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1978 - 1979 MARKETING OBJECTIVES CO~ITINUE TO CORRECT IH~ ~L~ ~;P~I~. ~'~:P~O~LF~I, " INCREASE AWARENESS O~ ~ BRAr~ BRO~TH~ff~ ~ ~LONGS, LIGHTS, LONG LIGHTS ~AINTAIN ADVERTISI~iG AWARENESS AT HIGH LEVELS.~ IF~PROVE ADVERTISING PERSUASIVENESS AS M~R~ BY CO~UMER E~ITUDI~L' ~TINGS A~ID BRAND TRIAL. - "..;~ . " INCREASE SA~ ~OKERS' PERCEIV~ ~VEL OF.~OKING ENJOYMENT. EXPAND SAL~'S S~RE OF THE GROWING HI-FI ~NTHOL ~TEGORY A~ PR~ENT F~NCHISE L~SES TO HI-FI ~. ;.-, R~UCE S~ LOSS ~ONG O~ER ~0~; CONTI~E S~GR~H ~0~ " YOU~ER ~0~. " '. 0 0

1978 - 1979 MARKETING STRATEGIES AQ INCREASE SALEB:$. toTAL ~91~ ~ |9~9~TING SPENDING AS FOLLOWS: a ~9:;"B ,' .... • ~: ,.. ]9/9 1977 BUDGET $, $ CHG. $ CHG. MEDIA SALES PROMOTION TOTAL PER M $27.6 $)i. 6 $30.Q . ÷i01 $33.4 • SPEND TO BAINTAIN BRAND GROWTH. ~...i. • OFFSET PROJECTED INFLATIONARY COSTS IN MEDIA." ÷I01 • COMPETITIVE AND NEW PRODUCT. EXPENDITURES EXPECTED TO INCREASE, PARTICULARLY IN HI-FI CATEGORY. ~ ~ ~; * • 1978 SALES PRQMOTION EX,..~ENDITURE REDUCED FROM ABNOP~ALLY ~I@B', 1977 LEVELS (NEEDED TO~INDUCE TRIA :ION SALEM LONG .~

$II~911 9NO'If (INV SIHgll '6L61 (INV 9L6T NI WSO:U.V'Id 9NISII~]A(IV S,W~'IVS ](IIAO'da OI ~NIIN~'~IM NglVdWV~ .IN~W;~OI'N]o S,(]NWll ]HI : 50119

O0 ,,~ C) t~|6L 61|0~ l MARKETING RESOURCES WI LL BE ALLOCATED DISPROPORTIONATELY HIGH KING ..$ • SUPPORT GROW13 ,.;.. ' /

0 DJ THE TREND IN ALLO~TION OF MAR~TI, N~, ~O~R~$~W|.LL ~TOLLOW THE FOLLOWING PA~ER~:,: , ~v"~ ~"~~ ~'i {, !i :,i ~ • INCREASING ALLOCATION TO SOUTHERN AND SMALLER, RURAL Im~RKETS. • INCREASING ALLOCATION TO YOUNGER SMOKERS (UNDER 35)s AND ~N, • POPULATION TRENDS. o INCREASING SI~OKING YOUN~ER S~13KERS. INCIDENCE A/E) VOLUI'IE COIlTRIBUTIOII AI~IOMG O WI~I~EN REPRESE~IT PRIMARY VOLIJI~E COIITRIBUTIOIIS TO EIIOWING ~ STYLES (LIGHTS, I.OIIGS, L(IQ@ LIGHTS) "

i II CX 7-P 79M00802

CX 7-Q RJM 065896 79M00803

0 • OF POTENTIAL I~TII~ PRO~ILANS III ~ TO AIITICI~TE AI~ ~IX~ FOR FUTURE 'e. lIAr-UP Ai~RTISII~ C.AgqPAI61I, "..1