcnslons • --. Total :ompanTons 2~.O PHASE I 20.0 15.O 10.O 5.0 I I I I I~__ YEAR 5D 51 ~2 53 5r~ 55 f~6090~0~9 f f I I I I l I f I t I I I I L~L__ I ~1.._1 I~_. 56 57 58 5~ 60 61 62 PHASE III ~--I I I I l I I l--r 63 64 65 66 67 ~8 69 70 71 72 73 74 PHASE IV I I l 75 7G 77
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EARLY HSTORY: KUOLS 1933 - 1955 Kools~ in~r3duced in 1933, was :he only menthol ci2arette of any illportance Far 23 year~. it ~as ~trodwce~ as a special purpcsc ci~arettc~ #remlum-prlced ($6.85/IOC0 ~ompared w~th $5.50fi00C for regufar brands), offering coupons. Until ]939, tkree times as math was spent on couFons as on advertising. Keels was positioned as a cigarette for '*Throat c~mfort". Th~ advmrtis~ng premised, ~Your throat will not 9at dry." The penguin wa~ u~od in th~ edvorti~in9 from the b¢9[nn[n9. Th~ ad~ also mentioned "Handsome qifts". By 1935, Keels achieved a 2.2% share of tPe market. It fell off to 1.7% by I~33 when a new ad campaign ~as launched ~ith the theme ~:For occmsion~l use - Keels for a change" ~nd "h botwccn ~ho othcrs, r~t your throat with Kool~". This ~ampai~n did net arrest the decline. Keels fell to a lo~ of 1.4~ in I~40 ~hen th~ tampa gn was dropped. Thus, durh9 the srucla] early years, ~ools' ~age was f~xed as a specialty cigarette For use at c~rtain times with an almost medicinal posit~onln~. Its strong m~nthol level sup- ported this posi~icnlng. in l~0, premium prlmm~ wmr~ ah~n~one~ and ~he slogan HSwitch from Nots to KeelsI' was First used, w~th the ~dd~t~on of :he phrase "S,lloke,'s Ha~k~' i~x l~l. Keels did quilt w~ll duri~ the war years, It w~s not seriously affected by cigarette shortages, and achieved ~ 2,3% share in I~43 when it dlscontTnued the coupons. Keelsm ~hare fell after the ~ar to l.~ n 1~47, at which t~me the pengulr acqulred a name (Will'e) and a voice which cooed, "Smoke KOOLSI Smoke KOOLS~ Smoke KOOLS~'~ Sales r~spondcd and by 1~4~, Keels had reqa ned its previous peak share of Z.2~. Thus, wfe~ the famous Reader's Digest article "How EarmFu Are C~garettes?" appeared in January, l~0 to kick off the Filler Revolutlo% Keels' sales were a~ [feit peak and rising. £6090 0&9 IO
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The early ef~ecEs of Lhc r~volu=ion s~ed to be helpful ~a Kools. In 1~50, it achieved new record share of 2.6~, ~hen in~r~sed further to 2,8~ in 13~1 and 3.O~ in 1952 Pa]] Mall~ a king size c[garettg Lhat ~ffered c×~r~ ~]]tra~ion by r~as~n O{ ]~s lenqth I~lfTIter~d tbrou~h ~in~ ~b~CQI'), ~as the only ot~er ~;Itered ~[~0r~:tB ~ing s~nn~ g~hs during Lhc~c years, ~n T~3, ~o~al c~g~re~Le ¢on~pti~n d~clined 1,~, regLl~r leng~ n~n-~l~r~ dcclln~d ~ a~d K~ls held steady. Kool~I ~dvert;~[ng the~ sh~c to I'D~n~t be chained ~o ~h~ ho~ a~ar~tte ~b~.II In 1~5~ a~d 1~5, when r~gula~ lengtll ~lon f~)=er~ dropped al~o~ 10 ~hare points e~n y~ac, Kool$ added a k;ng ~Tz~ non-filter and boosted its share ~o ~.~ ~nd ~.4 respect;rely. Agaln, only Pall Hallt ~lorlg no~-f~lt~r~, ~1~o managed ~ ~]n in sha~e. Tl:u~ through ~he ¢r~s~s ~hich set ~{ the gr~at gro~t~ in ~il~rs~ K~I~ ~tual]y ~]ned in ~a~ Continuing ~ o~f~r throat-~as~n9 ~ocln~s~ as an ant[dot~ to "hot" ~]gar~tte~, This quasI-~ed]cal appeal, an~ th~ ~n~reased ~v~rt[s'in~, ~hile e=fe~t[ve in increasing ~ts ~ark~t s~rc, ~lso ~ain~i~d a~d r~in~rced ~h~ Kool~I i~a~e a~ a ~ge~al~y ~odu~ ~p~e~li~ ~o that $p~c[a] ~eg~ent that ~i~ed :o ~vo[d '1throat d~N~sI' or ~Tshed to IIre~t their ~hroatI~ f~o~ "~ot~' Cigarettes. It r~alne~ For $a1~ ;n 1~6 to'find a ne~ p~s[t[on ~or m~nthol ~igarett~. 96090 0 9
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GROWTH OF KOOLS NON-FILTER BeFore the Filter Revolution To~al KOOL$ ~ KOOL$ Cigarettes Non-FT]~er ~on-Filter "933 lll.Z .5 .45 '934 124.~ 2.4 1.93 ;935 ]30.9 2.9 2.22 ;936 ]49.7 3.o 2.OO ]937 163.0 2,8 1.71 i938 165.4 2.0 I.~9 1939 17~,o 3,0 1.7I~ 1940 18o.2 2.5 1.39 1941 202.3 3,5 I173 I~42 229.9 ~ 8 2.09 I~4] 254.2 5.0 2,28 1944 2S0.5 5.S Z.20 I~45 268.2 ~.5 2.O5 1946 320.9 5.O 1.56 1947 339.O ~ O 1.47 1948 350.4 G.5 1.86 ~949 3S~.4 - 7.8 2.2O I~50 363.O 9.2 2,53 1952 39~.8 ll.S 2.9] ]~5~ 387.O ll.~ 2.~7 I$54 36%3 IZ.l 3.38 I~55 ~73.~ 12.7 3.3S Source: Haxwe]l 12
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SUHMJ~RY OF KDOLS~ AD CAMPAIGN THEMES 1933 - 195G YEARS AD CAMPAIGN THEMES 1933 - 1938 1938 - 1940 194c 1941 1947 - 1953 1953 - 1996 *~Thr~a t comFc r t,'I "Your throat will not get dr'/." ";-~r~ C~Up~)n$ brirlg handsome g~ts,'I "For occasTonal use - Kools for a change." "Jn beL~N tfl~ oLh~rs, 1~5t your throat ~ith Kools." "Switch fro~ HOt5 to Kools.'L "Smoker's Hack" Willie the Penguin: "Smoke KO,3LS! Smoke K30LS! Smoke K00L9!" "Don't be chained to =he hot cigarette hablt." $6090 0&9 19
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,r THE SALEM P~ASE 1956 = 19G2 In May of T9~, as the rush to filters was dzceTera[ln9 toward peak levels, Salem, the first ~e~th~l Filter, was intFoduceo ~pen;ng a new era for m~nthol ~ioarecte~. r~ the ~Tght ~on~hs of ]956, Salem ~¢hieved a ].o~ ~hare o~ the ycar'~ sales. Salem was positioned ~nt{rely dlff~rently frnm Kools and th~s dlfference ~n po~Itio~ing was c~FrI~ out ~oth in th~ ~dv~rt~ing an~ in the producL. Whereas KcOT5 had ~ee~ p~itlon~d ~ ~ ~pe¢ial purpose cigarette, S~lcm w~s pos~L~uned ~5 ~igarette for ~]~ o~cas~on~, ILS ad~ emphasized ro~a~ti~ outdoor ~oy-~irl scene~ ~rd ut~llzed the men~ho]~ not as a ~alIiative for ~r~at ills, bu~ for ~ts inherent plea~arable Ca~t¢ and cDolfn~ ~e~t~on. It~ c~p~ - "Eatem refreshes your ta~¢", ~'M~rl~hol fresh -- rich tobacco t~st¢ -- ~o~¢rn fTlt~Fj t~oi'~ "Take ~ ~uff, it's spr~ngti~e." Mot s~rprlslngly th~ campaign appealed to many women. So ~l~o d'd the product. its claims of eff=ct~wnes~ i~ supplylng throat easc ~u~ ]imlt~d iLs appeal. Salem was lightly m~tholated ard. therefore, mcra w~d~ly acceptable. T~¢ IF~h~ m~nthol g~w Salem ~n ~ur~ o~ m~l~ne~ w~ch m~e ~t, in e~, a new ~hesterfield(~ ~ns~o~ Was a ~rroEa~e for Camel)~ "There was n~ed for ~n acceptable t~t~ ~Itern~tiv~. The new f~l~er cTga~e~te$, wlth t~ir Migh~r proportions of bur]cy ard gcn~r~I]y ~tloli~r tastlng tob~c¢o~ were ~cou~tcr~n~ t~[~ p~blems. Salem's menthol ~ecm~d to satisfy thi~ n~cd ~or many ~moke~s. In addition, the connotations of m~nt~ol ~ a 9alliative for t~roat ~rr~tatlon and possibly as a ~e~ns of reducing t~e b~d eFF~ct~ of smok]n~ may hav~ also e~tcred I~. Kool~ filter Followed $aTem by ~ months, c~min~ out in ~ptember, ]~561 ~ut thI~ dec ~ot apparently chang~ ~nyth~n~ mu~h. (;G;OgOI O&9 IJ
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Keels lost .A ~hare points in 1956~ droppTng back to 3.0. IL stayed at that level, hardly budglng u~tll lgCZ. In 1957, SalemEs growth speeded up and renaln~d hlgh For 4 years, Thereafter, its growth slowed down. By T962, it reached its peak of 8.9 share po[nt~. THB intense growth of Salem Fl'aJll 1~57 thru 1~61 coincided with another ~]or development the Tar Derby. In I955, the FTC, reacting to conflicting claim~ as to tar and fHtration had impo~ed '*Cigarette Adv~rtls~ng 6~des" hann~g ~II ~a~tTo~ of tar, ~icot~n~ ~d ~il~rat~on ~'~h~n not ~staDlished by eo~peten~ sclentific proof", Thi~ put a stop to such claims in advertising. In July and August of 1~57, the Reader's Digest published two articles with Figures on tar and nlc0tlne mentlonlng Kent by name, The August article, w~tte,~ wlLh Kent's "~sslstanc~" . was practlcally an ad for K~rlc. In ~O days, Kent's sales l~apcd From 390 mi11ion to 3 billion per non~h. This article broke the dike and set off the Famous Tar Derby, Over thc nexC 4 year~, tar l~v$1s ~r~ drastically c~t, ~rlboro dr~gDe~ from 3~ mg. tar in ~5~ to Z5 ~. ~ 1955 and I~ ~g. in 1~6]. Winston and oth~rs fo]]~¢~d su~t. Kent dropped Fro~ 30 in 1957 to I~ ~ 1961. Several n~w brands ~lth very low tar Life, Duke o~ Durham, Spring - were introdaced acd did well, In mid 1960, the FTC ca'led of~ Lh~ Tar Derby, rTgidly prohTbiting tar and nicotine claims. Some of the new low tar brands disappeared. $oo~ ther~after~ the bra~ds s~opped redgcing tar leveTs and, indeed, hogan to r~ise them Kent, for ¢×ample, went from I~ mg. in 19~1 to %6 ~n I~63 an~ ~ in I~6. The FTC prohibition ended March 25, 196~ inltiatlng a new phase in "N;-F[ d0velopmen~. LorrIllard decided not to reduc~ Kentls Tar lewl again. Instcad it put out True. The Tar O~iby had one unexpected result - it sl~ed down and almost stopped the ra~np~gTng growth of filters. In 1957, F~]ters galncd ~.7 share ~o[n~s. 8y 1~61, th~ gain was only -9 share points, (See Chart) 00T90 0/ 9 Tq
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Full taste n~n-menthol filter~, wI)ich had 9alncd 2~ share points from T~53-57) a~tuaIly declined in 1958 and b~rel¥ r~covered by 1961, ~ven K~nt fell victim to the disease. It was durin~ these years C~ ~borto~ filter ~r~t~ durin~ th~ Tar ~orby that S~l~m m~de f~5 h~stor~c ~nt ~n ~h~r~. Furthermoret the ~ of Lh~ Ta~ D~hy co~ncld~d w~th tho end of S~lemls growth. After reaching ~ p~ share of 8.~% in 1~61~ S~Ie~ h~s 5~ayed The clear in~i~tio~ is ~hat~ ~5 the f~lter brands sharply reduced their ~ar Cand ~as~)~ they ran ~nto increasing consumer re~tanc~ ~hich curt~[]e~ theft growth. Salem off~red a viable ~a~L~ alL~rrl~LTv~ - a ~Tg~l~Lt~ witn mor~ tast~ r during thJ~ p~rlod. B~ckcd by very h~avy advertising~ it was p~opeIled inLo second pl~c~ in the filter market. Salem also reduced i~s tar during the Tar O~rby~ althou§h ~ llt~]~ itlor~ ~lowly. I~ r~main~d at all t~me~ at ~r ~lJflh~ly ~bov~ ~n~ton ~nd ~arlboro in tar lev~l. Thus, it mJ~h~ be poTnfed out that ~)em was ~[so losin~ t~st~, ~lthoujh it continued t~roughou~ to ~v~ ~h~ vital adv~ntag~ of montho[. In th~ lat~ 5~1~ S~lomls growth was affecte~ to some d~greo by [n~reas[ng co~potlt]on - notably from ~e~port~ another l~shtly men~hol~to~ cigarette, ~hich ~nt~red in )~57 and grew steadily to p~ak at 1.7 share point~ in I~E2. Like Salem, NewpOrt flattened after 1~62, then started a ~1o~ d~l]ne in tk~ late ~O~s. Al~in~ ~n~ ~prin~ wer~ introduced ~s HI-FI M~nthols in 195~. reac~d a peak of .~ shar~ ~oints jointly in 1~2~ f~attcnc~, ~h~n t~iIed off I~ke N~port Fn the I~te ~O's+ The other important menthol brand, ~ela~r. ~ntere~ ~n I~D ~nd followe~ a dlffer~nt ~a~ern." By 1~6~ rt ha~ a~hi~wd only .5 sll~rc po[nt~. I~ ro~e later in the 6D~ to 1.7, ald~d by a ~oupon campaTgn, a~d ha$ $1n~e de~][ne~ t~ 1.4. Thus, Sal~'$ fl~tLe~ing trond ir 1~62 ~as not apparently duo Lo m~nLhol competiL~on. 5alem'~ growLk had, ~pparentTy 6~n herght~n~d ~nd e×terd~d beyond its tern b~ the Ta~ Derby. When t~o Tar ~er~y ~nd~d~ nol O~Tly Salem, kut Newport, Spring ~nd Alpine a]] ~to~ped growlng. TOI30 OL9
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Total m~thols ha~ reache~ Ih.7~ ~f ell cigarettes ana 26~ of #11 Fllt~rs by )962. During all of these amazing developments, Keelst s~are ~ever budged. L[k~ Tareyt~ a~d CI~ Gold an~ Rcle{ghs~ ~iLh ha6 also put o~ filter llne extensions. Kenl~ q~ickIy Test mos~ of I~s non-filter buslness, but Failed Lo attract enough FITter bus~ness [o p~rmit growth of the brand, Evidently, most of the Keel non-Filter smokers s~itched over to f~lter Keels, b~ ~he ~e~ filter busl~es~ d{~ not 90 to ge~s b~ to Salem. /he Tar gerby had changed tb~ ~ituetioa in a ~ay which ~a~ to Become more favorabfe to Keel. AS ~oted~ ~alem and Keel also r~duced t~e~r tar (an~ ~ast~) I~vets ~iDb the fell~ ~Tgnifica~ ccnsequences: f, Salem, which bad been a legs Strong ta~tlng cigarette thaA K~ols, was ~o~ m~h ailder, Keels, ~hich had h~en to3 ~ron~ Tel rT~?SC, was no~ less strong an~ ther~o['e~ had been made more ~idely acceptable. OT90 O&9
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)- LUl ul % -j
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t ~ --~, F ~" II .g Lu i-- 35 3O Z5 2O 15 lo 5 III YEAR 5O 51 52 0" 901 0 9 ~3 Exhibi~ TAR LEVELS OF LEADING FILTER 8RAN05 IL l~,,R OERB'F-- !',,, 54 55 56 57 58 59 60 -- Winston .... Marlboro ....... Kent ,/ ,/ • 61 6Z 63 64 65 66 6/ 68 69 /C /I 72 73 7a 75 76 77
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Exhibit TAR LEVELS OF LEADING ~IENTHOL BRANDS uJ 35 3O Z5 B0 15 10 5 YEAR ~O 51 52 ~oTgo~o&9 53 54 --TAB DERBY-- \ • • 55 56 57 5~ 59 GO 61 62 ~3 64 65 ~6 67 68 6{) 70 71 72 73 'h ;~ 76 77 2O
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HI-FI Menthol~ (ex. Koo]) Koor Full Taste Non-Henthol Fall ~al] All Othe~ Non-Frlter CHANGES IN SHARES of a'l Cigare:tes Tar ~erby ......... I 1951 1952 1953 1954 1955 1936 ]997 195U 1959 1960 196l 1962 '96) .I .7 ,3 -.6 ,6 3.1 5.9 .4 .I -.8 .4 -.2 1,I 2.0 2.D 2.6 1.7 1.4 l.O 3,3 .2 .2 ,0 -3 ,I -.L .I .D -.I ,I -,I ,0 .3 .I .2 ],0 /.I 9,6 8,2 3.9 -1.2 .4 .9 ,3 I.l] 1.4 2.D 2,~ T.6 1.7 .5 -,A -,9 .0 .4 .3 .6 .C -.2 -2.1 -2.6 -3.7 -lO.O -ID.O -9.2 -8.8 -6.8 -3.8 -2.8 -.3 -2.~ -2.6 90Tgo o&9 71
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N C ~l °°° °° °°°° ~J la w L~ e~ ~3 v , omI 0 ~I L. L E ........ k. E~J 0% o • * ....... , L~ L L~ u c L m , u • - m ~.N:E QI ~_
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FTC TAR LEVELS Of Leading Cigarette~ (by mq,) BRAR~ 1968 1949 197o 1971 1972 1979 1374 1975 1976 Winston 21 2T 20 19 Z0 20 19 20 19 Harlboro 21 20 20 20 18 18 1G 18 18 K~n~ ]7 16 16 19 17 16 16 16 17 Sale~ 2i 20 ]9 19 !9 18 18 19 1~ Koc] 19 18 18 18 17 16 17 17 17 Dates Publishsd 1968 October, 1968 1973 August, 1973 1969 November, T969 197~ SePtember, 1974 1973 0cLober, 1370 1975 September, 1975 197] August, 1371 1576 November, 1976 1£72 January, 1379 ~ote: Cigarettes purchased for ~estlng ~6 nonths before publication date of reports. z3
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", ¸'ALP YEAR5 i956 - 1559 1959 - 196i 1962 - 1964 [969 196G 1967 1968 - 1970 1971 197Z 60T90 0 9 SUMIIARY 0F SALEMIS AD CAMPAIGN 1956 1972 AD CAHPAIGM THE¢!ES bo~-~iF1, ci)ol outdcor Scenes "SaIcm Fefreshe$ your ~asteII H~@nthol fresh -- r~H toSacco tasce -- rnoderm Filter~ too.II 'ITake a puff, [tI~ sprlng~ime.' l'Spec[al hi,h-port, itV paper breathes ~ew mi'dn~ss i~to the 5mo~e.,~ new Freshness Tnto th~ flavDr...air-soft~ns every ptff." !oCher brand5 made $1milar c1~im~) "the Special p3per th~C breathes: {nv]$ib]e porous openlng$ - br~athe~ in fF@&h a~.~ ~$~]e~ w~IGo~os you to ~ w~e~Fu] world Of ~o~nes~ a ~und~r[wl worTd OF ~r~shn~5~. S~1~m~s ~oftne~s ~resh~$ your faste.H llltl$ the wonderful, ~onderfu], wonderful w~rl~ oF ~]em cigarettesII IITry ~ometh[ng differcmt ~or a change. Tui'n to Sal~irl fol a t~Le ~hat5 s~ringti~e fresh." (appeal Co wom~n) '~p~Ip~Lud] ~pr~rlgtlme" with ro~@m[~c bGy-~Irl scenes in springtime settings. l~Try the ~lavo° ~hatl$ ~prin~t~mc fresh. S~]em re~rc~c~ yOUF LaS£C.I' "~ich ~obac¢o ~aste - mentho] Soft tas~,r' proSl~m/solution appioa~h wiLh sJr~k~rs w~h tired ~as~e F1ndhg Salem a good tasting cigarBt£e. ~'New 6upe~ King-~iz~ Salem, too." (v~ry ~imil~r to Kool) rlyou c~n t~l~e Salem out o~ ~hc ~o~ntry~ but you c~n~t ta~e the Country OUC OF 5~]em.I' "Th~ One cigarette worth makin~ longer" I'~alk th~ 1~ng w~y home ~n~ meet the nelgbSor and her 4o9' "Spr[ngtim~ t~sts Even Longer" "Sprlngti~e, It H~ppens £very Salemr' "rt~s Only ~a~ural - Natural Men~ho1" "The Lcng, Long Springtime" HNatur~l Henthol. Not th~ arti~icTal kTad. Th~'~ wh~c glve~ SaTem a tast~ thatl~ n~ver hars~ or hot.'I "S~lem refreshes n~tura]]y!'p (F~male 51ack fashln9 de~ign~r~ "I changed ~o,..Ripc-n-R~a4v N~uraT Menthol SaI~m" 2L
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F YEARS 1957 19~8 1955 1962 1969 1964 1969 1966 1967 1960 - 1971 SUHMARY OF NEWPO~T'S Ag CANPAIGN 1957 - 1972 AD CAMPAIGN THEMES "rlch taste -- with a touch of refreshing mlnt -- Newport never tires your taste'1 "reFreshes while you smoke" (boy-girl a~ oceanslde) "Ocean-breeze freshness of super-porous MTcrooore paper" "moro refreshing to begin with - pore refreshing ~11 the way" "Soothln9 cool- ness of natural m~nthol - a refreshing hint oF mitt" UNelvFort Smokes Fresher" dropped The hint cf ~int - emphaslzed n~turel menthol as opposed to synthetic "Newport Smokes Fresher'~ and "Tastes Better Too" "Ready to try a great Fre£h taste?" "Newport tastes fresherH "and [~st~s beLieF than ~n)' other menthol clBarette" put down strong menthols which "drown eli tobacco tast~" "If you're disappointed with the new 100mn cigarettes, try a Newpurt I00. They're never harsh or rough." "D~y after day, Newport is the smoothest-tasting menthol cigaret[e." "Brlgbt new pack,..coo] new Plavor.,.smooth ne~ tlp,H ~'NevIport announces a n~_~.w wave of flavor]" "Just enough menthol ' "Jus~ llke th~ s~a, Newport keeps inviting you back" 'rYou can t~ste th~ refreshing ocea~ breeze {n every puff.". (in black magazines) "Bold Cold" "Cool aindt bo]d. Newport is e wh01e new ~aj of menthol smoking." l'Newport...a fct more than cool.'~ "(Not) Too much... (Not) Tee l[ttle...Just right!" "Ne~port n~kes your world ~aste good" "Menthol flavor alive wi~h pleasure* AFL~F aI1~ if smoking isn't a pleasure, ivhy bother!" . i g5
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THE KOOL$' GROWTH PHASE 1963 T974 The new tast~ situation fo:]owlng the Tar DerLy favored Koo], but it took some time for th[$ to re~ster, Kco] ~ st~I[ t~e ~e~}~] purpose brand ~or p~ople w~Lh dry Lh~odL~, In ]~60~ KO0]~ began to make a poin~ of it~ heavier menthol land, therefore, more ~astel with a nc~ theme: "Smokers, ~hen your t~ste tells you ~ts t~me rot ~ ~hange..com~ up.,, come u~.,.comc all the ~y up to th~ menthoT i~a~rc oF Kool." In I~62 [~ began the ~'extra ¢o0]n~5" theme with the "Froblem/SoIu~ionI' ~¢~ni~ue. In i~ KooI5t sh~re 5~arted ~0 m3ve up~ reaching 3.2. It gre~ at th~ rate of a~out .5 share p~Ints a year from I~6~ thru ]967, and ~n aver~ ~? .7 sh~re poTnt~ a yea~ from I~7 thru 1974, Wh~t s~rted the sh~Ft to Kool T~ 1963-19G5? KO015 had done ev~r?thlng po~s~]e to cle~n up it~ ~pp~rance, rid its~IF ~ it~ old ~arrow ~mage - but ~ely had remained ~ ~tr~ngly m~ntholat~ clgarctte ~ qulte ~i~tlnct fEom Salem~ thus giving Ko01~ a taste aJvanta~e in a market wherein ~ste levels had ~ne do~ dr~tlca]]y in ~ ~h~rt time. In ]~6~, there was a large market ~0t~ntla] for ~entho]s. S~]e~ ~d the oLhers had done much ~o ~trod~ce ~nd popularize ~nc broadem t~e marI<et for nen~o]5. In ]~6~-1965, two ~th~r ~rend~ ~f importance ~re g~therin0 momentum: Z. Use of marijuana by young pe0pl~ was growing particularly ~m~ng the children of the ~ost w~s EaSy b~m, Th~ ~Id~t of th~e were just beoin~ing to enter ¢o]Ie9~ tn 1~G3 19G~.
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The U.S. Government has estimated that there ar~ currently 13 million user5 of marijuana, This is between I/4 and I/5 of the 55-GD millinn cigarette smokers. Accordlng to a 1972 consumer survey~ hcwbVel, 52~ of mal juana users aged 12-17 also smoked clgare~tes compared with only ll~ of non-users. NO hard data are available on the brands of cigareLteS used by smokers of po~ but menthoIB would appear ~o hold an above average share amon~ ~ii~h smokers. This would be conslscenc wi~h Koo1~a positlun a~ tll~ Fdvur~d ~u~rette of young a~ok~r~, Keels also became the mnst popular c'gacette among blacks, perhaps partially for the same reason, but p~rhaps also because of the image of the wo"¢ "cool" in the blacks~ vocabulary. These two :rends picked up steam thrn.gh the 601s, largely because of the sheer hcrease in the number of this new generation ent~rlng the smoklng ages and because of ~he growth in black consciousness. The growing avaiIabiliW of marijuana and the development of the counEer culture were Factors, Vieanam also added :e marijuana use and was a vital factor. An increase in Knols~ advertising and promotion to blocks and youth i~ the fate 60's speeded up these developments. Studies among blacks aged 16 and Over in ~en metropolitan ar~as sh~w Kn~l~' %hare rlslng from 14~ in 1968 to 37~ in 1974, 3~ in 1975 and 1976, th~n dropping to 33~ in 1977. (Acnng black makes under 35, Keels' share was close to 60%.) This suggests that in 1974, some 4,5 share poi~c~ out 0= KOOlS' I0 was accounted for by blacks and that about 70~ of the total k-point share g~n in keels between 1968 a~d 1974 came from the gains among blach~. Other ~urveys indicate tha~ Keels~ share among 16-25 year old smoker~ a~vanced from ~.O ~n 1966 to about ~.5~ in 1968 to ahoLt 16,0 in 1974 then decliKed ~o abo~t 14.5 in I~7~. The rise in Keels~ share in the 16125 a~e gFOLIp over thi~ period could have added over 2 share points. (Kcol~' 5[ld/~ alllU[l~ uld~l si/~ok~[s ~as actually higher than among young smokers until 1968. In the Z5-40 age group, Keels' share advanced only moderately from 4,2 iff 1966 to 67 in i57% anion9 smokers over ~0, from 4.1% to 5.6~*) Between 3 and 4 mTlllon po~t-war Ea)ies entered tee £n~bing-age papular{on annually star~ing in 1969. Since then they hav~ [llcr~ased their share of all s~okcrs b~ about 2~ loints pal yeal and, in 1974, accounted Fo~ more than one-third of all smokers, lhis post-~tar generation ~zas a~trac~ed :o boLh ~drlbulo end to l~ool~. Marlboro held the ~ame 5 ~hare from 1957 thrn,gh 1964. Therea{tar, it marched up in tandem with Keel. : TgO£O&9
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This poet-war generatTon is the key to understanding both the ~>~r~od since r963 and the Fu:~re. It i~ ~mpo~tant Lo note the spilt ~[tllhl ~t. Marlboru haJ a wh~e, ~lighCly mQre middle C~ass or[en~atio~. Kools was ~be cigarette of the Hacks and the counter ~ulture of Lh~ 60Is. It was pre-eminently also ~ mascu:in¢ cigarette. Thus ~t rer~alne4 completely dlstinc~ fro~ the other menchols. The 1ead~rs oF the pos~ ~ar baby boor. 9~,efJL~of,. n~ 27-31, are shrFcing theFr attitudes. They are ~ovJng strongly to ]ov/-~ars - a trend that nlust he exDectec to continue. These 27-JI lea~ers of ~he pos~-w~r generation have Iitt]e ~nFILe~ce on the 13-17 y~a~ olds now ~tarthl9 Lu smuke, fL a~pcars ~ba~ ther~ will ~e a ne~ battle For the new generation. Jt is smaller in ~umbers re~lec~[ng ~he lewer ~rth rates of the 60's, but just ~s I~ke]y to demonstrace i~dep~nd¢~e as ~ts predecessor. Kool~ i~ facing n~w risks a~ b~th ends o~ the age ~p~ctru~. It ;~ attempt~n9 to stem the outflow to l o~v ~ars by o~f~ri~ Io~el t~l I[ll~ ~L~rl~Url~. ~ultaneousl~, programs capable of s~renq~hening Koo]s' image among the new generation of starte's, particularly 5lacks, ~re ¢r:tlcal to na~ntainlng Koolsp overall market posT~ion, From these data. it Ws possT51e to attribute most cf ~h~ share growth Tn Kools between 1968 and 1~7~ to share ga~rs ar-~ng blacks and young smokers. A~ ~ haw staled, we believe th~s~ factors were i~portant in ~he earlier year~ of this phase also, NeverLbele~, nu~ all of th~ 7-point share growth fro~ ]963-197~ :ould ha~e co~e from th~se group~ alone. Some p~rt must be attributed t~ trend~ among adult ~b~te ~ekers, the pr~e motivation ~volved beln~ a d~;r~ For more La~te in their Cigar~Lt~s and a gr3wi~g acc~p~ tahoe oF nentnol., This phase a]~u ~ncludes the f]rs~ appearance of line extensions, tn I~6~ Be~son ~ Hedge~ added k~n~ size ~enthcl, a line extension which dld I~ttle volurn~. In 1~66 and 1967, sewral ~ajor brands adds4 m~nbhol line extensions and the practTce ~f Tntroducln9 ~ new brand w~th a ~enthol con:pan'on was started. By i97~, such line exten- sions and comparl~ons a~c~unted for ~,7 s~are points. Of this, 1.6 snar~ points w~re ~i-F[ 2 brands. Tke line extensions and companions accounted for about half of the 9-~oTnt gaTn i3 menthol's share between 19~5 ~nd I~74. 28
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Th~ advsn~ of these ,:: ;Ithol line extension; and companions h d no percebtlble effect on KoolsI growth during this period, Salem and Belair remained 1~val durlng thls period. Howevert Newport, Alpine and Spring de~l~ned sharply. Tho atrcngth of gools ~th blacks arid youths who sho~ed relatively ]lttlt Interest ~n the Hi-F~ Z produces, or, indeed~ in any o~ ~h~ ~rands wlth m~nthol line ektenslon~ of c0m- panlcns, ~hielded Kooll from their I r~act. Howeve r, ~hey r~y ~I1 have r~tard~d the growth o f the o~he r Fre~-sc~ndl~ ~rands, M~NTHOL BRAND SHARES Tot Menthol 17.9 26,9 +9.0 Tot Line E×¢ ~ co~p .~ 4.7 ÷4.4 Tot Fr~e Standing 17.6 22.2 +~.6 Kools A.5 IO.3 +5,B N~bort 1.7 .9 * .8 Alpine .~ .3 - .2 Sprin~ .~ .l - .2 Bei~ir 1.~ 1.6 ~ .I O~hcrs .3 .5 + .2 points, Salem ~nd aft For the I~ year~ from I~62 thru 1974~ Kools went Up 7.4 share 0~h~r fre~ standing brands to~ther r~se .I sh~re points. ~nd line e~ten~io~s ~nd ~om~nlo~ cla~m~d 4,7 ~har¢ polnt~° RoolsI shar~ of menthols increased fro~ 20~ ~o }B~. Sale~ and a!l other fr~e standing bran~s fell from ~% to ~b~. TTgO O 9
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SUHNARY OF KDOLS~ A8 CAHPAIGN TIIEHES 19S6 ~o Date YEARS 1956 - 1957 19~7 - 1959 1558 - 1360 1960 - 1962 1962 - date AD CAMPAICN THEHES (symptoms) "Throat raw?" ='Got a cold?" "Switch from Hat~ to Keols." "Break the hot cigarette ~abit." "SNow-Fresh Kool...Amer~e~rs most r~fresh~n~ clgacettJ,mm (a rca~tlon to Salc,O "Smokers~ when your ~ste tells you it's ti~e for a change...come up... come all the way up t~ th~ m~nt~ol maglc af Kool." (based on the idea thor thc public knew Kools was a heavier F~nthol) "Extra coolr~ss" (Problem/Solution approach to convey KOOIS' taste pro~Ise of Pearler menthol) (~p~clal promotions aimed at Spanish, Negro, and ~awallan markats ~rom 1967 on. Extensive black radio advertising ~n 1970.) ¥90 0&9 3o
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KOOLS' $FARE OF SMOKERS By Ag~ and Sex 19e6 - 1977 WAVE DATE TCTAL MALE FEMALE 16-25 26-~0 41+ I 11/66 3.9 3.7 L i 2 310 4.2 ~ . 1 2 3/67 4.2 4.3 ~,D 3.5 4.3 ~,LI 3 ~/67 4. r 4,0 4.2 3.8 Z~ I 4,2 4 3/68 ZL2 4.~ 3.~ 3.8 4.1 4.3 I1/C,8 4,7 4.9 4.4 4.B 4.8 4.6 7 11,/69 5.2 5.6 4.~, 4.9 5,7 z~,8 8 5/7O 5.3 5,6 4,9 7.3 5,3 ~.5 9 11/70 5 7 6.S ~r.I 8.4 5~6 L.9 10 ~,~7~ 6.3 7.0 5.3 9,3 5.3 5,2 t] 11/71 6,6 7.3 5.E, IO.S ~.5 5.2 12 ~/72 6.1 G,8 5.2 9.9 5.6 5.1 13 11/7Z 7.O 7,1 6,6 13.2 E,.] 5.~ 14 5/73 7.9 8.5 7.] 14.8 6.8 5.B 15 ]1/73 8.0 8.~ 7.0 16.6 6.6 5.5 16 5/7~ 7,5 8.4 7,3 15.3 6.9 5.4 17 11/7,' 8,C 8.9 6.9 17.9 6.6 5.9 IB 5/75 7.2 B,3 6.2 15.2 6.1 4,? T9 1!/75 7.5 8.8 G.~ 15.7 ~.7 4.9 2O 5/76 7.8 8.8 6.G 14.9 7-P 4.7 2~ 11/76 7.5 ~./ 6.3 15.9 ~.3 h.7 2~ ~/77 71 8.0 6.1 13.5 ~.7 4.9 Source: National Consumer Surveys
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KCOLS' MARKET SNARE AMONG YGURG SMOKERS/DLACK SMOKERS Total Market {Maxwe;l) I~-~ Age Group (S;mmonslTGE) BLACKS -~ Smak~rs Study) All Respondents Males 16-3~ [84MM) Males 16-~4 (99N~) 1967 1968 T969 f973 1971 1972 1973 1974 1975 1976 1977 5.4 6.1 7,O 8,0 8.~ 8,9 9,7 I0.3 IO.9 10,O 6.8 4.1 ~,6 ll.4 18.9", 12.5 16.4 17.6 16.4 19.3 14 27 90 37 38 38 33 29 5~ 46 55 5O 50 4S -- I 3 5 ~ 6 6 *This hlgh Figure was apparently a statistical fluke. &TTgOI O&9 32
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Z OE L~ r~et BY ,3EZ ;',:~] AGE S ];]G~ClUDS 5O 4~ 30 ' j ~TTgO~O&9 196E 1971 1972 1974 Ig75 197& 1977 ~oJrc~: 9lack Study
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~r"~ ,~ ........ ,.~, TOTAL BRAN_.~D ADULTS W~nston 14.4 Kent 5,0 KOol ]1.0 SalEm ~.4 41Ahr~Lb 5HAKES OF LEADING CIGARETTES BY AGE GROUPS 18-24 25-3~ 3~'~9 50-64 6S~ 26.1 17.~ B,5 7.0 5.9 13.6 18,] )3.0 13,B 9-2 2.6 3.4 5.9 5.6 8.c 19.5 i2,9 7,4 ~.2 7.~ 8,3 7.~ 9.1 ~.4 &.1 Source=TGI Sprlng 1977 report 6TT30[:0~9
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5HAk~ OF CIGARETTE SHOKER$ BY A2E--1976 B~I~D DATA H~AND~ TOTAL 18-24 25-34 39-49 AOULTS 5O-64 65~ Salem 5.8 Salem T00HH 2,6 Benso~ ~ Hedges Herthol 1,3 ~arlboro Henthol 0.5 Saratoga Menthol 0.3 VirHrnla gllms Menthol 0.7 BelaFr 1OOMM 0.5 B~laTr Henthol 1.] Kool Filte~ 7,8 Kool IOOMM 1,7 I<ool ~on-F~l~er 0,2 Carlton Henth~! 0.2 Lemon Twist D Pall Hall Menthol O,4 Silva Thins Menthol O,I Kent Henthol 0.5 Ha~ Hcn~hol O.I Newport 1,0 Newport IODMH 0.2 Spring O.2 Tru~ ~entho] D,5 Ev~ HenLhol 0,2 L & N Henthol D,I 5,8 2,5 1.4 I,l 0.3 T.2 0,2 0,4 14.7 1.8 0.1 0.I 0 0 0.2 019 O~ 1,8 0,3 O,Z 016 0.4 0, I 5,6 6,0 2.2 3,1 1.3 1.5 0.4 o.3 0,2 O,5 o,9 0,7 o,6 0,8 O,9 1,5 9,~ 9.1 2.5 1,9 0 0,3 D.2 0,2 o 0,1 0,9 O,5 O.I O,1 O,3 0,9 0,1 o.2 1,2 O,9 D.4 0.~ o.I O,4 O,4 O,6 0,1 0,1 O,l o,1 1.2 0.5 0 0.I 0.3 1.3 3.7 1.0 0.5 0.3 0 0.4 0.I D,4 0 D,B D.I O.I 0,4 O.l 0 I.I 0 0 0 0.6 1.6 4.~- 1,2 0,4 0,8 0 1.1 0 0.1 0 0 0.5 0,] 0.9 0 0,1 Source: ~GI Sprlng 1577 Report Og'l:90 O&9 39
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9~ 6703U6121 v3~p oI ~LGt S~V1-~07 30 H±~IO~ 3H1
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. ........ FnEE STANDING BRANDS, LINE EXTENSICNS~ AND COMPANIONS TRENO OF FRE£ 5TANDING #RANDS Free Stand~ng hrandsD whlch h~ve always accounted for most of menthol volume, reached t~eir peak of 2z.2% share of a]l cigarettes in 19711 ard declined to 2].5~ in 1976. Keels also reached Its peek share ~n 1974, held in 1575 and deslined slightly in 1976. All free standing brands except Keel reached a peak of 13.2% of all cigarettes in 1966, had de¢l~ned to 1],5~ by 197~, Line extenslon~ peaked at 2.8~ of cigarettes in 1975, declined to 2.7~ Tn 1976. Conpanlons also reach=d 2.8% in 1975 but increased further to 3.6~ in 1376. In terms oF share of all filters, mcnthols presen~ a different picture. Th~ g-ew rapidly as a share of fil:ers from 1556 until 1963 when they reached a 26.~ share, then held at about this level ~ntll 1966 when trey began a slow increase to 31,2% ~n 1974. T~ey held near that level in 1975 and 1976. Free stand~ng brands hit a 'eve1 of 2G.2~ as a share of filters in 1963, held at near this level until 1966, then declraed ~o about 2q~ in 1967 and have held that level ever since. Keels peaked in 1974 at 11.7~ of =Ht=rs, ~eclinlng to 11.2b in 1976. O~her free standing brands as a group peaked at 21.8% of filters in 1563, and declined to 13.1% in 1976. 8Z 90£O&9 37
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LINE EX]ENSIOR5 AND C(I~IFA~,IONS AII menthol brands wer~ Cf~ sta.dlng uutll 1963 wl~eq Benson & Hedge5 Tntroduced the first m~nthol lin~ extension. At ~hat ~m~. Benson & Hecg~s ~as a vary s~all brand and the re~ menthol !~ne e~ension ~ith sa~es of 2 b~lllon accounted fo" 71~ of the total brand volu~e. The real growth of merthol line extensions and companions was <Tcked off in 1966 by the Benson & Hedges lon~-lcngth m~nthol and by ne~ ~enthols by Luc,y $trlke, P~il Hall and Har]boro, In ?~67, ~inston, L & N, Chesterfie d and True added menthols, in I~67j these new menthds accounted fol 2.7~ Shdre of ~11 ~[galgtCes alld 13,~g oF all menthol sales. By 1974, they had grown to ~,7~ of all cigarettes and 17,7~ of all menthols and by 1~7~, 6.2% of all cigarettes and 22.~ of all menthals, Initially, mo~t af the non-free standing merthnls consisted of lhe extensions, hut th~ companions had grown steadily and b~ 1976 accounted ~r I4.2% of menthol volum~ compared with ~,8~ for line extensions, LINE EXTENSIONS The deEin[tlo~ of line extensron versus componlon IS in =o~e case~ problemat{cal. Thus~ True ~nd Vantage menthols are defined a~ companions~ even ~houg~ the man~o]$ followed th~ brands' intraducLi~ns¸ by a year. Benton & Hcdgas mcnthol long5 are d~flned a~ line extensions e~cn though they al~a foIlo~ed " the introduction of ~enson & Hedges Icngs in l~65 by abDut a year. The reason is that Benson & Hedges, as a brand~ had been introdaced in 19~5 ~nd the klag-si~e menthol had appeared i~ I~63. Th~ fa~t that Benton & Hed~e~ really began its rapid rlse ~ith the introcuati~n of the long size in 1965. however, makes the long m~rthol appear to som~ extent like a companion. In ge~era], the meothol line extensions appeared lon~ after the parent brands h~d ~chieved their grc~Jth, h almost all such Ca~, th~ m~nthoI ]~ne e×t~ng~on accounted fcr a m~r ~II~r~ oF Lhe ~idld'5 vo1~li~e. Tills ~5 tlu~ oF P~I] ~I1t ~drlbolO~ ~i[15toEl, L g ~ ~rld Kent, Ir ~ach case, the menthol ilne extension had achieved only 2 to 4~ of ~he brand's volume. ~B
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"sJO~llJ u] MP5 ~M uJ~)~ed ~4~ O~ SWJO~UO~ S!41 "5UO!Oedwo~ 3ua~aJ jo g~.l~4~ I0~ I~!dA~ ~43 q~]M spu~q pa4s![qe~sa 11~ ~J~pIo jo ~uo!~u~x~ ~U!l Joj aJeq~ ~.~ te~!dA~ ~q~ aaEd~o~ aM ~! ~ll~!~ad×a ~!~e~eap sI Jo~ • 1~0~ puE'Jq ~o oJe4~ [oqlu~u u! puaJ~ fi~!se~u! u~ u~ou~ ~AEq ~E~U~A pue SU!~£ e^[!~ ~r41 '~puoJ~ ~J~ U~oHS ~AeH spueJq ]enp]A]p - suo!sua~xa eU!L ue~ a~n/~^ pueJq jo ~4s J~46:4 ~llea~u~6 e Jo~ p~uno~ ~e4 SUO!UEd~o3 • ~n{o^ ~,pue~q ~u~a~d alaq~ ~o $~'~ ao~ ~uno~;e suo!su~xe OU!I I~q~u~ ~gL~I Ul ~IIea°~O '4~o~6 ~i~o~IJe3 ~o uol~od JoFR~ ~q~ ~o po!Jaa ~ bu!Jnp p~ed!3!~aed lo4~u~i~ ~q~ sn4~ "~L6I e~u!~ PaJ!Tb~E uaaq pe~ aJ~4~ pu~q 9Zgl aql ~o ~o~ ~4~ ~u Z~ e~ u!eS~ 461W AtleUe!~da~e sllOH~Uam aqa ~o~ uosEaz pappe uE S! U~o~ 03 pueJq o4~ ~o [~odde aHI aO~ 9Z~[ u! pa~uno~ uoJ~u~%~ ~u![ io4%u~ ~y~ '~^~oq 'sa6peH ~ uosua~ ~o ase~ ~q~ uI
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f 35.0 ~IEIJTHOL SEGI4ENTS SHARE OF ALL CIGARETTES Z 30.0 25.0 ~!! Lfne £x~nsTo~ ~nd Ccmp~nion~ 20.0 ~ Koo] ~i~ ~ ~ ~ ~ ~ ~ ~ F~e S~anding • ~1 Except ~ool i~ • 5~0 s~1 f ~j~ II ~lli I ~l__~__j__I~,,~.,,..l,__.~g,..,,.~ Ill~p~i~ i ~0
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u 35,0 25.0 2g.O 15.0 IC.g 5.g I I I YEAR 50 51 ~2 PENT~{OL SEGrIE[~TS SHARE OF TOTAL FILTERS Line Extens [ orls and Compan i on~ Koo I % / Free Standing l/a/.x Except Koo! i 53 $4 55 56 57 58 $9 6] 61 62 63 64 69 66 67 68 6B 70 71 7Z 7] 74 75 76 77
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MENTHOL ~EA~DS Year of Entry ef the Brand end First MenLhol Style CEEE STANDI~O LINE E~TENSIONS COMFAN[ONS ls[ rlencho1 lst Menthol [st Menthol Bra~__d S~yle Rr~nff ~tyle Brand ~tvle Kools 1933 1933 S~lem 19~E I~56 Newport 1957 1957 Alpln~ 1955 1959 Sprin~ 1959 19~9 Bel~ir 19GO 19~O Mont¢lalr 1962 196Z Benson & Hed~cs 1955 Lucky Strike Before 1926 Pall Mmll 1597 MarIEora 1995 Winston 19511 L & ~ 1559 Chesterfield Before 1925 TPu~ Silva Thln~ Virqinia Sli~s Dotal Eve Ke~t 155~ Vantage Carlto~ 1964 [¢ebe~9 1972 1972 Twist of Lemon 1573 1973 Saratoga More Bow Fact Nerlt & T90 O&9 1963 1%6 1966 1566 1567 1967 1967 1966 19~7 1967 1968 196~ 19G8 1~6~ ~965 1970 1970 1970 1970 1971 1972 1975 1575 1975 197S 1975 1575 1976 ])76 1976 1976
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GROWTH O: BRA~IDS OFFERING MENTROLS OF ALL CIGARETTES F~ee StanHing Memth~l~ B ~nds wlth H~nthol Line C~cns~o~s Brands with Menthol Companions To~al Offerlng ~e~thol 14.7 18.2 15.6 21.5" 27.3 5o.I ~9.9 4.5 lO.6 14.7 h5.5 74.3 82.1 MEN-HOL OF BRAND TOTALS Free Standlng ~enthols Brands wlth ~enthol Linc'Ex~ens~on~ BFandS with Henthol Companions Total Off~r"ng ~e~thol I00,0 130.0 3.6 I00.0 42,1 I00,0 I00.0 4.2 5-6 34,2 32.5 31.3 ~3.8 g I90 O&9 4~
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67030K'1.~ k'z[ ['o] o"8 Z'Z L'L ['L L'9 l'9 5'~ 5"~ - 8"G ~'ot L'G ['6 ¢'G ~'G ~'G o"G o'ot G"Cl o'~ Z'I ~'~ )t'~ o'ooi o'ooi o'ooL O'COL WOOL O'OOi O'OOL 0"001 O'OOt O'COL O'OOt O'OOL O'OOL O'OOt O'O~t L'L~ ~'L~ G'9~ 8"c-~ L'~ G'[~ ~'[T ~'z~ ~'LZ 4"0~ Z'~I 5"Lt 9"91 ~'91 L'~I G'O] O'gl L~I ,<1'11 9"Ol G'~ 1'9 O'L g'f /'z 47'9L ~'91 )1 St O'~l 5"~L O'll I'll ~'ol g'll 7"11 l'~ +J'l 0'~ O'Z 6"LTL 7'+19L 6'8~L 8"~4l ~'9{l ~'8~1 8"l~l ~'~lil ~'TLL 9"70l L'~6 ~'l~ 0"[9 {°zt/ 9L ~L ffL L'[I ~'z1 L'OL ~'9 ~'9 l'h ff'[ ~'~ C'Z O'g 17"~ ~'~ 19 09 5~ 9~ LS 95 SS ~S ~5 C~ 15 05 suoiu~d~o0 suolsua3x3 ~ui7 6~ pue~S o~J~ 70HIN3~ 7VI01 suo!ue~o3 suo!su~Ix] au!7 5u]pu~S o~ 30H±N~ 7~I01 $3113~V~I~ 77V ~0 suolued~o3 SUOISU~×3 ~u!7 6u[pue~s ~aa~ IOHIN3W 7V101 ~3113~13 JO SN017318 s~l~+aeO!} l[V io % sol~o~5!3 ]o suo!II!8 CSu!pue%5 aoa~) 70H£N3N 7~I01
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~'~,~~!!7~7~-~' ~ "~¸ ~ ~ I 0 I,I I ~ 1.1 1.5 I• o~Tgo~o&9
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~0 ~I 5z 5J 5~ 55 ~6 ~hare of all ci~e~ttes 19Io - 197~ I r I ~OHP~UlQ~ lrl~e Gree~ KSF 5ilv~ lhJns 9~llr~ 1 EVe ~I~M .2 ,h ,~ .~ , .~l .~l ,~ .] Vantage KSF ~1 .I .I .I .I .I More I~O~H ,I ,~ ~ct IC~F .~ Mc, rl t I¢~F ,I T~L C~l*)~;~n~ ,5 ,7 I,+ I5 I..~ I9 20 ~.1 2,~ 3.~ T~Tgo~o~9
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BP, ANO~ TO[ $alel~ TOt ~r~ft Tnt Alpine TOt Spring T~ Berber ~ot t~n~cl~ir F~ Iceberg Yot [~t of L~non For Fete Sta~d~n~ ~NT~roL SU~Ry sh~re ~r all filters 1~5~ - 197G 5.1 12.1 15.2 1~.5 Z2.2 26q 25.~ ~62 2~.176.] ~5 I t],S 2tl.Z 2~.0 2z~.2 2].~ ~.~ I0.~ 11.2 11.7 11,7 tl.2 1.0 .~ ,~ I.@ I.I 1,2 .I .I .r .I .I ,i 2.1 z.o z.G I,~ I,B I.~ ,i ,z .I ,0 2~2 2~,5 z5.6 2~.~ 2~.j .7 .7 ,5 .~ ,Z .r ,I .1 ,I .I ,i .i ~ ,r .8 1,0 I,O f.o 1,2 I,3 1,5 1,6 1.7 ~,7 ,2.1,1 ,I.r .3.5.~.S.5.q.~.},~-3,2 ,5.3.l,2.1.1.2,2,2,2,2 .7.7.6.~.~,~.~,~,~.3 .~,2.2,2.2.1.1.1.1 .2.].2.2.2.2.1 ~.1,1,2.3 It LINE EXTE.SI~N B ¢ ~ KSF Lu:ky SIr[ke KSF PaN f1~11 ~IH Harl~oro Gcecn VinsLo~ ~H ChesterField KSF Kent 0~ ~old~n L[~t~ Carl~o~ ~SF ~e~e $~nd~ng B,O IO,B I5,E 17.$ :0.~ 21.: .~1 ~ 2n.l~ Z02 19.2170 16,6 15[~ Ih.S
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~I COP~rOPJS Tr~Grcen K~F Fr~ Grc~n 99MH Sllwa Thin~ ~M Eve 99~M N~ ~r F~t KSF ~r;t KSF Tot ~p~nlons 56 ~7 ~8 ~ 60 195& - )97& .t ,'~ .~ .) ) .) .~ ,1 .) .t :2 .I ~1 17. l~2 19,9 !Z.2 2~.~ 2~.3 2~,.) )6.~ ~5.8 ~7,2 2/.6 ~0.2 20.~ ~8,0 ~0.0 2).3 3C),0 31.2 3hi ]1,3
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(. o ...... ~ ~1 ° ~ "1 ............. F+ -~l'!-J+
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:': " NE EXTENS~OP~S 0~" ',ION-MENT} :JDS Unit Eales in Billions BRANDS PEROONT MENTHOL OF ALL CIGARETTES' B &H TOTAL MENTHOL TOTAL RSF 99 MM Menthol LUCKY STRIKE TOTAL MCNTIIOL TOTAL KSF 99 MM Life Menthol PALLHALL TOTAL MENTHOL TOTAL 61 62 63 64 65 6& 67 68 G9 13.7 Ia.7 16.3 ;6.7 17.9 19.1 20.4 21.3 22.2 .7 .8 2+8 5.7 6.9 9.3 T5.6 2.0 2.o 1.6 1.8 3.7 2.o Z.O 1.6 1.5 .7 .3 3.C 71.4 3~.I 26.2 19.t, 23.4 41.2 39.7 35.3 3~-7 32.9 29.6 238 .-6 ,5 .5 .3 .2 2.1 2.1 71..__20 72.o 73.0 71.B 72.~ 73.o 6B.~ I .0 2,0 7o 7._.!_1 73 79 7._L6 7._Z_ 23.3 23.9 24.7 25.8 26.9 2715 27.7 16.2 15.7 17.2 18.8 21.O 23.1 25.2 26.3 26.2 4.3 4.3 4.8 5.5 ~ 7.~ ~ 9.1 9.5 • ~ .3 .3 -3 .3 .3 -3 .2 .2 3.E 4.0 4.5 5.2 ~.2 7.2 8,2 8.9 %3 26,5 27.4 27,~ 29-3 31,0 32,5 33.7 34.5 35.3 22,1 I~.2 15.I 13.7 13.2 12.~ ll.B 10,I 6,2 .2 .2 1.8 67.O 61.~ 58.0 54.6 53,5 52,6 61.5 50.0 45.6 2.0 2.C 2.0 1.7 1.7 1,7 1.5 1.5 1.3 99 MM Menthol HARLBORO TOTAL 24.1 25.0 MENTHOL TOIAL Green Menthol ~INSTGN TOTAL 58.8 G4.C ~ENTHOL TOT~ 99 H~ Menthol L e M TOTAL 25.8 25.~ ~L TOTAL 99 MM Menthol I .O 2.0 2.0 T.4 2.9 3.0 29.4 24.7 27.1 31.4 34.4 3%3 1.7 I.i -7 6.4 3.2 1.8 69..~ 68.Q 72.0 7~.3 81.8 84.0 27.2 22.~ zl.I 20.0 2,5 Z.7 3.1 3.2 19.3 ~8.1 1.3 1.0 6,7 5.5 2.0 2.0 1.7 1.7 1,7 1,5 1.5 1.3 3.2 3,4 3.1 3.2~ 3,2 2.9 3.0 2.8 44.1 51.4 56.3 59.8 78.8 86.1 91,4 94.2 .5 .6 ~ ,9 I.] 1.3 1.3 I.~ 1.0 1,0 1,1 I,I 1.3 1.6 1.4 81,O 81.9 84.0 95.7 87.9 90.2 9!-.4 90. I 2.3 2.0 1.9 i.9 t.9 2,1 ~ 2.8 2.4 2.3 2.2 2,2 2.3 2.2 1.9 15.7 15.8 14.4 t4.O 13.2 12.2 IL2 9.6 .9 ~ .7 .7 .6 ~ ~ ~. 5.4 5.1 4.9 5.0 4.5 4.9 5.4 4.~ CT90 O&9 50
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MEU k ~ . LINE EXTENSIONS OF NON-MENTHOL )S Unit Sales in B~I1ions BRAND~ 6] 62 63 64 65 ~,6 07 68 69 70 71 72 73 74 73 76 77 CHESTERFIELD TOTAL 25.6 21.0 20.2 17.0 ;5.5 15.3 14.6 11.8 IO.8 10+9 s.4 9.0 8.3 7.4 6.~ 6. MENTHOL TOTAL KSF +5 .I .] .2 .i .] Ment:hol 3.4 .B +9 1.8 1.1 I.I KENT TOTAL 35,2 36.4 3~.9 31.I 30.5 30.4 30,4 30.0 27.5 27.h 29.2 29.5 29.9 29,1 26.9 27.8 MENTHOL 99 JIM ~ ~ ~ 1,1 1,1 I,c .7 Golden Lights -5 Menthol 2.9 4.~ )-7 3,7 ).~ 3,7 ZI.2 OARLTON TOTAL 1.6 .9 ,9 ,9 1.0 1.2 1.2 1.4 1,9 2.5 2+9 5.0 7-$ MENTHOL TOTAL KSP .l .3 ,5 1,3 1.5 Menthol 5.3 12.0 T7.2 26.0 20.5 TOTAL BRANDS 282.2 285.1 289.2 274.2 279.7 233.2 289.5 289.5 277.9 279.9 284.8 297.6 30~.1 316.5 319.g 316.5 TOTAL ,'~ENTHOL 2.0 2.0 1.6 ~,I ll,6 11,2 IO.2 II.I II.8 12.9 Itl.O 15.4 16.8 16.9 MENTHOL -7 -7 .6 I+B 4,0 3.9 3,7 4.0 4,1 4.3 4.5 I~,~ ~-3 5+~ 51
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.0 O iJJ ~I ~I°~: ..... r. i ~i-'°~' °~i~ r~L ,=- -:,. ol~ ~ -i~ ,- ~. ~ ~-j~ .~ :I,~ ~ ~I~ ~ ~I'° ,~ ,~ ~ ° ~I~ _:'~ .~I~ ~ :I~~ ~ ~P " " -I° "~ "I~ ° ~I~ o --:I ~I~ d ii! :
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BRANOS MORE TOTAL MENTHCL TOTAL 120 ~M Henthol NOW TOTAL ~ENTHOL TOTAL KSF Ngn~hol FACT TOTAL HENTHOL TOTAL NSF Mentho] HER[T TOTAL MENTHOL TOTAL KSF 8 Mentho] TOTAL BRANOS WITH MENTHOL COHPANfO~S TOTAL BRANDS TOTAL MENTHOL MENTHOL ME,Ilk ' 3;~i .',I : ONS Unit Sal~:; in BiI]lons 6~ 67 6_~L 6_!_9 7..j_o 7_j_I 72 7_._L 7._L~ 7~ 7._.~_6 777 ~.7 s.4 z.~ 44.7 L4.4 3.3_ l.l ]3.3 1.2 30.0 8,5 28,2 2.5 B.6 12.& 20.3 Z4.7 3T .2 33,0 35.5 39,3 49.4 64,3 2.7 3.9 7.0 S.l s.s ]o.~ ..~ ~z.7 m~.~ Eo.9 ~14~ 3Lo 3~.~ 32~ 31.7 32.~ 32.~ 32.~ n.6 32.s ~T90~0~9
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HI-FI AND MENTHOLS The great grcv~th of Kent, [he first Hi-Fi cigarette, was see off by the Reader's Digest articles of July and August, 1957. In 1952 and 195~, Kent gained a total of 7.5 share po;nts. This occurred during Salem's great initlal surge, galem rose 3,4 share points in 1957 and 1998 a~d contTnued ~o gain an additional 4,1 share ~oints in 1959-I~61. As has beeq noted, the Readerls giges= article5 set off a competitlve Face to r~ducc Jar levels tha~ lasted until 1~60. During this time, the consumer ~as bombarded with messages regardlng hlgn filtration. He was a;so receiving very heavy advertislmg on Salem, the menthal cigaret~e. Betweem 1957 and ]961, virtually all of the 13.6 share point gain in fHters ~ent to either m~nthols (primarily Salem) or Hi-Fi (primarily Kent), A consumer in 1957 and 1958 had to make e choice - elther a Hi-Fi cigarette or a menthol - not both, In 1999~ Alpine and Spring appeared, which offered the combination of Hi-Fi and menthol in one cigarette. However, they achieved little success, Thus the split becween menth31 and Hi-Fi continued. Smokers were forced into a trade of= of Hi-FI vs. ~emthol. But was it indeed a trade off? AS we have noted, Salem was perceived as a relatively mild cigarette, and menthol itself had been promoted for years for soothing thrDats irritated by smokln9 and was the ¢~gar=tte used by many when they had colds, 6£ 90£O&9 54
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Thus Salem and ocher mench0ls could be regarded as equivalent to a Hi-FT. Th~s may be the reason why there wa~ ~ llttle attraction t~ard$ t~e early m~n~hol Hi-F!'s - namely, that Salem, Hewport eL aI w~re consid0r~d, in them3elves, to be equlva[~n~ t~ ~i-Fits. Jf ~e accept current defi~iti~n~, Hi-Fi ~enL!lo]s co~sTst~n~ o~ A[p~n~ ~d SFrin~ ~ccounted For only 6 to 7~ to total Hi-Fi vGl~me untl T~6~. 0r/ the o~h~r hand. ~he ~enthols ros~ quickly to 2~ of full taste fil:ers by 1961, 31% in I~63. he!d at that level untTl 1971, then rose to about 34% in ]~76. The later Hi-Fi smokers were not Forced tD choose between menthoT and ffT-Fi. True Green appeared in ]567, gaining 22.3% of Truels brand volume -or s]ightly above the 20.4% overdll menthol share of al] cigarettes~ but belo~ menthol's 27.5~ share of filters. ~entho1~s share among H~-Fi 2 cTgargtles rose slow]¥ to 27~ In I~74 In line with men:hal's averal~ share of a]] cigarettes hut again lower than menthol'~ 31~ shar~ af filt~r~. By 1976) hc~ever, mentholls share of MiIF] 2 volum~ had moved up sharpTy and ~as in line with menthol's 3[~ share of filters. In their f~rst Full year, 197~, hi-Fi 3 cisa~[te~ ~h~wed a 27~ menthol ratio - sIIgh~ly below the overall menthol share of 27.7%. The ~enthol smokers ~eem again to ~e ~nitially a b~t s}o~ in ¢omin~ to the Ni-Fi's. It was clear that th~ pMicy of introducing the new Hi-Fi 2 and 3 brand~ wi~h menthol com- panions had wiped out th~ dicho:cmy butween ~r~r~Lhul ~nd Hi-Fi. It al~o svggest~ ~h~t th~ HI-FI 2 and 3 5makers have 0bout the s~m~ proporti~n pref~rrln9 menthols as do all smokers. OIrggO O 9 ~C
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r" ~..i ~r~ • ~-~ MENTXOL 1976 ALL CIGARETTES No~-Filters Filters Full Taste Filters HT-FI I HI-FI 2 HI-FI 3 27.7% 31.3~ 33.B~ 30.5~ 27.1~ ]:V£90~O&9 56
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• ,t~ ,',~ ~r~ TREND I~ PERCEN~ ~I~THOL FULL TASTE VS. HI-FI 35% 3O 25 ZO 15 YEAR I Full Taste FWlters .... HI-FI 1 ....... HI-FF 2 t,I ,,,,~,~o Hr-FI 3 , -. o • m. Mon-FHters * I" ~ ~t" 4.,~" i i i ; I ; .... . /~, ,-_.,-,;;---:-; 50 51 52 53 5~ 55 56 57 5~ ~ 60 6] 62 63 64 65 65 67 68 6~ ?0 ]1 72 ]3 14 75 76 ~'T90~O&9 77
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£ ( :If -II :If J% ° ql z .- :II °~"~ "F°° °I .... I .... F°~ °i~ "I .... I~°° "I .... I .... 1 .... i°° °E .... F .... F° °F~ "t~ w- P" -F- -F" F~ °I°- ~I° :~- F" oF° °F" T-° ~-i° ~1~ ~1~ ~t~ ~!~ ~1-~ ~1 ........ ~I ° ~-~ ~,I -z '~I~°. ~.I '~ I ~o ~I~ ] (_ ~ 0 e}o e) o o ~ ~ C'~ iN ~T C': Cb p r~
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TCTAL ¢IC~ffETTES Renthol Non-Menthol Menthol TOTAL UN;ILTERED ~enthol Non-Menthol flenLhol TOTAL FILTERED tlenthol Non-Menth~l Non:hol TOTAL FULL TASTE FILTERS Menthol Non-Ment hol tlen', ho] TOTAL FIILL TASTE~ Menthol Non-Menthol Menthol TOTAL HI-FI hten Lho i Non°Merit hol lle~ Lho I MENTHOL I SUH~IARY (Unlt Sales ~n B1111ons) 62 63 64 65 66 67 E8 69 70 71 72 73 74 79 76 492.8 506,2 496,7 513.~ 520.8 522.2 927.9 515.8 523,7 535,7 553.4 576.2 591.0 598.6 605,9 gZ.5 2~.J ~-~,~ 91.9 ~./ 106.6 ~ II-i'Zi~- 121-'~TT~, 12T~'8~-,2 13-~.~ 14-~ 158.9 164,6 420.3 423,9 413.7 421.3 421.1 415.6 415.6 401.4 401.9 407,5 416.5 427,4 432.1 k34.0 437.6 14.7 16.3 16,7 17.9 19.1 20.4 21.3 22.2 23,3 23.9 24.7 25.8 26.9 27,5 27,7 218.8 210.8 191,6 I@2.2 163,4 1t~4.1 135.0 H9.7 107.6 97.6 91,8 88.2 83.7 77.4 71.7 3.2 3,0 2.9 2,9 2.] 2,5 2.5 2.1 1.8 1.6 1.5 1.4 1.2 I.I .9 215.6 207.8 1887 179.3 160.7 141.6 132.5 117.6 105.8 96.0 90.3 86.~ 82.5 76.3 70.8 1-5 1.4 1.5 1.6 1.7 1,7 1.9 1.8 I ,7 1,6 1.6 I .G 1.4 1,4 1,3 274.0 295.4 305.1 331,0 357./4 378,1 352.9 396.1 41G.I ~38.1 461.6 486.0 507.3 621.2 533.8 79.3 ~5~'T-'~9,0 97.0 Io-6-CTF. I IO9"-6~'7E, I-T~,3 12o,0~~ 197.7 163.5 204.7 216.1 229.0 242.0 2E0.4 274.0 283.1 263.8 296.1 311.9 326.2 940.6 349.6 357.7 366.8 25.3 26.8 26,3 26,9 27.1 27.~ 27.9 28.4 28.8 28 9 29.3 30.2 31.I 31.4 31-3 224.2 243.1 244,5 271.I 295.2 313.8 326.6 ~ 3010 347.4 362.1 378.8 398.9 411.7 419.~ ~o6.7 ~ 79.9 ]TE77~ 9-~-.~'I01-~'I~-~. T63.0 109.7 I15,1 122,7 131.7 140.5 144.9 137"3"~'4-. 158.3 167.5 166.6 395.8 202.8 217.4 224.8 227.0 237.7 247,0 256.1 267.2 271.2 274.5 269.3 29.4 31.1 31.0 31,2 ~1.3 30.7 31.2 31.2 31.6 31.8 32.4 33.0 3t~.1 34.5 33,8 443.O 453.9 ~36.1 453.3 458.6 ~57.9 4~l.& 449.7 455.0 ~59.7 470.6 487.I 495.4 496.8 478.4 6"6~T.I 7~.6 7B,8 87.6 eS.l ~.~ 10~,1 105,1 111.5 ~2 133.1 141.7 146.0 ~ 373.9 375.3 357.3 365.7 363.5 359.0 357.5 344.6 343.9 34~,0 3~6.4 354.0 393.7 390.8 340,1 19.6 I7.3 18.1 19.3 20.7 21.6 22,6 23.4 24.5 25,4 26.4 27.3 28.6 29.4 28.9 b9.8 52.3 6~.6 599 ~2.2 64.3 66.3 G6.1 68.7 76.0 82.B 89.1 95.6 IO~.B I27.1 ~.~ ~ ~3 ~ 7.~ ~ 9.3 10.3 ll,~ ~2.7 ]9.7 i-~7~.2 ~-FE-~- 29-~TT. 46.4 48.6 56.4 55,6 57.6 56.6 5B.] 56.8 58.4 64.5 70. I 73.4 78.4 8].2 97,5 6.8 7,1 5.9 7.2 7.4 12.0 12.4 14,1 I~,0 15.1 18.3 17.6 IB.O 18.3 23.3 *Includes NOn-F{ 1 ~ers 5~
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62 MENTHOL HI-FI SUMMARY (Unit Sales in Billions) 63 64 65 66 67 6~ TOTAL HI-FI 49.8 52.3 60.6 59.9 6Z.2 64.3 66,3 Non-~en~hol 46.B 48,5 5B.4 55.6 97.6 56,6 98,1 Menthol 6.8 7.1 6.9 7.2 7.4 12.O 12.B MI-FI I 49.8 52*3 59.~ 59.O 53.8 51 3 52.8 Menthol 3.4 3,7 LTL~ T5 ~T6 3,7 4.2 Non-Nen~hol ~6.4 48,6 54.~ 54.7 54.2 47.6 48.6 M~nthol 6.8 7.1 7.1 7.3 7.8 7.2 8.0 HI-FI 2 (INCLUDING ULTRA) 1.3 .9 ~.4 13,0 13,~ Menthol 2,7 3.8 Non-Menthol 1.6 .9 3,4 10,3 ~O.5 Henthol 20,8 ZZ.2 HI-FI 2 (EXCLUDING ULTRA~ 2.5 12,1 12,5 Menthol 2.7 3.0 NQn-Henthol 2.5 9,4 8.5 Henthol 22.3 24.0 ULTP~A HI-FI I.B -9 .9 q 1,0 Menthol Non Menthol Menthal HI-FI 3 Menthol Non-Menthol MentEol 69 70 71 72 73 7B ]5 76 66. 68.7 76.0 82.8 89,1 95.6 tOl.e 127,1 9.~- "1£.3 11.5 12.7 15.~ /7.~ 1~,6 29.6 36.8 5E.~ 64.5 70.1 73.4 78.t~ 83,2 97.5 lB.! 18.g IB.t 15.3 17.6 18.0 18.3 23.3 51.! 5¢,.Z 51 ,6 52,3 53.1 5~.7 88.7 41~9 3.1 5.3 5.o 5,o ~ ~CT ~.~ 46.5 45.1 86.3 47,3 48.1 L6.8 44.2 3~.2 9.0 IC-Z 10.3 9.6 9.4 9.3 9.2 6.3 13.0 18,5 24.4 3O.5 36.O ~3.9 53.1 7C.8 ~" 5.5 7.O IO.I II./ 1~.3 11.2 ll~.l 18.9 23*5 25.9 32.~ 39.6 43.2 25.~ 23.8 ZZ.5 22.9 28,1 26.7 23.4 3~.5 13.8 17.3 2~.0 28.(, 33,5 41.0 ~8.1 60.2 10.0 12.9 17.5 21.7 24.7 29.8 35.3 41.2 27.5 25.4 23,9 24,1 26,6 27,3 27.4 31.6 1.2 1.2 1.4 1,9 2,5 2.9 5.0 10,6 ,I .3 .5 1.3 1.6 .9 .9 .9 1.0 1.2 1.2 1.4 1.8 ~.~ 2.8 3.7 8.0 9.3 12.0 17.2 26.0 24.5 1~.4 ~.9 10.5 27.1 F 90 0 .9 6O
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TOTAL MENTU2L HI-FI H~-Bt I Spring Kent 99 ~ (H) Silva Thins Tot HI-FI I HI-FI 2 (EX. ULTRA) KOO] Mild 2~lem Light Iceber2 Tru~ Green KSH True Green SSHH Dora1KSH {M) . 2ant~gE KRH (M} Feet WSM (M) I Tot R;-FT 2 (e×. Ultra} ULTRA HI-FI Gerlton KSH (M} Now KSM (M) Tot Ultra Hi-Fi HI-FI 3 Merit KSM Salem Lon2 Lights Kent Golden Lights (M) Tot HI-FI ] 9Dl:90 O&9 59 6o 61 62 63 HENTH2L I b'l BI~NDS (Ulnlt Sale~ in Billions} 64 65 ~G 67 6~ G5 70 71 72 73 7h 75 7G 77 2.0 5.0 3,3 ].4 3.7 L2 ~,3 4.G 7.7 R.2 5,3 I0.3 11.5 12.7 15.7 17,2 18.6 29.6 1,0 2.6 2.5 2.5 2.3 2,6 2.7 3.2 2.6 2.G 2.3 2.1 1.9 1.8 1.7 1.5 1.3 1.0 1.2 .~ .8 .9 I,~ 1.6 1.6 1.4 1.1 1.1 .8 .7 ,6 .5 .5 .5 .4 .3 .B 1.3 1,1 I.I I.I 1.0 ,7 ,5 1,5 1,5 1.5 I.G 1.7 1.8 1.8 1.7 2,0 3.2 3.3 3.4 5,7 ~+,2 4,3 4.G 3.7 /L2 /LG 5.1 5.3 5.0 5.0 4.9 4.5 3.7 1.0 2.8 3.2 3.G 4.2 0,2 .1 l.O 1,3 1.2 ,B 2,7 3.0 2.6 2.3 G.7 2.~ 2.9 2.5 2.4 2.1 ,I ,8 ,~ 1,2 2.1 2.2 2.2 2.1 2.3 2.3 2.0 ,6 .8 1,0 1,4 1,9 G,It 2.7 3.2 3.8 4.4 5.5 6.5 9.8 11.2 12.2 15.0 .l .3 .5 .1.3 1.3 l.l .I .3 .5 1.3 2.6 2.4 1.0 .3 3.9 61
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MENT~OI, TAR AND T~$TE CLASSIFICAT[0~ BY TAR AND HENTHOL LEVELS Each tar Iovel ~e~d5 to be viovlod scparatcly when analyzing menthol levels. Whem this ~s done a Toglcal ~cherne for ¢l~ssif,/ing the menthcl brands for whJch we have daLa utillzes the Following IIctltt~n0 points~': Tar Levels Menthol Levels 15 - 19 mg .40 or more I0 - 14 and -35 - .39 5 - 9 .3O - ,34 Unc~r ,30 The following table shows how tile brands for which ~e have daLa fit i~=o this ~lassifl- caLion scheme. Although It daes rat cover all brands, it Hoes Indicate the major clusters of ta~/menthol levels onccan bc useful for analy~i~. Kools is properly seem as being Tr ~ class by it~e]?, distlncL from Salem, Newport and Bela~r. All were formerly in Lhe Lo~ M~nthol cla~f~caLion b~t all ~ved up closer to Kools. }~ools ranks ~ower Jn men,hal than a small but $Tgnigicant cluster of brands, the Very H~gh MenLhol ° Full Flavor graJp. Th~se ¢fg~r~ttes oll have a modern, chIc image, $~re$$ ]o~Hs ard h~v~ a~ abcve ~ver~go ~poa] LO ~omen. At the HT~Fi 2 ~r I~T, 9an:age and True have fl~% menthol lev~Is wllile Salem LI~IIL~, Doral and Kool Milds are relatively lo~ in ~enthol° There is significant volum0 at both levels. At the HI-FI 3 tar level, the p~eferre~i manthol I~v~1 ~e~m~ to ~ ~bOVe i~O~ menthol. K~OI Su~er Light Kings, however, is at the lower ~ools' m~nthol lev~l.
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f-" :~SSIFICATIOR ~F HERTHOL CIGARETTES INTO TAR/HZNTHOL SEGMENTS MENTHOL LEVEL Hediun Low V~r LO,~ TA ~ LEVEL lSmG ÷ lO-l~mg 5-grog ,tFuTI Flavor) (HI-Fi 2) (Hi-Fi 3) Virginia Slims B~nson& Hedges 5i]va Th[n~ Fools Salem Newport B~lalr Vantage Kent Gldn Lights True FOol Super tl~ht Longs Herrt Kool Euper LighL Kings Salem LFghts Dora] Fool Milds *MenzhoI as percent of tobacco w~ight PT9ORO&9 ~3
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BEOWN & WILLIAMg0N - LOEISVILLE DOCUMENT CONTROL PROJECT PHOTOCOPYING RARTANCE SHEET AT THE TIME OF REPRODUCTION, Tile FOLLOWING NOTATIONS WERE t~lAOh: DOCU~ENT C(gPIE~ ARE IN THE SAI,IE SEQUENCE AS THEY APPEARED IN THE ORIGINAL. DUFI ICATE DOCUMENTS APPEAf~ED IN THE ORiGiNAL PAGE NU~,IEIER(S] MISS:NO IN THE OP,,IGINAL. POOR QUALITY OEI(JINAL. OVERLA'{ ITEM COULD NOT 3E REMOVED ~VlTI~OUT DA~,~AGE TO THE OP,~C,I HAL. NO D(DCUMENT~% ~:~,,E FOUND WITHIN THE ORIGINAL: ( ] FILE FOLDER. [ ) REDROPE EXPANDABLE FILE. ( ) HANGING FILE. ( I E~VELOPE. / ) OTHER ISPECIF'f] DOCUME~,T COPIES V/ENE REPROP~UCEE) IN COLOR TO PERMIT CORRECT INTERPRETAT ion;.
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~9 G?O30GI43 - ~sJg~ ~q~ ~q P~LLl~Un ~3aL Oq~Lu c Ll!J ueo pueJq p~otalsod gL3~Ja~$!p V - spu~Jq ~ I~-.H ~0~ O~LO^ pueJq ho uol~o~o~ Loq~u~ ~qL ,spu~q ~u JO~ m~ou ~q~ u~q a^e~ Je~ e ~utod e ~noqe ~e ~L!pe~s ~s~ ~q~ +~9~ u! ~4~ 8"~k e F~q~e~ ~L '~o p~eLS ueq3 p~ssed m~tes '9~L ~g~do$ u~ ~ll~ e pappe S[OO~ "~t ~o~ ~u!~!e~ aq~ju e P~!h o= p~aat ~70HiN3H AO HI,~O~
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~TNOL PERCENT OF TOBACCO WEIBHT Brand 1966 1967 T963 1970 1971 1972 1973 197@ 1979 1976 1977 ~OOL "l~ing Size ,34 .36 .36 ,36 .36 ,35 .35 .35 .36 L~ngs .36 .37 -37 .38 .58 .38 .38 .38 .38 ~Id~ • .32 .3Z ,32 .32 .32 Su~r Lights Kings .96 Super Lights Long~ ,4~ BELAIR K~n~s .2~ .28 .28 .28 .26 .28 .27 -33 Longs .28 .Z7 .27 .27 ,27 ,28 .27 .33 Salem Kings ,27 .26 .26 ,29 ,~6 ,27 .26 .2B .30 Lo~9s .27 27 .27 .25 .28 .~8 .~8 .27 .30 Lights .36 .34 Newport Box .26 .26 ,26 .31 ,30 Kings .23 .29 .~9 .3~ .31 B & H Longs ,J3 .38 .A~ .4N .~4 .N5 ,~3 .4~ .43 -~3 .46 A1p~ K~ngs .31 -3~ -3~ .36 .IF~ ~oral King~ .29 .33 -33 .~7 .36 .31 .34 Pall Mall Long~ .42 .36 .~3 .41 ,44 .40 ,4~ .3G $1]Yo Th~n~ Long~~ ,50 .40 ,40 .~5 ,~2 ~rue Kings .40 .4O -33 .~o .3~ .41 .40 .49 ~e~t Longs .43 .34 .2B .31 .23 .Z~ .27 G~lden L~gh=~ .48 M~rlb~o King~ ,41 .~O .~8 ,43 ,36 .38 .43 Vlrghla $11ms Longs .4~ .~O ,44 .43 .44 ,46 Winston Lo~g~ .3C ,25 ,25 .25 .31 Vantage King~ .34 ,44 .40 .45 ,42 .42 Meri~ K~ng~ .44 ! O T90 OL9
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,, MENTHOL, TAR AhD TASTE CHARTING THE POSITIONS OF THE B~AN3S The chart sho~vs the relative positTons of the various menthoT brands in terms of tar and ~nthol levei~, r~ also sho,~s some movements in rec6nt years. Thus Salem ha~ mowd closer to Kools' menLhol level although still remainin~ lower. This accords w~th ~alemls increasing ~fRorts ~n the youth ant black market. Sale~'~ tar I~vel has been higher than Kools' The chart suggests that in terms of total t~stej th~ two may be compa~able~ ~lLhough Salem lily derive more of i~s tasLe fr~rl toba~ while KColS derives more froE~ menthoI. This use of ~e ch3rt~ however~ highlights a pr~ble~ which affects the ~e~ Io~ tars particularly - namely the effect of additives and th~ tobaccos used on the Ilamou~tI of t~ste of these ¢~garettes. Merit is a case in point. Merit's menthol level of ,44~ ~ould tend to classify it as a Hgh menthol product. How~verj if w~ accept Merit's clalm that it has tae amount of taste oF a cigare:=e ~i:h 60% more tar {I.e. 12.8 mg, instead of 8 mg.), then Merit Menthol becomes, in effect, a lightly mentholated cigarette. ~his is illustrated by the chart. The effect of the extra taste is to move Merlt's point to the right as shown. The~recically~ then~ Me~t Neqthol shoul~ Be perceived as similar =c a 12,8 mg, tar cigarette with .275% ~en~hoT. ¥h~s may be ~rue of the new low tars in Reneral. 65
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Thert is a striking coincidence between the grovJth o? m~nthols mnd the growth of filters - Sugpe~p that these two tren~ ~re ~elg~ed. "C-Dne bypothes~ is that menthols ~et ~ deveI~p~g need for prov~d~9 ~a~te ~hen ~he tobacco tast~ or ~garette~ was being ¢h~n~ed or ~educ~d - ~.e., when fil~ers came ~n a~c 1~torp a~ t~r {and tasteI levels ~ere b~i~p icducc~. Insofar as th;~ ~s true, the growth of ~i-Fi ~ ~i~h their ne~ taste~, r~present$ an "~port~t ch~rg~ w~]ch could ~f~ect m~n~hols. protect e~in~t th~ h~rmfu] e~fe~ts Of tobacco. It~ "coolness" ~ug§~sts that it provlde~ ~n ~ntidot~ t~ the ]rrlta~ng ho%n~s and the ~crid ~k~ of burnin~ tobacco - and possibly m~im]~ the d~ngers. ~oI~' ~dvertslng ~layed up th~ ~sp~¢t. By ~e second hypothesis, menthols ar~ to som~ ox~nt, ~ form of 1'perceived Hi-Fi'~t' - and tha~ ~ctu~lly ~ tr~n~ ~a~ from ~ull Strength ~oba¢~o was b~in~ m~i£~st~d throughout the la~e ~0'~ ~nd 6C'S by Ch~ s~ead~ly pro~<~ng proporC'on oF m~nt~ol ~lu~ pi~F~. Aglan, the 9rowth oF H~-~i 3 would seem likely to affect mentholI~ prawth. Another ~actor ~h2th ~FD~rently paIys an importan~ role ~s the par~llcIT~ bet~e2n the growth of Kools v~i~k th~ growth of black consclousness th'ough the 60's and 70's. Firefly there ~ the po~slbie c~nnectlon wlth the growth of marij~ano. T~e ~rend$ in the m~hol market require ~pec;~l an~lys~. ~ --): ' "
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A NOTE CN THE CONSTRUCTION 0; THE CH#RT The vertTcal dimenslonl "Net Hcnth¢l Levet" is ~llLeNJ~d [0 provide a rough measurement of th~ absolute a~ou~t of men~ho] delivered to the smoker. The tar lave/ ~ used as ~he means for adjusting fop the effec: of filtr~tio~ ~md ec~ation. The tar level is multiplied by "Henthcl Index" (~hich is the ratlo of "~ menthoV' to .36) tn estimate tee "Net Menthol" dcliwr~d Lo the smoker. This ~Ssume~ that - ], The amount of t~r in most cigarettes ~s about th~ s~me. 2. The ~ffec~ of Filtration and acra:ion IS to reduc~ both tar and menthol in equal proportio~. 3, The amount of :obacco in the cigarettes is about the ~ame. Theoretically, the effect of ~ddltfvcs Is to give the ¢]garette taste edulvalent to a cigarette with more taP. This ~oes not aflect the amount of menthol Cel~vered. Therefor~ the effect oi this chart is to move the position of a clgaret~e to the rlght. If we could ~stimate t~ amount of taste a~d~d In terms of equivalence to cigarettes ~Ith X~ more tar, we would have a chart shewing the t~ste pos~tions of ~Pe brands. Th]~ ~Ould hulp us in visuellzln~ taste segments 1:90 ,069 66
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r~ET R~P~TN~L LE~'EL a ~7
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99 W~k 70P,1N3N-NON 670aOG1 ; ; !~O~ ~0~ ~0~ ~0~ ~08 ~06 ~001 ~0 3~VH$ S,70~:IN3W 30 HlgO~9 3H1
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HI-Fi (2) AND ffI-F] 13) MENTHOLS ~e~r introduced 19~7 True Menthol ]359 Benson & Hedges H/F NenthoT 195~ Doral M~nthol 1971 Vantas~ Ncntilol 1972 * Iceberg 1972 ~* Xoel ~lds 1975 Carlton Henthol 1975 ~* Selem Lights 1975 Now Menthol 1976 Fact Henth~T 1~76 Kent Golden Lights Menthol I~76 ~erit Menthol 9 T901 0 9 1976 (Billions cf C[garettes) 3.01 .15 2.37 -75 4.24 t.47 7.21 1.08 .L5 2.~6 25.52 * Menthol Brand - ne~ Hi-Fi 2 ~* Line ~xtenslon of HenLhol Brand into Hi-Fi 2 # Menthols in total as percent of ~otal Hi-Fi 2 P~rcent f~ent hot of Brand Total 1o.5 37.0 z0.3 33,3 36.0 8.8 Z7.9 # 30.6% 67
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PEilT fINDING ITS TASTE POSITION {effect of Additives) % Men~Pol ]0 15 20 2~ TAR (mg) /2 Bns~d on assumption tha~ Mmrit has the tast~ I~vel OF c~saret~es wTth 63% more tar,
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TAR AND MENTHC _EV£LS BRAND (year) TAA~g) ~MENTHCL Y, ool KSF 7E 17 ,86 Kool Milds 76 13 .32 Kool Super L~ght KSF 77 ~ .36 Kool Super Light Long 77 9 ,46 Belair KSF 72 T7 .2;3 Bela~r KSF 76 JS .33 Salem KSF 72 20 ,26 Salem KSF 78 19 .90 Salem Lights 76 11 .3~ Newport Bo~ 71 19 .2G Newport BOR 76 16 .30 B & H 76 17 .43 Alpine 74 15 .45 goral 76 14 -3~ Pall Mall 71 18 ,43 Pall Nall 76 16 ' .36 Silva Thins 73 T5 .52 True 70 12 .40 True 76 6 .49 Kent Longs 76 18 .27 Kent Eolde~ Lights 76 9 .48 Marlboro KSF 74 14 .36 Marlboro KSF 76 15 .63 Virginia Sllms 75 17 .46 W~nston 74 20 .31 Vantage 76 II .bz Merit 7~ 8 .44 T90 0£9 HENTNOL INDEX ?00 88 100 128 77 9Z 72 83 94 72 83 If9 125 94 ' 119 ICO 144 111 136 78 133 Ico 119 128 ~8 I17 122 NET MENTHOL 17.0 11.5 9.0 .tl.S 13.1 13.8 14.4 15.8 lOJ 13-7 13.3 20.2 18.8 13.2 S] ,4 16.0 21.6 13.3 8.z 13.5 12.0 14.0 17.9 21.8 17.2 12.8 9.8
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OL 670006159 X ~ (IN 3ddV
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BRAND Raleigh Lights R~le~gh R×~ra MIld$ V~cer~y Extra Hilds Kool ~iIc~ Rela[r Dotal ~inston Lights Marlboro Lrgbts Old Cold brght~ Ken~ KSF Salem Lights Salem Lcng Li~hLs Vantage Vantage Longs Rarliam~n[ ROOt Super LiEhts Real ffewpor~ Lights Kent Colden L~g~ts . Kent Golden Lights IOOIs ~erit ~erit IOOIs L ~ M Lights L & M Long Lights Fact Tareyton Lights True True l~U's Now LEVELS ACCCRD;~!G ~0 ::£CE~T A0~LI~ "~ LSVEL(mg,) DATE(IVhere Available) 14 14 14 13 1977 i3 August Z], I977 13 August 23, 1577 13 August 29, 1377 12 ]2 August 19, 1977 I:1 August,1977 9' August,T977 It" II I~ June I, 1977 9 Jun~ 20, 1977 9 June 20, ]977 9 August TS, 1977 B December ]Z, 1977 10 December 12, 1977 a 12 8 December 12, I~77 8 ~ecemb~r 12, 1977 8 January, 1978 8 ~ecember, 1977 5 June I, 1977 13 June I, 1977 1 December, 1976 SOURC~(~4here Available) FTC Report FTC Report trans{C ad FT~ Report 09T90~0~9 71
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1953 1953 1~55 July, 1957 IMPORTANT EVENTS From R~adcr'~ B~gest A~t~IBB American Medical AssoclaEion tested 3 fil~er tips arid found one (Ke~) re~ove~ 55~ of tar, Late¢ Kent's ~ea<e~eO F!lte¢ removed L4~, and later still even less. BurIe'¢ - 16~ wore tar, 40~ more nlc~tlne than flue-cured - marked change in tobacco buyin~ - towards infev~o¢ ~rades - hurley r~thev than ~[Id North Carolina, light, flue-cured premium priced. AIsn strong, harsher tDp leaves of hurley. Low Brade tobacco soars in ~rice, 'rHomoqenized1' or reconstituted tobacco - oHglna11y used E~r cigar binders - [s used For cigarettes. KeeFs woody stem and midllb - uses the whole leaf. Reduced to powger, moistened, rolled thin into "sheet tobacco", then shredded. R.J.R. -"~e are usin9 ~t ~n all cTgarettes." FT~ ]mpose~ "Cigarette Advertising Guides~r banning ~11 mention of tar, nicotine and fil~ratlon "when n~t establ[sh¢C by competent scientific proof." Re~der~s Digest article p~ints out that improved =eIlulo~e acetate filters, " costing no more, wars avaHable thaL could red~cB ~ar 40% [instead of their current 10~). Dr. Wynder, $1oan-Ketterlng, ~ent~ned that a 30 m9. tar regular cigarette could be reduced to 18 mg, [Note: Thls ~s ~actly ~h~t happened between I~57 and I~60] Reader's Digest article descHbes Kent's forthcoming 23 mg. filter; "High Filtratlon". The~e 2 articles set off the "Tar Derby", destroying the 1955 "GuidesH, FTC "agreementH - ~anufactdrers to l~d~scontlnue the confusing and u~sub- stantiakedH tar and n~cothe claims. End of Tar Derby. TgTgoI o&9 7~
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HarcJl 25, 1766 June 8, 1966 NovemBer, 1966 June 30, 1967 1967 August, 1967 September, 1967 "No ~qore tar and nicotin~ claTms in cigarc:Le advert~Srng" - FTC chairman Kintner. ~esult~ Life. Duke of Durhem. Sprln~ ~ractlcally dropped out of ~ighL in 1960. HSmnklng and Health! Report of the Advlsory Committee of the Surgeon General of the U,S. Fu~li¢ It~alth Scrvlc~" - Th~ I'T~rry Report'j. Fedarar Cigarette Lakeilng and Advertising Ac~ - rla l a~ we can llve witq"- pvovided ne~ly t~at a ~arolng, "CautiGn: Cigarett~ Smoking ~y Be ~azardous To Your gealtht~ must aOpear ~n package by January I, 1~6~. No oth~r statement on package or i~ ed~ertJs~n9 would be required before July, 1969 (3 year grace), FTC suspends rule againsL nl~ntionln9 tar and nTcotlne in advertising, FTC es~abllshes lab. Reader's Digest ex3ected another *'Tar Derby'f, FTC Report to Cocgress: NO evidence that warning does any ~ood. Raper[ to 5u'geo~ 3enaral, "The ~ealth Conseq~e~6es of SmokTng". U.S, Publ'c Health Service printed milllon~ of copies ~f folder~ 'HF ~ou must S~ok~ - ,, Dr. ~illiam ~, 5[ewerE~ Surgeon 6enera! OF the U.S. Pud]fc Health ~ervice: d~he proposition ~hat cigarette smoking is hazard~u~ ~o human heath ~s n~ Io~g~r controversial,II 0] 90 0 9 73
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( .a ( ~DOL~ J968 1972 ~97~ 1975 197G ~977 19~8 1932 ]974 19~5 1976 1977 ~O~L 99 1971 ~97~ 1974 ~£35 lO3G EATZ~1 99 1968 ~g71 1972 1974 2975 197& 1977 :;]~LgCT;';D ~.;r:;ii'llOL 13~AIIDS 14 25 26 31 31 3z 26 9 ~]. 10 10 n .tO 10 3 3 4 4 2 2 3 2 2 3 4 blAIE 16-3~ 3~ n Ovoc ~RbIAL~ 16-34 35 & over 25 7 i 20 11 5) lZ I . 26 11 4G 16 29 12 55 15 36 &5 50 19 38 ].5 50 15 ~9 l~ 45 16 27 13 f 9 S le B 9 9 9 7 12 1! 17 5 i0 i0 15 12 16 iI ii 9 12 S 9 I0 i0 O ~COi' I~VA!L~;15/~ NATIONALIty 3 9 ' 4 4 ] ~ 4 1 "/ 3 6 3 7 5 G C~ 7 4 2 1 2 2 3 2 1 4 6 2 4 2 1 2 4 4 3 ~ 7 2 2 8 5 * 0.5~'~ cr lec~
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l! l! II ~9Tgo~o&9 n A
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( ( t A StLI~~ ~f Cons'lmer A~,~reI%eg~ Of and A ttitJdes To~ard 24 Leadin~ Cigaretle Brands 1977 The design of this study was based en a specific point of vdew about key factors which determine sales success far cigarette brands. Three key factors were determined to dictate sales success for cigarette brands: t. "Top-of I~iind" Aw&reneBs Brand share of advertising pressure Intrusiveness ard men~orability of the advertising 2. Conversion Df "Top-of-Mind*~ to Be6-~]ar Brand Use Persuasive brand imagery Branfi L~ Product delivery of expected satisfaction Stable, clear, ~n-tune hr&nd imagery I. I'Top -of~ ]%~ind" Awareness A. ~hc study show~ that while tnp-of-rniad awareness is desirable, if cannol he very productiv~ without substantial conversion per- $uasivenes s. Au ~xamination of & brand's pote~ti&k 6o reph~ce a consumer's current brand may yield significant marketing opportunities. II. C~garette Brand Imagez'~, Product Imagery User Imagel7
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7. [ ( t A. Bi Product Imagery/_ Produ~ iru~.gery is ~ t~nctto~ O-q 1. Satisfaction A f~eling of contentment, relaxation, a filling sensation, and ~ sense of relief. Marlboro, Winston, KOOL, and Salem score well her~. Taste/Aroma Not biting or strong, hut full-flavored and rich. Marlboro and Winston are the leaders here, while hi-fi brands score poorly. 3. T~b~cco Im~_ The image of higN quMity tobacco linked to a brand. The q~lR]t~y of the tehacco used does not appear to be as si~i- ficant ~s the way ~e tobRcco is ~acked -- ideRtly ~rm ~nd ~el] packed. 4. Fii~ er I~ Ease of drawing and tilter sofIneis are important filter attributes. This was found to be a function o£ ~rnoker and product char~ctevisEigs, rather than dintatlng thoae characteristics. User Ima eg~ The brand Smokers use makes a stalement about the~i: lifestyle. 1. O~cupatio~3 I~a ~ex~ l)esigEates the klnd~ of occupations people associate ~tlh Blue Collar -- Marlboro ~?~ite Collar -- Wizlstol~, K~nt, Tare~on Protessior~l -- Benson & Hedge~ Athletes --Marlboro, ~Ii-Fi, KOOL Secretary, ~odel, Teacher -Hi-Fi brands, Salen], More, Virginia glims O~
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( ( t pL~i~s Not ~orrfeci ~bouf smoking Imdependent Wants the "Real McCoy" Heavy aria oke r M~r[ho~o Women find him exciting Masculine Makes things h~pp~n Trusts instinct * W~nston Tr'Jsing, trustworthy Ha.dl~=s things as they come L)oes ~he right thing Does i~ ~ell Hi -Fi Light smoker Worried sr~oke~ NoD-decislv • Worried abo~li sr~okf~ag ;round others Vls~ F ei~inine Men find her exciting Shows emotion Excitable M~a~ho! Loves nature Take~ it easy Sees the bright side Enjoys life Smokes more when rela~ed O.~ bored i Oo
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9, 3, A high correlation o~en exists between brand$ pcople associate ~'ithvarious people oll the basis oftheir appear- RnCe. ( <_ -J &a fO
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G¸, Hr~ GT0~0G170
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A Study Analysis A.STUDY OF CONSUMER Conduo~ed AWARENESS EF__AND._h~ UP E S TOWARD CiG _ARETTE For; By" and Reoammendations By: .BRAND.~ The Brown & Williamson Tobacoa Co. Creative Researoh Assooi~±es Inc. MoGann-Erloksonj February 1977
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~T90~OL9 B_ADKGROUND This study was undertaken as part of an assignment to develop a basic advertising strategy which will significantly improve brand share for Viceroy cigarettes. Further, the design of this study was on a specific point of view about key which determine sales brands. based /actors success for cigarette
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BRAND AWARENESS/TOP OF MI~P The first requirement for sales success is consumer awareness of the brand. We believe the critical factor is "top of mind," the percent of smokers who name the brand spontaneously. We also believe that top of mind for o brand is determined by brand shore of category ad- vertising expenditure and by the attention- getting power and memorability of the adver- tising.
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FAOTOR 42 GONVER$iOfl OF TOP OF MIND TO BRAND USE AND BRA~ ge believe that the seoond factor in brand suocess is the percent of those with top of mind awareness of the brand who have been persuaded to give the brand significant trial plus those who would be willing to buy the brand. i We also believe that the qucllity of conversion of awareness to meaningful brand trial is a function of the persuasiveness of the adver- tising. Persuasiveness, over the long haul, is the result of the brand image delivered by ~&TgOCO~9 ~he advertising.
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P~ FA'T~ • REI'ENTION.OF.TR!AL SMO.KER$/BRANO LOYALTY We believe the third the ability of the triers. major factor brand to hold in brand sales i±s significant |$ The ability of a brand to hold is, we believe, determined by the ability of the prod- uot to deliver the satisfaction the smoker seeks; and by the appropriateness of the brand image delivered by the advertising. Specifically, the image of the brand should not only be vivid and powerful enough to attract smokers' but also stable, clear, and in tune with the current needs and aspirations of significant numbers of smokers so they can maintain their identi- ~ficution with Che brand image over time. its significant triers .
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KEY FACTORS THAT WE BELIEVE DETERMINE SALES SUCCESS FOR CIGARETTE BRANDS Factor ~I: "Top-of,Mlnd,",,Oo, ps,umer,, ,,, Awareness Brand Shnre of Advertising Pressure Intrusiveness and Memorability of the Advertising Faotor #2: Oonversion o1,Top Of Mind to, Persuasive Brand imagery Regular Brand Use Factor #3: Brand Loyalty • Product Delivery of Expected Satislaotion Stable, Clear, "In-Tune" Brand Imagery 9&T9Of:O&9
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MECHANIGS,,,OF THE STUDY i~ational sample of smokers: Four Region-20 Market stratification Market Facts quotas of Age, Main Sample of 829 Smokers Augmented Sample of 125 Viceroy Smokers Sex and Income Designed and conducted by Cred¢ive Researgh Associates Fieldwork: Oe~ember 13, 1976 thru January 11, 19T7 Refusal Rate of 6~ Average Length of Interview:70 Minutes (:45 to 1:45) ~&Tgoco~9
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THE INTERVIEW i.-Home interview BRAND AWARENESS PRODUCT. IMAGE OCGUPATION IMAGE PERSONALITY IMAGE APPEARANCE iMAGE BEHAVIOR following telephone screening: -Unaided and Aided -Up to Three Brands (1.4 Choices) G4 Attributes (94% Brand Choice) -Best Fit Brand 24 Occupations -Beet Fit Brand 65 Images (96% Brand -Best Fit Brand 30 Photos (99% Brand -Brand Trial -Current Favorite Brand -Five-Point Attitude Scale Toward Use Of Each Brand (99~ Brand Choice) Ohoice) Choice) ~&Tgo~o~9 i
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( ( i/ °/ I~ooel o • t.Q~ I .... "~i ~ ~ ~"~"" ~'~ ,~ ~,.,,.:,~.~ 1r " c¢) ,,~ ~ E ~3 W ~ gl~ ,,~1.1-~ 0 i ~ ~ -I-'-~' ~ :,--~,1-~ ~ ~ 0 ~ ill 67030~L7~
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E~_OBJECTIVES OF [H_E,_.$~ PART 1 Determine brand awareness and quality of ness for 24 leading industry brands. Determine number of users~ and degree of lending brands, brand awareness. aWaFe- significant triers= current willingness to buy for 24 in total, and in relation to O~TgO~O&9
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SPEC,,!FtC qB~ECTIVE~ OF THE STUDY PART 2 Determine the loser brands, OQCUPATION PERSO.NALITY APPEARANCE image charaoteristios of leader and in tot~t, and by oategory~ speoifioally; (64 descriptors o1 sotisfootion' taste, tobocoot filter ond package) IMAGE (24 descriptions of oocupations) IMAGE (6$ descriptions of personality) IMAGE (30 pictures of people) T~T90~O~9
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Before we look at the key findings of the study, let's review the 24 leading brands in terms of: Dominant Selling Style • Tar Oontent in Milligrams Usual Industry Segment Combined Share of Market (As of 10/76 MSA)
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~'~ E~|D CbUSTER~ DOMINANT TAR USUAL COMBIMED SELLING INDUSTRY SHARE OF ~TYLE CONTENT* SEGMENT MARKET** BRANDS VICEROY K~ 15.7 Full Taste 2.26 Marlboro KSF 17.7 Full Taste 16.62 Winston KSF 19.3 Full Taste 14.15 Benson & H~dges I~DP 17.6 Full Taste 4.35 L&M KSF 19.1 Full TaSte 1.58 Raleigh KS? 15.9 Full Tamte 1.96 Tar~yton KSF 20,5 Full Taste 2.32 Virginia Slims 100F 16.1 Full Taste 1.47 More 120F 24.5 Full Tast~ .99 Kent KSF 15.9 N~Wi Sub Group I 4.80 Lark KSF 17.@ HIFi SU]) Greup I .83 Parliament KS? 15.7 HiFi Sub GroUp I 1.49 Carlton KSF 4.2 IIiFi sub Group I3 .98 Merit KSF 9.0 [|iFi SUb Group II 1,73 True KRF ll.l IliFi Sub Group II I.bQ Vantage KSF 10.7 HiFi Sub Group ~T 2.25 C~el 70 23.7 Plain/~egnlar 4.]3 Chesterfield KS 27.7 Plaln/Regular +99 Lucky Strike 70 ~5.7 Plain/Regnlar I+4S Pall Mall KS 26.6 Plain/EeglJ]ar 7+26 Belaix ESF 1R.0 Menthol 1+30 Mool KSF 17.3 Ment/~ol 10.81 Newport KS? 17.2 Mendlo1 1.26 E~lem KS? 18+8 Menthol S.83 *FTC-4/76 **MSA-]0/76
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FINDINGS PART 1 ~OP OF MIND In a fleZd of 24 Zeading brands, Viceroy ranks 8th, with a respeotable 47~ top-of-mind awareness. We believe this to be a reasonable level of top of mind in relation to Viceroy share of industry advertising expenditures over the past severaI years, 17~1;90I~0~9
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UNAIOED BRAND~ARENESS roP-ol i,,u VICEROY Marlboro Winston Benson & Hedges L&W Raleigh Tareyton Virginia Slims More Kent Lark Parliament Cerlton Merit True Vantage Camel Ohesterfleld Luoky Strike Pull Mull Belalr Keel Newport Salem S~g9OUO~9 Average # of brands named 47~ 74 76 :38 29 29 34 3G 24 46 1G 25 18 20 27 26 77 46 So 62 24 (33 22 73 9.9 RANK 8 3 2 ll 14 15 13 12 19 tO 24 18 23 22 16 1T 1 9 T 6 20 5 21 4
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VIOEROY SHARE OF iNDUSTRY ADVERTISINS DOLLARS w , ,, , iNDUSTRY VICEROY VIGEROY $ MILLIONS $ MILLIONS % SHARE 1971 $142 $11.B 8.2% 19Y2 189 9.8 5.2 1973 192 9.2 4.B 1974 244 13.1 5.4 1975 234 IO.O 4.3 1976 (6 Mos) 199 3.0 1.5 Six-Year Average Share of Adv. $; 5.0 Share of Top-of-Mind Awareness: 4.7 951;90~0&9
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CONVERSION OF TOP OF MIND TO BRAND USF Marlboro and Winston, are The two volume leadersj distinguished by the foot that they convert 19~ and 17~ respectively of top of mind to brand use. Merit signals future success by showing a 15g conversion of top of mind to brand use. ranks '20th in Among the 24 brands, Viceroy conversion of top of mind to brand use. &~TgO~O&9
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~uJ~ ~E 0 [ooo L C
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We judge the current level of Viceroy converslo of top,of,raind to brand use to be unsatisfactor;. I~ Viceroy brought its top-of-mind up to the Ze ~z~arzoor? and Winston. say 75%. an~ ~n--~-+^~vel LH~I IOp-oT-mi ........... -¢=u ___.j . . nd~o ~sers. at the current rate i .uuza onzy nave 4~ aT smokers. . t On the other hand, =f Vicero- c^'~ _Z= ..... j uu~u mucoR Marlboro or Winston in conversion rate. sa 18 Y!ceroy's current top- -ml...~ ~v~ ~' ~hen. Viceroy close ¢n R =~ ~-:''~ ~" ~'~ WgUla give share) ....... ~ uurren~ users. (About 9% t op-of-oiod ,s always de ,rable ,t r~y ~oUJ.a 110-( De vet - Y producl:lve without a substant|al Improvemen± in conversion persuas- | veness. 6~9oeo&9
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• CONVERSION TO USE OF LEADERS AND REMAINING BRANDS TWELVE LEADIN6 B B~LS i t aE.i~, i ~S~ ~01.'75 II,l 7.3 IB.6 iN.2 2.3 h,4 ?.3 h.8 1,7 2,3 ]O,D 8.8 ~O~VERSION 5 O 15 17 5 I~ 5 11 15 ~ 9 13 ~SA OOT.'?6 ].5 ].0 2,0 |.6 ].5 i~ 1,5 0.8 1.5 1.0 1.3 1.3 CONVERSION 2 2 N 5 4 ? 6 6 D 6 6 6 oGTgo~o&9
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I.,.N.,GREASI~'~B, ,V!GEROY'S TOP-OF-MIND] CREATING MORE PERSUASIVE IMAGERY CONVERSION TOSHARE OF AWARENESSREGULAR USER___ S _I~A~ EK_~I_ Current 47% 5 2.35 Awareness Raise by 5 Hold at 5- 2.6 Strategy " I0 " 5 " 15 " 5 2 • 9 " 20 " 5 3.1 " 25 " 5 3.4 " 30 " 5 3.6 3.9 Conversion Hold at 4T Ra,!se by 1 2.9 (Imagery) " 47 Strategy " 47 " 54.93"9 3 " 47 " 9 " 47 " ii 7.0 " 47 " 13 8.0 9.0 IF, GigolO&9
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As we indicated earlier, we believe there is a second measure of the cuaZity of persuasiveness of the brand image, the percent of smokers who ore not now smoking the brand but would be will- ing to buy it as an alternate. In this instance, Vioeroy ranks 17th in a field of 2¢ brands in converting top of mind to willing- ness to buy the brand as an alternate. Again, we believe this indicates that the current image is not persuasive. It is worthy of note~ however~ that about 15~ of smokers say they would be willing to buy Viceroy ~ as an alternate brand~ and these people may well be a particularly fertile target for advertising effort.
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f~ CONCLUS!ONS PART 1 We believe that top of mind awareness of Viceroy among smokers is reasonable and proportional to share of cat- egory advertising investment. While an Increase in top of mind for Viceroy would clearly be beneficial to brand share and any advertising strategy should seek to improve top of mind for Viceroy, we do not believe this is the key issue for brand share growth. The clearest distinction between leader brands and loser brands is their ability ~o convert top ot mind to users. The data indicate that Viceroy ranks low in achieving such conversion. Therefore, we believe that improving the conversion ratio for. Viceroy - perspading those aware of the brand to use the orand - Isthe key issue for achieving brand share growth. Because we believe that the image of the brand projected by advertising Is the key factor in building users~ the remainder ol th s report of highlights of the findings of this study will be concerned with an examination of brand images. ~6T90C0~9
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6V0306194 ONV~O 3113~V910 ~0 SISXIVNV NV 1BVd ',J ~ ,J
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C C • C W~ ~'~i~- ~j~,~ ,~ r~ ~ ~
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t~ ~ We believe that cigarette imagery has two main oomponents: PRODUCT IMAGERY USER IMAGERY (Smoking satisfaction, taste tobaooo, filter, package.) (Work role imagery, personality imagery, and physical appearance.) To get this muoh image information, it is neces- sary to make it easy for the smoker to give us this information. It is also important to be sure the imagery is being clearly and specifically re- lated to brand. 96~901~0~,9 I8~r iMAGE ITEMS
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To insure the accomplishment of these objectives we first created o BRANDS BOARD. Then we generated four sets of cardsp one with product descriptions, another with occupational descriptions, one with personality descriptionsp and one was simply a deck of pictures of people. The smokers ~ere given the cards one deck at a time, and asked to relate each card to a brand. in the ease of product imnges, smokers were allowed to ~ssooiate several brands with one image. For the remainder, they were osked which one brand best fit the image. ~6~90~0L9
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1~ i~ upparc,~ LJ~ Jpulu ~etter'kno~n brallds are llkel~ to be seleci~ed in such a process more freauentlv than less well-known and accepted brands. Therefore, it was necessary to take.an extra step in evaluating pre- cisely which imagery IS linked to each brand. We calculated the average number of people mentioninn eacq ~ran~ across ~he whole range of imaae items. T~An we ae~ermlned whether the number of ~eocie a~innin~--- ~2e part|eular !moqe item to a particular brand°fei~ uuuvu vr DOIOW |~S own average. To make the data easier to evaluate, we then calculated the Index (the number of people who mentioned the brand for the Item or !mage divided by the average number of persons who mentioned the brand.for all of ±he items). For our purposes, if the ndex Is 150 or greater, the image Is siQnlfigan~ly associated with the brand. By the same token, Indices of 50 less indicate that t. . .or ne Image is not associated w=th the brand, indices between generally shouid not be regarded as signifi- cant, ~E;~90~0~9
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EXAMPLE OF INDEX DEVELOPMENT "Too Strong to Smoke Regularly" PEOPLE CHOOSING BRAND FOR THIS ITEM Camel PaiI MalI Merit Vantage 0.85 0.72 PEOPLE CHOOSING BRAND FOR ALL PRODUCT LTEM$ 14.07% 0.99 INDEX - IO0 +265 "140 60~90~0&9
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THE PRODUCT IMAGE OF LEADING CIGARETTE BRANDS 00~90~0~9
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f~ bMU~ING SATISFAOT|ON The volume leader brands are leaders because smokers believe they deliver deep down satisfaction. The regulars,. Camel and Pall Mall, are too strong, de- liver too much kick, are overpowering. The Hi-Fi cig- arettes do not del=ver complete satisfaction and donVt give enough k=ck. The:leaders deliver the riffht be1- Satisfaction stimulating, relief. is a feeling of oontentment,.relaxing and a filling sens~tion when drawn, a sense of The satisfaction image of Viceroy is certainly on the favorable side, just below that of the leader brands. in our judgment, smoker belief in the ability of Viceroy to deliver basic satisfaction is not a key weakness in the Image of the brand. TO~.90~O&9
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CAMEC" 8, T I SF. OT ION IMAGE OV~RPOWER[HG ~0 MUCH KICK ' TOO STRONG +~ds DEEP DOWN SATISFACTION F]LLIMG SENSATION STIMULATIHC/RELAKING FEELING OF CONTENTMEnT/RELIEF NOT SATISFYING NOT ENOUGH KICK - 5O - BS CHESTERFIELO LOGKY STRIKE PALL MALL +]55 +210 +]20 - 45 - 6~ - 45 - 7(] + i0 - 70 MARLBORO' WINSTON - 4O - 45 ~ 65 + 65 - 6O ¥1GEROY~ - z", + 45 - 3O BENSOM & H£D6E$ L&M RALEIGH_. TAREYTON ~|RGtN|~ SLIMS MORE, KEN1 ; LARK= PARLIAMENT - 30 +45 - 5O - 9O - /0 - 60 -80 + S - 45 + lo + 1.5 - 20 - 25 4n • lO 10 +~40 ---- ]~ 4 65 40 + @O QARLTON MERIT TR~E - 70 - 80 - 9¢ - 75 - 5~ -7~ VAMTAG£ - 8O - 5O +235 K00L + 15 ~ 60 - Z5 NEWPORT, - 60 + 15 + I0 SALEM - 65 + 9o - ~5 zozgo o&9
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p4 The right taste is full-flavored and rioh~ not strong, harsh, biting, scratchy, and It doesntt leave your mouth feelin~ bad. Aroma is also important - a full tobacco aroma. Viceroy does not fare as weZZ. in taste.as it does in its ability to deliver smoker satisfaction Viceroy is rich-tasting, but it is not competitive in terms of~ull flavor or aroma. Viceroy alga differs from Marlboro and.Winston in having a mare biting taste and a bitter taste We believethese differentiations are significant and shoutd be given careful consideration in product devel- opment. However, we also believe that these differenoes in taste perception are not the key to the current yiceroy brand shore position. £0~90~0&9
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,-% TASTE FULL TOBACCO AROMA FULL FLAVORED RICH TASTING 4- 25 + ~_ STROUG BITING HARSI{ BITTER ~AUEL~~ ÷ 7~ GHESTERFIELD ~ ~i15 LUCKY STRIKE +205 + 9~5 PALL ~ALL +145 4 MARLBORO~ ~ _~ WINSTON ~ ~ -!~_ VICEROY~ _~ ~ BENSON A HEDGES _~, ~_5f L&M - 20 +]0 TAREYION ~ 45 - 15 - 25 VIRGINIA SLIMS~ - 77T - h'~ ~ORE - o _ ~ _ KENT" - ~ - ~ - 35 LARK-" - 25 ~ -~ PARLJAMENT - 75 - CARLTON~ - 7~ -~TF - B5 MERIT - 95 - 75 - 55 TRUE - 85 ~ _~_ VAHTAG£ -~5_ ~ - KO BELAIR~ _~ - 55~ - 60 KOOL ~ _ ~ _ f~---~ NEWPORT - ~5 - 3~ - 4__~_s SALEM ' - 70 - 55 - l~ ?0Z90 0"9
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Vloeroy also has commonalities with Benson and Hedges and Kent in being peroeived as smooth and perhaps meZlow, but it Is not slgnifioantly weak, mild, bland or light as are the Hi-Fi brands. The menthols freshness and medlcln~Z. involve another dimension in taste, refreshing but they are also Agaln~ while we beZieve these taste images of Viceroy are worthy of attention, we do not think they ore ~ key factor In depressing brand growth. ~0~90C0&9
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TASTE WEAK MILD SMOOTH BLAND FRESII MELLOW LIGII~ REFRESHING SWE~T ~AMEC - Su - 95 - 80 - ~0 CHESTERFIELD - 50 - 75 - 70 - 80 LUCKy STRIKE - 75 - 9o 80 - 8q PALL MALL - ~5 - so - 35 - 5o MEDICINAL - R0 - Rrl - 70 MARLBORO. + 20 - 60 WINSTON + 30 so VIGERUY-- + r5 - 20 BENSO~ & HEDGES"-q-~ - ~0 L&M + 60 4 15 RALEI6D. - 25 - 30 ThREYTOfi__ + 20 ÷ 55 - ~ - 90 ZO - 60 - Z~ - 4~ - 40 - 3~ - 3q + 20 - 9@ + 20 - {5 - 2D - Ra - 80 - 79 - 3£ - 5N - IN VI~SIHIA SLIMS -' - 2o - ~9 ~ 50 - Pn ~RE - 15 - Y5 55 + io - 9~ KE~T * bU +ibO - ~5 - 00 " ]O LKRK ÷ 15 ~ 30 - 49 +~0 * 20 - 4~ - 1o PARLIAMENT + 15 + 8u - ~n BK~LT~R - 40 +19o - 85 MERIT + i0 +160 - 45 TRUE - ~Q +~95 - 65 ~kNTKGE + 5 +J,79 - 5~ SELAIR + 40 + 9~ +~50 - 10 • lO - 4O - ~9 - 4N - 9~ + 1N +190 K00L__ + io - 20 ~ + 1o 42qa NEWPORT + 25 ÷ ]5 ~265 +120 ~ SALEM ~ 70 - 20 ~295 4 A/l_ 419~ 90Z90£0&9
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/ To what extent is satisfaction and taste imagery based on the tobacco Image of ~hese brands? While the two volume leaders, Marlboro and Winston, are'\ identified as having high quality tobacco, so are Camel,/ Pall Mall and 9enson and Hedges. The image of high quality tobacco does not, then, insure the delivery of- deep satisfaction to the smoker, Further, the general Image of high quality tobacco does not seem to be significantly linked 1o tobacco specifics, domestic versus foreign or natural tobacco. The only place where ±he two leading deep sa±isfaction brands are distinguished from the five quaZi~y tobacco brands is in being farm and well packed. Th=s at least suggests that the more Important difference may not be perception of che quality of the tobacco as such, but in perception of the manufacturing process. Here, again, while the ratio for Viceroy is not sig- nificant, it is clearly on the favorable side. &O~O~O~D
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TOBACCO IMAGE HIGH-QUALITY OAMEC' + /u -xu + Rn FTRM TYpE~ WELL- CURED, OF CHEMICALLY- PACKED AGED TOBACCO TREATED + 70 - 80 OHESTERFIELO + 40 +I0 +120 + 20 - 80 LUCKY STRIKE + 40 +90 +150 - - BO PALL MALL ±21~0 +3~ 4 9Q - ~0 - ~0 MARLBORO +I1o +9o - 30, - 70 WINSTON ÷12~ ~7~ + 3o 1o - 5o VICEROY ~ J~ +~u BERSON & HEDGES +120 +30 L&M + 30 -2~ 5o - to - 1,0 - ]rl - 60 - 20 10 - 4q RALEIGH - 70 + 60 + 60 - 30 TAREYTON . - 40 -~.~ - ~0 - 40 - lO V|R~|RIA SL{MS" - 60 -~u - 9D t 90 - ?O MORE .... - 60 +~9 - 7~ - &P t 40 KEMT.., - 3~ -~o - 59 - ~ - 3o LARK - 4o -20 - 80 - 2o + 10 PARLIAMENT +-~ -4o 40 - 40 - 20 OARLTON - ~u -/{l - /u - 4u +~zu UERIT - ~ L80 - 70 - %0 +150 TRUE - so ~s7)~ - 60 = so • 2o VANTAGE, - 70 -6o 80 - 7o ÷ 5D BELAIR" - ~9 -bU - Ju - uu +]50 K00L - 30 40 - Co - bo +]50 REWPORT - 3o -40 - 6o - 50 +200 SALEM. - 20 -20 - 60 - 50 +Ii0 O 901 0&9
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~ILTER IMAGE The.volume leader brands are'significant on two characteristics, easy to draw and a soft feelin9 filter,, Viceroy faces well on bath of these meas- ures. It may be interesting to note that KooZ falls below Salem on both of these meas- ures. 60~90~0&9
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FILTER DRAW FI~EL OP FILTER DRG~EB OF FILTRATION TYPE OA~EL' - ~o - - - 70 - BO - CHESTERFIELO - lo - ¢D - 70 - ~0 - 8D - 7O - BO -~EQ - 80 LUCKY STRIKE, + 20 - 50 - 90 - BO - 70 - LO - 90 - 80 90 ~ALL ~ALL +loo - 60 - 70 - 7o - 6o - 7o - 7~ - q9 ..- 7~ MARLBORO~ + Ho ~o + 50 - 40 - - ~ * 2D - 80 . - @0 WINSTON + so - 5o ~9 - 40 +l,O - ~0 + 5n - Bn VICEROY ~'~s~ Lu + )u - z(r + LU ~Z{J + 4o - }~" BEN50~ & IIEOGE$~ru' - 6u + iu - 40 - 4u - I~ - 20 - 70 70 L&~ + 30 - +110 - 10 + 20 - 30 ~ GO - 50 - 50_ RALEIGR - u - + 30 - 20 - 2o - 50 - - - 5Q TAREYTO~ - 4o + 50 L zo + 30 ÷ 90 + 79 ~B2Q +~0~ VIRGINIA SLI~u - 60 4240 KEHT ~ t~ + zu LARK - PARLIAMENT- 1o + 90 OARLTON~ °~ MERIT - 30 + lo TRUE o 2~ +120 - - B0 - 40 - 70 - 60 r 90 - @O - 30 +300 ÷ c +17N + 9n +I2L - 50 + i0 ÷ 19+~~ +trio - 30 - 3D ~ 20 ~17D + 6~ - ~D VANTAGE o J~ + 90 - 20 +I00 + 50 +¸193 +]on~0 BELAIR - 5o - 57[--~ + 4o 4~ - 1_9_0 - 5o KOOL.~~-- + ' - ~ i¸ ~~ _ - - ~n ~EWPORT - - ~0 + ¢I) -~~ + 70 - 3o SALEM + 60 - 70 +130 = 6o - - 70 + 30 - B0 +170 +lID , +18{) - +20 0T 90 ,0 9
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t"~ PACKAGE IMAGE We are inclined to doubt that the responses to these package items are really a reflec- tion of smoker response to the package. Instead, we believe the general image of the brand is carried over to the look of the package. However, the findings for Viceroy do not seem to us to offer any significant cause for concern. IFgZgoco~9
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PAGKAGE GAMEL~-- GHESTERRIELO LUCKY SYRIKE PALL MALL_ MARLBDRO~ WINSTOn_ °"°- I I FASHIONED MODERN FASHIONABLE %q79- -~IT _~ +3 5 - 70 +400 - 90 - 90 + 85 60 - 60 -55- ~ + 30 -Tf + 2o ~+10 LUXRR I(XT~ ~ZNTEREHTrNC, I ORDINARY ---[Q-- ---/-/0--_____f_//t VlDEROy -%~0- _~ BENSON & HEDGES - %qT + so L&M 0 RALEIGH~ TAREYTON. - 70 -- VIRGINIA SLIMS - ~J MORE, - 90 ~JO. +350 ~ ~ - 20 ~Q - ~ - Z~L__..__t~XL - 60 - 60 ~ ~ ~D- ~5 401 - _~& KENT~--~ LARK~ --~[ -TU -TO - 30 PARLIAMENT_ DARLTON, MERIT TRUE VANTAGE BELAIR KOOL__ NEWPORT SALEM. '1; 90 0&9 - 65 - 50 -~rS- +6U - 90 +330 - g5 + 30 -- 95 +I00 - 70 - 20 - ~ -50 29_ - 7o ~o _ + 20 +190 + 14_~0 -~ - ]o - 30 + 70 - _7_0~ - 80~ - 2.0_ -~2~.__ -~LO. ~ - 5o - 6_~o --I-E_ 60 - 40 __4 60 - 20 - 50 60
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e~ VIL;~.~OY PRODUUT IMAGE S UMMAR Y Volume leader brands are di-+,---=--^~ =- - L .. O~IH~MI~H~M gy uonsumer ue,lef that they deliver deep down satisfaction. Viaeroy has strength here, We see opportunity for improvement in the Viceroy taste image, more aroma, reduction of biting and bitter taste overtones. Viceroy has a.satisfaetory tobacco image* with some opportunity to strengthen its perception as a firm, welZ-packed cigarette. Viceroy also has a favorable fiZter image. Overalls-we see some ureas of opportunity for im- provement, in produot mage for Viceroy, but, at the same time, we do not believe that the produot Image of Viceroy is a significant fao~or in its share trends. CT~90~O L9
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G70306~14 8(]NV~8 3113~1V510' 9NI(]V37 30 3uVBl NOILVdNOOO
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THE OCCUPATION IMAGE OF LEADING CIGARETTE BRAND~ One very important determiner of brand choice is that brand choice Is a way of telIing aurseives and others who we are. When we display the brand we use we are savina in n very clear way which crowd we choose to 3oin,~which vaZues are Important to us, and, perhaps most import- an±, we are telling people how ~o behave toward us. The simplest way to begin understanding the "user image" of brands is to see which kinds of occupations people associate with these brands. We described 24 different occupations and asked people to tell us which brands people in these occupat ons would use, using the same brands board. As before, an index of 150 or more indicates a significant relationship between occupation and brand; and Indices of 50 or less indicate a significant absence of relationship. BT~9ORO&9
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SIGNIFICANTLY 3RAND i,,,ASL.( IS LINKED TO OCCUPATION Traditional and intensely masculine blue collar ocoupations, like construction worker, truck driver and auto meohan o, are still t=nked most intensively to Camel, Pall Mall is also linked. The only filter brand signifloantly linked ¢o In- tensively masculine blue collar ?ooupations is Marlboro. Winston Is not signlfloantly linked to these occupations. Among the, filter brands. Marlboro is the sole in- heritor of the crudi¢!onal imagery of the regulars. In a sense, Marlboro =s the filter son.of Camel and has inherited its blue collar masculinity. iceroy is consistently below Winston in its image ~inkage to this kind of masculinity. 9g~90~0~9
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When.our ocoupation descriptions move from the traditional blue oollar • masculine into white collar, salesman,. Walter! small businessman, supermarket manager~ Camel linkage beoomes very weak and, f?r most~ neither Pall Mall nor Marlboro are signifl oantly linked. Wlnstonls linkage is to white oollar, and here we azso negln to see some significant linkage to Tareyton and Kent. An occupation like waiter also links to the menthols.
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$OQIAL STATUS BL/LE ¢OLL&S ---- ~'RUCK bRIV~R CONSTm;C~IO~ WOR~E~ AUTO MECIIANIC CAB DRIVER GAS STATION ATTENDANT CRAFTGMAM CAME£ Iz~u + S0 CHESTERFIELD + 90 + 40 LUCKY STRIKE, +l~u +115 PALL MALL * 90 + 85 MARLBORO + 7D + 30 WINSTON + 20. + 5 VICEROY - ~b 5 BENSON & HEDGES - Hu - 60 L&M - 2o - In RALEIGH__ - 20 i 70 TAREYTON, - 50 t 4~ VIRSINIA SLI~S - ~5 - 8Q ~ORE, - BO - 4U KENT. - J~ - 5 LARK - 5o ~ PARLIAMENT - Ro - 4o DARLTON - (o - 35 MERIT - 7o - 25 TRUE - B5 - bo WHITE COLLAR IeAITER SALESMAN E~ALL DUSINESSMA)~ BANK TELLER SDPZ~RKZT M~R. - 45 - 75 I0 + ?N 9 -.5 +JJJ + J5 - 15 + 65 + 1~ + 10 t 40 + 60 t 75 + 15 + ~fl + 20 + 7N - 85 ~5 +2~ +2n * 35 +JLS - ~$ + ]s - 39 - 3~ - 35 + ]5 - 5O - 15 VANTASE - 7C - 50 - 25 ~ 35 BELAIR - %0 - 40 - 25 ~ 50 KOGL__ - ~O z5 + 45 ~+ S NEWPORT - 55 - 5 - i~ + IS SAtE~. - 60 30 + ~ + 55 ffl;zgot:oL9
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~hen we move to occupations wi~h tradit!onalIy Igner s~a~us~ SUCh as corporate executive, lawyer, professor and poIitlaian, the Image 1 nkage shifts sharply to Benson and Hedges. Neither Marlboro nor Wins±on is slgnifioantly linked to these high-status occupations. While Vloeroy is significantly linked to only one OT ~nese oceupations~ it is worth notin~ that Viceroy linkage to high-status occupations is always greater than either Marlboro or Winston. In effect, then. the Viceroy image is clearly more upsoale soolaliy than Marlboro or Winston. G~90~0~9
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When.we look at two occupations outside tradttional work status definitions - artist and writer - Benson and Hedges is strong for one and Kent for the other. V!ceroy is net signlf!cantly Iinked 'to either of these, nor Is it signifiGantly differentiated Item Uarlboro and Winston. It would appear, then, that the upsoale image for Viceroy is limited to traditional work status definitions. 0~'~0~.~
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When we look at another pair of images that fall outside traditional work status definitions, foot- ball star and tennis star, we see an Interesting picture. Three brands ore. significantly linked_to footbalZ star,~ Uarlboro, MePIx aria vantage. /nerel. seems to be a kind o¢ split between the masculinity 9f football and the health implications of athletics. The pattern f?r tennis star is different¢ pnd more difficult to ~nterpret, because we ao no~ KnOW iT the smokers had Chris Evert or Jimmy Connors in mind. ~e still see the linkage to the Hi-Fi brands, but there is also a linkage to Kool. Viceroy is not significantly related to either. As we wouId expect, medical researcher is Iinked very heaviIy to the Hi-Fi brands, and nothlng else. T~9OCO&9
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6" "% HIGH STATUS OCCUPATIONS OAMEL OHESTERFIELO LUGKY STRLK£ LAWYER ARTIST POLITICIAN WRITER FOOTBALL TENNIS CORPORATE EXEC{ITTVE PROFESSOR STAR STAR - ~ - G5 - J0 - 90 MEDICAL RESEARCBRR 8O - 40 - 80 + i0 - 30 - 30 - 60 - 60 - 60 ~ I0 - 5~) PALL ~ALL - lO - 30 - 40 UARLBORO" - Ju - 4o +110 WINSTON + 15 - 40 + 20 - 80 - 70 - 50 - 70 - 50 - fill VICEROY + 4s BENSON Z HEDGES %]60 S + 30 +]0 - Tfl + 95 -~70 - 20 - 50 L&M + 10 RALEI~U + 40 TAREYTON, + 35 VIRGINIA SLIMS - ~ MORE. ÷ 30 - - 30 • 2fl - 5~ t 20 - 60 - 40 - 1~ + 15 - ]0 - 4~ - 45 - 80 - - 50 • 105 - 3~ - 2fl - 10 KENT" LARK PARLIAMENT__ CARLTON + z~ +~5 . 4q - 20 - l0 - 75 +_.15 - lo - 40 F lS +145 t ~5 - ,50 - 9~ +150~0 WERIT TRUE VANTAGE DELAIR' KOOL NEWPORT + i~ * 25 t IQ ~3 + 15 +130 - 40 • I0 + 70 +TID +760 - 70 +410 - 40 ¢ 3~ + 50 ~12G i2~L - 3b + 90 - 90 +120 "~ + i0 . • 15 ~ 60 - 25 + 55 - 50 +ii0 + TO - i0 ~ 15 - 40 + 20 - 20 SALEM ZZZ90 0"9
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Then we look.at ~he four occupn~ions which seem to be more feminine than masouline: social worker~ teacher~ seoretary and fashion model. The soolal worker is expeoted to smoke a Hi-Fi brand. The ceacher smokes Ken~ and Vantage and Salem. The secretary smoke§ Salem, but Is in- tensely linked to V=rginia Slims and also significantly linked to More. For the ~ashion model, only Virginia Shims and More are seen as suitable. ~g~9090£9
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FEMININE OGOUPATIONS G~MEL GHESTE'~-~F~i~ I SOCIAL WORKER I TEACHER - /b SECRETARY I FASHION MODEL - gO - 55 - 75 LUGKY STRIKE, - 70 - s5 PALL MALL - 45 - so MARLBORO~ - 4U - 65 WINSTON - 15 - ~ VIGEROY - 10 - ?3 BE~SON & HEOGE$.,. - 15 + 15 L&M - 5 - 65 RAL~, ~0 - 6fl TAREYTON, + 5 - 6n VIRGINIA SLIMS - 15_ +725 MORE -~ ÷]60 KEN1 t ~,) - I~ LARK + 40 - 40 PARLIAMENT zs - 40 OARLTON • ~ - ~5 MERIT + 55 - 45 TRUE +~ - 30 VANIAGE + 95 - 55 BELAIR +11o KOOL + 20 - ~ NEWPORT + 6o - 25 S~LEM_ i ~Q 1; Z90 0/9
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f~ OCCUPATION IMAGE POSITION OF SUMMARY The Viceroy brand has considerable image strength, but is too diffuse. Marlboro owns traditional masoulinity. Winston owns ordinary white collar. Benson and Hedges owns upsoale traditional status. The Viceroy image falls between Winston and 8enson and Hedgee~ The opportunity to invade the Winston franchise Js probably more immediate than ±he op- portunity to invade the Marlboro franchise or the Benson and Hedges franchise. VlGEROY However, if.~he image of Viceroy is to compete more effectively, it mus~ be sharpened and made more vivid. ~90COL9
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GVO3OG~G $(3NV~18 3113~v~i0 9~110V37 -10 $3~)Vltll XII7VNOS~I3~
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IMAGE OF SMOKERS OF PLAINS DOESNtT WORRy ABOUT SHOEING DGES NOT NO~RY HOW OTHER PEOPLE FEEL ASGUT HIM 5MOK[HG ~OULD RATHER ~AVE A LITTLE OF THE REAL NCCOY 711AN A LOT OF A SUBSI|TUTE KNOWS AII~ UMDERSTANDS T~E USE OF TOSL~ AND MATFR]ALS IS NOT EASILY IMPRESSED ~EOAUSE HE~S BEEN A~U~D IS ~T A ~tdOINER~t FEELS 711A7 DAYDREAMIN~ IS A WASTE OF TIME IS h VERY INTENSE PERSON A 8RANO 7HAT IS FOR HEAVY SMOKERS & 9Ol O&9 ;AMEL GHESTERFIELD LUCKY STRIKE PALL MALL MARLBORO ~INSTG~ VICEROY BENGON & HEDGES L&M RALEIGH TARE~TO~ VIRGINIA SLIMS MORE KENT LARK PARLIAMENT CARLTON MERIT TRUE VANTAGE BELAIR KOOL NEWPORT SALEM +120 + 50 + G5 " 15 " 20 - 15 +5 - 15 - 55 - 10 " 25 - 30 - 3D - lO - 20 - 30 - 30 - 50 - 20 - 40 - 40
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r i IMAGE OF SMOKERS OF PLAIW$/MARLBdRo A HASCUL[NE BRAND ENJOYS PROVING HOW TOUGll HE IS WORKS NARD AND PLAYS HARD ~EL|ENES THAT WIN~NG |Bt~', EVERYTHING, IT'S THE ONLY T~ |t~G IS ALWAYS ~IHSELF NO HATTER WHERE IS |5 ~R WHA~ HE I~ DOING CAMEL CHESTERFJELD LUOKY STRIKE PALL MALL MARLBORO ~INSTON VIOEROY BENSON & HEDGES L&M RALEIGH TAREYTON VIRGINIA SLIMS MORE KEffT LARK PARLIAMENT OARLTON MERIT TRUE VANTAGE BELAIR KOOL NEWPORT SALEM +120 ÷ 20 B5 45 +115 + 20 - 15 - 40 10 - 10 - 10 - 60 - 35 - 50 - 30 " 60 - 50 - 50 - 65 - 40 - 50 - 25 " 30 " 35
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f-, IMAGE OF MARLBORO SMOKERS A MAN WHO WONFN FIND EXCITING YOU FFEL WILL MAKE TILING5 HAPPEN TRUSTS HIS OWN INSTINET~ AND ACTS IJD{)N THEM QUICKLY CAMEL CHESTERFIELD LUGKY STRIKE PALL MALL MARLBORO WINSTON VICEROY BENSON & HEDGES L&M RALEIGH TAREYTON VIRGINIA SLIMS MORE KENT LARK PARLIAMENT GARLTON MERIT TRUE VANTAGE BELAIR KOOL NEWPORT SALEM - 5 -15 -20 5 ÷90 ÷25 ÷I0 +10 -15 -15 +10 -20 + 5 -25 -35 -20 -55 -15 -40 -20 -30 -20 - 5 -20
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t'" IMAGE OF SMOKERS OF MARLBORO/WINSTON SHOKES NORE WHEN HE'S ENJOYING HIHSELF IS A SOLIO~ DEPENDABLE PERSON GOES AT EVERYTHING NITH GREAT ENERGY 01~90£0P..,9 AMEL CHESTERFIELD LUCKY STRIKE 415 PALL MALL ~15 MARLBORO ¢55 WINSTON ~55 VICEROY -10 BENSON & HEDGES - 5 L&M -15 RAI_EIGH-tO TAREYTON-10 VIRGINIA SLIMS -50 MORE -2D KENT ~ 0 LARK - 5 PARLIAMENT -30 OARLTON -35 MERIT -35 TRUE -45 VANTAGE -45 BELAIR -30 KOOL -i0 NEWPORT -40 SALEM - 5
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L IMAI3EJIE_W I NS_T_QIC_~0~ER,.~ HAS THF KNACK OF DOING THE ~|HHT THII~G FEELS THAT OTHER PEOPLE TRUST HIM BE£AUSE HE TRUSTS THEM ENJOYS ~AKINC T~)I~G5 WORK CON=IDENT THAT THING5 CAN BE HANDLED AS THEY COHE BELIEWFS THAT IF A JOB'S¸ WORTH DOING AT ALL, IT'S WORTH DO[HG TO THE BEST OF OHEIS ABILITY BAMEL -15 CHESTERFIELD * 5 LUBKX STRIKE -10 PALL MALL+ 5 MARLBORO +10 WI~STON +35 VICEROY ~20 BENSON & HEDGES ~ O L&M - 5 RALEIGH +10 TAREYTON +i0 VIRGINIA SLIMS -45 MORE -40 KENT +IO LARK -i0 PARLIAMENT + 5 CARLTON -40 MERIT - 5 TRUE - 5 VANTAGE -30 BELAIR "30 KOOL t O NEWPORT ~ 0 SALEM t 5
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m i IMAGE OF SMOKERS OF BENSON & HEDGES PREFERS NOT TO SHOW EMOTION BEL[EVES YOU SHOW MORE RESPECT FOR OTHER BY KEEPING YOUR DISTANCE BELIEVES THAT IT IS VERY IMPORTANT TO KEEP IRACK OF DETAILS BELONGS TO MANY GROUPS AND D~GANIZATIONS HAS A SORT OF MAGNETISM CAMEL G~ESTERFIELD LUGKY STRIKE PALL MALL MARLBORO WINSTON VICEROY BENSOM & HEDGES L&M RKLEIGH TAREYTON VIRGINIA SLIMS MORE KENT LARK PARLIAMENT CARLTON MERIT TRUE VANTAGE BELAIR KOOL NEWPORT SALEM -30 -25 -30 -15 -TO 4 5 "~15 470 -i0 ,"20 +10 t15 ~:O *20 -40 *,tO +I0 -20 "!"-0 +-0 -10 + 5 -10 -15
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IMAGE OF SMOKERS OF REAL HI-FI'S CAMEL OHESTERFIELD LUGKY STRIKE PALL MALL A BRAND THAT IS FOR NEW SMOKERS A BRAND THAF IS FOR LIGI~T SMOKERS MARLBORO W I NSTON ~ORRIED ABOUT SMOKING WOL}LD, BE WORIED ABOUT SMOKING V ICEROV A CIGARETTE IN A ROONFUL OF NOH-SMOKERS BENSON & ~EOGES L&M FEELS THAT YOU I~AVE TO BE WATCH- RALEIGH FUL TO PREVENT IHING5 FROM TAREYTON TURNING OUT SADLY VIRGINIA SL II~S ALMOST NEWER HAS STRONG FEELINGS ~DR~ TAKES PRIDE IN SELF-DISIRLINE ~,ENT BELIEVES HIS TASTE BUDS ARE VERY LARK SENSITIVE PARLI A~Ei~T FEELS TIIAT VERY OFTEN THE BESI DECISION IS ~JO DECISION ~2~90r.07.,9 CARLTON MERIT TRUE VANTAGE BELAIR KOOL NEWPORT SALEM -55 -3(3 -45 -40 -43 "35 -25 -3O +- 0 -40 -15 410 420 +25 +20 410 +140 +133 +150 +120 +20 + 5 +IO -lO
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fM+~E OF VICEROY SMOKERS HAS CO~F|DENCE THaT THINGS WILL USUALLY ~ORK OUT FOR THE BEST ALWAYS 5EE~S 70 MAKE A LOl OF COMMON SENSE FEELS THAT IT 15 ONLY IMPORTANT TO KEEP A FEW BASIC IDEAS IN MIND TENO$ TO LOOK AT THE SERIOUS SIDE OF IHINGS ~C~90[:0L9 CAMEL CHESTERFIELD LUQKY STRIKE PALL MALL MARLBORO WINSTON VICEROY BENSCN & HEDGES L&M RALEIGH TAREYTOR VIRGINIA SLIMS MORE KENT LARK PARLIAMENT CARLTON MERIT TRUE VANTAGE BELAIR KOOL frEePORT SALEM -25 - 5 -IO +5 -15 + 5 4-45 -I0 4-10 +25 -10 -3O -25 +15 -lO +20 ~10 5 -10 -10 -10 -15 ±C,
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IMAGE,OF SMOKERS OF OTHER FILTERS IS KNOMM FOR tlAVINO A DRY WIT ~OULD RAT~ER RISK A MISTAKE THAN DO NOTHING AT ALL DON=T TRUST OTHER PEOPLE TOO MD~H SMOKES MORE WHEN TRYIHG TO CONCENTRATE ALWAYS SEEMS TO BE IN CONTROL OF THE SITUATION COULD SIT DOWN AND WORK CUT THE ANSWER I0 ALMOST ANYTHING LIKES 30 PLAN OUT ~HINGS BEFORE DOING ANYTHING LIKES TO SLEEP ON IT BEEORF ACTING CAMEL GHESTERFIELB LUCKY STRIKE PALL MALL MARLBORO WINSTON VICEROY 8ENGON & HEDGES L&M RALEIGH TAREYTON VIRGINIA $LI~S MORE KENT LARK PARLIAMENT CARLTON MERIT TRUE VANTAGE BELA{R KOOL NEWPORT SALEM -2O 0 -15 - 5 -10 + 5 +15 + 5 +15 +10 +ZO -45 -15 "+3O 4" 5 +25 - 5 ~0 "15 4 5 -35 +- 0 - 5 - 5
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," f IMAGE OF S~OKER$ OF VIRGINIA SLIMS A FEHININE BRAND A WOHAN WHO MEN FIND EXCITING LIKES TO LET EHOTIGN 5HO~ ENJOYS GETTING EXCITED ABOUT THIN~S 9C 90C0 9 CAMEL -50 CHESTERFIELD -50 LUI;KY STRIKE -50 PALL MALL -35 ~ARLBORO -30 WINSTON -30 VICEROY -50 VIRGINIA SLIMS +625 MORE +105 KENT -35 LARK -15 PARLIAMENT -30 .CARLTON -55 MERIT -35 TRUE -35 VANTAGE -55 BELAIR ~ O KOOL -I0 NEWPORT -i0 SALEM ~ 0 BENSON & HEDGES +30 L&M -40 RALEIGH -50 TAREYTON-40
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¢.-. IMAGE OF SMOKERS OF MORE BELIEVES THAT "WHEN IN ROHEs DO AS THE ROMANS DO,rr DOES II[S OWN THING A-, 901 0 9 CAMEL +15 CHESTERFIELD - 5 LUCKY STRIKE - 5 PALL MALL -25 MARLBORO ~10 WINSTON +10 VICEROY -10 BENSON & HEDGES ~ 0 L&M ± 0 RALEIGH +]O TAREYTON -20 VIRGINIA SLIMS 425 MORE +140 KENT -45 LARK ± 0 PARLIAMENT-20 CARLTON -25 MERIT -15 TRUE -40 VANTAGE - 5 BELAIR -35 KOOL -10 NEWPORT -I0 SALEM -20
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IMAGE OF SMOKERS OF MENTHOLS LOVES AND UNDERSTANDS NATURE LIKES TO TAKE IT EASY WBE~ WORKING OR PLAYIHG CAN ALHhYS SEE THE BRIGHTER SID~ OF T~ING$ WINNING IS NOT AS IHPORTANT A~ ENJOYING ONESELF FEEL~ THAT IT IS ALR[GIIT TO DAYDREAM OFTEN AN~ EH~OYS IT LIKES TO SHARE A GOOD BECKY L~UG~ SHOKES HORE WHEN FEELING ~ELA~ED SHOKES NORE WHEN FEELING ~OREO CAMEL CHESTERFIELD LUCKY STRIKE PALL MALL MARLBORO WINSTON VICEROY BENSON & ~EDGES L&M RALEIGH TAREYTON VIRGINIA SLIMS MORE KENT LARK PARLIAMENT GARLTON MERIT TRUE ~ANTAGE BELAIR ROOL NEWPORT SALEM -5O -20 -39 -20 -10 -10 -10 :.1o "30 " 5 -15 -15 0 :,30 -10 -3O -10 - 5 -10 ÷130 ~25 t65 +80
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t,~ p~ THE APPEARANCE IMAGE O._.F LEADING CIGARETTE BRANDS 6R~90RO£9
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For the mosl part, these Piotures speak for themselves~ and offer their own Interpretation, Here are three people who would smoke regulars. One of them would also smoke Raleigh. 0~2~90~0L9
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CAME~ +47~ ÷ 75 .... +1~ OHESTERFIELB +2t5 + 95 ÷ R5 LUCKY STRIKE +3~5 +180 *18~ PALL MALL ÷z3~ + 9o .~ 95 MkRLBORO WINSTON - lo - IO - 35 - 5 - Z5 VICEROY - z~ - 1o z 25 RENSON & HEDGES. - 95 - 55 - ~N RALEIGH + 20 + 2~ ~14n TAREYTO~ - 55 + 5 ~ 3n VIRBINI~ SLIM~ -~oo - ~0 - ~ MORE.. - 70 - ~0 - 50 KER~. - uo - 5 - 5 LARK, - 80 + ~ ¢ 15 PARLIAMENY - 90 - 47 OARLTON - 7~ - 30 - Zo MERIT - 95 - 6b - 5 TRUE - 75 - 50 1Q VANTAGE BELAIR, - 70 - 50 - 55 - 5g - iO - 40 KOOL NEWPORT SALEM - A5 + 35 - ~r/_~_ - 40 - 60 ----- 50 - 35 - 5O
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Hero are three more pictures. One would smoke regulars or Marlboro. One would most likely smoke Marlboro, but also Winston. One would most likely smoke Marlboro or More. Bu~ all are Marlboro smokers. ~90~0~9
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---
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Neckties and haircuts produce a different identification. Most important, image identity begins to scatter. Five brands reach sta±istical significance 1or each picture.
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r'- GAME~ ...~ ~:'~ 2b -65 + 15 CHESTERFIELD ~ lo -15 • 45 LUOKI STRIKE - 30 -55 + D PALL MALL + 10 -75 + ~E MARLBORO ' ÷ ~0 +7s * 60 IINSTON ,_40 +~ ÷ 5S VIDEROT + BQ 115 + 45 BENSON & HEDGES. +1o5 +75 + 90 LAM • 6o -50 RALEIGH, + 15 +!5 + 7o TAREYTOH + 25 ~ - IQ VIRGINIA SLIMS -95 -too NORE ~u " I m -35 - 15 LARK TlO -15 + 4o PARLIAgENT. + 75 +~ 5 nARLTON s +35 - Zo HERIT {- ZO ÷10 5 TRUE - 30 -2o -~ Bo VANTAGE + ~o -]5_ - 4~ BELAIR - 4o -15 - 70- KOOL - 45 -So - 55 NEtIPORT - 25 - 25 SALEM - 40 -]o - 30 ~17Z90~0'~9
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Let's look a~ some where Viceroy ge±s associations. pictures significan± 9F~90~0~9
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CAI.4EE__ + ~ - ~6 CHESTERFIELD + 80 ~ 25 LUOK7 STRIKE ~- 3-'7 -~SzJ, L~ PALL MALL + 95 + ]~o MARLBORO~ ~INSTON. -__E3.__ YICEROY BENSON & HEDGES L&U + 40 + 25 - 55 + 60 + 25 t 40 - 60 + 80 + 80 15~ - 30 - 5 + 20 -Jl.~ + 35 TAREYTDN. VIRGINIA SLI~S ~IORE. KENT~ LARK--- PARLIAMENT OARLTON~ MERIT + go - 4O ~- 9O TRUE RELAIR~ KOOL~------- NEWPORT SALEM &bggoco&9 - 15 - 75 - 35 -3~__ + 80 ¢ 95 - 60~ - 25 +145 + 8O q + . - 25_ 50
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OAMEL + /u - - 20 CHESTERFIELB + 9o + 50 + 60 A LUCKY STRIKE + 65 + 5o + 20 PALL MALL + 35 + to MARLBOR~ + Ju • zo - lo WINSTON + lo + 5o + 30 VICEROy ~ 20 + i~ 5 BENSON ¢ HEDGES +l~zJ + ~o + 2~ L&M + 30 ÷ 20 + 35 - 9O RALEIGH +]15 + 75 ~].00 3AREYTON. ÷ 5 + ]5 + ~0 VIRGINIk SLIMS - vu -1o0 ~ORE, - 6O - G~ - 1~ KENT" ' PARLIAMENT - ~ + ~0 - Pn GARLTO~ + 35 - 40 + ~5 MERIT -25 + EO - 25 TRUE - 70 - 5o - ~o VA~TkGE - ~0 + ~5 - 3~ BELAIW~ - 3o - ~5 - 35 KOOL - 15 - 35 + £~ NEWPORT - 15 - 35 + ]0 SALEM - 40 - 15 - ]0 S?L 9ORO&9
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CA#EL - 80 - 6o OHESTERFIELO - 45 - kO LUDKY STRIKE - 65 - 65 PALL MALL - ~5 + ~o MARLBORO 8o - 7Q WINSTON - 5o - i0 -85 - 75 - 75 - 7q - 30 - 10 VIOEROY + zu + 20 bU BENSON & HEDGES + 3O 3O - 40 L&# RNLEI£~~ - lO + to 4 ~5 - ]0 - 4O TAREYTOH. - 20 + 20 + 40 VIRGINIA SLIMS + 5o - 30 + 40 #ORE, - 55 + i0 KEN] + so ~ 65 I + 3u LARK + 50 + 75 + ],0 PARLIASENT +105 * 75 - 20 CARLTON + 5 + 30 • 70 MERIT + 20 + 70 ÷ 55 TREE +105 +i00 +135 VANTAGE, ~- 75 + 95 4 55 flELAIR" ÷±uu 4 ZO + ~U KOOL NEWPORT SALEM G ZgOE'O&9 - 25 - 25 30 + 60 + 3~I + 5 + 35 + 80 - "
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f--,, CAM£'*- CHESTERF I £LO LUCKY STRIKE PALL MALL -- 8flSQ I -_ 5~ -_ 6015 ~JkRt_BI) RO WINSTON VICEROY J - 6fl f 15 - 65 - ]0 + - ,L~, L&M RALE I 5 H TAREYTON, '/IR~ I HI A SLIME UORE KEMP' LARK PARL I .%MENT OARLTON MERIT TRUE VAtlTA6E BELAIR ' KOOL. ~EWPORT SALE~ - aft - ~5 _ ?(1 + 3fl # 4fi f '~ - 10_ ~" 35 + ]0 + ~ ÷ 35 + 6Q 60 4- 30 - ~to + ao 455 - 4~ + 45 ' + 20 - 35 - 20 i + 55 + 70 + 30 l + 43 ÷ ]o + 95 + ~0 + 45 - 15 - 25 , + 75 + )5 + 25 + ?o + 50 + 30 + 6(] o zgo oL9
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Every one of the pic±ures of black people inoluded in the study gener- ated a statistically signifio~nt mention of at least one menthol brand.
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¢-, CAUECL GHESTERFIELD. LUCKY STRIKE PALL MALL MARLBORO WINSTOfl ,,% - 85 45 - O~ + 5 - 70 + 60 - 55 • 20 - 30 + 40 - 15 - 25 - 50 + 2U -- T5 ~ i0 - 40 V|~ERC~ BENSON & HEDGES. L&M RALEIGH TAREYTCN VIRGINIA SLI~G " MORE KEN1 " LARK, PARLIAUERT CARLTON b5 - 55 - 40 - 5 - 15 - 50 + 40 + - 30 - ~0 + 45 - J5 - 15 - ]/ + 15 - 4fl - 90 - 5 - 95 + I0 - 55 + i0 - 40 + 90 40 - - 15 ÷ !0 - 35 - 20 4 5~.. * 50 - 70 - 55 + lg - 15 - 35 + 35 + 5 - 2Q MERIT TRUE 8~ + 20 - ~5 • R5 - ~5 + 50 - 50 + 15 - 3Q ÷ 35 - 20 - 25 ~ANTA~E 8ELAIR I~ + 95 - 15 +103 KOOt +214 +],BO +1~0 }ln6 + 60 - 25 I #~ 40 + ~5 + b~. NEWPORT - 50 SALEM -4o
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FEMININE IMABERY Women young enough ±o be assumed to be sexually active are primar- ily related to Virginia Slima, and secondarily to More. Older women are not so much assoc- iated with Virginia Slims and More, and are more likely to be related to Kent or Hi-Fi brands.
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f-, CAMEL - 70 -75 - 8O OHESTERFIELO LUGNV STRIKE PALL MALl. MARLBORO~ ~INSTON -95 -85 - 85 - 30 - 30 - 75 - 5n - 85 - 7q - 5~ - 70 - 40 - 35 - 5~ - ;'5 VICEROY - 4~ - 4o + 15 BENTON & HEDBES" + £5 • 75 + 5 L~M - 50 - 40 - P5 RALEIGH, - 70 - ?O - ?n TAREYTON - GO - 10 - 15 VIRGINIA SLIMS • 41u +J4b +255 ~ORF +Ii0 +]50 +140 LARK. - 40 - &~ - 10 PARLIAMENT. - 35 - 30 + 5 CARLTON - 20 - 30 - ZO MERIT - io ,~.]o + 5. TRUE - 3o VANTAGE, - 20 - 30 + 30 BELAIR' + Iu - lu KOOL, - 4~ - 40 - 4~ NEWPORT, + 25 ~ - 15 SALEM + 5 + 15 ~EZgO~OL9
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MERIT +350 + 55 TRUE + 15 + 85 VANTkBE f ~0 BELA R," + 15 + 45 KOOL , - 5 .- 1~ ~EtPORT ~ 3~ ÷ 10 GALEM. + ~5 ÷ 35
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PRODbOT IMAGE There ore minor Vioeroy produot Increased Decreased CONCLUSIONS P_~RT II opportunities to Improve the image: firm, well-packed image biting, bitter imuge However, the product image ol Viceroy is muoh more competitive with the leader brands than the user imuge of Viceroy. USER IMAGE The user image of Viseroy is diffuse, slightly upscale socially. Psychologically, o serious, sensible individual, confident thor things will work out well. Overall, the Viceroy image is closest to Winston. There is a clear need and opportunity for a more vivid and appealing user image for Vioeroy.
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OVERALL SUMMARY AND CONCLUSIONS Top-of-mind for. Viceroy is proportional to historical snare of advertising dollars. More top-of-mind i-~ ds- ~ri;able, but it is not at present the key issue for-- n grow~n. Viceroy ranks low in converting awareness to regular use of the brand, and in converting awareness toi favor- able attitudes toward the brand, We believe the key objective must be to generate more persuasive brand Imagery for Viceroy. The Viceroy product im is a sound base on which to build. More emphasis sa~eu,= be given to firm and fully packed, and overtones of bitter and biting taste should be managed. The Vleeroy user image is its weakest point, but Viceroy does not have a negot=ve user image. Rather, the Viceroy image is pale and diffuse. We believe the key objective for Viceroy sales and share growth Is more vlvmd imagery of the kind that new smokers will want to identify with and that wii1 not alienate tne current Viceroy franchise. ~90~0&9
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RECOMMENDATIONS We believe the first and most basic decis- ion that Viceroy strategy must make is whether to attempt to invade and capture the area of clearly established imagery; or attempt to build a new image to capture smokers currently using brands with diffuse or weak Imagery, Letts look at some strategic alternatives: $~90~0~9
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A l ,,,,, ~ E~ I ~, .~ L...~.LP,~I~ i i ~ ~... Increase Viceroy share of mork?t by invading the Marlboro franchise through giving Vlaeroy a strongly masouZine image. There are.±hree reasons for findin~ this strategic alternative unattractive, despite the size of the vol- ume opportunity, 1. MarlbOrO has. a very strong, l~ng-te;m 10ok on this masculine Imagery, some of which was built at a time when the market was ready for a transfer from the regular brands, it would be very diffiault to shake thisimage franahise signifiaantly. 2. We beIieve it is likely that the aurrent (Marlboro) image of masculinity, like the predecessor. (Game1) will get out of tun? with the times and lose Its selling power. To imitate Marlboro would be to shoot behind the target. 3. We believe that intensely masculine imagery in the mold of Marlboro would run the risk of sertous al- ienation of the current smoker franahlse. (We sus- pect the race driver image may have been doing that • ~_already). Viceroy users see themselves as being a G~9o~0-~aut above the MarLboro type o~ Ima~e.
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r~ ~,~ STRATEGIO ALTERNATIVE Increase Viceroy share of market by position- ing Viceroy between full-filter flavor and Hi-Fi as the ideal compromise between the need for fu11 taste and the need for low tar. mlmmlmMlm~Nmm~li@mm#IN@NllillNINm(lilmm~ll@mN¢ After study of the data, we believe that the low-lar advantage of Viceroy can attract full- flavor smokers, but canno~ pull in ~he smoker headed for real Hi-FI brands. 09P.90 I~O&9
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.PREFERRED STRATEGIO AL_T~ERNATJVE Inorease Vioeroy share a new image position in Ing against the Winston, and by of market by creating the market: target- volume held primarily by other filter brands as well. ~92~90RO&9
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Ctq~A~FTWF ~lp f,F~OHA~rTIF5 ~l~An PLA¥1N~ $]RCh~ M~$¢ULI~Ir¥ EXCITI~G TO WOHEN~ 1~511HCTIVEt DQ~R 5Otln. ~FRt~lt~, ¥~V~lk~ DRICH~ CL~D M~M6~R ~Url~U~ ~pPr~Li~ ~?l~l~t CA~L LUCKY $~IKE HA~LBCR~ MArLBOrO vr~Rr~V WI~H ~F~T np~$~ T~U~ V]BGI~I~ 5LtH5 BFLAI~ 6~ 21~ 17|
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I!
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IC. ( New IBr~nd Development for Cigarettes: An Examination of the Marketin$ Opportu~itiea by Smoker At=itude Segment3 ]977 I ( ~ound This report skudies smoker &tt~tudes to~.ard health concerng and ~oclal cencerns about cigarelte smoking, and exalIlirles =licit ilTlplica~ions for new p~nduet deve]npment. I. AttitudinalDirnen~ion Unconcerned about social or perso~ml issues Little concern for social or personal issues Concerned only about soci~l issues Concerned o~]y ~hout p~rso~a] issues Concerned about both social and personal issues (du&l concern) If. Smoking Concerns by Sex A. Worsen III. h]osi are only slightly concerned M~.ny ~press ~ social concern ~any a]~ expre~ dual concerns, hut , .. F~w have exclusively persorl&l Concerl%s B. Men A hi~her DruDortion of men are either unconcerned or only slightly concerned, compared t~ won~en, They are less concerned with social consequences than womerl, ~nd ... They are *note personally c~n~erned. mu~l concerns ~tnson~ men &re in the s~me proportion as Rmo]]~ women. Trends in Brand Behavior Viewing switchin~ among the 5 groups of smokers over the past 5 years yields the follo~ing observations: ~J fm 0
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( ( t 11. Dual concern smokers have yielded the most r~cd movement -- primarily to hi-fi styles. ]~Ioven~ent by s~nokers with only personal ece~cerns does not exceed movement by those who are uncDnceFned. iMoven, en~ by those wI~h only social concerns is less than nlcve- n~e~t hy tlnConcerned ~mokers. ~n~okers with or~ly soeia] concerns or only personal concerns represent an opportunity market fol" hi-fi ~iyles that h~s no± be~n tapped. IV. Smoker S~atisfactlons and Dissatisfactions Tobacco Qualit~ Perceptions The dual concern smoker resists claims of quality, naturalness, and absence of chemical addi±ives. Taste I. While the dual conce~-n sn~uker feels he gets mild, smoo-h, ref~eshir]~, and ~on~ati¢ ~obaeco f~.ste, lhe t~s~e is no= rich and °,xci~ing. It c~uld be improved. The ~uuiKlly concerned s~]ok~r ~s sat~sfled with the tz~te of hi~ brand, and taste is the op~i:num benefit. The personally concerned sn~ok~x" l~ts difficulty ~lving up tasfe impact. V. Psy~ Frofiles of the Attit,ldinal Grou~ A. ~Jnconc erned 5rsnker s B. A n~acho inlaRe Wants the "Real McCoy" Takes things as they come Ghow~ iittie emotion Magnefic per so~lity ~li~hfl~ ConceTned SmokcPs Energetic Self-confident ~[e~ps a Fe~p~ctful d~sC~nce from cthers O Ca N Ca
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12. C ( C. Socially Conccrncd Smacker Emotional A "joiner" Disciplined Good ccr~rnon sense D. Personally Concerned Smoker Good self-impression Can be himself Thinks ~men find him exciting Lacks seriousness and deciclve~ess E. Dual Concern Smoker H~s a "knack~ for lhings Tgkes thin~s easy Loves na~ur e Easily influenced by external pressures Moved by flattery (_ e., o A~
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NEW BRAND DEVELOPMENT FOR OIGARETTES AN EXAMINATION OF.THE MARKETING OPPORTUNITY BY SMOKER ATTITUDE SEGMENTS L9~90~0~9 Prepared for: Brown & Williamson by: McCann-Eriokson, Inc. August 1977
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BAGKGROUND e,, IN OUR ANALYSIS OF THE 24-BRAND STUDY CONDUCTED FOR BROWN & WILLIAMSON, IT BEDAME APPARENT THAT T~O FORCES ARE DRIVING THE CURRENT HIGH RATES OF BRAND SWITCHING: SMOKER CONCERN ABOUT PERSONAL HEALTH SMOKER CONCERN ABOUT SOCIAL CENSURE THE AGENDY ALSO OONGLUDED THAT SUCCESSFUL NEW BRAND DEVELOPMENT WOULD HAVE TO BE AIMED AT AND SATISFY THE SMOKER NEEDS ARISING OUT OF THESE T~O KEY FORCES.
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THEREFORE, THE AGENCY PROPOSED A SEGOND AND MORE INTENSIVE ANALYSIS OF PERSONAL HEALTH AND SOOIAL £ENSURE OONOERNS, WITH THESE SPEClFIO OBJEOTIVES: 1. THE SIZE AND IMPORTANOE OF THESE OONOERN GROUPS: HEALTH ONLY, SOCIAL ONLY, AND BOTH. 2. THE BRAND BEHAVIOR AND BRAND BEHAVIOR TRENDS OF THESE SEGMENTS, OOMPARED WITH UNGONGERNED SMOKER SEGMENTS. 3. SATISFAGTIONS AND DISSATISFAGTIONS OF THE SEGMENTS IN TERMS OF: TOBAG£O, TASTE, AND QUALITY OF THE 5BOKING 4. THE PSYCHOLOGIOAL THE MARKET SEGMENTS. EXPERIENCE. GHARAGTERISTIOS OF 69~90£0&9
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DEFINING THE ATTITUDINAL SEGMENTS 0~90~0~9
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THE 24-BRAND STUDY INCLUDED MENTS OF SMOKER ATTITUDES: ~.CONCERN ABOUT HEALTH MEASURED BY AN 8-POINT END POINTS TWO CRITICAL MEASURE- SCALE WITH IDENTIFIED fPOINT 1 "I'VE ALWAYS SMOKED AND NEVER SERIOUSLY THOUGHT ABOUT CUTTING DOWN OR GIVING IT UP," L.POINT 8 "I'VE OUT DOWN BUT I'D REALLY LIKE TO GUT OUT SMOKING ALTOGETHER. ~ONCERN ABOUT SO01AL PRESSURE ALSO MEASURED BY AN 8-POINT SCALE WITH IDENTIFIED END POINTS FPOINT I "IT'S MY RIGHT AND PRIVILEGE TO SMOKE, AND I SMOKE WHENEVER I FEEL LIKE IT. /_POINT 8 "I TRY TO LIMIT MY SMOKING ONLY TO THOSE TIMES WHE~J IT WILL NOT BOTHER ANYONE ELSE." ~&~90~O&9
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,r' HEALTH OONOERN., SO01AL CONCERN NEVER ABOUT SMOKE WHENEVER I V/ANT TRY TO LIMIT MY SMOKING THOUGHT QUITTING 12 6 6 WOULD LIKE TO QUIT 8 4 25 8 11 20
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, t"~ t'~ ~ i it ABOUT HALF OF THE SMOKERS EXPRESS A SIG- NIFICANT DEGREE OF OONOERN ABOUT SMOKING, WOMEN SLIGHTLY MORE THAN MEN. 12g ARE NOT AT ALL CONCERNED ABOUT ~ SMOKING. 39~ ARE ONLY SLIGHTLY SMOKING. 17~ ARE SIGNIFICANTLY CONCERNED ABOUT / 12~ 2o% CONCERNED ABOUT BUT NOT ABOUT 9~~C' SOCIAL CENSURE, PERSONAL HEALTH. ARE SIGNIFICANTLY CONCERNED ABOUT,~ PERSONAL HEALTH, BUT NOT ABOUT ~"~" SOCIAL CENSURE. ARE SIGNIFICANTLY CONCERNED ABOUT BOTH PERSONAL IIEALTH AND SOCIAL CENSURE.
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CONCERN ABOUT UNCONCERNED tOTAL NONE __~ ........ ~£ .... ~ .... ~_. MEN 54 13 41 MOKER~ LITTLE tOTAL % % ._~___ 46 SMOKING BY SEX CONCERNED SMOKERS ;OBIAL ~EALTH % % 17 12 DUAL WOMEN 48 11 3T 52 22 10 20 ~&~90~O&9 % 12 20 14 20
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f ~NGARETTE BRAND PREFERENGES PREFERENGE TRENDS AMONG THF FIVE ATTITUDINAL GROUPS
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t" SINCE EACH SMOKER IN THE STUDY WAS ASKED WHAT DIGARETTE BRAND HE PREFERRED FIVE YEARS AGO, IT WAS POSSIBLE TO LOOK BACKWARD. THIS CONSUMER RECALL CANNOT BE ASSUMED TO BE ABSOLUTELY ACCURATE~ BUT DOES PRO- VIDE GOOD INDICATION OF WHERE THESE SMOKERS WERE IN PAST TIME. 9&~'90~0~9
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FiVE ~EARS AGO THE CONCERNED SMOKERS HAD ALREADY MOVED AWAY FROM PLAIN BRANDS. ~:j~JHO'~EVER, THEY APPEAR TO HAVE BEEN USING FULL FLAVOR S. USE OF MENTHOL BRANDS ALSO APPEARS TO BE ABOUT THE SAME AMONG I]ONCERNED AND UNCONCERNED SMOKERS, ',VITH THE EXCEPTION OF THE SOCIAL CONCERN SMOKER, WHO WAS MORE LIKELY TO USE MENTHOL. USE OF HI-FI "A" BRANDS ALSO DOES NOT SEEM TO BE PARTICULARLY DIFFERENT FIVE YEARS AGO. INTERESTINGLY, THE ~OVEMENT AWAY FROM PLAINS AMONG CONCERNED SMOKERS AT THAT TIME SEEMS TO HAVE BEEN TO THE "OTHER" BRANDS, LARGELY 100 MILLIMETER.
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BRAND PREFERENCE BY SMOKER ATTITUDE UNCONCERNED SMOKERS CONCERNED SMOKERS FOTAL NONE LITTLE [OTAL SOCIAL ,EALTH DUAL III III I I ~ ~I ~I MENTHOL 18 17 21 17 18 HI-FI A 8 8 9 9 HI-FI B 2 1 1 3 OTHER BRAND 4 4 5 6 NO BRAND 6 8 11 9 100 100 100 I00 ~&~90~OL9 10 10 100
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WE ALSO ASKED SMOKERS WHAT BRAND THEY PRE- FERRED ~ YEAR AGO. LOOKING AT THE YEAR-AGO PROFILE, WE SEE SIGNIFICANT GHANGES FROM FIVE YEARS AGO. 6.~g90~0~.9
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BRAND PREFERENCE BY SMOKER ATTITUDE UNCONCERNED SMOKERS CONCERNED SMOKERS I .. , , ~OTAL NONE TTLE "OTAL IEALTH DUAL \ ,~'" I YEAR AGO ~.ZTPLAIN/REGULAF 21 16 10 II 10 FULL FLAV.FILT. 4L 45 39 51 35 /f MENTHOL 22 18 25 14 25 HI-FI A 3 8 6 7 HI-FI B 3 4 4 7 T 8 OTHER BRAND lO 7 15 T 15 NO BRAND 0 2 .I 1 3 O lOO i00 IOO iO0 100 0~90~0~9
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t" A CLOSE. LOOK AT THE SHIFT FRO~JI FIVE YEARS TAKIi,~ AGO TO LAST YEAR, It~E SEE: [IN~ONCERNEO SIL4OKERS HAD MOVED TO OTHER BRANDS AND MENTHOLS, AND HI-FI "B." SLIGHTLY OONCERNEFJ S~(IKERS WERE MOVING LESS, BUT TO OTHER BRANDS AND HI-FI "B."c#''~/-'~''~ .,~,. ~,~.~.~i_ I WERE MOVING TO OTHER BRANDS, MENTHOL, -F I ,~, n . ,, AND HI ~.~. ~,'IERE MOVING TO FULL FLAVOR FILTERS AND HI-FI "B." SMOKERS VilTH BOTH SOCIAL AI~!HEALTH_IIONDERNS WERE MOVING TO MENTHOL, OTHER BRANDS, AND HI-FI "B." IT I.~ IMPORTANT TO KEEP IN Uli~O. HOWEVER. THAT MANY OF THE~E ','~ERE NEW SMQKER~. AN[I_THE OATA_MAY E'EFLEC'I"
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TRENDS IN BRAND BEHAVIOR BY ATTITUDE GROUPS UR~ONCERREO SUDKERS 80RCERr~ED SMOKERS FOTAL LITTLE TOTAL SOCIAL ~EALTH 5 YEARS AGO V$ 1 YR AGO PLAIN/REGUL~ FULL FLAV.F LT MENTHOL DUAL OTHER BRAND *6 ÷3 +10 NO BRAND -6 -6 -10 NET CHANGE 14 8 17
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WE ALSO ASKED SMOKERS ~HAT PREFERRED CURRENTLY. BRAND THEY IN VIEW OF THE FAOT THAT ONLY ONE YEAR IS INVOLVED, THE OHANBES ARE IMPRESSIVE.
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BRAND PREFERENGE BY SMOKER ATTITUDE /,* Iq, JOO~JCERNED ;t,,IOKEffS CONOERt~'EU SMOKERS L J ,o ,RA,B 0 . O 0 - 0 l O j [[[[[I[][[[]~][[I[21I[[I.[[][[[12[2[2[Y[[[IILI[[[[][[I[D2 HI-FI A 5 8 /i 8 8I ~o -~;:;;--~ .... I ......... ;-] --G--[Y ........ ; ........ ;--i-Y;-~- --EI~--[-E~--- ............. F ..... ;--o-l-=°--l-I ...... ;'= .... , P~90~0~9
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~L " ~ ~ ,~ ~ ~ -a-,~ ~-~i :~-- ~,~- ~ ~!~- ~~i~-~ ~ IN THE I~T YFAR, ALL SEGMENTS OF THE MARKET SHOW SIGNIFICANT CHANGES IN I~EE OF CIGARETTE PREFERRED. (ACTUAL BRAND CHANGES GREATER, SINCE THAT INCLUDES =L SWITCHING WITHIN TYPE.) , S IINCON~ERN~n ~U~KFR~ SPLIT. HALF OF THOSE WHO ~,;j,~i[~I'~- CHANGED WENT BACK TO PLAINS; AND THE OTHER HALF~I~ WENT TO HI-FI A AND B. ,.--.-~,,SMOKERS W£IH SOCiAL_CONCERNS ONLY SHOWED THE LEAST MOVEMENT OF ANY OF THE GROUPS, WITH SLIGHT SHIFTS TO OTHER AND HI-F "A."~-,~'/~ #~ ~ ~'~7~Y;~:×'~ / *// SMOKERS ~ITH HEALTH CONCERNS ONLY WERE MOVING PRI- MARILY TO MENTHOL AND OTHER BRANDS, SECONDARILY TD HI-FI BRANDS. RMnKERS CONCERNED ABOUT BOTH SOCIAL CFNRIIRF ANn PFP, ROMAI HEALTH SHOWED THE HIGHEST RATE OF_ MOVE- "~ ~ENT. AND '#ERE MOVING EXCLUSIVELY INTO HI FI BRANDS, MOSTLY HI-FI B. IT IS ALSO INTERESTING TO NOTE THAT THE ~,IA,IC)R PART OF THAT MOVEMENT E~AME FROM
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TRENDS IN PAST YEAR BRAND PREFERENCE U~CONCERNEB $~,IOKERS CONCER~ED SMOKERS TOTAL HONE ITTLE rOTAL IAL NO BRAND 0 -2 -I -3 O PLAIN/REG. I *3 -1 -1 -1 O FULL FLAV.F LT. ~4 -4 -i -3 -1 MENTHOL -1 OTHER -I HI-FI A HI-FI B +4 0 +2 7 NET CHANGE B +3 i ``T I i 10
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EXTENDING OUR LOOK AT AND TAKING INTO ACCOUNT WE SEE THAT 7% OF THESE OIGARETTE (NOT BRANDS). CONCERNED AND ABOUT EQUALLY REGENT BRAND S~ITCHING, THE SIZE OF EACH SEGMENT, SMOKERS SWlTOHED TYPES OF UNCONCERNED SMOKERS CONTRIBUTED TO TOTAL TYPE SWITCHING. AMONG CONCE~EO SMOKERS, IT IS APPARENT THAT DUAL CONCERN BOTH HEALTH AND 50DIAL - YIELDS REAL MOVEMENT, AND THIS IS BEING CAPTURED BY THE LO~ TAR BRANDS. HONEVFP: THE SFGB~ENT SOl_ElY ~ONCERNE~ WITH PEP- IS NOT SHOWING BETTER MOVEMENT THAN THE UNCONCERNED GROUP; AND THE SEG~ENT SOLELY CON- ~ERNFB WITH SOCIAL CENSURE IS SHOWING VERY LITTLE MOVEMENT, LESS THAN THAT FOR UNCONCERNED S~OKERS. &~90RO~9
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q RECENT SwllCHING BEHAVIOR AMONG ATTITUDE GROUPS r ~.rqOrJ+qCPF.'r9 SI+<OKFRS .qO!!~FR~JFn £L~QK.r'~£ I ) ) I i , I I I I I I I I I ,Z.O_TiLL , ~ ,~L.L ,TaT~L ,S~Z£..~L~J_ pXFALTH I Of Pop, j I (12) I~ J i~ I (~27)- , .^ mtT-##~--4 .... F --6-- 4---Z--l--[ ...... -'---+- .... t---'----t--~-u---- TYPE SW]TO|II+IG 3..¢g[ 0.7 1 2.7 I ~, 3.5 0.7 1 0.8 I 2.0 ('r-.~1- - --{ ...... c .....~ ..... ~ ................ n .......t ....... J L I SHARE OF TYPE t ~ l i J I I SJLIj2.+~.L ~, OJ_U~t _ _ J.9~,_ L _ J+O_ _ j _ d __ __3 £__'____ ____51__% ..... +0______~______12____~__ 2__9____ -- I I I I I J L I I t f~-~-R-E- ~-F- -~t~:, ...... I ..... 7 ....... ', ...... -'+ ........ ~- ...... F ...... HI'FI SWITUHfG 29~ L 10 J 19 , 71% , 10 I 6 , 55 ........... i---- + ---- _ [ + . + i ....................... F ...... F- ...... i i I ; I S%Aml- ~+- ~--~ ..... L ..... • ...... ,__, ...... ~ ........ - ...... - ..... + +I " , I , , , , 5 ' 6 0 B SWITCHING ~ 35~ L 5 I 30 I I 65~ I 0 I I ................. i .............. i ........... i .... F ...... I I I I } I F I I I ........ -- ..... -- ........... i ~ -------- ........ r ~ ................... r- iI I I I I ) i I I I T f I- r- I I i i I I I ........ r ...... r ...... I I ....... r ...... ~ ...... I
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( ,f ( ~, co~ CURRENT FAVORITE BRAND 670306~89
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~NMF GFNFPAI D~FRVATIONS ABOUT TRENDS THE DUAL OONOERN SMOKER (HEALTH AND SOCIAL 20~ OF SMOKE"S) IS FUELING THE DRIVE TO LOW TAR BRANDS. HOWEVER, THAT DRIVE IS NOW BEGINNING TO INVADE THE MENTHOL FRANCHISE. WE ASSUME YOU HAVE ANTICIPATED THIS PROBLEM WITH KOOL SUPER LIGHT. WHILE THE SOCIAL CONCERN GROUP IS NEARLY AS LARGE AS THE DUAL CONCERN GROUP, IT IS ~ BEING SUCCESSFULLY TAPPED BY THE LOW TAR BRANDS AS THEY PRESENTLY EXIST. ~FURTHER, THE PURE HEALTH CONCERN GROUP IS NOT ~BEING EFFECTIVELY TAPPED BY EXISTING LOW TAR BRANDS. THAT SAYS THAT 29~ OF SMOKERS WHO HAVE SIGNIFICANT CONCERNS ABOUT EITHER HEALTH OR SOCIAL PRESSURE (BUT NOT BOTH CONCERNS) ARE AMARKET OFOPPORTUNITY FOR NEW BRAND DEVELOPMENT. OG~90~O&9
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ONE VERY BASle OBJECTIVE OF THE RE- MAINDER OF THIS ANALYSIS, THEN, WILL BE TO GET AS MUCH UNDERSTANDING AS POSSIBLE OF THESE TWO TARGET SEGMENTS: WHY THEY DO NOT MOVE, AND HOW THEY COULD BE MOVED BY A NEW BRAND. I6~90~0L9
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SATISFACTIONS AND DISSATISFACTIONS OE THE SMOKER SEGMENT8
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~,IF'T Hnnm n~'l' ~GEgO~O~9
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AVERAGE RELEnTION FOR OWN RRAMR PERSONALITY PRODUOT NO OONOERN 15.9% 19.9% SLIGHTCONCERN 15.1 19.B HEALTHCONCERN ONLY14.2 18.4 SOCIALCONCERN ONLY13.9 17.9 HEALTH & $OOlAL BONOERN 13.5 16.7 D6~90~0~9
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t~ t'~ ~ Z.~ IT IS APPARENT THAT EACH GROUP HAS A GREATER OR LESSER PREDISPOSITION TO SELECT HIS OR HER BRAND FOR PERSONALITY AND PRODUCT IMAGERY, IT IS, THEREFORE, NECESSARY TO USE THE AVER- AGE FOR EACH GROUP SO THAT HE CAN GALOULATE IMAGERY I~PhRTAN~E FOR THAT GROUP. WE HAVE CALOULATEB THE INDEX VALUE FOR EACH DIMENSION (NUMBER OF PEOPLE IN THE GROUP ATTRIBUTING THE DIMENSION TO THEIR BRAND DIVIDED BY THE AVERAGE NUMBER OF PEOPLE IN THE GROUP ATTRIBUTING ANY DIMENSION TO THEIR BRAND.) THE DATA IIAVE THEN BEEN EXPRESSED IN TERMS OF DIFFERENCE TO THE AVERAGE.
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FXAUPLF NF INRF% DFVFInE~F.J~LT.: "A ~I~ARETTF MARE WITH VIRGINIA TORACCn" NO CONCERN SLIGHT CONSERN HEALTH ONLY SOCIAL ONLY HEALTH & SOCIAL AVERAGE SELECTION OF PRODUCT SELECTION OF INDEX IMAGES FOR SPECIFIC ITEM INDEX DIFFERENCE nwN P~A~n F~ nwN R~ANn ~ 18.8~ 8.0~ 40 -60 19.8 9.9 50 -50 18.4 8.i 33 -6T 17.9 5.7 32 -68 16,7 5.4 32 -68 98~90~0~9
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f" P~ ~ 3o TC)RARF:.O C~IIAI ITY PERCEPTION~ THE DUAL SMOKER IS LEAST PERSUADED THAT HE IS GETTING A HIGH QUALITY PRODUCT. ON THE OTHER HAND, HE IS NO MORE LIKELY TO SAY HE IS GETTING A OHEMIOALLY TREATED PRODUCT THAN THE UNCONCERNED SMOKER. THIS SUGGESTS THAT EMPHASIS ON NATURAL AND ABSENOE OF ARTIFIGIAL INGREDIENTS (REAL) MAY NOT BE AS POWERFUL AN APPEAL AS ONE MIGHT ASSUME. ALSO, THESE DATA SUGGEST THAT WHEN LOW TAR BRANDS TALK TOBAGOO THEY BETTER TALK ABOUT WHAT YOU DO GET, NOT WHAT YOU DONtT GET. &6~'90~O&9
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TOBACCO QUALITY FULL FLAVORE[ +172 +141 HIGHQ~AL J.O._Bj&Q.P ...... +122 +137 ¢106 + 90 GHEMIGALLY _T_RF-~A_~ ..... ............. L ..... 1 ~EL~JOOO~9 PERCEPTIONS C3~CER~ED SMOKERS "OTAL OCIAL IEALTH 3/ DUAL +171 +i03 ' i +134 + 89 ", 25 57
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t"' ~'~ ~'~ 3z- THE QUAL_S~QKEE FEELS HE IS GETTING A NUMBER OF TASTE BENEFITS RIGHT NOW - MILD, MELLOW, REFRESHING, FRESH AND SMOOTH. HE ALSO GETS A FULL TOBADCO AROMA. HOWEVER, THE TASTE IS NOT RICH, NOT FILLING, NOT EXCITING. CLEARLY, HE WANTS TO IMPROVE THE QUALITY OF THE EXPERIENOE OF SMOKING O~ THF Plll~ ~lnEi AGAIN, THIS SUGGESTS ItE MUST BE SOLD ON WHAT HE WILL GET, NOT JUST WHAT HE WON'T GET. GG~'~O~O~9 Oon~inued . e, °e
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THE SOCIALLY CONCERNED SMOKER IS HAVING A PRETTY SATISFYING TASTE EXPERIENCE, AND WE SUSPECT THAT THE SOCIALLY CONCERNED SMOKER WILL NOT EASILY TRADE AWAY HIS OR HER TASTE SATISFACTIONS IN EXCHANGE FOR ANOTHER BENEFIT. THE HEALTH CONCERNED SMOKER, WE SUSPECT FROM THESE DATA, FINDS IT DIFFICULT TO GIVE UP IMPAOT OR EFFECT. ~<~-~,-o~,~Fc,~ ~s THERE IS ALSO SOME SUGGESTION THAT THE SLIGHTLY CONCERNED SMOKER MIGHT RESPOND TO EMPHASIS ON THE MORE DELICATE TASTE CHARACTERISTICS. 00~90~0&9
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~ATI~FACTION THIS CHART IS SURPRISING. THE DUAL CONCERN SMOKER SEEMS TO BE GETTING A REASONABLE MEASURE OF SATISFACTION, WITH THE EXCEPTION OF CONTENTMENT. THE UNCONCERNED SMOKER IS NOT PARTICULARLY HIGH ON SATISFACTION.~~C~ THE SOCIAL SMOKER IS GETTING MORE SATISFACTION THAN ANYBODY. ~c~ ~x,~ ~,v~ AT THIS JUNCTURE WE CAN ONLY CONCLUDE THAT THERE IS A GREAT DEAL THAT WE DONIT KNOW ABOUT THE NATURE OF SMOKER SATISFACTION.
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I I I I I I I I I I I I I I | ............. J ........ L. ..... J_J ...... L ..... I ! I i 1 t l ! I i j a i i 67030~302 - i ..... J= ........ I ....... -I .... F .............. ..... j _ j _~ ,__ r .......... I I I I I I I I ...... -~ ...... 'i ........ F ..... -4,--I ...... t- ...................... - I I I I I I I 11 .... --- -Ii__ ..... __Ii ........ I__i ..... J-'Jl I .... --II ........... .~ ............ B I I I I I I I I I ...... ~ ...... ~ ........ b ..... -4,-~ ...... F ............ }- ........... I I l l l l I I ...... J ...... _I ........ L ..... J-J ............ I I I I I I ~" ...... IL ........... I I I I I I I I , ........... ..... ,-; ...... r ........ -- ....... I I " ";~1 I 1 I 1 ...... 'J ...... J ........ L. .................... , £~I~ ', ooI~ I ~91, I I |;tI+ | zzl, ~v~n Oi /@V3 ! J J L -- . I . t . ' .................... F ...... , ...... r ..... ....... r ...... j .......... LI I 'i ...... J ....... L ....... L ...... LJ ...... L ....................... _ n ....... L_L ......... ' ~ ITI~I ~i'I~-I,' 3]~011 I I NO|tOYJSI£V£
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LDRAP.CO T;~STE AN~S~.TI,~FA{~TIC]N OVERVIEW THE DUAL CONCERN SMOKER IS NOT SURE THAT HE OR SHE IS GETTING FULL FLAVOR AND TOP QUALITY TO- BACO0. WHILE EVERYONE IS LESS SURE THEY ARE GETTING FIRM, WELL-PACKED CIGARETTESj THE DUAL CONCERN SMOKER IS EVEN MORE DOUBTFUL. THE DUAL CONCERN SMOKER IS ALSO APPARENTLY NOT CONCERNED THAT HE IS SMOKING A CHEMICALLY TREATED PRODUCT. INTERESTINGLY, THE SOCIAL SMOKER IS A BIT MORE LIKELY TO THINK SO, AND THAT IS PROBABLY MENTHOL. THE DUAL SMOKER IS GETTING SIGNIFICANT TASTE BENEFITS, BUT THE TASTE IS NOT RICH, NOT FILL- ING, NOT EXCITING. THE DUAL CONCERN SMOKER ~ANTS TO IMPROVE THE QUALITY OF HIS SMOKING EXPERIENCE. ~0~90~0~9
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'7 T~RA~n~: TA~TF A~n RATIyFA~TInN ~VFRVIFW(Con~d.) ,THE SOCIALLY CONCERNED SMOKER IS VERY SATIS- FIED WITH HIS OR HER CURRENT PRODUCT, AND DOES NOT GIVE THE IMPRESSION OF BEING WILLING TO TRADE MUCH SATISFACTION FOR OTHER BENEFITS. THE HEALTH-CONCERNED SMOKER IS REASONABLY SATISFIED, AND AGAIN WE SUSPECT IS RELUCTANT ~5. TO GIVE UP THE IMPACT OF HIS SMOKING EXPERIENCE. THERE IS AN INTERESTING INDICATION THAT THE SLIGHTLY CONCERNED SMOKER MIGHT WELL BE RESPONSIVE TO THE Ir~AGE OF PRODUCT DELICACY FRESH, SMOOTH, MELLOW -IN ADDITION TO THE MORE TRADITIONAL BENEFITS OF RICH, FILLING AND EX- CITING. bOC9Oco&9
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P~YP, HNI NRIP, AIPRNFII F~ ATT I TIIFI I N~I ~Pt311p ~ (Same Methodology Described Previously) ~0~90~0~9
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THF IINOONOERREO RMOKER THE UNCONCERNED SMOKER IS DISTINGUISHED BY ATTITUDES THAT WE USUALLY THINK OF AS BEING INTENSIVELY AND TRADITIONALLY MASCULINE - A BIT MACHO, IN TERMS OF CURRENT THINKING. 90~90~0&9
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PROFILE OF THE UNOONCERNED SMOKER ~/ 'll~;nnr~nFR[~Fn ~nKFR~I I ~,O~NEO ~OK~.RS I I I l uo-E ,L.LZ_U.E, II.~.T.LL ' ' , F~m-~L #.u.L~ulo.u~ , I I I I I t I b I I ~]~ M]~O~ i i- I I I I ...... i THAN S [JB-S]q-~ ...... r --:-- ........ I--I ...... / ....... ~ ....... i I TIITF I = +ZZr +40 I I = t23 i IO~ / ~q----J l ...... F ............ ,i_, ...... -I ........ b ...... ', ....... I THINGS (]AN p ..... I ...... C i ...... -~ ........ ~- ...... ~ ...... I I I l "J~ -J~LD, L.E~ J - I L I i i , I I I AS THEY OOME + 70 1 t,-~*~ I I I--i----l--~3 .... ~----~d~ ........ I T I I =~ I I I ~'Z~ I 1'51 ; +37 I Ill i L ................... _l __ I I I I TRUSTS OWN ~ .... C ...... ~ ........ r ...... ~- .....I --~~ II I I I --I .................. ~ II I I I I THEM QUIOKLt< I, + 57 .l~ll.~ i, -I ..... ~ll-:i~'~ .... f~Ia.~--IF_.i~..i~__! ........... J ...... lt~ ...... i i i i i .... l I I I I ........... ill ...... I .......... I I I I I I HAS A SORT , T --l--r- ..... -I ........ r ...... r" ...... JI£--MIO*I/~T_I_~ ; " 32 i -03 ~ I I +03 I -14 I I'~1 I l ..... [.... ~ ...... I _I ....... I ........ I - -- I I I r ...... r ...... I PREFERS NOTI ' " 26 I -18 ' I _.~, , ..... I -"-, .-,, - -I I-IF" ..... n ........ r ...... C" ...... I I I I I I I I I I I I I I I , I I , : I I i I I I &O890£O&9
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~ ~i~i i~i~!~!~' ~! ~ ~ ~ T NF .~t IGHTLY ~£)NP, F'RNFrl S~OKF~ THIS IS AN ENERGETIC AND SELF-CONFIDENT SMOKER, BUT AT THE SAME TIME MAINTAINS A RESPECTFUL DISTANCE AND A FAINT DIS- TRUST OF OTHERS. THESE PROFILES TEND TO FURTHER CONFIRM OBSERVATIONS ~ADE IN THE ORIGINAL STUDY ANALYSIS BY BRAND USE PATTERNS. ~oPgo~oL9
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PROFILE OF THE SLIGHTLY CONCERNED SMOKER ~INnflHCFRMF~ ~.~,~NKF~g P.~FPNEn .S~KFR~ I I I I l t l [ I I~ - ) I JU I L~.~ I I I I I I I .... ..... ........ ', ..................... i_ii ;_II_, ...... @;~If@Iff~@~,¢ ..... F:f~-- I-;g#I- -;#2 .... JLI@ i ,J.~, ~_TUtNG__IIj ...... F ..... -~ ........ i t i YOU ~]HO~ MOR~ '~ EE~EE~ _E~ _ J ............ J ....... KEEPING TOUR', -69 ~-20 ' I I p~pII-- im~ii--~-- --~ ..... ~----I--~II I _ , ] -:$~ ..... .~T--Ir--:$7. - n~u~___~ ............ ~ ....................... = ............. I I I I I I JiI.III I I ....... ~0~-~6~i~ = .....~ ........ r .....~ ........r ....... I l I I ABE&QIIE_~Q~ ...... ' * ' : I DON'T TRUST~ , ~ , , , nT~C~r t~nI. ...... , , , , _ t "*"'"''~~UOH , -:~--n-:~I-r-r, , , ...... '-:~$ .... F:St --F-=SB-I' I I LI . I ....... I I I II I I I I II I I I II I I @OR9ORO&9
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t"' P~ ~ , THF ~RIALI_Y RON~ERNEB SMOKER IT IS APPARENT THAT ONE OF THE REASONS FOR SOCIAL CONCERN IS THAT THIS SMOKER IS A VERY EMOTIONAL AND SOCIAL PERSON, A JOINER WITH FAITH IN LUCK. ~)! , c3<- prl' AT THE SAME TI~E, THEY SEE THEMSELVES AS DISCIPLINED, HAVING COMMON SENSE, AND THEY BELIEVE THEY ARE A LITTLE HARDER TO IMPRESS. LIVING IS MORE IMPORTANT THAN ~INNING. I') 0~90~0&9
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P~ PROFILE OF ~ V(" THE SOCIALLY CONCERNED S OKER tfNP.~EIP, FRNFN R~'r)KFR~ ~NRF~N~ R I I I I I I I I I I I I I I I I L~(%K FR~ I i I t ! ~ L ....... r ..... i i . i -14 i 34 I ..... t_---i--! .... "! ........ IAoj_, o% syo~_ ..... F -_1_2_ _ ~ _ _ 2_2_ _ ,,_ _, ...... 4 = -* -% - - - I I I I I I -L- nCK "~ -~ ~ .... ~ ..... ~ ..... + -', ...... -~ ............... ', ....... ' l I I I I I I THINGS_ BEFORE ___L_+_%%_J__C3.!._,__' ...... .__te O ___L_tO_8___, __t5_9__ -~o-~-¢ ~rn~Inc~- I I ', I7 F J L J i I I i ........... I ...... I ..... i ...... I----I ...... --i ............... r ...... I I I i I I I L J I I I I TO MAKE-A L~)T L / i i = . i . -Ol~ -COI~o~T - u ......, .....~ ........ r ..... ~ .............. r ..... t 4. I f I I I ,~ ~, I -~ SENSE / / 26 ~ 52 , , , 65 30 , 50 ........... -, ...... r ..... 7 ...... r-r ..... m ............... r ...... I I I I I I -fKcf-~r6E -rN----b ..... -~ ...... I--~- ..... -{ ............... " ..... +07 J z..o! ' ', , ,' SELF-DISC IP INE ~ ~'23 -1& , 4.15 I I I I I I I I I I .................. r ............ i--i- ...... t ............... i- ...... I I I I I I I I i I I .................. r ............ f--f- ..... 7 ............... r ...... | I I l I I II I I I iI I I I TTCDO~oL9
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PROFILE OF q~'h .... J_HE_ S 0 C_ LA_L_L..L..C..0..N_C_E_R..N_E~_ ..S_M_O_K_E R_ _(_P_ate- 2_ )_ ....... IIMI~t31JCFPI*JF~ ~nKER~ CONr, FRNFn ~MnKFR~ I I ~ I i t I I I I I I IrlilAi I IZO_T~ l e.O~, ,'L'~'~ IZ.O..T..~ l~nr, JAL ,,UJ~L.T.U,. ,.,,,~ ,' I I I I I I i l ,-~---~-,-~-~--~-~,~ ,,: ...... ~ ..... ~ ........ ', ...... ~ ........ •', ....... '~ ...... I B~_G_AUSE HE W~S , , ~ , , i p , ,F"-~, . ' o =L g6 R-g ~- nL ...... r-wf - - ~, ----~ -- .'- -,, ...... l, ~_~.--~F~'- -1--3~ --r-L .3~2 .........".". ...... "_~ ..... "_~ ........ ', ....... "., =-~-'---' r ...... ', ....... , l I I I I~ I I I . -- j_ I J I I i ( ¢~ o-.-G-s- T~ -~N-Y----F ..... l ...... ,-7 ...... ~ ........ f--'---F ...... , Cp~O u P_s_ _/~Lq. O_R_G_AX--_, -___ _ j ..... ,_ _, ...... • ...... '- ....L .... IZATIONS i 1-25, i-¢T , , /-02 '-35 " -52 a I I i I I I I .................--I ~ ..... ,.J ...... I__I ..... -- I-- i.................... • I I I I -~ I I I I I I I I I L I I I r~ -.-o-~--~-~-~-rc~ ..... :-_:;--!-:;;--',--', ...... l-:;; .... -T. ...... :;~--! j -~" I -'~ I i I - - [ LMP~__ i ...... ~ ..... "~ ...... r-r ..... -1 ...................... i I I I t I [ I _~ I • i f i I ! .......... I ...... -- T ..... "1 ...... I----I-- ..... "1 ...................... T I I I I I I I I I I [ I I I IrrRR n~E-i-s -TEE .... T ..... _'~ ...... ,--r ..... -I ........ r ...... ~" ..... ONLY THING • , 43 I 40 , i , 64 ,-31 , -34- t ........... 7 ...... r ..... "i ...... i--i ....... ~ ...................... i I I I I i I I J I I I I 1 I ........... i ...... I" ..... "1 ...... r-r ..... "1 ...................... " I I I I I I I I I I I I I I I I I i I I I I
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j. • THE HEAITH-RONnFRNFn RMOKFR THE HEALTH-CONCERNED SMOKER, NOT SUR- PRISINGLY, HAS A GOOD IMPRESSION OF HIMSELF. HErS ALWAYS HIMSELFj WILL MAKE THINGS HAPPEN, THINKS THAT WOMEN FIND HIM EXCITING, AND HAS SENSITIVE TASTE BUDS TO BOOT. BUT HE ALSO GIVES EVIDENCE_OF NOT WANT- ING TO BE SERIOUS, AND A TOUCH INDECISIVE. £T£9080~9
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r', PROFILE OF ~7 THE HEALTH CONCERNED SMOKER IINP.nrJ.'3.F!~VVF"FI ~.,.,nl(FpR ~ON~IERNED ~L~QKFR8 I I f I I I i I Iz~x.u.. Ir~(~.E ~L.LT.~ ' ' ' ' D.u.u. , l I I I I I I I I I I I __1 .... f i I -- __ __ l InL~_-mTc¢- , .... I- - --4 ..... -, -, ...... -I ........ F .......... ' THINGS HAPPEN - _I ,01 _I -08 I I I ."_0..7 - , ..+.44 710 _I .......... -i .... r .... "f ...... I--~ ...... "i - m --~ ...... 7, .... L ALYATS HIMSELF ! f19 ! '1"64 I Ii i fG5 ii "P80 i . +ST i ........... -i- ..... I" ..... -I ........ , ...... -I ........ ~" ...... , ....... I I I i I I I I I ...... L .... j - ____Ira I ....... I -~I~ --..I "x-'~'N-'wm~-I , - ,- -- , , -I ....... ,----~ ,,---- , FIHO EXGITI~IG .~ -06 I 4"19 I I ~ ".03 ~ f8O,.~ ~ flO ' ~-Cs- SE.G m'[[ ,, ,, ,,,, "~ F F- 3~5_T.L p_.lJ_O~ a.. JL .¢o1 j .-.oG , _r .... -0_7 -- L +22___L *01 - -- --/ -- m-- I .... I ..... I-- I ....... Wm -- ~ ..... I I I I I I I . - - I L- J --L L 9-E~ ~- i~-F~r-Cg-~ ~r-- -I .... ; .... I -I ...... _D£...q_lj.%.l p_I'L J S, ~i O / , ' , DEO IS i-ON -] ...... F"--~--~,-'-'sn---F-F ...... - F-F ..... A~s .RO~.A_N_S_ Dp ...... ~.-2J-_~--3-&_,,_-,r ...... l I -'rCNb-s" -TO- L"O- _AT_ S_ER_LO_ES_ OF THINGS t I I .~ ...... I .... r ..... "i ...... i-'l r,, ' f01 ~ -28 , ...... T ..... "3 ...... r-i- ...... I I I I t t ~ i I I " " -- I- -- r I I I I - -zs-£- -- ~ -.~T- -F - =-5-.~- - I I i .............__ ~__,_--~ '-30 ~08 -¢2 , I I/i:g9OgO&9
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THF nll~l nO.~.GFJ~N ,~MOI(ER THIS SMOKER IS MORE LIKELY TO SUCCEED BY "HAVING A KNACK" THAN BY WORKING HARD. HE LIKES TO TAKE IT EASY, TO DAYDREAM, TO POSTPONE DECISIONS, AND FEELS YOU HAVE TO WATCH OUT FOR BAD THINGS. HE ALSO LOVES NATURE, AND UNDERSTANDS IT, HE FEELS. THIS IS AN INTERESTING PROFILE AND PERHAPS A BIT SURPRISING. IT MAY BE THAT HE HAS BOTH CONCERNS BY BEING A SOFT INDIVIDUAL, EASILY INFLUENCED BY EXTERNAL PRESSURES. THE DATA CERTAINLY SUGGEST THAT FLATTERY OF THE SMOKER AS AN INDIVIDUAL ~OULD BE A GOOD TACTIC IN THIS TARGET SEGMENT.
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i ~uF IL~ ui" It9 THE DUAL CONCERN SMOKER . UN ~" , nm ;FffNFO ~IOICERS I I I ' LLT-TJ~Z, FOT~ J i I I I I I I ~t~ ...... F ..... I ...... ', ......... _HA_RO ....... J___._L_+3_8__J +3s I I ......... I I I t1~-~w~ ..... I- ..... 4 ............. IT EASY WHEI) 1-06 J +07 -~R '~T~~-TPr--A]I~I~-- - F ..... I .............. ........... _1 ...... L ..... J ...... I I I ......... I I I I ~O,-L~. U.~U_T~ OUSU. I I I +08 "~ +15 -03 i i I i I r r" i • 08 ,' +30 I ~33 i c r } I I I I I "B'Jl,~- X'~'I~K- '01t- ..... L ...... ,__ , , t'-- ----r" .. --I DOING RIGHII I +19 +03 ......... ..+_13 _ I '~01 I +28 1 "r~ ...... 7 ...... ,i- ............ - --,'- ...... F ...... I "FE'Et'S-I'r'~'L~ ...... P ................ ' . _ ' RIGHT TO I I ' , i ! ........i'm II I .... I I l O~mRt~A~'- --' ...... ~---I~ ~ .... ENJDy~ ,T I I ; ] ....................... l-- ~- 7 .............. I I I I I I ........................"-- " '~l ~" -- I I I----I ....... I I ........ I I I I I I I I I I I I I I I I I I ....... I
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r', PROFILE 'OF THE DUAL CONCERN SMOKER (Poge 2) {JNCONCFRNF'~ ~L'{}KFR~ CON~F'RN(:'D 5~.(OKERR I I I I I J D I I I I I I I I I I I I I I I I I .... I I I J ......... r -~ ...... ,--, ..... ~ ....... r ...... r ...... LIKES TO SLEEP , , , , I a , , ~H ~I_BEEQR~_ __i .... ~ _ , i -- -' ..... ' .... L- _ i AGTING ~ I 37 ~8 I ~ ~ 5~ ~1 ~ ........... ~ ......~ ............ F-I ......~ ...................... I I I~ I i J ...... L ........... J_J ......J ...................... l YOU HAVE TO IBE ~ , , • I I II I I IAIGHEUL_~QJ ...... L- - , ' _ ' ......... i KEEP THINGS] ',-iO;---::i--'--C~ , , .... ]-:59 .... :42--- -12 -- / ...... I ............ I----i ..... ~ ............... OUT BAD i 1 l l l ........... ~ ~ ,' , _ I I II I ! I i ........ ~ . ~F ~ ..................... I I II I ' '-50 -18 i u ~ -28 "14 +01 U~DERSTAND$, , , , N~TORE ..... ~ ...... r ............ ,--r ..... ~ ...................... I i I) ) i il I . I I l l I ........... i ...... • ............ c-r ..... "r- .................... I I I I I I I I I I I I I I I &T~90~O&9
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OVFRVII:'W ~F" TNF P~YP.HNf ~IP, AI PRNFII F~ THE PROFILES FOR UNCONCERNED AND SLIGHTLY CONOERNED SMOKERS CONTRIBUTE LITTLE NEW TO OUR UNDERSTANDING, BUT RECONFIRM PREVIOUS OBSERVATIONS. WE BELIEVE THAT WHAT IS IMPORTANT HERE IS THE DIF- FERENCES BETWEEN~ THE SOCIAL, HEALTH AND DUAL SEGMENTS OF THE CONCERNED MARKET. IT SEEMS DOUBTFUL THAT ANY SINGLE BRAND IMAGE POSTURE COULD BE SIGNIFICANTLY SUCCESSFUL WITH ALL THREE SEGMENTS. AND CERTAINLY THE LOW TAR BRANDS HAVE NOT BEEN EQUALLY SUCCESSFUL WITH THE SEGMENTS THUS FAR. THE CURRENT LOW TAR BRANDS MAY IN TIME PULL IN THE HEALTH ONLY SE6MENT, BUT WE ARE INCLINED TO SUSPECT THEY ARE HANGING IN WITH FULL FLAVOR FILTER FOR IM- PACT REASONS MORE THAN TASTE REASONS, AND WILL BE HARDER TO MOVE. MUCH CLEARER IS THE INDICATION THAT THE CURRENT LOW TAR BRANDS WILL BE A LONG TIME IMPACTING THE SOCIAL GROUP. WE BELIEVE THIS MAJOR OPPORTUNITY OF DON- OERNED SMOKERS WILL REQUIRE A DIFFERENT STANCE.
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I! A P~ I! cH 0
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( Smoker P--obl~ 1978 iB. ( The two ob~ec~ivea of this st'~dy were: Evaluate selected smokeF problems in ol~der of i1~poPtance, and Identlf:~ p~vtiuular problems cf specific segments. fn l-ankin~ variou~ smoker pl-oblems, frequency of occurren~ anc] deg~'ee of conce~'~] were ~aken ~nto ~eeounl, I. Ccneral Findinss A. Like5 and Dislikes (rank ordered) Likes Di~]i~o¢ Relaxing effect Taste f,7 alm k: g ef~et Enjoyable :~a2i( S~mething ~o do w/h&nds Personal co~cerRs Expense OveFdeoendsnee Ashes A]ess Smell Ho&rsene~5 B. T c~p 10 Problem~(ranh ordered} Expense BRd breath ~horiness ~f breath Unplea~anl ~ml~ll I~ad influence on ehildverl ~akes a r~e_~s Sl~]oke n2ol~@ a71d nqol~e Afleria~e Smoke in ~he air ',~ S~alns ~eelh and f~ngers The hlghesl f~'equency of problems were ~ucia] uoncern, b~! . . 1:'erson~l prob~er~s ¢realed the nJosl intense concern.
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14 ( C. E, S~ci~l Problems frank ordered) Bad breath Ba~ ~rorn~ iu room Bad influence on children .~ ~l~l, es a mc~s Fills air with smoke S±ain~ t eelh/' finger ~ Smoke rnor~ socia]]y Over deFenden~= e Social probleros ~re primar ly £requency problen~s. They hap- pen a ]o±, Personal Probl~r~s (rank ordered/ Lack of breath Smok~: ~ore than before Burns e:~ e ~q FiLrn~ deposit in [r.ou~h TCO much Pt~i~' Headache Personal prol~lem~ ~gn'~ occur ~ freq~enll)¸ bu¸ r'c~ul~ in Product Problems (rank ordered:, 1. Physical EXp~-I2Ee Ashes fal] off Li~ ~_nd fails off Poorly packed Burns ~oo fas~ Defective filler paper Hard t~ dra~, ~ $ c
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15. ( ( t I]. 2. T~is[ ~ Unpleasant aftertaste St~le/dry t&$fe Not enough taste Too stror.g/harsh Not enough satisfaction Chenllcal taste l~igher ranking problems are more frequent, but lower ranked problems, ~uch as lit end~ falling off ~nd chemical tasie, genie- rate r~oI~e COnC~yi2. Findings for Specific Subgroups A. Males vs. Females Over'all, ten, ales are more concerned wi~h the social and per ~onal problems associated wilh SrnokiIlg. Mai6s are niorc Co:]~ cerned with problems of the produc! itsclf ~articularly tast~. ]3. Cat e~or~- Usagc i. Pla~n sn~okers are less co~icui'~i~d about ~he problems o[ smoking 2. Social proble1~s rankhi~he~= for fl~ll-ta~ie andhi-f! smokers, followed by ~ersonal problems. 3. ]~lentbol full-iasie and hi-fi s1~okers, and non -meillho] hi-fi streakers find physical prodt*ct problems mor'e irf,- portant than taste problems. 4. Non-lnenihol ~!l-i~te gn](iki!-s find taste prohlel'~s n]o2"e il;*portailt than physical product prod]erf~ C. Hi Fi Triers l, Exhibit greater concern for social, personal, and produ(I problems than non-hi-fi triers. 2, Hi-fi triers are l~]ore il',~'nre of inertia-seal ci~ar~tie depend" ence, breKth, throat il'rifatiorl, and expe~ar~ than rlOrl-lr[ers 8 ~0
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16. ( m. SwNch~Fs |. The awA~eness of social and personal pro~ler~ by $wiich~r~ . i~ far ~r~tcr lhan for non-switchers, 2 Taste and physical product problelns are also,rearer among s~itchers but net as great as social and personalprobl~n~. ( t .q CD Cn
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~I ~ M D R A N D D r, TO; A. R° NAGLE [e])rlJ~rv 9 T !)TH CC: D. S. Johnston G. 1. PeJ:] P. E. McK~own B. L. Mc'Caf[~rty M. C. Wilison E.A. IIil]et~ J. M. Coleman J.H. Barnes E. T. P~rBck M. J. Ilnc~ %- P. J. Tighe L.R. LeWi~ ~. L. Bro~u]~er R. A. Ve~Ich ~ w. L. Schermerhorn R.L. Jchn~om W~ F. Scholz (Bates) Thorn GLant Ant hon~ H~b¢l {P~G) FINh], REPCRT SMOKER PROBLEI-I STrFI~Y (PROJECT ~1977-i19) (~|¢Cann) A study w~s co~@~cted oD smokers' problems with ciqarettes ~sd smokinu. The t~o prlmary objectives of thi~ study ware lj to • evaluate ~elecbed smo~ probl~m~ in terms o[ i~crtanc~ ~c ~] to identify the p~rticul~r problems of spot_fie m,uher segmeiLts. COI!CLUZ~ 3NS ( Primar~ Proble[,s On all urla!ced nlsls, t]l,~ mn±n d slikon ~bn~! : -king ~]e~]t with followed, Three of the to[~ i0 p~obLem~ doalt with 'Inple~sar~ sme/J~ Social Persona ~ p/oduc" Problems £ CategDriz~tiull of the proh]ems b}" ~oci~/, ration i~dicate] thot sociel F~oblems i;en0rnI:e,! th0 h{~he~t ov=r- proh]~m~ h~d the low~( overall rankln~ i4.6: ~.3 exclul]±Dg ex penslv~) . • -<~cmsl probl~m~ owe tl~oSr ~op priority t~" h~qb froque~cy ratinqs~ 3~oter$ are ~, ~ Ii_~,, high o frequency ratings) of the possibility of offe~din~ others Lu a gro~ter recFree t}10~ C~'llo~ ]~roblems. ~ Ilowever~ they age ~ot ~nymore cuncernel° • Personal problems qe~erate the most coilcern.
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( Smoker ~ment Pr, em~ GeNer~lly, all smoking p~obloms were more import~Dt tO females than males. The notable exc~r~lJo~ was product taste problcm~ which were mor~ relevant to males. CateqDry Us~qe A~g Plain'smokers, almost all problems had less impact than a~g other smoker~. The exceptions were staleness ar~'poorly p~ked tobaccos. Anti-smoking activity eppeared to bother Pl~in smokers most. Hi- Fi smokers were more tolerant cf this opposition tha~ Full-Tasteo Hi Fi Triers and switchers Sn*ukers WbD had recently trio~l a number of I~[ Fi b:~n<3s and es- pecially those 1,.'ho h~ve switched brands ~n the ],~st year feel tie impa~t of problem~ w~th ~mok~ng more than those who h~ven't~ BACKGRO~b'D A qupntit~ ivc consumer SILJdy Was conducted on s~oI:ersl prohl~m~ with cigarettes and smo1<~mg. The L',o primary ohj.~cLiv=s cf thi~ study were; i) to ~va!t;ate selected s~oker I)roh!e~s in term~ cf importance- ii.e., ~r~Ii,~_ncy o~ occurrence a!~4 d~_~-e=. of ani~)y~nce and 2] ide~ti£y th~ prcbl~s perceived ~ [~porta~ to ~pe~£il~ smoker segnent s. The prob]~i'~s under Dtudy were s~-l~cted fro ~ brogd list of known smoker problems refined by meBDs Of focu~ group~. The final questlonn,~]re w0s further refined b0~ec] on i~for;natlo~ obtained from a pilot study conducted for fha~ [~l[rpose. The sBmple coDsisted o~ about 10O0 gmokers divi~ed by cigarette usage os ~ollows : 198 Plain ~mokers, 395 Mcntho~ smol:cr~, (188 HJ Fi/207 Full- T~st~:, and 438 Non-Menthol Filter smokers {217 H~-Fi/221 Full-T~te). Each cell wa:, ~v~nly divided bV sc:~. T]l~s study %'as conduct~ -~n october, 1977. FINDINGS Detal]ed results are ou~linec~ in the attached tables. The last four pages d~al ~ith appl~c~ti~n Of this study to ~ p~od~nf d~vel~pmen~ . /< I K. s. Kell,/ /JJ
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t~ ( j ~L' C ~es~ndents wer~ ~sked "wh~h thin~s do you [i~,e/d~ slike abo~Jt smok£n~?" e' Rel~King ~ LJ~ Tast0 411 Calming Effect 32 poutlnc/{{ahit 2~ Somethin9 to do %'~tb }{~nd~ 19 Per s0n~ ! Concerns 22 ExpenSive 2'! ovardcpan!~eI!:'~ on Cigarettea 13 AS]leg Fall Off I I- Prob,%b~y lltlp] ~'~ ~mnt Aroma lc* Hakes Tllront {Ion~-~e ]0 likes ~e~1]t r~Dl-i2 wit)1 bC~laVioz-%] effecl~. iiI:~Ii',,!~- }in,1 ~ore tO dO ~itll person~l concexns, money, ariel ~o!¢){:,l;~i'J I}" me!~s. Al~hou'gh no "~ipw" pr0blm_ms were @i~co~@red, %)1e ¢]¢~'-3~e of m~tions i~ worth notinq.
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.¢~ [ t" SmDkers were given ~ list of sl ite~ents ~nd first ~sked which Ones applied to them. They were then asked to r~nk th~t~te- m~%s in terms of impQrtB~ce. Result~ £oilow~ t w ' A i~l)lies %0 Se~}:<r :7,N;~ I'~'e~) ]1]_i2_)~ i "J~"~ < ] ~ fleas ,~ I~ ~elexln~ 8~ 3.1 • i Adds TO Enjoyment After M~I 87 3~6 c~lms Me %~h~n N~'~'ou~/l~errie~ 7~ 3.9 GiVeS Ile Smm~,thinq To Do ~With Hy H~nds 69 ~lekes Drin-:~ng Ilor~ Enjoy~b!¢ 52 ~e~ps Weight Dc~it 43 Helps M~ ~el At Eese ~ith Pe©ple I Don't l~no~ 42 4.9 5.4 5.6 5.8 5.9 • 6.8 Helps He Co[!centra~p J¢ He~ps Keep Me Awake 20 R~ki~ ~ term~ of imi~t~t~c~ ~nd tile deq~cc 0[ effect on smoker yielded similar ro~u]ts. . , .~mokin~{ ~q caJmillq, r~!I~):<]1],l :Hv] add~ to en'jeymen£ of me01 $ubst,~D~]sl percent~qe (6,9%,'~) ~,'ucl th~t ;~t qnvo t]~,e~~ ~ommthinc ~e do w±th their h~nds, gemB1e.~ (7d~,] ~uJ H~-F~ ~m~?,er~ (7~,-} ~gres~ more of%en th~*n /,1~ies and FUlI-Tnsto smol:ers. Fe[~tnlom els~ te~de~ to use cigArm#'tes to keep their weight down more often vs m~ les). {emsle s
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C L~ ~i~ ( [ 42 problems wer~ rated <n both When I sm0ke~ - It very often happens to me It sometimes happells tc mc It hardly ever h~ppens to me - ~t never h~ppe~s tO ~le [[~(~u~ii~, ~11<{ ~<)i~£~. 4 3 2 1 If it happened to ~: I wo~Id he extremely concern~,] it would c~n~rn mo a lot - It wou1~] concern me ~ lltt]e 2 - It wouldn't concern ~ ~t all I £ iA ~enn rn%ii~f i,~ _<h!'.n in ti%o [0llo"in'l :nh!r.t The b~her the Ilumhez for a ~i~e~ V~ul,]~m, tL~ mor~ ~r~quent or the gre~ter the c~c~rn. To ~v~l~t~ th~ overall ~ortall~ ~f ~ !~obl~, a f~ency X co~ce~ v~l~:~ ha~ beell calculated.
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d ( ( 42~roblems were zuted in tut~l. The problems h~vs been ~te- " go~zed by their primary orientation - social personator prpr~uuc~. The socially orleflted problems appeor belo~ Also ~ ~ a tiv ty~s~rectw°iproblems relating to slnc~e~s;~ reactic, n to anti- 42 PROBLZMS SOCIAL SOCIAL (16) ~I f-C~ien~-ed (7) Stains Teeth/Fin~ers Bad Breath Doesn't Smell Mi:e To Me Overdepe~dcnc¢ Dulls Appetite D~ll~ Sense of Taste ~ekes Wa~t TO Drin~ Something Other-Oyientod Dot h (7) ~nnops Others ~oci~]]y Annoys Others In Public Annoys F~mily Bmd I~fluence On Children Leaves B~d ArDma Im Room Fills Air With Smoke Sign Of Poor Willpowe: TO ~thers (2) bI~cs A Mess Smoke More Soci~lly
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[ T : i~,~ ~ (2) Reformed S~ok~r Reforming Others Smoking Restrlef ~ons De let ei~ []) 'i'her~ ere ind~c~1~ions tb,nt the b~-lo'•" pr.~b~L~nl subsequent ]~' r~n~:in~). T}l~s, the p±ub]em ~s deleted from the ~n~si3. Smmking Unfeminine (Pe~l~!s) Smoking unmascnline [!4al~s)
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( Th~ ~i~e ~roble~ G~ ~ p~n~! ~onccr~ ~aLu~e a~ sho~'~,¸ below: 0'.t of Hrcath Easily $mQke M~rP Than dsed To ~t]~ z Eyc~ Filmy DeFo~it In ~o~:th ~r~t~ites 7~r~J=~t ~lake~ Th~_~t Hoarse TOO ~[~ch T~!r C%
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.,I_ ( J~ 4 ,d & ( tProduct problems - physi2~l B~d tBs~e - p~CDUCT PRODUCT (]4] IS) Lit En:] Pal 1~ Off ~shes Fail OYf ~o}gacco PoorlT pa-]~:l l)ef~ctive F ] ] tar,/PaDeV l%<Irr~ T~O r~t Hard TC D~," I¢Qn't StD~, IJit ~re" ~S 50~lu~,wS : T~ste (6) Sta!e/l]iV Ta~lil, q Ck~rcttcs HO~ Enouqh Sn'~iSfacl l(!n Not Encl'i~']l F~!;tc/F[avor Too $ ~r(Dnq/[13 ~S}I C}lemic~ I Ibis' e
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:~x~q~¢ 6uT~¢[io/ ~qz~ 111[. ~moqs ~x~ s~uo[qoxd 6u~u~x do~ O'f ~q& r C¸" ~
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G7030C 4 ~ ~'~'~S ~D~~ ~* ~T~'2~~ ~1~.)~0~ ~U ~L ~;.~ ~ ~ ~ ¢~0~= f,~l~O~ ~a~l~ ~(,.,~ ~..c_~. _ i~=~ ~o~# ~c ~P~ ~ t~4~/~ ~=~ Z~- ~U~L ,~" ~JC~ ~I E~Jr~ ~l~t'~l~ClJ~) ~!I~Dp~H ~0~1"3" O~ l~o~l~ ~i~ ~'~OI'; ~0~" ~/,~uo~':~= p~e !g-~)
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IsOCiol, Concerll CO~ccr~l Low , Cc)11c el~~ Total [ligh "requency FNE~UENCY S r~ 1 Produc~ 3 Social i Per snna 1 4 Social i Product Tctal t-led ~ q,n* ;,~I., High ~ Conc~i n _ . 1 Frorlt;L t i ~mcia] 3 PrOdUct 4 Socia ~ F, I~r%l~ ~ P~rsolIO1 7 socil] 1 Persona [ High concerndlt~ms 'are mor~ social and P-r-1equnll~ aon~ 5' dz,p_L.,cd j, Lwe~n product, ~er~oIla: corlc0Yrl £tol~q [~ncr~f ~RIC] m~,.* perceived as that freq ~ll~. "~Ilc'zrn out aro not ?
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• °T J i,¸ TO evaluet~ the impo. into oF on type of problum, the mean ratin~ for each caEegory is competed boJ ,~; [
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• The next few charts ( .al wJ'~h p! .lemg of a ~oci;~I nature. Both (Z) $mckc I[o~c -~ocia[i~ ~formed $~lioke~ Refo~rllng Otncrs 10 Oe I Ated 'I '~ SmoXi~:g Unfenu nin~ f en,.~ " ,:~;/ 27 .72~ Smoking Unmaaculine (I,l~les) 30 ~ "'~ ]*2 . ¢
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oth ~I~]:es A ~Ios~ 2.q ~.'I Sm~k~ ~lore Socially 3.2 ,~ 2.0 II-1 NOTE ~}1 CO~C/fT~'I. ~r rli%l~ C~11r¸ '~I ~ i. ILl IO~ Conc/f~q. !0~;~C~ USua[J m,~tc]ics ,~id Dccasl0ndlJ}' OLLW~I JJll; ~]~e soc~ilf 0~eI~ed problem~. r 7.C 6.5 6,2 5.1 4.B q.0 3.b ?,(, 7,3 3,1 ~.4 C,4 ~cltr~- fo~ 2 9 ]± 18 2ff 24 8 )l IG 16 26 6 iD all r • r i "3
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~B OTIlI:I~S C)I,:N:OI~, ~=oor Willpower to Other~ 2 " 0 I l 7 3"4 26 2"6 2"d 6"~2 11 Bad Aroma in Room Air Wit]l Smoke I .i I 2.5 7.5 2,4 5meli Nice To lle 2,2 2,3 4 6.7 8 ~ ~i~i~ Smokers claim ,j calc m,l~] m~r~ ~,l~o,z~ h~ir 9".n f~ °veYd~Penc]~nc~ oI~ c±~-a~tte5 than ',/llethe[ otJl~:s have pour Wlllp~wer" thinU '~ [°°m ~L)ma iS no1-1ced mor~ fre I"'.nt] / than E~CC On the smoker himself. the.
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i- ~11, ] EIIL; ~ Co;icesiI r;{c • In ~blie r~ . ~ 2,3 6.2 ]z goelal 2.3 2.2 b.l 16 , Family 2.5 2,3 5.~ 12 Bad Znflu~n=e ~ ~ L? 3 . On ChJldzc~ 5 i
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IW- r2tin9~" ~pp~ar in the next two charts." + PERS~ : 9¸ Out O~ Brea~h Easily ~S~cke ~Io~ Than U~J 'Irrltatps Thro~ ~ Thrc ~t IIoazse Burns Eyes Filmy Depusit In !Iout~ ~4uch Tar Too MUC]] C.~ To 13 17 17 22 2G ;4 q
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PE]ISO'IAL FR~QU~'~CY CO IL~E]I Breath Easily 2_7 {;11 2.0 (lJ B ~1ore That Used io 2,6 'H 2,6 Ill] zates ThrQa ~ 2.2 2°6 H) 2~2 (rl) 246 fIl ~'~'~Eyes'j.I . 2.3 III 2°3 £ Deposlt In l.lout}l uch Tar 2.,; I I_G IA 2,~ @ [.6 (L 2~1 '" CnNCe~71 foF p@l~Jna] n each casoo 6.8 5.7 5°7 b,3 3,0 % C 4,( 3.4 prDb/ems m~tcnes or olJt~,~ %iI15 frOqUeney Of nroath pa~I 1.. iF Erl~ mOSI rrrwl,lrql- .- .i I %S tile ;%oqt diSC°l|~ertl~ persozlal l~1~bler (overall r,Till:: ~OllCern[~-~d~c[lejs'~ hiqI1.]°~' r~i~,11L3 is .(hl~ L~ i ill iL ~;l! ~,~c,,j ~ 211c~ aS 3 7 13 13 [,1 17 17 22 gb
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q [ FI,0DUCT i 1 ] ]~ ]< ~3 ~7 29 8 t~ 2n 21 22 25
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---
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( FI~ODErC,~_ ~c TASTE : FI~EQUE~jU y ~ UII jE p~ [ .~c p~.~ ;~ i~ nple~sant Aftertaste 2~.~.~ (if) 2.4 If-If 6.~ S -i!~tale/DrY Tasting Cig~. 2.1 I~ll 2.5 IT 5.2 15 "~!~;ot EnOugh Tast~/Flavor 1.9 ILl 2.2 ~I 4.2 20 ~oo~strong/Harsh 1.8 {L 2.3 (If) 4~i 2I ~:~t ENough S~tisfo~lon 1.9 L 2.! ~] 4.0 22 heroical Tast~ l_d (L ~(~I 3.5 25 k
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L 5 S with prob]@ms of ~peciflc smoker
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~bXLES 5.5 D£her 4.5 5.8 5.0 5.0 Ph~-si ¢ el 4.8 Taste 4.r, 4.8 FErVILEb 5.5 6,5 5.2 5.5 4.6 4,2 tPN I~I CI~S foma]e~ than [0 (
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,., ,. f
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~J ( ( F]{LOUUI:Cy X CO'~CEp~ TIfew wezM m0r@ awaro of instances WI]~re les 14@re oli°,. V o problem than
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---
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CC 0 u- ~D o ,I ~ E~0 u'~ u~ ~n u: u~ ,~ u~ 5 ~.sc ~ - w%l CD %9 .~ ,,r ~ .- ,. ~ ..~ ,-~ .~ ~.~ ~ ,~IL~~ • ~°~:~~ .... .... ~I ~ ~I~" ~" !
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Le~ C~cern~d About E~ery~hing EI.4 diff~ence vezsu~ 0.5 totol ~if[~encc~) the ~a~nlt~d~ of th~ dtfforcnc~ I~ lIQt ~S qr~t. 'i! (
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---
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( TOTALSMDICLI3 PIAII}y Restrictions 5.2 6.0 Tasting ~Cigarette~ 5.2 6,2 Poorly Packed 4,4 4.8 D/ff. )i r I~I,jAICF +i .0 4{t 4 thnt TYPE pI~©D L El OPposition Product - T~s£e Product - P}lys~cal 2%nti-sr~oKln'= opposttloll )]ot}l~r~ p]~ ,~[,c,~ r,r~ I-©ir ~¢ r]o PrDd~rct pr01)~9~ ~f ~t~]~n~r~ at] pD0rl~- i~<~ ~b~c0. All oth~c problems bother fhem loss. &
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( ii ( ~FI ',,% -UI "" ~ '~' " Ut'L-~:I, ]E
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Ilf-Fl VS FULL-TASTH IP'U I,L I AS'I'E 5.2 5.2 sligl'tl " mere ptrJblen~ 5.] 5.4 • 1 ~] DI[V +0,!
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t < ~C DI[ F. ~FE PRORI~II +0_7 4].I 4/.0 +') , 7
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,. , -35-
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16- HI-FI ql~iij,,]. VL!!~EU~ J4{)IT-f[IIEFf
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J, P Tri~J~ S 5ccis~ 6.0 8olf O~her 5.8 8.2 5.0 5.5 Pr~dur t 5. I FhF~ical Taste 5.1 4 .!1 +! Ty12TS b.3 5.! S.5 4.8 I g 4,d +~
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breath blore Th~n UseO TO More At Parties lleulth S=if
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t i,J- II:-Y: 'll:lEkS VFIISU,~ {jOS~_~TRELI~i N or]-T:io~ Izi_Es Diff. No Smoking Restrictions 5.7 5.0 -0.7 (Avg. uifLl (+0.5) ~O S;~)~ly:~ [~St~cElO2]Z DOLh~r=CI [rlOrs ],~b~ f]lqlI not1-Lr~r~"
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-40- ( L Z~I"I'] C'I I/;P S I~'- ~IL~IJ Z~CI TC]{I. R,Z :i
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4, -- ']-- f @F~aLOSL f 0
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b- C
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°.,, ,.I.. COLIC S p]~ 0 [3 LJ L] [ C Teal] Ilk.- I0 S OC IIAL COI~CI,RL~ L U L [_1 [.) [ irk, [o JIrl~t! lr~. 9TTI~blf'[T ({3 [:1~., "--~ D,)r~ler a~.O~~ [1 h] [_ I
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1 l?i 3~:r 2']~ UI~coccgr~ed 3[iaht~.- Cu::uer~ P~cna[ Cc~c2![ ~c~i~ C~c.~r~ ~ ~ ......
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-!i- (
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- 46- E'L~F p[ E S PLCIFIC APPLICA]'IOt~ J~ • Beneflt: longer lastJn~ C~q~tet+e. Thi~ satlrfi~s • " '~Thc ci~drette bur~ away ~ooq~ckly.,, ~~I] ~a]qnc~: 5~th m~diun the problem
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C~e~'~ige no dlf[ecenees are no~ed b~ Eex ant cave,or'a" 4
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~t J C, 0 J ILL~ R • [~L<TI~UU V:~ Non-Switchers 2.~ Frcuu~iIc~ SOcial And ~ona.l contain Unconcerned 2.1 DU~I Co~:trn 2.3 Person~l Concer~ 2.3 Socisl Concern 2.0 S11gBtlZ Concern 2~2 ~wit~hers vs. No~-Swltchers Trl@~S vs. NDn-TLiers f X C ~,1 4.4 1,9 4,4 ].~ 3.8 f,C 4.4 2.1 5.0 2.0 4.4 Triers ~.i 2.[) 4.2 ~n-Tzler~ 2.3 2,0 4.6 ( Th~ ~robl~m ~ppears %0 ')e ~osu imlozuanu of COl]rSP, ~his g~oup COI1~az~s ~hlly U~dez S~Ok~rS.
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• i The need for a s]ower burning eigaretL~ Js m~re apparent ~mcng smokers Of bra~d~ with ~nder 10 mqs. of t~r. Other problems more i~porhant £o this group ~re as foll0~. (FREQ~_E~ICy X CONZEId~) (
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! I! ~&~90~0~9
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( 17. A Brief Look at~n~mics of the Cigaretle Industry t~77 Background This douument is a subjective assessment of the dynamics in the cig"~ret:e industry. V, rhile ~orne of t~¢ informal[an p:'es~nte¢ h~s bee~ q~.nti~ed, maJ~ ~s~umptions and conclusion8 are slric~ly qualitative 1. Overview PKG has identified 3 f.moa*~ents] dynaznics in lhe cigarette business: Consumer Trends Dynamics - - a graduKl move toward increased pe~'son~l colqee_-'~l aric 'Finoderllity, r, Product ~namics -- a move toward products ~hat satisfied con- surncr need~ [c~ red~ct[o[l Of person~] COnCerns ~m~ r'n~odernil~. ,r Adveri~ D~namlcs -- success is achieved by establishing a brand image 5&sed on a product be~eflt that satisfies ~he smok- c~8 need fo~- t~te, p~rson~1 re~s~ur&~ce, ~nd ~rnodernity. ~ tn DetaD A. The D~narnics o~ Consumer Trend~ I. ~lild~esB -- the t~e~d tex~rd rnitdnesS is ~ taste ~hcnon~e- z%on wiih perhaps ~ subconEcious Ynolivatlo]~ to &chleve 2. Model~ni~ -- a dominant trend for sor~e smokers and re- cessive for u[hers A r~Jnf0rcem~nt of ~he smoker's l~Odern image. 3. Pe~gonal Conce~~'. -- ~he dominant %rend in the I~rk~ i~- fluenc1n~ at! m~jer shifts in smoking h~hit~ sincc ]g~0. Pr~ducl O~narni~ $ l. l~is~01"ic~l]y~ produ~s offering taste a~d personal ~'~assllr- ~ee benefits ]1~ve bee~ most successflli. ~s ~n~et~i~y ~ col%st/met noncerns ehal%~e, product a[tFibules ch~n~e Io meet lh~ new staDdards. ¢D
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( ( (_ 18. Coupon hr,.his provide & different kilxd uf benefit e.g part Df th~ prDduct. This rer~oves these bI'alldS from the r!~atil- ~tz'ealn of pl~oducl d~narnic~. C. Advertising Dynamics i. Advertimt~g is the key mea_~s for n~v~ng clgareltes. 2. If must cre&te a compelling brand image fo~ the con- 3urner to &~5oci~te wi±h. 3. It must emphasize visual elements that can comrnunicate this imag~ and the product benefits quicldy. The br&nc- loyal majority will not devote muca ~ime to reading com- petiti~'e ad copy. Ill. _Ci~m-~ette Hislory and D~r namic9 ovcr ~he Past 25 Yeara A. 1950 to 1960 B~ i. The move from non-filters to filters in the I950'a was spul*i'ed 13y per~rz~l concel~ns. 2. Menthols perfor,"ned strongly due to perceived peEsonal concern beneftts. 3. The "moder:~ity" of these new styles figured pro~i~cn±ly ~n their ~ccepta~c~. l~a61 to 1965 C. 1. A r~latively inactive period for product innov&tio~. 2. A noteworthy exception: Lark an~ "Farey~on, wi~h their charcoal filtc-~ b~nefit, score strong~ in the rn~rket. 3. A 1964 Surgeon General's report figures promillently in the fcllowin~ per~d. 19~6 to 1970 1. In re~ction In broad anti-smoking campaigna, sI~oking irlciden~e declines ~nd ind~lstry s~les flatten. -.l q~rue, IDoral. and Vantage Inew high-filtrafion, free- standing brands) arc introduccd al~d successfully capitalize On th~ z'esuI'geDc~ of p~l'$on~] cclr~cPrn~.
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i£. ( ( S. I97I to 1975 1. 2. 3. 1976 1. The loss of television advertising el'cafes a new chmllenge in creatln~ brand images; and throughout this p~riod, no new bl-snd~ of siC:lille&nee at'e su:_ue~iull~ introd~ced~ A few 100~nmand 12On~n. styles creat~ a niche -- with "modernity" as ~he p~irnary appeal. LOw 'tar']ine extensions begin to appear. Fu11-taste sales declines f~r the first riffle, and rner~thc] stabilizes. 2. SuccessfE] 1ntr36uetlons of M~rit s.nd Now sol;r the most vi~ozuus g~owth in hi-f~ sales yetj resultin~ ~na hi-fl share gain from 16~ to 20% for the year. Future I. Al~ost all n~ar ternl greyish is ~x~cted~o be hi f~, o Established brands will uo~l~inu~ to lower 't~l~. " 3, The iir~e ~t~11~i~n ~o hi-f~ tr~d v4ill Cot%~i~'l]e, ~.~i! ,~oi~9 of the ~tabl~hed brands ~v~ll re~aunch at lower rtar' 4. AC donars will be used hehinc these ~rowlh sly]e~. t
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( A BRIEF LOOK AT THE DYNAMICg OF THE CIGARETTE INDUSTRY ( Prepared by PEG January 1977 ==
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( FRETACE ( The purpose of this document is to put forth in wriEi~g~ for the first time, PKG*S view of wh~t the c~garette business is all 8bout. This is ~ot a factual document 6etailing what has happened in the business, It Is a document of opini~n~ r~pre~enti~g ou~ ~Kperie~e and ~nowledg~ of the clgarette industry. We have tried ~o identlfy the d~namics 0i ~he business, that is, the conditions and factors that ~re present and ~orklng in the marketplsee whe~ eh~ngcs take p~c~. ]~ is ]la~d Lu identify precise cau~ a~d effect~ ye~ ~e see a consistent patt~r~ ~f cha~ge ~elatln~ ts cerrs~n eonditlons. The~e eon~ition~ w~ call ~ynam~es~ It should be pointed ou~ that little of r~a quantitative resemrch we ~r~ so familar w~th i~ wrltte~ i~to thi~ ~oc~m~nt. ~be research is ~ere, bu~ only in ~erm~ ~f our understanding of ~he business and Orovldin~ a foundation for our op~ion~. W~ ~re no~ trying to s~pport a point-of-vle~ wi~h ~acts £n thi~ document. We ar~ s/~mp!y ~ryiu~ ~u unders~d the ~arket an~ explain ho~ s~e ~t. ~ ~is s~se, we h~e i~ude~ s~ ~ua1~e research and a~aly~i~ conducte~ by P~ over ~he years. This research is ¢o~mer oriented. I~ is used unly ~o help ~xplai~ 8~0~g dynamics. It IS ~o~ ~ncended to quantify ~hem. The format of ~he douument is co firs[ ~den~ify and explain the dynamics. Then we have briefly related the dynam~e~ t~ the history of ~he b~si~ess nver ~he past 25 y~rs. ~inally~ we h~v~ provided a brief for¢~ast for the f~ure hosed OR our und~st~ndin~ af ~moki~g dyn~i~. -J -j
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( ( t Over the ~ear~ PK~ has toTm%d ~ 90int-of-~iew relating to the dyne~ic~ of the cigarette industry. Thds polar of-view separates c!ga~c~ J~namlcs i~to ~hree ~ajor ~L~uri~s: Co~sume~ Trends D~namics The f~da~enta] long ~rlz t~e~ds in the business a~e for ~moker~ to move g~ad~ally to produc~s th~ repr~se~ ben~fi~ of "health'~ sad modernly. 2. Produut DTnamlcs Successful brands h~%.~ off,red "real" or "perceived ~o be real" pro~uc= benefits that are founded on smoker~' ne~d~ for "health" and modernity. O~ly ~ few brands can share those benefits in a major way. The flr3[ brand(s) to offer the benefit usually gets most of the business; however, th~s ~nd(g) can be "upstzged" at a later date w£th produc~ improvements and/or ~ighly dramatic ~dver~i~ing. Ad%~er~i~in$ D[namics ~BCCessf~I] adver~dsin~ in ~h= cigarette bueinesa is achieved by es~ahlishlng a brand image based on a prodect benefit tha~ ful- fil-s consumers' needs for v~ste, "health'~ and modernity. As~u~mg two products are ~asdcally ~he same~ the brand wlKh the m0~e dramatic and compelling image usu~lly ~ets more business. While the~e d~namicsma7 ~ound ~impli~tlc a~d a lot l~ke Dther product cat=gorier, it i~ important to note ~hat the dynamics ef the ~igare~te ~usxness are highly accentuated because of the deep~eated p~ychologlcal ~r~ of Pr~due~ usage. ~m~ki~ i~ ~ h~blt zh~% Te~les~ts~to so~e de%re~ - a manlfesta£ion of one's self-image, a physicel experience, s nervous ex ~ress~on an~ fi~a]]y, ~n emotional c~nfliet between short t~ grallf~ca~lon a~d 10n~ ~e~m '~he~Itl~'~ ~o~e~s. Therefore. gucces~ in the cigarette business, in oul upi~lon. ~omes only as a result of develop!n% a hl~ly disciplined marketi~ program based on f~damen~al dynamics: a ~rogram chat correctly positions a brand b~sed on consumer tre~ds, ~ program ~hat offers a product to fulfill~'~ ~eag con~r needs, a program that creates an imaRe f~r the produc~ ~asfd ~n a "real" benefit. P~sitlonimB alone can't do it; adver~si~ig alonew~ can't do i~; product alone can'~ do i~. All three must work in concert to achieve ~rue success. It is a simple formula, but difficult to ~xecute in the highly competitive cigarette business.
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-2- ( CIGARETTE INDUSTRY B~NANT~S IN DETAIL ( L To fully understand the dynamics of the cigarette business, it is helpful to look Rt the~aldtative side of research that has been con- duct~d over the years. 1. The Dv~amlcs of Consumer Trends An analysis of the 1967 Switchlu~ Study, prepared by PKG, provides a provocatlve, ~nd for the most part, still valid view Of long ter~ bra~d sw~tchlng trends. "Clgare~te brand ewluchers have two major roads to foli0w: elth~r theF go toward health con~ern~ ~r they ~n to~a~d e~ joyable, light and mild experience. "The movement toward modernity is not smooth. Brands and seg- ments are skipped over, and ~he eud-v~lu~s ud llgh~ness and mild- ness or health are not always clearly separated. Most brands, in fact, are compromises h~tws~n health concerns and a light and mild experience. Some uf Lhe~e represent unique combinations of oppDsing values and, therefore, have attained clearly defined bra~d imeges and franchises. Winston, Raleigh, Sale~, Kool, and Tareytvn are examples. Other compromises, however, represent aceo~odgtions to change in which previously secure brand images and franchises ha~'e weakened. Fall Mall, L6M, and Viceroy are examples. "Some brands hav~ images by whlch end-values are clearly defined. They have become pinnacles cf certain desired characteristics - ~n te~s of strength or in ter~ms ~f llghtness and mildnesss et~. Lucky Strike and Camel, Marlboro and ~enson & Hedge~ are examples. Flnslly, some few older brands have a nearly complete cllnical personality. Kent and True are the most preeminent. "Cigarette brand switching is sensitive to current meres ~nd styles of living. As styles change, pressure is put on brand images and franchlses; brands plck up and lose smokerg through swltnhin~' and ~ew ~rands a~e marketed to take advantage of Dpening oppor~unitle~. Bra~d switehlng~ the~ occurs in a~ overall dlreetlo~ of modernity. "Modernity, however, has two personalities, not always compatible. On the one hand, modernlty means light and mild experience. It is the leisurely good Idvf~g of the upper-middle cla~s whoseex p~tationo and szyles set modern trends. ]n co~trast to this~der~ personality, older styles are perceived as heavy, harsh, a~d lower ed~ss.
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-3- ( "Modernity also means the clinically ~afe~ clean, technoloEical ~astery over the cnvlror~e~t, The best things are the latest Innovatlons whlch tend to re~ove the individual from personal involvement and eomta~t with his envlroru=e~t. In contrast to this ullnlual mode[nlty~ older styles appear dangerous, dlrtv, and imprecise. "These two modern personalities clash on a number of value posi- tlons. Where the ~ne ~tre~ses e~J~yahle, light and mild experl- ences~ the other stresses detachment; where the one is frivolous~ the other is conser~ative~ where the one is hedonistic, the other is stralt -laced. " (
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( -4- 2* PEOduct DTn~ics The haport~n~e of p~oduct ~.~velopment cannot he undere~tlmat~d. The cigarette habit is so s~ror~and ~hus brand switching so low (only 15-20% a year} that the ~m~ker will not respond t~ products that don't offer a real b~nefi~. IIistoricalll', brands thaL hav~ achleved the most success ar~ those tha~ offer taste within the ~onEine~ of "health." In e~mence, ~roductm ~hat Offer the consumer a ¢o~prcmise b~w~n uonfllcclng needs: the hedonls~¢ gratification of s~okdng v~rsus "heal~h" c~ncerns, Once filtmrs w~r~ e~t~hlfshed a~ "healthy~" Marlboro and Winston dc~minat~d the market ba~ed on tasEe. Today we see a mew evol~tion of this pa~tern where taste- oriemted brands in the hi~i ~egment are s~ce~sful (e.g., Vantage and ~rd~)~ ~api~alizln~ o*~ th~ ~om2~umi~e of ~asLe a~d io~ ~r. Products tha~ focus only ~n one of these ~enafits have mot been as ~uc~ful: Kent and VICEROY wi~h focus On ~he filter were out- distanced by Mar2boro mm~ Winst~n~ Carlton am/ ~ow focuming on low tar a~e 5ei~g outdistance~ b~ V~nta~ and ~erlt. Profits can b~ ~ade on single f0c~s product~, but the real "~ction" is in products tha~ d~liver, or a~e perceived Co deliver, ta~tm while ~epresenting the mo~ reasonably "safe" pr~duct availahl~. It is important ~o no~e that in 1955 the average tar yield was 4~ milli~ra~s compared to about l~ milli~rams today. Thus, ~rodue~s have evolved along the io~ ter~ ~ontlnut~ t~d "health" and modernity. Tho~e ~ha~ have capitalized on these ~rends with a poiuL~uf-dlffere~ee are ~he ones Ehat h~ve been the m0s~ sunc~ssf~[. They have "up-sta~d" Other bra~ds in thmi~ ~e~ment ~ith a product an dan image advantage, and as such~ b~neflt f~om heimlg ~erceived a~ both "healthy" a~d ~odern...as th8 lates£ Co~pro~ise ~e~wee~ taste and t~. To fully apprecLate boy the product evolution process worhs~ ~t ~ helpf~l to li~te~ to smokerm a~ they rationalize their way along the dr health /modernity continuum (from EALEIGH Filter Focus ~ou~ Re- search in 1974), "You know with al~ th~s stuff on cancer~ yon think if y~u smoke a filter, you'd he a little better off. I dontt know how much. It catches something ~ou're no~ g~tting." (Female) "Years ago I use~ to mm~ke lucky Strike 5~t of COUrse I have gone into the fll~er ¢l~aret~es because they're supposed to be less harmful." (hale) "I t~ied ~0 give it np a~d I can't so I may as well smoke a £m filtered clgar~tt~. It filters a~ay a llt~le of the harm. Probably ~ot ~ tremendous amount." (~le)
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-5- C ( t 3. "I could qui= smoking tomorrow and get hit by a car, I believe this." (Male) "YOU ~ow you think of its being detrimental to your health-- coffer nod clgarcttes. Ey grandmother add grandfather Just died in ~h6 last year. My grsndfather was 92~ my ~ra~dmothe~ was 89. They w~ren~t youn~ pe~pl~ n~ %he7 6xan'~ a ~Inlm~ ~ £i~ ~ll~ns of ¢offe~ a day ~nd ~m~kEd a mln~mum of two Caz~D~s of Cigarettes a week Rnd a box of cigars. And they h~ue be~ doing that s~nce I~ve been thi~ high. They ~ust died ~f ~i~ ag~." (Male) Finally, dt should be noted that nertm4n prod~czs have used other dynamics ~o cr~a~ a ~odn~-0f-dlfference. ~s~ ~otably~ C~Up~ benefit1 The ~upon ~n this c~se be~ome~ part cf ~h~ total product~ an~ ~s a ~n~equ~n~e~ ~mewha~ removes ~bese ~ran~s ~ro~ the main- stream ~f the ma~0r consumer trends ("h~Ith"/mod~rnlty). Coupon br~ds, therefore, are less responsive to~ajor shlfLs i~ ~o~su~e~ ~ukin~ trends, but are ~ore responsive to other ~onsum~r t~ends, such ~s i~flatio~ factors. Another example of this kind of sub-dynsmic condition i~ the lower price prop~t~n tes~e~ ~y Eagle. ?r~e ha~ not been a ~jor dyn- amic ~n the cigarillo b~iness. Th~$~ a lower price bra~d ~st erea~e a n~ dyn~mi~--wlth ~arrow appeal--in order to achieve su~ess. Also, we can see variations in the sub-dynamic approach in the mar- b~ng pursued~ b~t it ~pears ~h~t ~h~ appeal of a W~an's cigarette re~ts more on a ~onsumer conditdon than ~n ~ s~okln~ trend. Since sub-dNnam~cs are some~ha= out of the =~instrea~ trends, they tend to have less appeal to all smokers. When sub-dynam~ hsve been su=- ce~sful ~ £h~ c~arett© ~ndus~ry~ success has ~sul~ed f~u~ the develop- merit o6 a v~y compelli~ pKod~ct (arid i~a~e} Dra~nsitieu to a tiBhtly d~fi~ed group of s~oker~. ~uh~dy~amIc hran~ ~r~ unique and ~an 5e ~ry profitable, but it ~s unl~kely that ~hey can ~apE~re a dominant ~h~re pu~tlon. Howeve~ i~ should be noted ~ha~ a~ one poln~ menthol~-and probably hi,i--could be ~iewe6 ~s sub-dynamics. ~he~e product a~tribute~ were actually ~a~ent "heal~h"/~oder~Jty ~ttrib~es ~hat b~came hi,hip appe~lin~ a~ consumer trends chan~ed. ~ ~d Advertlsin~ D~namlcs ~ Wi~h ~he h~torical limited us~ of tradlt~en~l marketi~ t~ols-- ~ pr~lng, pr~utl~n, e~,--adver~ising has emerged as th~ key means to mov~ c~garette pro~t~. ~ven th~s and the natur~ of ~be ~ produc~, it is not sur~ris~n~ that th~ produc~ i~age is important. ~
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-6- ( ( t TO us, the importance of a brand's /mage is paramount, Focus group work conducted by PKG in 1975 helps to put thls in pers- pective from the smoker's stasdpoint: "Iu addition to the tasze and 'feeling' of smokin@, dmaeery is an important aspect cf brand preference, U~fortuma~ely, ~etti~g a respondent to verbalize the full impact of a brand's Imaze is difficult because a smDker may not want to admit selee£d~1~ a brand on the basis of Its imagery and/or his or her response to an Image May be par~lally subconscious. (PKG Re~arch ~mmary) "As evidence of the role Df brand imagery, it was InterestlnK to note that the majnrity of smokers arrived st their current brand choice after smoking a friendts elgar~ttes of ~he 5a~e brand. ~hile they say they w0uldntt spend 50¢ on a brand they had ne~er tried, i~ seems more likely that a frlcndPs (i+e.+ poe=Is) acceptance sf a bra~d--provides some form of assurance in ~he area of brand--and smoker--imagery. (PK~ Resemreh Sugary) 'I smoke Parliament. Te~ years ago a friend of ours smoked Parliament and we swi~hpd over. I smoke close to a pack a day.' (Female~ Low Tar Smoker) 'I didElt ~e to admit, but probably I was self ceaseless. I was Impres~ionabl~ ~nuugh where l~ke with Marlboro adver- tislng and Winston I associated with its type of people and I suppose thetis probably wh~ I started ~e move. But I do like 5hose clgare~es the mos~++ (Male, Full ~aste Smoker) Additional focus ~roup work seemed Mo help Id~atlfy the general r~le of brand image in advertising: ~'Perhaps the moat Outstanding fiudiu~ uf these most recenu ~r3up discussions on clgaret~e products invol~es the Impnrtance ef the visual elements of a ed~a~£te advertisement, it is absolu:ely critical ~ha~ ~he headline and visual elements of a creatdve executlon he capable of eor~munieating the full impae~ cf the adds message, Smokers readily admit a very s~r0ng degree of loyal~y to their eiearette brands; consequently, their atten- ~do~ to ~garette ads, n~t ~o mention ad readership, is a~ very lea levels. Th~ visual ~urtlon of a c~gare~e ad~ then+ ~st not only attract the readers' attention but it also ~ust ha able to CO~unJcnte the product story and imagery am if the 5ody Copy ~ere not th~*e. For shose v~ewers who go beyond the headline and vlsuals~ the bo~y ~opy should serve to reinforce their first perceptions of the produc~." (WALEI~H Fll~ers Focus Cro~ps 2/74, PKC Reserach Summary) =n 0 0 0 0
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-7- ( ( Going further, the focus groups showefi how smokers react to the whole idea zathe~ than the ~peclfi¢ el~ents: "A~ demonstrated in the e~ahlatlon Of the creative execlltlo~ and the &~o~p memberst ~¢actlons to the image-loaded taste descrlptlons of ~ALEIGH Fil~ers, most smokers resD0nd first to the vlsu~l el~ents o~ a creative executlon a~d ~econd t~ ~he headline copy. In ¢ottras~, minlmal attentlon is glve~ to the body copy of a cigarette ad~ even 9~ the artlPi~la] reader~hlp situation Of a group dlscusslo~. ~n ~ct, wh~ asked to respond to words such as hearty, b~id, vintage, the ~Jorlty ~ re&pondents felt such fez'ms a~e extY~eoug, p~rt~cu- larly when ~y are u~ed to d~ri~e ~he ~as~e of cigarettes, a taste which most ~okers ~hemselves find ~iffieuit to ver5ali~e." (RAlEIgH lliters Focus Groups 2/74, PKC R~ear~h ~umm~ry) It is importan~ to note that ereatlng a brand i~ge does not ner- • ~arily mean imagery adv¢~isi~ Fo~ ~xampl~ Vanta&e advertising creates a bra~d image With ~he I~Se of all-~yp~ advertlsi~g. D~ image iQ cigarette advertisin~ £s p~ohahly 5eat defined a~ the ~ub- conscious imp~aslon smokers have ol the ~rand. I~ s~m, we se~ t~ rrlmary job of clga~ette advertisin~ a~ One o~ b~ildln~ a meaningful a*~d id~u£ifiabl~ image fur Lhe product based o~ what it stands £or in the ~eneral sense and ~ha~ benefit it offers in the specific sense+ If the product is right ~nd ~f the ima~c i~ tom pelllng, t~ ~llanc~s are ~hat ~he bra~d will ~e suteessful. AS o~ of Our creatlve directors o~¢e sald~ "~at about Image? I thin~ ~'s the whole hall ~ame." III. CIC~ETTE HISTORY /~D D3'NA~IC$ OVER THE PAST 25 YEARS. t 1950 - 1960: ~*e Advent of the Filtel Be~%'e~n 1950 and 1960 the cigarette industry expanded from 366 billion units to 45~ billion units. During this time span. filter c~gar~tes ~ere Introduced; their ~m~ss acceptance, and the exodus from non-filt~rs~ clearly de~nstrat~d the consumer d~namlcs of "health" and m0derni[y. Although th~ issue of smoking ~nd "health" dates ba~k to the Elizabethan era, ~he encr~us i~portance of this issue in modern ti~es probably h~g~n with the firs~ R eaderI~ Di~es~ article. It besan t~ quantify th~ issue. -J ga
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-8- ( VICEROY was the first bzand to dlzcctly capitalize on thls by £eaturing its filter bcu~flt, and sales were dramatlc for Lhe brand. Most of the established brands seen today werelntrodueed £u filter fo~-~In the 1950's. The brands introduced i~ Lhe 50's are as fallows: L&M Filter - 1952 Kent Filter - 1952 Tareyt0n - 1954 Old Co14 Fil~cr - 1954 Benson & ~edges Fllter- i954 Winston Filter - 1954 Hnrlboro Tilter - 1955 KOOL Filter - 1956 Salem Filter - 1956 Newport Filter - 1957 RALXIGE Filter - 1958 The 1950's also saw the develo~men~ of the menthols (also considered to ~ave modern an~ therapeutic overtones). Salem l~ad th~ category shortly after the brand's i~rudu~on ID 1956. Salem, KOOL ~d Bewport were the onl~ menthol brands available at that time. ( t 1961 - 196~: A ~table Period ~ring the early 1960*~, industry sales growth continued as in the 50's, with filters becoming more prominent and menthols l~creasin~ their share of market. The charcoal filter wan Introduced ~s an attempt to "up-staSe" ~tand~rd fllEezs, and 5oth ~areyton and Lark b~n~flted. In 1964, the first Surgeo~ G~ral's Repor~ appeared as well a~ another Reader's Di~esE article on ~mokin~ a~d "health". The~e rcsulte~ in a decltnc in sales for the y~ar. The m~rke~ recovered ~he follo~ng year. It was at this time that Carlton was introduced - the first resl response to the "h~alth" i~ue ns We ~ee i~ tod~y. The early sixties saw onl~ five new entr~e~! B~LAIR - 1~62 Lark - 1963 C~rltua - 1964 Lucky Strike Filter - 1~6~ Philip Morris Filter ~96~ 1966 - 1970: Stron~ 'IHealth"/Modernity Trends The late sixties saw a reduction in incidence of smoking, and industry sales flat~cned; "heal~h" was a big issue. Anti-smoklng ca~palgn~ ~ppeare4 heavlly on television. Three hif! br~nd~. True. Doral and ~a~tage (wi~h n~. more mod~n filters) wer~ Successfully Introduced a~ t~Is ~i~e. capital~ Izlng on ~he "health" atmosphere that the a~ti-smoklng forces ~ere creating. Longs (i0~'~) were introduced capitalizin8 on modernity, and they accounted f°T 20~ of ~arke~ by 1970 wl~h new brands and llne extensi0~s. .j 0 0 0
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-9- ( The last of the sueeQssful emtTd~ into the market were see~ during the last days of televlsion in 1870 (Dural and Van~ege]. In addl£]on to llne extension longs, the brands to be introduced during the Iste 60is were: True - 1966 Virginia Slims- 1968 Ches~e[field Filters - 1966 Dural - 1969 Camel Filter - 1966 Vantage - ]87D Silva Thins 1968 Eve - 1970 1971 - 1975: The All-Print E~vlro~ment ( t AS the industry moved from television to the print world, sales In¢~eaDed once a~aln. Rr~ with ~a~es ~nd ~omenttLm that ~ere e~ab- llshed wi~h TV c~n~dnued to ~row. ~failds wlth~ut momentum ~eeli~e~, wi~h the exceptions of Vantage and ~ew~o~t. Until 197§, no ne~ br~nd~ ~ere i~tro~ed g~ee~ul~y~ The full taste se~men~ $~ili dominated the market; however, menthols eontln~ to gaim ~har~ accounting for 28% by 1975. L~ngs ~ntinu~d to develo~ dramatically i~ this pe~iud. The trend of concern w1~h "h~al~h'I Lights in i~72. At the 5~i~ni~ of this ~ year period aC ~xpendi~ures were ~duced, bu~ 5y the ~d of the period, e~endltures increased to the levels o~ the la~e 6~'~. [~ s%m~ it was difficult to cha~l~e hrK~d imaEe5 or ~reate ~ow ~nes i~ the print e~viro~m~nt. G~ow~h bra~d~ f~o~ TV wer~ domin~nt~ and n~w pru- ducts ~er~ u~s~c~e~£~l. I~ ~ecame ~ppare~ ~ha~ re~l product di[~erences were n~ede~ to z~lly aff~c~ m~u~er th~nk~t mn~ h~hlt~. Th~ limited but successful ~ntroductlon of a f~ci20~rands d~m~nstrated ~his. The grOWth ~learly showed the undercurrents ~f "health" and mo~e~n£ty. Th~s~ trend~ would ~o~n r~ ~m~r~e in a ~nlfizan~ way. 1976: The 5eginning ~ a ~ "~ealth" Er~ During the firs~ nine months ef 1976, the Clgarette Industry sho~ed dramat~m acceleration ~f ~'health" ~n~ ~ernity trend~. The ~ull ta~t~ ~r~n~s ~i~ly ~upp~d ~ro~in~ an6~ £n ~a~t~ ~e~re~d ~ ~arket sba~e. Th~ m~hol segment ~hlch had grow~onsistently ~ver pr~v~on~ year~, appeared ~ stah~llze. Th~ ~os~ ~bv~us ehante ~n ~h~s p~od was L]Le tr~h of the hi~i summons, ~ith th~ ~nt[o~uc~ions of two new hifi ~rands - O~ ~o G~ -J
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-i0- ( ( L Me¢lt & NO~ - the hlfl market has ~rownto nearly 20% of the market by the e~ of 1976 from 16% at 1975 year ~d. This was the f~rst ~fgn of dramatic growth in this area for years and it clearly dominated the industry. IV. FORECAST POR THE FIITURE Clearly 1976 can he vlewe4 as a pivotal year in the ¢igare=te industry. An~, in iooklng inte our "crystal ball" we predict that the tre~ds of 1976 will probably continue into the future. I. H~fi brands will play the major role in the market. Almost all near term gro~thwill be related to low tar products. There could be excepticns in the s~yna~ic ar~6~. 2. EstaSlished ~ran~s ~ill f~rther lower the tar and nlco~ine content toward h~fi levels on ~helr o~ a~ord or possibly by force of ~over~ental ¢o~r~l. (T~ tar an~ nlrot~n~ fi~r~s h~ve ¢on~ teutly h~en i~c~e4 o~ ~aSilsh~d brand~ siac~ th~ fi~s~ repo~) 3. Sp~ciAllzation of pro~,~ct dlffer~n~es w£11 ~e critical to bran~ ~r~th. ~rhis will be ¥e~ evldcnL ~n the area of ~ew products, Al~o~ establlshe~ b~an6sDa>• be ~taBe~ or Tel~r~cke~. Thi~ ~v~Iveme~ is already visible in Such c~ses as True cu~tlng it'~ tar and nlco~in~ in ha]fj and wi~h ~he heavy s~pport [Qr ]ow t~r i~ne extensions, e.~., Ken~ Golden L~h~. 4. Some ad ~pendltures w~ll be dlrec~ed away from established brands. ~e line extensions and ~ew products will pro~a~ly be ~he recip~ent~ of thes~ expe~i~ur~s, ~ have seeo ~h~s ozcur to some e~n~ al- ready wi~h brands such as Salem Lights, Kent G~Iden L~hts, an~ Fall Mall Extra M1]~s. In ~um~ ~he dynamics Df "health" a~ ~oderni~y trends w~li be dominant. Th~ smoker avpear~ to ~ r~ady to ~ake another msJor shi~t, losing gra~ifl- ca~ion and o~ta~ni~g a "safer" produ£~, to a ~e~ g~era~o~ of products ~it}i single d~git tar ~um~er~. Each new entry wl]] ~ttem~t ~ "up-~age" ~a~e mo~e ~oder~ the ?revlou~ e~tr~. The s~k~r will b~ ~da~e~ ~ith 'lhe~ith" oriented advertising. $o~ smokers will seek Justification (r~t~onalizat~on) fo~ staying with a full t~te hran~, others will move on to the ~ontinu~ug Co.praise of ]e~ satisfaction wh~le continuing ~o s~k~. ~9 G~
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-Ii- V. S~¥ AS stated, the purpose of thi~ document Is to twy t~ pzovlde under- standing of w~t has and will happen in the c~ga~e~te ~ndustTy. 0ur view may not be ~n~cd by ~ii~ ncvcrt~e~cs61 it is an a~tempt to a~ive at a co~on u~derst~nd1~g of B~ok~g dyn~mlcs. We believe the understanding Of these dyn~£c~ is crltf~l ~n ~<imlzlng long term g~th potential ~or BR0~ ~ WILLIA~0N. Agre~men~ Qn d vnam~s~ amd their marketing ~pllca~Icns~ could focus the ~i~s aRd ene~gles Of ~he Co~porat~0~ a~d ~t~ ~e~cle~ ~n th~ ~t productive d~e~t~ns. ~n ad~i~ion~ a ~u~l u~s~a~di~g o~ dy~mi~s could foster the kind of toc~l ~ea~ork necessary ~o ~ch~eve C0r~ora~a g0als, In ~h~s v~n, we h0~ that th~ docl~ CAn b~ help ~ul. ( L ~3 :D Q~
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i! P~ , ! i'~¸ A
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20, ( lndu~try D~mai~,i~'~, Part II 1979 This do£xlrcetx% introduced "The Wave Theory" -- & ra@del of industry dynamics, In wave theory, lhe cigarette m~rk~t is repres211ted in ~ive "~aves, each conqposed of sr~Jok~r~ w]±h differing characleristics and cigarette 'tztr' level preferences. Over time, the composition of thcs~ w~xres ~han~e &s s~okers iq~ove lo 1Dwer rtarr ~,aves d~ to peFsonal, social, o~ ot!l~r c©ncerrls. ( All five *'ayes viewed together repr:.sent a col"ltinu/]m frolTJt Wave" 5 to !&'ave 1 Nigh 'Tar' to Low ~Tar' Strong Taste to Weak Toste Strong EnloNonal Inla~e Needs to Stron~ Rational Inla[c _Needs Kncotteerned t~ High Pers~e,i Con~er~ Wave ~fheory Curt cn~ Siluatlc~n \VaVe 1 Cu~ ['el:Lly, 2% of the cigarette market is in this wave, The~e smokers are experin3eniors, A s%r~g~ersonal concern for healtt] has drawn then- out of waves 2, 3, ~nd 4 to the ultra-low Itarr brands charBcterisiic of wava 1. They are n~ostly older ferraleswhc are not concernec w~ih a ciga~ci~c lhat enhance~ :]~eil- in,age; rather, riley are tryin~ to eliminate the ri~k~ of smokin%~. 'vl~ ave This wave of sznokers is aI~ assembly of progressive Inobil~ sn~ckel~S who, IOF p~FSOn&] &lld Social r@~SOrl~, !]&ve left w~ves 5, ,i, and 3. Its r~.n1{s &Iso illciIlde soi~i¢ sl]~iJk~ ers who have left wave I for the slight taste advantage ~f- {~r~d by the freestanding lev~ rt~r~' a, nd menthol li~e ~ tensions characteristic of wave 2. The wave is equally d~vidcd b~4~een Inal~ and felualu smoker~. It acconr]~s for 18~, of the market.
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21. ( ( F. W~tve ~lnOkcr5 of wav~ ~ have Stpilck a eoi3promibe between fasle/~afi~f~tif~n and pel"so~l concerns, They smoke lo~ ttal' li21e ex ensions hoping h~r the 2u1£ taste of high 'far' brands and the relative benefits of lower 'tar, ' They are slightly more male and older than wave 1 and 2 smoker~ They torte from the high 'tar' brands and cux rently con-- prise 14% of the markeL Wave 4 These are full-taste smokers, some wilhno peruon~l or boeial concel'n~ &no son2~ with eittler or both, The~" si~e ~ourlgey' ~n2©ke~s, often .5ts.rtCl^S~ who are 13]or~ col]cuz.rl~d with ~t]e satislac~ion delivered by [heir ful]~!e brands. At 5@~ o; the nJ~trxel, they repre~e:ll the l~rge51 conceding. fiOrl Of S/~icke]'s in ~y ~-~ve A imc< of concern, eith@2" soel&l o.~ p~rson~], eharacteii~c.~ this ~Fotlp Of srf]0kers, These o!deF n]ale~ h~ve sn~ckecl plaln-end or high tar~ filters for years and ~ill not be sa !s- lied with a cigarette lh~ ~'oYu~ron~ises taste and sad~fac!ion to deliver less tar.' The~ account for 12~ elf thE' rnarkc!. ]'rejected az~ileh!n~-- 1978 - 19~5 h is pro~ected that during this period, thin picture will change. Wave 5 will ~pill over into waves 4 and 3 and will disappear. The ~x'ogressives al~d experil~ierl~OrS ~iil spill [rite ~he u]tr~- lov¸ ,tar~ category o.rid a new ext/'~Dr~cl:f ]ov,r ~t&Tr category, 'Finis i'~ die dynaInie n~tuI'e of wave theory. As one Wave ~ie~ C)llt new ~ave ~lnepgc~ ~,l lh~ f~l~ ~tld of the conlinuul/1. I~rands positioned in wh&i is cui'renily cons[deI'ed ]%8.ve 3 shoulJ Ztbsorh fhe g1*e~[~t rlu]ndel~ of new s~ilokez's ~.s v¢~ves ~ :~nd subside {12% share growth by 1955). Waves 2 and 1 should a~sorb shout 8% and 6% of the n~arket, respectively. ..~ PosiBonin Opportunities ~-~ -- g _ ~ There are opportunities for those brands thai zan achieve' a "hreakthrol~gh ' (i. c, ,high 'tar' satisfaction in a lay, Tiar' ei~a-ed retie), or position itself to nisei the needs of a specific '~zave. Breakthroughs help mMntaln a eenlpany's eo'npetitive edge, but positioning to a growth segmenl yields Quicker grou th ant a l~nger-l~g~inN franchise
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( INDUSTRY DYNA~ICS, PART II March 26, 1979 Prepared by PKG/C~nnlngham ~ Walsh ( t O O
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( INDUSTRY DYNAMICS, PART II A second brief i00}~ at the dynamics of the cigarste !ndustrl with focus on the icw 'tart revolution i~d ~ew prDduct positioning opp~rtunities~ THE WAVE THEOHY. ( t Prepared by P~G/Cunningham A Walsh in presentational format March 27, 1979
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C INDUSTRY DYNAMICS, PART YI PREFACE Industry Dynamics, Part I prepared ~n January, 197g: Purpose was to put forth PEG'S point-of-view on "what the uigarette b~i~ess is all about." Method~]ogy was historical study, some quantitative analysis, more q~alitative understanding, and a lot of e~p~rience/judgement input. ( Industry Dynamics, Part I: prepared in March, 1979: Purpose iS to (a3 go further in understanding the dynamics of th~ low 'tar' revolution, and (b) put fort~: a positioning hypothesis for New Products . Mcthodology is slnilar to P~rt I, but builds on it with new data, i.e., to pull together all key quant:tative and qualitative data and interr]~r~ it based on knowledg~ and experience t
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INDUSTRY DYNAMICS, PART iI OVERVIEW • In total, the move to low 'tar' is a cigarette revch*tion: 13% ~ 40% in last deca~ 19% -----> 40% in last 5 years ( • Su_it, this 'revolution' does not affect all smokers equally: Changes in the cigarette business appear to come in waves. PKG has developed an analysis of these changes, called the "~ave Theory." t ALSO, the Wave Theory applies tc New Products positioning: - The Wave Theory begins to Provide a means for effective market seqmentation. - B&WIs desire to "leadr ~ot follow" in New ProdG=t development, possibly can be refined through application of the Wave Themry.
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C INDUSTRY UYNA/I~CS, PART II -- TEE WAVE THEORY INTRODUCTION ( A]neri~an culture ha~ eMper~enced ~a~sive cha~ges in the past 20 years: ~h~ "big ~g" ~f the 6~'~ ~i~d ~h~ "h~wt~lan" r~tl~ aftermath -- the le~s ezplosive era of the 70's. - The majer d~crease in Old Values and the splintering of New Values. - From the age of "We" to the age of "Me'. Soc±o Cultural chances occur in fits and spurzs -- by smoothin9 the5~ outI we can see WAVES: - In ge!1~z~l ~erms, manl socio-cultural chan~es are initia~ed b~ kid~, won~cn and in big city coastal locatiun~. - Ezt this is not necessarily the case for ~roduct revolmtions; r~actions c~n be different, particularly depenMing on the nature of the m~oduct category. PKG has attempted to relate these massive changes to the cigarette industry: - PKG identified amd analyzed change to modernity iD 1967 thrD~igh lifestvls movement and clinical m~vement (se~ Industry Dynamics, Pair II . - Now we ~hould look at these chances as relat~r] to the lou: Itar~ revolution.
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r% THE ORIGINAL WAVE THEORY A COLLAPSED VTEW OF THE LONG TERM TASTE/'TAR' CONTINUUM High 'Tar' I Low 'Tar' > Plain End/ Full Taste Double Diqit LOW 'Tar~ Ultra low ITar' High 'l'ar' Filters/i{id L(l% 'Tar' Pi!ters 'Tar' ~Old Values Newer Values WAVE
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INDUSTRY DYNAMICS, PART II -- THE WAVE THEORY CONSTRUCTION CF A WCRKINC MODEL Market is divided in£o 5 waves (unequalquint:les) movement from full taste tc low 'tar' reflecting the • Waves represent type of smokei~ ~nd ~a~ based on brands SmOked, Th~ process for determining/understandln~ waves ks: - Brand mlusters on t~'_e/'t~r' basis ~ p~sition and Siz~ Of ~ave - Net switching data for waves ~ movement in market by brand cluster - Waves by s~oking "concern" ~ cross check on cluste±s and "co~ceyns" by cluster - Waves on a demographic basis ~ age/sex nndpr~%srdin~ Waves ~n o social value basis ~ iifes=yle/value understanding Wave~ ca~ then be viewed as target groups with usage, democraDhiz and psyuhographic dimensions:
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INDUSTRY DYN/MMICS, PART II -- THE WAVE THEORY ~gAVE ~i WAVE ~2 WAVE ~3 IqAVE 54 WAVE 55 The Theory In The Abstract Conclusions Experimcntors-------------~ The Pessimists (2%) Mobiles ~ The PrDgressives (16%) ~iddlists ----~ The Compromisers (14%) Staticg ~ The Resistors {56%) Reg,essives ~ The Rejectors (12%) Applic~tlon TO The cigarette Industry Ke~indin~s Fearhmotivatedr reactive, obsessxve COnCer~ Primarily rational, aztiv~ reasoned concern Rational/emotional balance, restrained, con- trolled concern Emotionally needy, Deor ~ctive/reactive, sub- ordinated concern E~otional chauvinists, inactive, buried ccncern 001790 0&9
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INDUS'fRY DYN,M~I~ PART Ii -- TIiE 'NAV~ THEORY CURRENT ~ITUA2±ON 1978 (68%) Full Taste ~ : ~ LO~ 'Tax' (32%) (4} , (Plain/Older FT} TO '9OP.OL9 Re~ctor~ Camel Pall Mall Raleigh Lucky Strike ~e~istor~ Marlboro Winston Salem KOOI Benson & Hedges Tare~ton Viceroy Newport L ~ M B~] alr .... Virginia S li:.s c~ Marlboro Lights Winston Lights Be[]~un ~ Hedges Lights Camel Lights Kemt Viceroy Liqhts Raleigh Lightg Tareyton Lights L & M Flavor Lights Parliament Merit Vantage True .... ) Kent Geld~n Lights Sal~m Lights KOOI Super Idghts Newport Lights Pessimists Carlton N~w Ken£ III('79) (Pull Taste) ILine Extensions/ Older !]ILl) (Free Sta~iding HrFI/ (Ultra LO~ Men~tensi0ns)~'Tars') (5) i (3)
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INDUSL'Ri UkI~AMICSr FI.i{I ~i -- THE WAVh ~u~o~,~ SWITCHING MOVEMENT & UNDERTOWS (68%) Full Taste ~ -~ Low 'Tar' (32%) (5) ! (3} (2) Rejectors Resistors Compromisers Prngres ~i v~s l~ s s ~iilis t ~ Pla~lter ~ Mi~ts LCW~ Ultra LOW "Tar' [] >[] >[] Z 0 U ZO?90~OP.9
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± ,~ ...... ./SEX DEMOL ~IICS, SMOKER ~w,, (~RNS, IMAG~ N~LUS !~8%) Full TaSte ~ -> L~w 'Tar' (32%1 14) (5) i {3 21 It)C ~ectors Resistors CcmDromisers Proqressives ~essimists • Predominantly Male/41+ yrs. • Unzomce~n@d • Heritage/Historical Image • More Male/ • Slightly Male/ Predominantly ~qually 26-40/41+ 26-40 yrs, yrs. • Runs the Gamut from • Sucial/Dual Unconcerned/social/ concern Personal/Dual • Transitional • Strong Llf~style Lifestyle Image • Equally Male/ Female, Slightly 41~ yrs. • Personal/Dual Co~ccrn • Eationa] Image • Predominantly Female 41+ yz~ • Hiqh Personal Concern • Sterile/Sele~- tific Image ) Seurces: SS Wave #2~ | J SZP O1'90 0"9
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INDUSTRY DYN~IICSf PART II -- TIIZ WAVE THEORY 1978: SOCIAL VALUE~ (68%) Full T~ste ~< I ,~ Low 'Tar' (32%) ) (5 3 2 R~sctors • Anti-Bigness • Anti-Hypocrisy • Suppo[t of ?am[lism • Concern for Personal Safety • D~-foc~s on Youth ~o~gonO&R RETREATERS OLD VALUES >I< Resie&ors • Anti-Bigness • SensousnessI • Conspicuou~ L Cultivationi (pseudo s0phisti- c~tion) • ACCeptanc~ ~f Druds N~%~ CONFORMI ~T/ AIMSKSS r N z !~ c~ • Living for Today • LOW Acceptance of Purpo£elessness • Support Psychology of Affluence • Physicsl Fitness dlld Well-Belnq • [ntrosp~ctlon Pessimists • Social • Away From Pluralism i Liberal Sex • Social/cultural Expression • Anhi-Mypocri~ • Meaningful Work • Bl~rring of SaKes • Concern Abo~t • LOW Tolerance Environment For Chaos and • Concezn ~bout Disorder Privacy • New Cynicism • Female Careerism NEW CONFORMIST/ FORERUNNERS V A L U E S----- FORE~UNNE~/I MATERIALISTS, NEW COSFORMI,STS MORALISTS I-
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ii f INDUSTRY DYNAMICS, PART II -- THE WAVE THEORY KEY IMPLICATIONS • While understanding the waves might be "nice", one has to ask: "What does it mean for our business?' ( The fact is, that while the low 'tar' revolution has started, its major business imFact has not yeu been felt [see 1972- 197~-1955 waves). We project that 19~0 8~ will be the key time to take adv~ntag~ of irmmed-ate and major business opportunities as well as long tern growt~ p©slt~onlng (~ook for a calme~ consum~~ "~a" afte~ 1985).
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(86%) Full Taste INDUSTRY DYNAMICS, P±~II -- THE WAVE THEORY 1972 SITUATION > Low 'Tar' (14%) (4) Pall Mall Camel Raleigh Lucky Strike Chesterfield (Plains/ Strong Taste) ~egressiv~s 90 90 0L9 Resisters C~ Winston Tareyton Marlboro Benson & Hedgc: Kool Virginia Slims Salem Viceroy L & M Belair Pall Mall Filter Camel ~'ilter (Full Taste) {Mid 'Tar') Statics Middlists Pessimists Marlboro Liqhts True Kocl Milds Vantage Kent Doral Parliament LL • (Liuht Extensions, (New HIFI) Early/Perceived IIiFi) Mobiles Experimcntor:
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INDUSTRY DYN~211C ~,~'ART II -- THE WAVE THEORY CURRENT SITUA~II~4 1978 (68%) Full Taste (4) Rejectors Camel Pall Mall Raleigh Lucky Strike (Plain/Older FT) Re~eL~ives Resistors Marlboro Winston Salem Kool Benscn & Eedge~ Tareyton Viceroy Newport L & M Helair .... Virginia Slims (Full Taste} e Stauics Low 'Tar' (32%) (3) C~[i[Dromis e r ~ Marlbcro Lights Winston Lighh~ Bonson & H~dges Lights Camel Lights Kent viceroy Lights Raleigh Lights T~reyton Lights L & M Flavor Lights Parliament (Lin~ Extensions/ O~FI) Middlists Proaressives Merit Vantage True .... Kent Golden Lights Salem Lights Kocl Super Lights Newport Lights Pessimists Carlton Now KENT III ('?9) (Free Standing HIFI/ (Ultra LOW Nentho] E×tens~ons) 'Tars') Mobiles Experimenters
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14 ~NDUSTRy DyNAMiCS, pART II --- THE WAVE THeOry PROIECTEDSWITCH[N~ 197~ - 1985 (BASED OM CURRENT TECHNOLOGY) 14) 7 > +7 _~ > _~ -...~ +2 (5) i (31 (2) (i) ~'~ [FULL TASTE] [LIGHT~ Z:~TZI~SIONS] F~L~OWFR~[; Z, TAN~INTAR S~ [ULTE, LOW 'TARI [rl~,¢ ~RAIVDi L__~ LOW *TAR' (32%) (68~) FULL TASTE < D (s) ~01790~0&9
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INDUSTRY DYNAMICS, PART II -- THE WAVE THEORY 1985:SITUATION OF THE FUTURE -- ~O ECENAR[O~ (ScFnario #] Current Techuolugy / Scenario #2 --- New T~chnoloqy) (40~) ~ulz Tast~(----~ pLow 'Tar' :60%) ~L~RLBORO WINSTON SALEM KOOL ~LNSON & HEDGES TAREYT(3N VICEROY L & M NEWPORT (?] VIRGINIA SLIMS (~) CAMEL PALL RALEIGH ~I LUCKY ~TRIKE ~ Sc_ enario: #1 -2~ -- ~2 -28 60 90 0 9 Rcsistcrs Comprom}sers ~RLBORO LIGHTS WINSTON LIGHTS BENSON & HEDGES LIGIITS CAMEL LIGHTS VICEROY RICH LIGHTS F~LEIGH LIGHTS TAREYTON LIGHTS L & M FLAVOR LIGHTS KENT PARLIAMENT MERIT TRUE VANTAGE CARLTON KENT GOLDEN LIGHTS NOW SALEM LIGMTS KENT Ill KOOL SUPER LIGHTS * ULTRA LOW LINE BELAIR EXTENSIONS NE~POKT LIGHTS * RESTAGED BRANDS A~CTTC LIGHTS * NEW BRANDS • MEW D?~A~DE Fessimists * NEW BRANDS *HIGH TECH +12 +8 ~6 +Z + 4 ~S +14 ~2 (NOTE: rerforeted Waves ..... Scenari0 #2)
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INDUSTRY DYNAMICS~ PART II -- THE WAVE THEORY SUMMARY OF A PROJECTION INTO THE F[[T[JRE -- SOURCE OF BUSIMES~ LOW 'TAR' % CHANGE IN LOW ERA YRS+ SNARE OF MARKET % CHANCE 'TAR' SHARE POINTS Technological 1975-1980 19% ..... I0~ + 100% ÷ 21 Points Revolution Po~t-Tech 1980-1985 40% ..... 60% + 50% + 20 Points R~volution SOURCES: PKG ProjectioNs based on WAVE THEORY (2:1 ratio, Modernity:Clinical, of switching to low 'tar'.) ositioned brandsI [positioned brands • Peer • "Wean" acceptance momentum OIFgOSOL9
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~7 C INDUSTRY DYNA}~CS, PART II -- TEE WAVE THEORY ( THE WAVE THEORY IMPLICATIOXS ON NEh" PRODUCT POSITIOniNG O
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C 18 INDU~TPX DYN~CG, P~RT ~I -- THE Z~JZ TBSORY POS-TIONING DYNZ_MIC$ • "Lemd, not follow" can be translated i~to two positioning opportunities ..... (i) Perceived/Product Breakthroughs ..... "Better Products" 9 mg satisfaction at ultra low leve~. - Super low delivery, IDW 'tar' add low gas. - NO rtarr or tobncco s~bstitute product. HISTORICAL EXAMPL~S~ CAZLTON NOW ME~IT (2) Product/Positioning Segmentation ..... '~ifferent Products" - Parity plus approach with a basiudlly parity product having tangiDle and perceived mea~ingf~] point-cg-difference. - ~arity plus pr~auct i~ positioned against a specific t~rget segment Of s~oKers b~sed on physical and emotional needs and marksz movement (waves). - Brand 1~ge/p~so~a]~ is b~d on to%~l ~ferinq ~ith point-of-difference being ceEtral i~ making total image differen~ and m0re desirable. ~ISTORICAL EXAM~L~: MArLBOrO BENTON & HEDGES VIBGINIA ~LIMS t e
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19 ( INDUSTRY DYNAMICS, PART II -- THE WAVE THEORY ~OSITIONIN3 OPPORTHNITZE$ Both approaches can and should be explored~ DRO~ & WILLIAMSON R&D continue perceived/product break- through work. BRO%~$ & WILLI~MSON/A~encies work on product/positioning segmentation approach. ( Here's why: (i) Perc~ived/Produc: Breakthrough Cc, n~.~ S%ong t~chnologizal competition Speed crit~cal: h=g advantage for first in Not necessarily a large segment initially Must bet on future D~fficult to base on perceptions alone Can be very global and ncn-proteztah]e Ca mean lower margins Necessary 9o ~nsure competitive products Can be a major success if achieved C~ (n
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2O ( INDUSTRY DYNAMICS, PART II -- THE WAVE THEORY POSITIONING OPPORTUNITIES lecnt'd} ( (2) Product/PositiDnlng Seg~;entation~ Con~: - Does not necessarily insure major growth. - Could cause distrib~bio~ problems for the other BROWN & WILIIAMSON Brands. Requires additlone] marketing, commitments, both human and financial. Pros: Can be very effective means to baild company growth, e.g., en~ share of the market at a time. Can insure a lasting, protected franchise. Allows for inlmediate entry and net new business. Can force competition into defensive, reactive position. Can emerge into a major winner. C
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21 C INDUSTRY DYNAMICS, PART iI -- THE NAVE THEORY POSTTTONING OPPORTUNITIES -- SUF~MARY ( L Pursuing the Product/Positioning Segmentation Approach ..... In General: - Opportunities for new brands exist in wavos 2 and 3, ultimately drawing from wave 4. - Progressives and Compromisers represent a large current source of busil:~, and R~sistors represent a mg]or future ~ource. - Positioning should be based cn desired ta~te/'tar' needs and keyed to emotlonal needs. - Positioning must take into account waves i~ a dyna~]ic sense ~ crests, troughst u~dertows. - Product point-of-difference must relate to the target emotional needs as well as brand image. Specifically: - Forerunner-types (more rational) may be currently tapped by rational/clini~al wave 2 and 3 brands~ - Major opportunities among New Conform=st-t%,pes who are more emotlcnal as ~xplor~d by LTVA (wave5 2~3, and 4). Definite ovportunities may be found in Aimless-type, ~ot explored by LTVA {probably wave 4). Largest opportunity appears to be a low 'tar' otterln~ which provides peer image acceotance. ,posslule' "* nc~' entry point). Key is PO build slightly differenti~=ed products to appeal to U]e~e segments/need~. m
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22 { INDUSTRY DYNAMICS, PART iI -- THE WAVE THEORY POSITIONING OPPCRTUN~TTEfl -- ~UMNARY (cont'd) ( ~mokcrs broken out by Value Group ..... 9Le~t~st opportunity a~o~g Ai~less/New ~onformist and New Val~e qroup in general: % Smoker PoD. % Total Po~ Aimless 21} 19} New Conformists 21 61 18 53 Forerunners 19 16 M~reria!ists 14~ 141 Marali~t~ 1C 39 15 47 Retreat~rs 15 18 Incidence of sm©.king Aimless: is higher amonq N@w Value grouos, particularly Smokinq % Incidence Aimless 48 New Conformists 39 Forerunners 38 Materialists 36 Muralis~s 24 Retreaters 32 SOURCE: Yankelovlch Smok~: vs. Non-Smoker Analys~s (Auqust 19,/b. &¢
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23 C INDUST~X DYNAMICS, PART II -- TH[ WAVE THEORY ~OSITION-'NG OPPORTUNITI~ -- 8U.M~t~RY (cont'd) • S~ggestions Ba~d on Wave Theor} ...... ( t i. Evolve LTVA into broader area Of NCO (New Cen~crnist offerin=) . - Significant movement of New Conformists to low 'tar' anticipated ~ capitalize o~ this wibh low 'tar' off~ring which speaks directLY to them. L~VA p~rt of that project ~ diz~ct@d to New V~lies, specifically New Conformigts, offering POD which supports ~mage. 2. Initiate New Product development directed to Aimless seqmezt. - Oze Of larqest psycho~<aphic s~oking segments probabl} n~t c~rrentlv t~pDed b'f a io~ 'tar'. - Should be explored fo~ New Products and~or line exnension~ Of existing B&W brands that have appeal to Aimless segnent. O ¢n NOTE: In botd CaSeS, [~oduct POD/J}~D (Just Nuticeable Differenci!) needed to support i~lage [e.g., menthol and mint, value-added, aromatic an acceptable non-clinical J~qD which rei~force~ imag~).
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i
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INDUSTRY DYNAMICS, PART II A~pendix i. W A V E i ~ PESSIMISTS SHARE OF MARKET 2% • ULTRA LOW 'TARS' • REPRESENTATIVE BRANDS: CARLTON NOW KENT III • SMOKER CONCERNS: HIgH PEREONAL CONCEP~N • DEMOGRAPHICS: PREDONYNANTLv ~E~LE/41 ÷ YEARS • TAST~/'~R' NEEDS: LITTLE TASTE/ALMOST NO 'TAR' • I~GE NEEDS; SCIZNTIFIC/CLINICAL II~AGE • LIFESTYLE DESCRIPTIONS: AWAY FROM LIBEraL SEX ANTI-HYPOCRISY LCW TOLEP~ANCE FOR CHAOS & DISORDEn NEW CYNICISM • ¥ANKELOVICH GR©UD: MATERIALIST/MORALIST .j CD
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INDUSTRY DYNAMICS, PART II Appundix i: WAVE 2 ~ PROGRESSIVES SHARE OF MARKET: 16% • FREE STANDING LOW 'TARSI/MENTHOL LIGHT EXTENSIONS REPRESENTATIVE BRANDS: MERTT VANTAGE TRUE DORAL SALEM LIGHTS KOOL SUPER LIGHTS NEWPORT LIGHTS (ARCTIC LIGHTS} GOLDEN LIGHTS YANKELOVICH GROUP: • SMOKER CONCERNS: PERSONAL/DUAL CONCERNS • DEMOGRAPHICS : EQUALLY M~.LE/FENALE ~,~'," SL:GNTLY 41 ÷ YRA/~S • TASTE/'TAR' NEEDS: MILDER TASTE/LOWER ITAR' -- SINCLE DIGIT • IMAGE NEEDS RATIONAL IF-~GE • LIFESTYLE DESCRIPTIONS: SOCIAL PLURALISM {FF~EDOM OY LIFESTYLE CHOICE} SOCIAL/CULTURAL EXPRES~ ION MEANINGFUL WORK BLURKLNG OF SEXES CONCERN ABOUT ENVIRONMENT FEMALE CAREERISM FORERUNNER/NEW CONFORMIST (PRIMARY) ( SECONDAI~y )
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INDUSTRY DYNAMICSI PART II ( ApPendix ill, W A V E 3 ..... COMPROMISERS ( • SHARE OF MARKET: 14% • LIGHTS EXTENSIONS/OLDER HIFI • REPRESENTING BRANDS: MARLBORO LIGHTS WINSTON LIGHTS SENSON & HEDGES LIGHTS C~MEL LIGHTS VICEROY RICH LIGHTS • SMOKER CONCERNS: SOCIAL/DUAL CONCEBNS • DEMOGRAPHICS: SLIGHtLy ~LE/EQUALLY 26-40/41+ YEARS • TASTE/'TAR' ~EEDS: LIGHTEE TASTE/COMPROMISE 'TAR' L~VEL • IMA$E NEEDS: TPANSITIONAL LIFESTY-E I}t%GEEY • LIFESTYLE DESCRIPTORS~ LIVING FOR TODAY LOW ACCEPTANCE OF PURPOSELESSNESS SUPDCRT OF THE PSYCHOLOGY OZ A?mLUENCE PHYSICAL FITNESS AND WELL BEING INTROSPECTION (SEE ALSO WAVE 2] • YANKELOVICH GROUP: NEW CgNFORMIST/FORERUNNER (Primary} (Second.rE) TAP~YTON LIGHTS L&M FLAVOR LIGHTS KENT PARLIAMENT -J O O ¢@ N
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INDUSTRY DYNAMICS, PART II Appendix iv. W A v E 4 ..... RESISTORS • SHARE OF MARKET: 56% FULL TASTE REPRESENTATIV~ BRANDS: • SMOKER CONCERNS: MARLBCRO TAREYTON WINSTON VICEROY SALEM NEWPORT KUOL L & M NEN$ON & IZEDGES BELAIR [ON THE MOVE TO VIRGINIA SLIMS WAVE 3) RUNS G~MUT PROM UNCONCERNED/ SOCIAL / PERSONAL / DUAL CONCERNS. ~il • DEMOGRAPHICS: MORE MALE/PREDOMINANTLY 26-40 YEARS ~ m TASTE/'TAR' NEEDS: SOMPWHAT STRONG/MID 'TAR' TASTE ' • I~E NNEJS S~RONC ~IEESTYLE Z~C.~Ry ~i~r: • LIFE 'STYLE DESCRIPTORS cONSPICUOUS CULTIVATION (PSEUDO- / ~: ? , ;/ ~i! oENSUOUSNESS ..... ~. A ~I BIGNESS : ACCEPTANCE OF DRU~S • ¥ANKELDVIUN GROUP: NEW CONFORMISTS/AIMLESE MIX £
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INDUSTRY DY~AMTSS, PART IT Appendix v. W A V E 5 ..... P~JECTORS ( • SHAR~ OF MARKET: 12% • PLA:N END/OLDER FULL TASTE • REPRESENTATIVE BRANDS~ ~A~EL RALEIGH PALL ~LL LUCKY STRIKE • SMOKER CONCERNS: UNCONCERNED • DEMOGRAPHICS: PBEDOMINA~TLY ~LE/41+ YEAR~ • TASTE/'TAR' NEEDS: STRONG TASTE/HIGH rTAR' • IMAGE NEEDS: HIZTORICAL IMAGES/FEELING OF HERITAGE • LIFESTYLE EESCRIPTORSr ANTI-BIGNESS ANTI-HYPOCRISY ~[IPPORT OF FAM~LISM CONCERN ABOUT PERSONAL SAFETY DEFOCUS ON YOUTH • YANKELOVICH GROUP: RETREATERS
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High Impact 5tronq Taste~ StroDg EmQtio~al Image NeEds ~ O M P R OM I S E AREA-- UnconcerN~ {1) ! > LOW ImDact >Less Taste/Lower 'Tar! Ntrong Rational Imagel ~ Needs ~High Personal Concern !ii!
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• L INDUSTRY DYN~41CS, PART II % SHARE OF SMOKERS BY TYPE / AGE al Plain Total 16-25 26-40 41e I0 < 2 8 15 ~" ii 9 17 12 i0 18 14 12 19 3 14 , ~3 12 20 2 16 ?~ 4 15 21 '~31 16 15 22 4[70 18 i~'7 17 25 p~ 21 20 25 b~ 22 12 21 26 67 23 14 23 26 Full Taste Tohal 16-25 26-40 41+ 63 76 61 53 64 79 65 56 69 85 72 60 67 87 70 59 69 86 71 60 6B 86 69 59 71 89 72 62 69 86 70 61 i 65 84 67 60 ! 65 80 68 60 I 63 79 64 61 Appendix vi=. HiFi TotHI 16-25 26-40 41+ 30 22 31 32 25 18 26 21 19 12 IH 22 19 I0 16 22 17 Ii i~ 20 16 i0 16 20 13 6 13 16 13 7 13 16 13 7 13 15 12 8 ii 14 14 7 13 13
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i C C q~ |
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22. ( Growlh grid Overvie.., of ~. g. I4igh-F{itration Scgmcnl ( t ~ound "]~he following is ~!] overview of [Ii_~ trends ie~.din~ to the cllrrenl iDw 'tar¸ m ovenq ent I. Filler Brands' Share of l%larkel Extremely small prior to 195[) 3% in 1950 to 53% in 1960 Spurred by he.lib cuncerns 7g% in 1976 90% in 1~78 II. First Generation Hi-Ki~s: l~a~ 1963 MicrDnite. recessed. ~n(] chareoml filters. None less than i~ m~. ~[~r', yet hi-fi b'" st~.~dards of the period. hhar~ ~f market ~ro~.vth f~'n~1 4 2% to i0.3% for the period. Iii, First and Second GeneP[ilen Hi-Fi's: 1964 - 1975 Emer3~ice of brands us ng low '±ar' as prilnary appeal. 17% of market by end of per3od, IV, First. Second, a~x! ]'bird Oener~iionHi-Fi*s: 1976 - 1979 Proliteradon of single digil 'lap' bra~d~ Toia[ hi fl share of ~,Jaz'ket is 21% in '76, 62.3,% in ~78. Note: Share numbers ir*chlfle first generation lo~ *taPs' that would noi be consi~ePed ]n~, 't~tp' b2e loday'~, siandard~. V. 'Tar' l,eve] Shares: 1972 1078 Actual hi-fi brands (less than 15 rng. 'tar') are 5% of 1972 i~arkel Account for 31% ~y 1918. Single digit 'tar' brands have 14% share by 1978. VI. Advertisln~ Expenditures: 197(3 - 1977 In 1970, an average of $9.6 million spent behind each of major hi-fi hrR.d~, compared to $15 million on each of n~ajor full taste brand~. on M g¢ @. N
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23. ( ( In 1978~ those [i[ures change to $23.6 million and ~I~ 4 r~illion, r es~eclJvely. VII. Current Lead~n~Br~nds by ~T~r~ Delivery Full-~astc ~nd plain end .~tyles account for 655,7~ shar~ oFnnarket Largest hi-fi ~eglnen~ belween 11 and 15 r~, (15.5% of rnarkel). V~nt~ge l~ads this segrz~en± at 2% si~are, io 10 m~, c~egors- has I0. F~% sh~'~, l~d by Salem hig]Tts Kin~s al 1 9%. I Ic~ ~ ~g c~te~ory is 3. ?%, led by Tr~e Kings at ,0%. VIII I{~nt ~h~re -- 1955 - 1978 A~ 'the hi~h~fillratlon ci~ar~lle," }~cnt grew f~'o~l 300 nni]ii~n units io 3 billion in '~7 As ec~nlpetitors ev~mi~]]y c~ht ~p, Kentr~ ~ha-~e drop~eC, Kent C~(~Inen ]Lig}~ts ha~ offset ±h~ decline, L O :m Gm
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) ) GROWTH - Table 1 : Table 2: Table 3: An 0VERVIEW OF U.S. H]~H FILTRATION 5~GMEET "Share of Filter BrLnds - 1930-1978" The most Important trend in the U.S. clgarette industry today is the trend towards low tar and nlc~tine, p~ high filtration, products. This slide i~ a go~ starting ppint for a dlscus~i~n of the ~i-£i segment. There was an e~tremely small filtered aigarette segment until the 1950's. At that point, faltered productE took of~, rocketing from 3% of the market in 195D to 53~ An 1960. The mo~t important roason f~r t~is growth would have to be growing health concern. Filtered bran~ c~ntlnuea tc increase share, Iislng to ?Y~ of the market in 1970 and 9~ in 197~. "First Generat&on High-F~itratlcn Brands - 1957-1963" The best way to look at hi-fi gr~h in the U.S. is An terms of 9en~ratlons. From the mid-195D's up tc 1963, the f~r~t ~eneration o~ high filtr~tlon products de~elo~ed. today'~ definition, the ~rand~ making up th~ first hi-fi gen~ratlon were not even hi-fi, i.e. they wez~ not le~s than ~6 mg~. of tar. But they were ~celved a~ hlgh-filtration cigarettes because they ha~ mpe~ial filter~ - mlcr~nlte, recessed or ~ar~o~l. Between ~957 ~nd 1963 ~uch bra,d5 ~rew from 4.2~ of the ~ark~t to i0.~. But the real Ip~rt In growth came in 1957 and 1958. This mt~m~ from a 1957 ~e~er~' D~aest ~epor~ on cigarettes. FrOm 1958 throug~ 1963 performance of hi-fi brands z~malnQd ~rotty It~le. "First ~na ~e~nd Generation Righ Flltr~tion Brand~ . 1954-1975" The next generation of ~i-fi development ip~ns th~ peri~ f~ ~9S4 through 1975. What sets this • peri~ apart £I the a~peara~ee ~f ~rand~ which ~ctually based their appe~l on luw tar and nicotine ~umberao -J • cJ
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( ( C Table 4: Table 5: In ig64, T.hlm grou~, in eddlt~n tc %he plrcelved ~i-fl ~ranas, D=co~nted for l~.2W Of the market. By 1975, the coral hi-fi megmer.t had gr~rn to "Firct~ Se:ond, and Th£rd Generation ~Jgh Filtration ~rands - Ig76-1978" The third generat£on ~f hi-fi development i$ marked ~ the proliferation of single digit tar delivery b~an~s. The lue~ess cf much brands resulted in the molt drama¢Ic growth the hi-fi ~ategory ~as experlemced s~nce the 195~-1958 perlcd. Xn ig76, hi-fi~s totaled ~i~ of the ~arket. By 1978, that ~l~uIe w~s ~p over 12 ?oJnt~ to ~2.3~; cf ~h~ m~rk~t. "T~r ~evel 6hares - ~972-1978' ~ is ~npozt~nt %0 remember t~.at the JecDnd ~nd third generaf~On figures from the prevlcus ©h~rt$ i~cl~de thole early b~ands ~h~t were h~-f£ ~n term~ ~d /mage zathe~ than actual numberl. This lllde gives l~e ~dea of ~¢w rapidly actual h~gh°fil%ra%~on ~r~n~s have been ~rowin~ • e~ently. By actual h~-~, I mean ~ands with 15 m~s. of ta~ or ~eBs. Xn 1972, I~ch bzanQs icco~mt~ f~r ~us% 5% of ~emrket, v~th ~]1-f]~v~c ~ands at 9~. ~n 1972. slngle d~glt ~rands h~d ~Irtu~11y no¸ ~re~ence. By 197~0 th~ Bitu~tio~ ~ooke~ }ike thi~. ~al ~i-fi's |rood at 31 w~th l£n~le d~g~t ~rand~ ac~ountln~ for ~4% ~f il~ ~£g~ette ~olmne. Full ths~e brands, On the Other hand, dropped from 95~ ~n I~72 to 69~ ~n 1978. &: &:
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( ( C Table 6z T~ble 7: Table 8: Table 9: "Advertising Expenditures of ~h~ Top-Twenty Brands - 1970-1977" This lucce~ of hi-fi brands is due ix par% t~ the large s,~ms being spen~ to advertise the~. In 1970, there were seven hi-f: or perceived hi-fi brands in the top-twenty. On a~erage these se~en spent $g.6 mi111on, co~pared with an average expenditure of $15 million for t~,e 13 full taste brands in the top-twenty. By 1977, this situation had turned around. Still seven hi-fi brands i~ T-he top twenty, On average they i~nt $23.6 million while the full-tmste brands spent an ~er~ge of $18.4 mi~llon. "Leading Brands, By Tar Delivery - 197~" This slide shovs ~ne segmentation as it is today, as well as the leading brand styles within each segnent. This chart briefly summarizes ma~r restrictions and publications as ie~ards th@ 6nski~q and health issue. "Kent's Share - 1955-~978" After the cadets' Diaest report in 1957, KENT grew from 300 million units per month to I biZllon umits per month in 90 d~ys. ~NT h~=~me th~ h~gh-filtration e~garette Of that ~ra. Since that peak growth perind, KE~T'J share has been declining steadily. In 1976. KENT Golden Lights were introduced. ,The |uccess of Golden Lights has offset the sales decline of Kent Parent. ~D O
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TASL~ i ( S~i~R-r OF FILTT~ BP~h~:DS ~93Q-1978 ( Filter Bran@s 1970 9C 1970 79 196~ 53 1950 3 1940 0 1930 ¢D O O O~ C~
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TABLE 2 ~h ~XRST G~h-E~T~ON H~:~ FILT~3.TION B~AND9 1857-1863 ( Hi-Fi Sh~re % 10.3 1962 10.7 1961 9.9 1960 I0.6 1959 10.7 1958 9.9 1857 4.2 Source: Maxwell -J (n &4 Cn
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TAPLE 3 ~2 FZRST AND SECOND GENERATIQ~ HIGH FILTP~TIDN B~J~h~S 9~-]975 ( ~i-Fi Share % 1975 17.0 1972 15.0 196~ 12.6 1964 12,2 Source: Maxwell C
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( TABLE 4 FIKSTr SECOND, Ah~D THI~D ~ENE~kTION ~IGH FILT~ATI0~ BBARDS 1976-1976 ~i-Fi 1978 32.B 1977 26.2 ( 21.0 CD O O
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TA~LH 5 TAR L~rEL ~:-L~S Total ]-I0 11-15 1-15 ~ mcs. 19~8 ~.4 ]7 31 16-21 % 5S 21+ % ll Totdl Full Taste 69 1~76 4 i0 14 "72 12 84 ( 1974 2 8 9 1972 5 5 76 76 14 17 9O 95 *bees than 0.5%. E;ource: JH.E; °A. £ O O
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C TABLE 6 AD~RTXS!NG EXPENDITURES OF THE TOP-TWKN_"5" BRANDS~ 1970-1977 (Millions of Dollars) 1977 Full-Tsste -- B~an~s $239 (5~&) HI-Fi Brands $165 (41%) Total $404 1970 176 (57~) 132 (435;) 3O8 1974 199 (81~.) 45 (183;} 244 1970 199 (7551] 67 (25%) 266 *MeaSured medin only, Source: Maxwell -J O Ca O ~3
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TABLE 7 ~kDING BKAh~DS BY TAR DELIV~Y~ True KS Carlton KS ~arket Sh~re 3.__! 0.9 0.8 ( Sal~ Li5ht5 KS Merit KS Go3den L~gh~s KS J.°9 1.6 1.3 Vantage KS Winston L~ghts MS Marlboro ~g~ts 2.0 1.9 1.5 Marlboro KS wlnstonKS Kool KS 12.0 8.1 6.1 L Pall Mall Regular Camel Rey~lar Ducky Str£ke Regular 4.5 2.7 1.2
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TABLE 8 First wave of antl-smokln9 publicity if. Rea~ers Digest report pn hazards associated with smokln~ ZII. Surgeon General's Report Iv. Pack warning requirement instituted V. Advertising "Fairness Doctrine' "VL ~evised pack wBrning VII. Broadcast idvertlslng b~n VIII. Adverti~in~ healt~ w~rning IX. Dr. G~ri'B ~ep~rt 1953/54 1957 1964 1966 1967 1970 1971 1972 1~7R ~j ~D
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0 -) L'O &'G 0'8 096~ 6"S $96~ 9"~ 6"0 t'~ 9t&% 3~iS ~,LN~24 6 ~q~q~
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