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I II produced by RJRTC in GINI ~ MAN "

iN THE YOUNGER ADULT OPPORTUNITY ANALYSISs VE LEARNED FUBYAS " ~HOSE YOUNGER ADULTS VNO ARE ALREADY SHOKERS BUT HAVE REACHED THE STAGE OF CHOOSING W FIRST JJ.%IL~ BRAND. (FIRST USUAL BRAND YOUNGER ADULT SHOKERS) SWI,1gHEI~S - YOUNGER ADULT SHOKERS WHO HAVE ALREADY CHOSEN A ~ FIRST USUAL BRAND. • -. ANnA-THAT FU~YA~, NOT SWITCHERSs HAVE DRIVEN THE SUCCESS OF THE~,~KEY |RANDS OF THIS CENTURY. THEY ARE LEADING INDICATORS OF~TN. AND DECLINE. CX 8-B R~ 8 8~103080

e STRONG PERFORMANCE AHONG FUBYAS SMOKERS IS ~ :O LOeee TERH SHARE |R THE TOTAL SHOKER HARKET, FOR BOTH BRANDS AND COHPANIES. ALTHOUGH SVlTCHING CAN BE IMPORTANT IN THE HEAR'TERH ~..~R~KET,~, LQYAL~Y AND THUS FUB SHOKERS, ARE THE DRIVING ~E OVER THE LONG TERN. s ANOS/CO.PA. emm IES VHICH ARE ~ AHONG FUBYAS SEEn ~[O__~AtN SOMI~..;~J.L~,AL~,Y. YEAR AFTER YEAR, EVEN |F THEY ~ER DRAMATIC SVlTCNING LOSSES (E.G., HARLBORO). e BRANDS/COHPAN|ES WHICH ARE UNDERDEVELOPED AMONG FUBYAS ~UST CONSTANTLY YORK NARD TO ATTRACT SNITCHERS "" TO HOVE THESE NEARLY I~HOVASLE LOYAL SMOKERS. CX 8-C B ~4M0309C

produced by RJRTC in MANGINI ~ 9f~9 66~0g

YOUNGER AOULT S.OXERS "" FUBYAS °- ARE A JLLY_.r, JU~EJ~£ TO RJR BECAUSE • DESPITE STRONG SW|TCH|NG PERFORHANCE YEAR AFTER 5 YEAR R JR *.35 *.q2 *.39 PH *..17 *.2q -.q3 TOTAL SMOKER SHARE HAS NOT KEPT PACE HITH ~ IST HALF ~j'l~-~ 32.? ~3.3 32.! 32-8 32.7 32.3 PH 2?.8 29.2 31.0 32-3 3q.7 3q-? 6AP *q.9 *q.l *|.! * -5 "2.~ "2.q cx 8-E 8 5 84M03092

THE TOTAL HARKET GAP TRACES DIRECTLY TO YOUNGER ADULT SnOKERS AND THE LONG TERn InPACT OF THEIR BRAND LOYALTY. THIS YAS GAP HAS nUSNROOMED TO NEARLY q0 POINTS-.- P R~ND* • * R JR P~ S.O.S. 18-?l ]ST HALF ]7.7 ]7.5 63,2 63.9 GAP • ..SIHILAR TO THE OHINOUS PICTURE PAINTED IN THE SDS OF THE ]8"YEAR-OLD SHOKER TREND. CX 8-F 8 5 ~'~r~03093

SHARE RMONC, 18-YR-OLD SMOKERS CX 8-G ~4M03094

~O BUILD ON LEARNING FROM THE YOUNGER ~DU~T OPPORTUNITY ANALYSIS. • TO FIND CONCRETE PRINCIPLES AND MODELS FOR SUCCESSFUL MARKETING ACTION, • TO MOVE FROM PROILEM IDENTIFICATION TO WHAT V£ CAN DO OVERALL STRATEGY RELEVANT 0N-TARGET POSITIONINGS [XECUTIONAL GUIDELINES HOW TO REACH THEN AND CATCH THEIR INTEREST 8 CX 8-H 84M03095

e HDD/~RKETIH~ i#~u~ " OUALITATIYE "GuT FEEL" ZDATAREVIEW AND SOMETIMES RE'ANALYSIS ~ • ~) • YA Sn~'~s FROM OTHER DISCIPLINES AND |NDUSTRIES. "~~GROUPS AND DEPTHS ° SAN DIEGO, fl[MPHIS, NEW YORK 5 CX 8-I 84M03096

~O GIVE INSIG~T INTO ACTIONS WHICH CAN IMPROVE RJR PERFORMAHCE AMONG SMOKERS CHOOSING THEIR FIRST USUAL BRAND. OUR IDEA IS TO: " ~HOOT ~TRAI6HT COMMUNICATE ACCURATELY (MORE THAN PRECISELY) CX 8-J 8 5 ~zr ~,030_ 7