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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

SUCCESSFUL ~ARKEIlNG TO YOUNGER ADULT SHOKER$ WE CAN DO IT (OTHERS HAVE). 2. H~CAN DO ~)'I)~1ART WITH BASIC PRINCIPLES - GETTING ON TARGET (DIFFERENTIATION) ~ - USING GROWTH SECTORS (LEVERAGEA|iLITY) t~NOW THE TAR6ET INSIDE OUT ~ ° mARKET TRENDS " ]~1 NDSETS t ~AKE IT LOOK RIGHT TO YAS Eves - "SEGHENTS° YAS'$ KNOW ° CUES AND SYHBOLS 3. 1HI BOT~O~ LINE CX 8-K 3 ~4M03098

1. ~E CAN DO .iT -- OTHERS DIDI 1~0 EXAMPLES OF BRANDS 1HAT DID il -- AND J~: "° TURNIN6 A BI6 BRAND AROUND CX 8-L 84M03099

~'~ ~ Sou,¢e: ~ell D8¢8 (1983 Estluted) ~ . AD ~.YS JACX D'NI.L . I. • *UNDOUBTEDLY ONE OF THE CLEAREST EXAMPLES OF SUCCESSFUL ~ . Ry.e ~AR~J~G IH A DECLINING CAT[SO • S JD's SALES GAINS THROUGHOUT THE 1970'S AVERAGED ISZ GROVTH PER YEAR, MORE THAN TRIPLING ITS VOLUME OVER THE DECADE* SINCE RUH NECK AND NECK FOR #1 WITH JIM BEAM, THE LON~ ~ARKET LEADER. • JD HANAGEHENT SAYS THE BRAND WAS AFFECTED IN ~983 BY PRICE SENSITIVITY nWlTHIN CERTAIN SEGMENTS WHICH HAD BEEN AN EXPANDING PART OF THE BRAND*S FRANCN|SE.n (LIQUOR |NDUSTRY ~ARKETING, 198q, P. ME SUSFECT THAT THOSE eEXPANDING SEGMENTS: WERE YOUNGER ADULTS. CX 8-M 84M031 O0

JD*S AGE PROFILE ALSO RESEMBLES MARLBORO*S AND SUGGESTS THAT THE BRAND'S GROWTH HAY BE A FUNCTION OF AGING AND |RAND LOYALTY, SIMILAR TO MARLBORO OR NEWPORT (WHEREAS JIH ||AN IS RIDING THE HEAVY CONSUMPTION AGES)e BRAND USED "MOST OFTEN" SHARE RDI JIM BEAn q11 q91 156 150 78 3q qO 127 123 92 18 23 67 72 111 18 27I 32I 100 100 100 r~ omm~ HEU~LEIN DATA SHOWS AN EVEN PiORE DRAHATIC SKEW FOR JD, LEGAL AGE TO 3q 3S-q9 TOTAL SHARE OF BOURBON DRINKS CONSUHED 521 186 I6 57 6 21 28I ]00 CX 8-N 8 8.~M03101

JD'S 1ARGET • YA JD TARGETS YOUNGER ADULTS, ALTHOUGH ITS ORI6|NAL IDEA IN 195q WAS INTENDED TO CAPITALIZE ON HIDDLE'AGED HEN#$ NOSTALGIA FOR *HOH'S APPLE PIER* ~T'S RHARKETING STRATEGY HAS ENABLED JD TO DO EXTREHELY WELL AHONB~tELL-EDUCATED, AFFLUENT 18-~q YEAR OLD HALESR "" [SPECIALL'Y COLLEGE HALES "BY WHOM IT IS PERCEIVED AS A STATUS SYHB~ (AD AO[ 8/q/80) *I,m 8 5 CX 8-0

JD'S POST|ONING G JD IS TO BE SEEN AS *THE HOST CAREFULLY HADE, HIGHEST GUALITY, SUPERPREMIUH BRAND OF AMERICAN STRAIGHT HHISKEY ON THE HARKET.B ~(AA 8/q/80) SHOUL~'~ ~(FLECT "A SOFT-SPOKEN RESTRAINED PERSONALITY THAT ATTRACT~ S|HPLY BECAUSE IT NEVER SEEMS TO TRY TOO 7 "- eWE HAVE HAD A FIRM POLICY OF NEVER DISCOUNTING OUR PRODUCT (JD zxec GUOTED IN AA 8/q/80). A COIqtIANY DOCUHENT WRITTEN IN ]955 SAID THE JACK DANIEL'S IHAGE (AA ~*1HEY HAD[ IT RIGHT IN THE GOOD OLD DAYSB ITS AD CAMPA|GN CONVEYING THIS MESSAGE APPEARED IN |95q AND *HASN'T MOVED MORE THAN AN INCH OR TWO IN 2~ YEARS." (AD AGE 7126/8q) 8 CX 8-P 84M03103

ill t THE ADS "$EEH[D REVOLUTIONARY AT TIIqE ** THE LONG COPY WITH NO HEADLINE, DRAWING OF THE DOTTLE, |LA¢R AND ,.o,o. ,.,,o.,,-..,, ,,.-- R NOTHING ELSE WAS OUlTE LIKE IT. OUR ADS LOOKEO A BIT ODD AMONG TNt aOTTLE'AND'GLASS AND DEAUTtFUt. 'tOPL[ ADS." (AA 7/25/8q) VISUALS AND COPY ARE aDOrN NOfl~e AND NEIGHBORLY °* UNDERSTATED AND AUTHENTIC- • ITS PRODUCT IS BCHARCOAL NELLO~f[D DROP BY DROPe FOR eSIPPIN* SMOOTNU[SS'*

I I I II I I ~m~m II RECENTLY: "~Y TVO FAVORITE TENNESSEAHS "- JACK AND CHARLEY ~AHIELS*" l BECAUSE OF PRODUCTION CAPACITY, JD HAS SEEN PUT On ALLOCATION AT TIMES, LENDIN; IT A "HARD TO SET" IHAGE. (AA 8/q/80) e BUT JD HELPS THE HYSTIOU|. IT+ DISTILLERY IS ADVERTISED TO BE: NESTLED IN THE FOOTHILLS OF THE CUHBERLAND flOUnTAINS AT LvnCxluRs, ln {POP- 361)- " In A DRY COUNTY (THEREFOR~ "ILLICIT')- ON THE U-$. MATIONAL RESISTER Of HISTORIC PLACES- Og[9 66[0S ,=,-, ,-u -_, u~ m u.+ I,:+~

LOAD OF I lARD MAI~.E ~s a wd~:ome ~,[h~ ~o our ~/ckyard ~[~ ~c~u~ ~ ~ak~ a ~o pr~ly sm~h ~ ]~k D~n~l's. Ne~gh~ wi~h z u~ ~ ex~ ~ can c~m on ~r ~yin~ ~ h~ m~pk. Y~m see. i~ [aE~ a ~mh of~ ~o make enou[h charcoal to lus~ one of the chzrco=l n~llowmg v~s ~ ~r wh~k~ thm~h. I~ the sign' sm~h. m~s, ~ives J~ck D~n~l's well ~nh ~!1 we ~ ~ ~d supply. AWARENESS NUnDENS In THE LIQUOR INDUSTRY FoR [XAHPLE, IN A FIRST-HALF 198q STUDY, JD RECEIVED HONE nERTIONS THAN ANY OTHER BRAND THEN CONSUnEmS wERE ASXEU TO NAn[ TN[ FlmST LIouom ADVEmTISING T.AT CAnE TO ntno -- NOT JUST |OUR|OR (IflPACT 9/1/8q, p. THIS DOES NOT SEEM TO TOTALLY RESULT FRoIq SPENDING.

• JB iS A TOP SPENDER AMONG |OUR|ONS,'BUT IS ABOUT HATCHED BY 2°~ OTHER BRANDS. ITS "SHARE OF VOICEa ROUGHLY EGUALS ITS SHARE OF SALES. AB EXPENDITURES (flAGAZlHE/HEvslOOH) SHARE OF BOURBON SPENDtNG 10Z II][ lq~[ 161 SALES 11 1~ 16 16 16 • JD~EHPHASIZES HAGAZINES, BUT SPENDS HORE 00H DOLLARS THAN ANY OTKER.BRAND. UNLIKE ITS CONPETITORS, IT HAS NOT TOUCHED NEWSPAPERS UNTIL VERY RECENTLY. SPENDING PROFILE .,~ ~ J.~ ~ .~ ~ J.~.DAHJEL'S HkG. ~ ~ 28 26 21 21 1 ~'" 00H AL~bRSON ~AG. 61 61 59 60, 65 "e~ NEWS. 1~ 1~ lq 11 11 • 00H 26 26 29 29 2q • JB D'O~ CUSTOH SELECT ITS |OOKS TO REFLECT BOTH ITS TARGET AND IX~"~oe. ( -- YOUNGER ADULT - JD PUTS MORE "PAGES" IN,~0J~TL..z~,.~THAN ANY OTHER ~OOK (1982). " ]HE LIKES OF ~AHE~, ~SCOYE~, AND ~0THER EARTH NE~S, ~HICN OTHER BOURBONS RARELY TOUCH, -" "PREHIU~" DOUBLE OTHER BOURBONS' EXPOSURE IN BIG BUSINESS (E.G" FORTUNE) AND EDUCATED UPSCALE (E.G., HARPERS, ~TLANTIC). - Low E~PHASIS ON "TRADITIONAL" BOURBON VEH]CLES LIKE SPORTS ILLUSTRATED OR SOUTHERN LIVING. " HO ~LACK BOOKS. CX 8-T 84M03107

~L~PRU~0TION~ PROHOTIONAL H[RCHANDIS[, ESPECIALLY CLOTHING, I$ A HAJOR |L|HENT IN JD's RARKETING PROGRAR. • PROHO ITEHS ARE MARKETED THROUGH THE "LYNCH|URG HARDVARE AND GENERAL STORE', VHICH IS HEADED BY A CORPORATE VP, Exec. YP BRAND I~IARKET I NG JACK I)ANI):I.'~ FIELD T~rEH SHIRTS ~ VP "&'LYNCH|URGSTORE'GEN[RAL I ITS OMN SEPARATE, NATIONAL ¢AHPAIGH JACK DANIEUS FIELD TESTER CAP Th,~ is e comloflible spoflsmafl's b~ D~e 8(ark mesh (1,, C0~) lad ~lUSI. "J;tk Oan,ers ~elO ~sle~" ~lCh on I~ $1lfl I 101 0t C0~vtlSlhoes CX 8-U 8 9 84M03108

JD Is AH EXAMPLE OF A VlA|LE POSITIONING, EXECUTED IN A "NON-STANDARDa BUT AUTHENTIC AND UNPRETENTIOUS WAY~ VHICH REACHES YA COHSUHERS NOT ONLY THROUGH THEIR lOOKS, IUT BY CONVERTING YA'G INTO VALKIHG BILLBOARDS. THEY STARTED VITH A GOOD IDEA AND STUCK TO IT- BUDt~E~S,~,R~ IN CONTRAST, IS A STORY OF HAVING TO RE'THINK THE YA I~ARKElV-~dJk~J~ TH[ GOIHG GOT ROUGH. CX 8-v

BUDVEISER LOST HARKET LEADERSHIP TO H|LLER iN |9?8, ALTHOUGH THE HANDVRITING WAS O# THE VALL BY 1976, VHEN IT GOT A q°POINT VALLOP FROH HILLER. BUOI~EISER - rlILLER p • |T UAS IN |g71~ THAT AUGUST BUSCt4 DECIDED TO SITE THE gULLET AND GO TO WORK ON YOUNGER ADULTS* 8 CX 8-W g4MO3 110

"IN ]976, A-B REALIZED THAT~TO GET THE ]8-2~ MARKET, THEY VOULD HAVE TO DEVELOP PLANS SPECIFICALLY FOR THIS SEGNENT, A NATIONAL aTEST° COORDINATOR FOR COLLEGE/YOUNG ADULT FIELD-MARKETING VAS HIRED ~iTH A BUDGET OF - THE DECISION VAS MADE TO CREATE SEPARATE YA VERSIONS OF BUD'S ?V, RADIO, AND PRINT CAMPAIGN, [VERY YEAR SINCE ]g77, A'B HAS INCREASED ITS YA COMMITMENT, ~NIC. REACHED ]8 STAFF AND $10~ BY 198q. Zo 8 5 CX 8-X 84M03111

G DESPITE STEADFAST AND INCREASING COMHITHENT, IT VAS ]98] °" ~ TO q YEARS "- BEFORE BUD CAUGHT HILLER AMONG YOUNGER ADULTB. REGULAR BRAND USAGE AGE |8-2q 1.5 ~> 26 22 (~ 9 BUT WHEH THEY DID, THE PAYOFF WAS DIG. CX 8-Y BUDWEISER HIGH LIFE 84M03112

1. ~HEY APPEAR TO HAVE UPPED THEIR OVERALL BUD ALMOST DOU|L[D ITS aSHAR[ OF VO|CE" IN THE INDUSTRY (ESSENTIALLY MATCHING MILLER FOR THE FIRST TIME IN 1982). (MAO/NEWS/00H/TV/RADIO) B~wZ36.5 q9.0 67.7 10q.7 9.9--)11.7--)1q.6--)19.6 !1 ~ ~,~,,~ ~,.o ,~.o ,.~o,.o ~.o ~.~ ,,., ,o.~ iLR~ ~a ~uRC IMPACI DAXAIOO~ ADULT AD ~ PER Se MA$ NOT THEIR PROBLEH A~~A~ARE~ESS 18-2q REG. ~RAND USAGE 18-2q

4, THEY HEAV|ED UP FIELD HAAKETING AND PROHDTIONS. • THEIR LABEL (A YA STRENGTH) WENT O~ PILLOWS, ~ BH|RT$~ EVEN JEANS* , PERCEPTIONS ]8-2~ .. ATTRACTIVE PKG. ~ <--- 26Z 192 (AHPUS EVENTS, BAR NIGHTS, SOFTBALL TEAl'IS AND STREET ~ENES "" GIVING THEIR COORDINATOR AUTHORITY TO II.IPLEHEHT ~L,,~....I'A~. SAW FIT (W|THIN GUIDELINES) TO CAPITALIZE ON A FIELD OItPOR'TUNITY ALHOST OVERNIGHT. I ~VENT WHERE THE YA WERE,, IN SHALL AS WELL AS DIG HAYS* CX 8-Z-2 84M03; l<

THEY DIDN'T REPOSITION THE DRAND, THEY RE*EXECUTED IT FOR THE YOUNGER ADULT HARKET. ~H[Y LEFT THE COPY AND CHANGED THE MESSAGE* BUD PRODUCED SPECIAL TV SPOTS FOR YA-TARGETED STARTING ON SATURDAY NIGHT LIVE HITN "TASTE BUD" "" AN IHPROHPTU*LOOKING AD VlTH PEOPLE DRESSED AS TASTE BUDS IN A GIANT MOUTH, TOSSING DACK PIZZA INGREDIENTS HHICH VERB WASHED DOWN BY THROWING THE PRODUCT IN THEIR FACES. IT LOOKED LIKE PART OF THE PROGRAHo TODAY "FoR ALL YOU Do° IX TXE GENERAL MARKET |S TREATED AS ~,~RAIGHT, EVEN INSPIRATION LINE. BUT FOR YA °ALL YOU J)G~:~AN MEAN ANYTHING. e ~.:~RADIO, THE BUD COMMERCIAL IS NOT A dINGLE BUT A ROCK $OB~ -- NOT A YEAR OLD, POPULAR ROCK SONG, BUT ONE FROH '~E;~LATEST HEAVY HETAL ALBUM -" ON THE RIGHT STATIONS, 8 CX 8-Z-B

ON TH[ |OTTOH LINE, YA PERCEPTIONS OF IN |gS0, ~ILLER HAD THE KEY P[RC[PTION~ ON ITS SIDE* t ALL PRODUCT PERCEPTIONS I +YOUTHFULm IHAGE i PeER PReSSURe • ~ASCUL~N[ 62 c- - tmmm REGULAR PeRsoN 66 • ~ SELF CONFIDENT 58 ~ PRESTIGE HA Z HODERN/YOUTHFUL 5q --> POPULAR qq "-'--> ~ PRODUCT SUPERIOR TASTE SMOOTH TASTE FULL-BODIED TASTE LIGHT IASTE HIGH 0UALITY GOOD VALUE FREOUENTLY ON SALE YA REG. BRAND SHARE ~> 50 ~> 33 "-'---> 56 ~> 37 36 |5 57 63 55 MA 63 66 65 69 65 59 67 31 22 CX 8-Z-4 L 8 5 84M031~6

BY ]985, BUD HAD ACCOMPL|SNED 5 KEY CHANGES! DIFFERENTIATION OF BUD'S SUPERIORITY AS A BEER WITH FULL-_ TASTE (NOTE THIS IS NOT OPPOSITE TO eL|GHT')* PRODUCT ~UALITY PERCEPT|ONS VXlCN HEAN "GOOD YA~U|e REGARDLESS OF PRICE* SIDE BENEFIT OF PEER PRESSURE; ~ ]980 .... ]~83 CHA~G~ YA PErEEPTION~ ~ HIGH LIF~ ~ HIGH lIFE ~ HIGH Ilrr .~Mo .. OUTH~U~ 5q~) ~3 61 58 * 7 Gooo VALUE 37 q3 "39 (" " 30 * 2 ~ FREOUENTLY ON SALE 3~ 51 55 30 - ] - ] r~ YA REG. BRAND SHARE CX 8-Z-5

IT PAiD OFF WITH YOUNG[R ADULTS AND IT PA|D OFF IN TH[ TOTAL BUDklEISER - I~ILLER 5 BuD DID IT -* LEARNED TO DO IT* CAN DO IT, TOO, CAN WE DO IT? CX 8-Z-6 8.~M031i8

BASIC PRIHCIPLES FRDM HISTORY |N THE YA OPPORTUNITY ANALYSIS, VE IDENTIFIED KEY THEREB IN THE SUCCESSION OF MAJOR FIRST USUAL BRANDS OF THE PAST. |N ESSENCE, 1. ~EI~G "IN TUNE" OR "OUT OF TUNE" A SUCCESSFUL FIRST USUAL BRAND BEGINS TO DECLINE WHEN ANOTHER BRAND SECOHES BETTER *IN TUNE" THAN ITS PREDECESSOR WITH THE YAS WANTS OF THE TIHES, IN TERHS OF PRODUCT, POSITIONING, OR Ex mlO.. ~: ~ARLSORO'S UNSHILING COWSOY WAS SETTER ATTUNED TO THE RE~[~~IOUS, FLOWER'CHILD 1960'. THAN LIGHTHEART[D "ALL A~AN" WINSTON. ~ ~R~VT~ SECTORS BE~NG NORE (OR LESS) "IN TUNE" NAB BEEN RORE A FUNCTION OF cmm~s IN YA WANTS 1NAN CHANSES IN ~nANDS. T~ESE CNANSES IX WAK~HAVE OFTEN SEEN TRIGGERED OR PROPELLED BY CHANGES IN EXTERNAL FACTORS, WHICH: - DIRECTLY AFFECTED S~OKER WANTS (E.G., THE RUSH TO F~LTERS W]NSTON)A~TEn THE F~RS~ SU~OEON GENEn*L'S REPORT IN THE ~950'S AND 0R " INDIRECTLY CHANGE $HOKER WANTS BY CHANGING THE DEHOGRAPHIC ]9~0'S, "FEHALEe WANTS BECAME NORE I~PORTANT AND PALL ~ALL ROSE ON "STYLISH LENGTH'# A~1HOUGH IT NEYER [ALLED ITSELF "FEHALEe BRAND. ]HE SUCCESSFUL ~RANDS WERE THOSE THAT eCAUGHT THE RIS)NG TREND AT THE RIGHT ;IHE "" EARLY. ]0 FOLLOW UP ON THIS LEARNING, WE CAN CLARIFY THESE TWO ]DEAS AND HAKE THEH HORE CONCRETE AS FOLLOWS: CX 8-Z-7 8~M03 ~ i 9

]. IN TUNE " DIFFEREN]|ATION ' • TO BE IDENTIFIABLE AS YA TO YA'k, A BRAND HUST EHBODY ELEMENTS ('MANTS') MHICH CLEARLY~LLU.U~T..L~THE TARGET GROUP eeon ALL OTHER GROUPS. THUS, TO TARGET YA SMOXERS ]8-20 (FIRST USUAL BRAND SHOKERS}, THE BRAND MUST TARGET MANTS WHICH ENDURINGLY DIFFERENTIATE YA SMOKERS ]8-20 FROH ALL OTHER GROUPS: SMOKERS 21~ NONSMOKERS 2]" ~ SHOEERS 21"2~ ~ Z" NONSHOKERS 2]°2q NONSHOKERS 18-20 . .ERE.T,AT,O. DOES .oZM.., • mm( .~*ANTS OF SHOKERS ]8-20 ,HICH ARE DETESTED BY OTHER ~GROUPS. ;HEY DONeT. REALLY EXIST AND MOULD NOT ENGENDER ~ ~LOYALT¥ ANY,AY. ~ ~.~TRANSIENT, FRIVOLOUS MANTS. ~NECESSARILY -EXTRE,Ea pROPOSITIONS. ' ' THAT UNDIFFERENTIATIN6 ELEHENTS -" UNIVERSAL ~ANTS "" CANeT BE INCORPORATED TOO. DIFFERENTIATION ~ ~[AN~ " HORE THAN dUST ~APPEA~ AHONG YOUNGER ADULT SHOKERS~- " BETTER DISCRIMINATION IN ~ELE~TING KEY ~ANT~ AHONG HANY WANT~ 0N A ~EASURABLE BASIS. CX 8-Z-8

2- USING GROWTH SECTORS - "OPTIMUM LEVERAGEABILITY" OBVIOUSLY, WE CAN LEVERAGE (OR TRY TO LEVERAGE) ALHOST ANYTHING. ]HE KEY POINT, HOWEVER~ IS HOW MUCH EFFORT IS REOUIRED FOR NOW MUCH PAYOFF. ]HLr~EA OF OPTIMUM LEVERAGEABILITY IS TO MAXIMIZE THE CHANCE OF ~YOFF. AND THE SIZE OF THE PAYOFF. CX 8-Z-9 84M03121

0PTIHUH LEVERAGEA|ILITY CAN BE ACHIEVED OHLY ON AN ELEHENT HHICH DIFFERENTIATES THE TARGET,. WE IqUST FIND THE TARGET PRECISELY TO KHOW IfHERE TO PLACE THE LEVER. 1H15 I~OT THI~. NOHSHOXERS I SMOKERS CX 8-Z-IO 84M03122

~AXl~ RESULTS WILL BE O|TAINED FROH A PROPOSITION (LEVER) WHICN CAPITALIZES ON THE EXISTING R|GININGS OF ~OHENTUH/GNOWlNG WANTS.-. • -. UR AT LEAST POTENTIAL HOHENTUH (WANTS WHICH ARE LIKELY TO GR0V IN THE FUTURE) CX 8-Z-f1 8 5 84M03123

$0299 DZHfH ~(q poanpoad

|T IS ALSO UNDESIREA|LE TO LEVERAGE WANTS WHICH ARE DECLINING. TN|$ CAN BE NONPRODUCTIVE, FOR EXAMPLE, A BRAND COULD EARN YA RESENTMENT BY LEVERAGING AN BINe TREND WH|CH IS ALREADY BOUTm ° PRESUMPTUOUS~ CX 8-Z-13 0 84M03125

LEVERAGING rANTS VH|CH ARE STA|LE (DIFFERENTIATING BUT R[OUIRES EXTRA ENERGY (RESOURCES) BUT SEEKS POSSIBLE 5 ~0 ~£ANINOFUL DIFFERENC[ " NO ~OTION. CX 8-Z-14 84M03126

THESE ~ "PRINCIPL|Se DIFFERENTIATION OF THE TARGET 0PTIMUH LEVERAGEA|ILITY HEANINGFUL BRAND D|FFEREN¢E ARE TOOLS TO GUIDE, HOT MAGIC FORMULAS. TO PUT WHAT IS LEVERAGEABLE AMONG YA SMOKERS TODAY? 1 8 CX 8-Z-15 84M03127

LEVERAGE IN MARKETPLACE iN TERHS OF CIGARETTE CHOICE, YAS ARE BEST O|FFERENTIATED FROH OTHER SHOKERS BY THEIR AFFINITY FOR FULL FLAVOR AND VIRILE SMOKES. FIRST HALF ]gRq Vi~ILE ] ~o.~I ~.S FULL FLAVOR I 50.q I q3.0 SOURCE: TRACKER FLAVOR OR "TASTE', AS A CENTRAL FEATURE FOR A BRAND ....... DOES NOT APPEAR LEVERAGEABLE AHONG WHITE YOUNGER ADULTSa ~NCE IT IS DECLINING. |T HAY, HOWEVER, STILL NAVE SOME ~MENTUN AMONG YA BLACKS. 18-2q TRACKER SHARE TOTAL 53.9 52.8 50-9 52.3 50-q -3.5 BLACK 68.2 67.5 71.5 76.9 76.3 *8.! THIS FITS WITH THE GENERAL PERFORMANCE OF NEWPORT VS. NEWPORT LIGHTS AND MARLBORO ¥S* MARLBORO LIGNTS, THE VlglLE CONCEPT STILL APPEARS LEVERAGEA~LE, EXCEPT THAT ALL OF THE SEGHENT'S GROWTH COMES FROH MARLBORO. CX 8-Z-16 84M03128 8 5 9

]. LEVERAGE. IN HARKETPLAC[ 1R~H0S (CoNx'n) AMONG WHITE YAS, FFLT HAS SEEN SROVlNS, nUT ROWE SLom.v IN RECENT YEARS* ]RACKER SHARE FFLT 37.1 39.3 39.8 ql.3 qO.5 q2.q *5.3 I~lS FFLT TREND DOES NOT APPEAR TO DERIVE FROM CONSUMER ~TEREST iN "LOW TAR" PER SE. DESPITE CONTINUING IMPLIED ~PHASIS BY THE F]C, ]/q OF BOTH TOTAL AND YA SMOKERS ~ ~.~VE MOVED FROM BAGREEJ TO "DISAGREE" ON THIS POINT SINCE ~OW TAR AND NICOTINE CIGARETTES REPRESENT A ~AJOR STEP ~:~h•. THE DIRECTION OF ~AKING SMOKING LESS HARMFUL TO THE ~'~EALTH" (YANKELOVICH) ]8-2q 55 ~,,------- ql -25 18" 77 (----- ~3 "3~ AMONG YA SHOKERS, THIS IS CLEARLY CONFIRMED BY PERFORMANCE OF THE ~ODERATION AND CONCERNED SEGHENTS. TRACKER SHARE 18-2~ ~ODERATION 9.6 9.7 9.q 9.2 8.2 7.q "2.2 CONCERNED 5oq q,5 q.O 3.0 2.q 2.2 "3.2 • YA SMOKERS WON'T BUY FOR PRODUCT NEGATIVES. CX 8-Z-17 R 8 ,! 84M03129

1. LEVERAGE IN ~ARKETPLACE TR~N,~ (CONT'D) |. TOTAL, COOLNESS/MeNTHOL hAS DECLINED sEveRELY AS A FIRST USUAL BRAND c,oIce SINCe 1977. HF0 SHARE AGES ]8-20 COOLNESS 32.9 33.5 33.! 30.9 29.7 26.0 2q-1 20.7 • ]HIS DECLINE, HOWEVER, HAS OCCURRED~NLY AI4ON$ MHITE YAS. TRACKER SHARE AGES ]8-2q 23.! 21.~ 20.1 ll.l 18.2 e~ AM~N~WHIT[ YAS, THE'I~OVEHENT HAS NOT ONLY |BEN AWAY FROH C~SS, BUT HENTHOLS IN •ENERAL* ~. TRACKER SHARE AGES COOLNESS 23.1 21.~ 20.1 18.1 18.2 "~.9 MENTHOL 31.5 31.5 30.6 27.7 27.7 -3.8 A.ON~ W.ITE YAS, THE COOLNESS/~ENTHOL LOSSES ARE GO|N• TO MARLBORO. IN THE 1983 SDS, 9qZ OF ALL 18-20 NON-mENTHOL SMOKERS ARE NOW SMOKING ~ARLBORO, USED TO S~OKE ~ARLSOROa OR LIST MARLBORO AHONG THEIR 3 FAVORITE BRANDS. ]HE LONG-TERm ~REN~S ON NF0 ARE mIRROR IMAGES (DISREGARD LEVEL). COOLNESS NFC) SHARE A~ES 18-20 32.9 33.5 33.1 30.9 29.7 26.0 2q.1 20.7 18.7 -1q.2 3q.3 33.6 32.6 3q.8 :~6.q 38.q q3.2 q6.7 50.9 +16.6 CX 8-Z-18 8 84M03130

LEVERAGE IN flARKETPLACE TRENDS (CONT'O) O AnONG 8LACK YA, COOLNESS IS HOLDING ITS ONN, SINCE KOOL'S HASSIVE LOSSES ARE |EING OFFSET |Y NENPORT eee ~ NEVPORT 18.6 SALEfl 17.2 TRACKER SHARE AGES 30.8 27.9 21.8 17.2 ~ 22.q 27.735.q 38.5 i o.o 1 19.2 17.3 13.6 ]5.9 - 1.~ Co~s 71.3 72.8 73.0 72.1 72.q * 1.1 Co~s ~EHTHOL ITHOLS CAPTURE 90~ OF THE MARKET, I.E*, DIFFERENTIATE 71.3 88.6 TRACKER SHARE AGES 18-2q . 72.8 73.0 72.1 72.~ "1.1 89.7 91.5 88.9 93.8 *5.2 CX 8-Z-19 8 5 84M03131

I. S2. • SOURCES FOR SATISFYING THESE NEEDSS CLOSE FRIENDS BELONGING • |NTIHATE RELATIONSHIPs CHERISHED PEER GROUP IDENTITY I: ---"---) BELONGING + BEING DIFFERENT HIFFERENT VIA THE 5ROUP, NOT INDIVIDUALLT ]BUT I!A]T TO SEE WHP.T OTHERS THINK CX 8-Z-20 8 3 84M03132

1- & 7. RrtoN~l.~ ANn 8~ ~VFERENT (CONT.) VS. PEER GROUP IDENTITY A FEW CLOSE FRIENDS BEING DIFFEREN~I BEING DIFF[RENT VIA 6ROUP "" A FEW CLOSE FRIENDS "- OPPOSITE SEX °- THE BROADER SOCIETY BEING DIFFERENT~ ( "" ~[ING DIFFERENT AS AN INDIVIDUAL DEVELOPING SELF" IDENTITY (TRANSITION) -- NHO A~ ! CX 8-Z-21 84M03133

J~ARKETING RELEVANC~ FUBYAS' PEER GROUP IDENTITY UITH |DENTIPIA|LE SOCIAL GROUPS PROVIDES • SPECTRUH -- ~iNDSETS O SPECTRUH -- CUES & SYH|OL| WILL DISCUSS LATER IN DETAIL CX 8-Z-22 84M03134

3. UP~AAD STRIVING 91FFERENTIATES FUEYA$ CX 8-Z-23 84M03135 " ~

UP~ARD SIRIVING "" • M.AT DO FUBYAS ~EAN VME# THeY TALK ABOUT VS. • REALITY-BA~[D AND Success etELATES TO TOFIORROM A~PIRATIONAL IUC~,ll o- eMAKIN6 |Te "" Joa, CAREER SUCCESS "" ~OOD, GREAT INCOME "- ~EVELOP|NG POTENTIAL Z - A 9ATE °- ~EETS~G OOALS ~UmU( - A GOOD PANTY °- NICE HOME ~1~ " A "coupe IN FRONT OF -- ~ANY eTHINGSe THE GANG .~ " THE MOST POPULAR - • - ]HE MOST ADMIRED " "RIDIH~ THE |TO rAVE" 5 CX 8-Z-24 84M03136

UPHARD STRIVINg • ~ARKET|HG RELIVANC[ -- UPWARD STRIVING MOT|YES AND THEREFORE CUES AND SYn|OL$ ntCATED TO 10~0RROW AnE .OT mELEVA.T 10 FUBYAS YANKELOVICH DATA SUGGESTS TVO FORMS OF FANTASY HAY BE BOTH DIFFERENTIATING AND LEVERAGAELE: ESCAPE IHTO I~AGIEATION GOOD OLD DAYS cx 8-z-25 B 84M03137

). flPwAl~ STnlVlNG (CONT.) • [SCAPE INTO IRAGINATION (REsPONS'IVENESS TO FANTASY) ~HE INCLINATION TO DEAL VlTH LIFE BY ESCAPING INTO IMAGINATION DIFFERENTIATES FUBYAS |OTH FROH OLDER SHOKERS AND FROH NON°SMOKING PEERS. .~ [scA,t ,N,O ~,O,NATION ! )R-~O SMOKERS NET AGREEMENTI VERSUS o~o J VERSUS 18-20 "~AND, IT APP[ARS TO |[ PARTICULARLY LEVERAGEA|L[ |[CAUS[ IT ~ IS GROVlNG. ~ 19gl-19ff5 [SCAPE INTO IMAGINATION SOURC[: YANKELOVICH CX 8-Z-26 8 84M03138

oo (CONT.) ]HE DEGREE TO VHiCH FUBYAS FIND ROMANCE |N THE FANTASY OF eTHE GOOD OLD DAYSe HIGHLY DIFFERENTIATES THEM FROM OLDER SMOK[RS. ~' "Good) OLD DAYS" "Z ~ SOUR~. A.KELOV'CH [ ~29 ] R 5 CX 8-Z-27 84M03139

• ~H[ GRAPH SAYS YOUNGER ADULT S~OK[RS ARE RIGHT HH[N THEY D[SCRIR[ THE REST OF US AS BEING IN A RUT- EXC|TING THINGS CX 8-Z-28 8 5 84M03140

q. ~ (CONT.) VS. HAV[ FUN IN EVERY WAY POSSISLE AT EVENV TIHE POSSIBLE • AVOID SOREDOH, RUT, ROUTIHE O 8E SPONTANEOUS FUN m PARENTS ENaOV 10DAY/THE ROHENT CX 8-Z-29 - HAVE FUN SELECTIVELY SELECT ACTIVITIES OF INTEREST • DEVELOP EXPERTISE e PURSUE IN ALLOCATED LEISURE TIME • SWITCHERS ~U~ |S A SZ~N OF SWITCHENS SUCCESS "* SHOWS YOU•RE *MAKING IT* R 84M03141

~ (co~.) -- Fort ~oo~'s FUBYAS, EXCITE~EHT ~s .o~ SlneL~ "A SO00 -- 1; ~S LIVIN~ ON THE EDGE/THE LI~IT..-oe, AT LEAST, leAGIg|g6 so. Z CX 8-Z-30 8 5 3 84M03142

°° TH[Y LIK[ TO ~[ S[[N AS RISK LIKES TO TAKE CX 8-Z-31 5 84M03143

-" AS ONE VHO STANDS OUT |N A CROVDee* ~TANDS OUT IN 7X 8-Z-32 8 5 84M03144

"" AGGeESSlV|... CX 8-Z-33 84M03145

q. EXCItEmeNT o *THE ~DG~~ °° AS ACHIEVEnENT ORIENTED (IN THEIR OHN rAY).., CX 8-Z-34 84M03146

S0299 629~ ~ DZ~If~I ,(q po~,npoJd

oo AND, &D¥~HTUROUS. Zo ZX 8-Z-~6 B 84M03148

q. EXCITEmenT -- "THE EDGE" TNE DESIRE TO LIve ON "THE EDGE" no* ONLY DIFFERENTIATES FUBYA$ FROH OLDER SHOKERS. IT ALSO APPEARS TO DE A PARTICULARLY LEVERAGABLE IDEA, I.[., IT IS SnOWInG. • eTH[ EDGE" IS NOT LIHI*[D TO MACHO/PHYSICAL DANGER ¢ON*EXT "" m~HE EDGEm IS AN 1HAG[, AN IDEA, AND CAN APPLY TO CLOTHES, SEX, DRUGS, LANGUAGE, CARS, ANY MAY YOU CAN "TAKE IT TO THE L|MIT*a SOURCE: SDS 8 5 (./ {iX 8-Z-37 84~A03149

LAST °° BUT SURELY NOT LEAST. • elmml e LOTS OF DATES ~ LINKS To SUCCESS NEeD Z ,I~KtWTHING SOES LINKS TO [XCITEH[NT NEED VS CLOSER RELATIONSHIPS WE'RE PARTNERS -- 50/50 R~ 8 CX 8-Z-38

5. ~Fx (CORT.) • HARKETING R~L~VANCE LI|ERAL ATTITUDES TOVARD SEX CLEARLY D|FFEREHTIA?E FUBYAS FROH THEIR NON-SMOKING PEERS...THEY ARE THICE AS IN TU#E VtTN YHtS VlEVPOIXT. NET AGREEMENT/DISAGREEMENT LI|ERAL SEX ATTITUDES 18-20 ~ 15 |8" "2 CX 8-Z-39 84M03151

5. ~x (CONT.) • A MARKETER CAN SELECT AMONG ~ ALTERNATIVES TO APPLY THIS LEARNING! °" GEAR THE TOTAL MARKETING EFFORT AROUND BLATANT SEX °- USE SELECTED ELEMENTS OF THE HARKETING M|X TO TARGET THE SEX THEHE TO FUBYAS ONLY. ~USE THE LEARNING DEFENS|VELY, I*E., EXECUT~ RELEVANT ~ HARKET|NG EFFORTS THAT DONeT APPEAR OUT-OF-SYNC NITH ~ .~. FUBYA$ VIEWPOINT. Fi 8 5 3X 8-Z-40 84M03152

s, SOURCE: FOR EXAHPb|I JpVAN Musk 25-3q 3.7 120 35÷ 2.q 78 Z 18" 3.0 100 ~TING ~ROM ~ 10/22179: ~ . ~OVAN --IS THE FIRST COMPANY TO BREAK INTO THE UoS. FRAGRANCE MARKET SUCCESSFULLY IN 15 YEARS. |NDEED, '~OVAN'S NOVEL MERCHANDISING TECHNIOUES HAVE TURNED THE ~I~i~USTNY ON ITS EAR. ~(FI~LE OTHER COMPANIES MAY ONLY ALLUDE TO A USER'S SEX APPEAL, JOVAN SPELLS IT OUT WITH COPY ON |OTTLES, PACKAGES, AND ADVERTISING DESCRIBING RUSK OIL ASS • "PASSION-AROUSING: • "EROGENOUS" • "ANIMAL'LIKE: 8 ~AP~nODI~IAC~ AND JUST A PLAIN "TURN'ON'" :IHlS MESSAGE APPEALS TO THE UNDER 25 CROWD,: SAYS AN INDUSTRY ANALYST. 1983 SMRB CX 8-Z-41 8 84M03153

• USE SELECTED ELEMENTS TARGETED To.FURYA~ ONLY FOR EXAKPLEI T-SHIRTS ARE SO POPULAR BECAUSE THEY ARE FUN, SELF" EXPRESSIVE/BADGES. -- muc. OF Tx( CLASSIFIED AD SECTlO. OF ROLLING STONE Is DEYO'~ED TO '~"SHIRTS tilTH "SAY|NGS-" ~ FEV TAKE ONEll ~ e I~S T~ ~T'S LOVe. NEXT ~lne IT'S $20. ~ . Hov CAN ! LOVE YOU VHEN YOU ~ON'T LIE 90VN. • | THINK ] COULD FALL KADLY IN led MITH YOU. To TIE A LINE TO A BRAND VOULD, OF COURBEm TAKE A RELEVANT LINK. flOH ABOUTI FOR A CAMEL 1-SHIRT -- VANNA HURl)? -- ONE HUmP OR TWO? CX 8-Z-42 8 5 84M03154

5. s~x (conT.) • Us[ THE L~ARN|NG DEFENSIVELY KEEP IN HIND THAT SOU[AKY CLEAN LOOXS SOOD TO US *" BUT IS OUT-OF°SYNC WITH THE FUBYAS ¥1EUPOINT. IT IS LIKELY TO ~[ SEEN |Y THEH AS NOT $P[AXINS TO THEH, ~I~"~UND[RSTANDING, NOW RELEVANT TO THEIR LIFESTYLE. CX 8-Z-43 8 5 84M03155

ALL OF THESE KEY NEEDS ARE |NORHOUSLY INTERTHIN|D, YOU HAVE SEEN THE INSEPARABLE RELATIONSHIP BETVEEN THE REED TO B[LOHG AND TO BE DIFF[R[NT -- AND HOW THE NEEDS FOR SUCCESS, EXCITEMENT AND SEX RELATE TO EACH OTHER. ", THE NEXT SECTION, YOU WILL SEE HOW THESE LAST THREE ~-~t-'~ TIED TO ~ELONGING AND BEING 0IFFERENT- ~ A ~:~ONCIS[ IDEAS CAN ~E CAPTURED FRO~ THESE NEEDS AND THEIR INTLett~LATIONSHIPS TO SERVE AS READY'REFERENCE GUIDELINES: Foe T.E FUBYAS W.~T Is CRITICAL ]. TODAY, NOT TOMORROW 2. STAYING YOUHG/NOT IN THE RUT 3. ON THE EDGE, NOT THE .IDDLE OROUND SEE THINGS THROUGH THEIR EYES, NOT OURS. 8 5 "I I -1 t -1 t CX 8-Z-44 84M03156

~IFF~IF.:IATIN~ HIIHIN 1H~ FUBYAS GROUP 0 FUBYAS ARE NOT ONE HOMOGENEOUS GROUP t ~HIS IS GOOD NEVS, BECAUSE THERE~N LIES DIFFERENTIATION AND OPPO~TUN|TY • TI~,S~GHENTS THAT FUBYAS x.ow AnE T.Eln SOCIAL snoups. THESE ~FuEYAS DRA~ ~HEIR IDENTITY, !.[., ~ EELOEGING ~o THE THE GeOUe TO BE DIFFERENT F:On OTHEn YOUX~En 5 CX 8-Z-45 84M03157

t ~HY AND Ho~ ARE TH[|[ ~OC|AL GROUPS POTENTIALLY 1HESE GROUPS FORM A SPECTRUfl • SP[CTRUH REFLECTS ATTITUDINAL STANCES OR HINDS(TS TOWARD DEALING WITH LIFE/WITH NEEDS ~ FRON VERY CONS(RVATIVE TO OU1,RAGEOUSLY EXI"R(.I",E ~|N ADDITION TO PROVIDING A SPECTRUM OF MINDS[T$ RELATED ~ TO NEEDS, WE FIND THAT THE RESULTANT LIFESTYLE CUES AND SY~BOLS ARE ALSO DISTRIBUTED ACROSS THE SOCIAL GROUPS SPECTRUM ACTIVITIES Ruslc DRESS PRODUCT/aRAN~ SELECTION iN NET, THE SOCIAL GROUPS SEEM TO DIFFERENTIATE SETTER THAN DO DEHOGRAPHICS! t -- FUBYAS ~INDS(TS TOWARD DEALING WiTH LIFE/WITH NEEDS "'- ~H[ NAIURE OF TH(IR NEEDS "- ~HE RESULIANT t. IFESTYL[ CUES AND SYMBOLS CX 8-Z-46 ~4MO315g

"" HNE INDIVIDUAL FUBYAS IS HOT A PERFECT STEREOTYPE- HE/SHE DOES NOT EXIST PURELY AS A HEH|ER OF ONE, AND ONLY ONE, SOCIAL GROUP "" ANY HORE THAN A EI#$TOE SHOXEn FITS THE V/RILE LABEL PERFECTLY ON ALL DIHENSIONS, HO.ETHELESS, THE FUBY&S: ~READILY CLASSIFIES OTHERS INTO THE GROUPS ~KNows VHAT HIS "HEHBERSHIP* IS ~PROVIDES ATTITUDINAL AND BEHAVIORAL SELF" DESCRIPTIONS ~qE~MHICH SUPPORT SOCIAL GROUP CLASSIFICATION. .< CX 8-Z-47 8 5 84M03159

-0- pro{!uced I)v RJRTC FUBYAS _SOCIAL GROUPS ~SPECTRUH in TODAY'S SOCIAL GROUPS • GOODY GOODIES • Tx~ LENGTN O~ TNe SPECTRUn is IIILT. • PREPS e G0s e DISCOS o ROCKERS e PARTY PARTIES • PUNKERS CONSTANT OVER TmE-'EXPANO$ CONTRACTS - In lgq0s, LESS RANGE - In 1950S, ~OBE RANGE HHATEVER THE LABEL"THERE IS ALVAYS A GROUP VtEVEO AS VERY NONCONFORHING eRR ITS GENERATION. • THE LABELS CHANGE OVER TIRE"BUT SLOWLY ARo THERE ARE HONE LABELS TODAY THAN BHOWN°-DUT THEY REFLECT SU|ll.E DIFFERENCES e THE LIFESTYLE CUES ANO YOU HILL SEE SOON) CHANi| MR Tin| AND CAN CHANGE RAPIDLY EXTREr~E "~ NONCONFQRr'I l TYI BURNOUTS _4 ~ ~__~.~ , g~(9 66~0~ -_ ..j m C:C) cj, j.

THE 0EJECTIVE IS TO: |DENT|'PY THE ENDURING HINDSETS BEHIND THE SOCIAL GROUPS, ~ Us~ GROU~' LAEELS NOT AS TARGETS, RUT AS GUIDELINES TO NELP .~ EX~_ RIGHT FOR TODAY. 8 CX 8-Z-49

pro JRTC • GOODY GOODIES • PREPS • fig's • DISCO's nSUCCESSe IS ESTAE" LlSnHEnT APPROVAL DOn'T GO nEAR AvoIO "THE EDGE" SEx APPRECIATE EDGE, LIRERAL RUT RARELY PART" ICIPATE -0- • ROCKERS • PARTY PARTIES Live AT EDGE HORn Nov Ann THEn LI|ERAL • PUNKERS • BURNOUTS IS OUTRAGE THE VERY HOST EDGE LI|ERAt LO[9 66~0~ qm ,;..~ ........ ! ...... 1_~..~ _ _ u ...... i i ' ;an ....

FURYAS SOCIAL GROUP SPECTRUR WITH REGARD TO aSOCIAL GROUP" PARTICIPATION, FUBYAS TEnD TO Live IN A MOVIE "" ;HEY KNOW THE ROLES --~Y KNOW THE SCRIPT ~ ~ KNOW THE ¢OSTUI~ES D~ y ;mmq -- :Y KNOW THE PROPS SUPPLY ONE OF ;HE PROPS -- ;HEIR BRAND OF CIGARE11ES CX 8-Z-51 8 5 84M03163

jEXTREme J CONFOR~LIY I)rod RTC • 500DY GOODIES ~USlC AS THE • PREPS FASHION HERCEOES • Gg's LOOK VOLVO • DISC0's ~CKOROURD - lzoo CANARD (Top qO) - "NIce" • ROCKERS • PARTY PARTIES RU$1C AS A LIFE STATEHENT IHHERSlOH CONCERTS PERFORHERS SELECTED FOR THEIR IMAGE ANTI-FASHION USED CAR TO " FIXED OP OUTHA~EOUS - SOUPED Im - Ih.o k.ACK VAN T-SHIRT PIcK UP o PUNKERS JUST - SpiKES On m, EELS EXTREHE ] CLOTHES NONCONFOR~ITYI , BURNOUTS HAIR ~.1 GHT BEEn II|IKEKEN I. JACK DANI[LS BUDleElSEN T H E F E E L OF THI|5~

• A FEW T'SHIRT LINES VHICN SEE~ TO CAPTURE TNE FEELING OF THE SOCIAL ~ROU,S. (GooD~ Gooo,Es ARE BOR~.S. '[-SHIRTS AREN'T.) - ,,., .o, ..,,.,. ,oo .,. o. ~o.,. 8 IT'S HOW YOU LO0~ PL~YINO THE ROCKERS PUNKEN$ SAHE- 5 - |T'S It~PORTAHT TO HAVE BELIEFS- | BELIEVE |'LL HAVE ANOTHER BEER. O " |F YOU LOVE SOMETHING, SET IT FREE. |F IT DOESN'T CO~E ~ACK TO YOU, HUNT IT DOWN AHD KILL IT. ,.,-- BURNOUTS " TIME FLIES WHEN YOU DON'T KNOW WHAT YOU'RE DOING. CX 8-Z-53 84M03165

EUBYAS SOCIAL GROUPS £PE£TRIM -- Geoues OH CONFORMING END OF SCALE VIeW IONCOMFOR~IN6 GROUPS WITH DISTASTE GROUPS TEND TO ADmiRE THE ~OST NON'CONFORmING GROUPS NOT W.AT onouP DOES BUT ~HAT BEHAVIOR E[PRESEHTS| "" lNE "GUTS" 10 NOT ¢ONFORR "" ~OT BEING SADDLED WITH ANY SENSE OF RESPONSIBILITY *mm ~,]H[ HAVE's" "" DONeT NAVE TO STRUGGLE FOR THINGS CX 8-Z-54 84M()3166

II , EXIRERE ! I NOH EOHFORRII~ I I | III I I I II I II I I I I i roduced by' IRTC TOLl) Us... II _ EXTREHE i NON CONFORHITY • GOODY GOODIES • PREPS [I.ON] • Gg's • DISi:OS • ROCKER i HIr.,H' I , PARTY PARTIES • PUNKERS • BURNOUTS "PREPS DON'T ~iOKE" • "CIGARETTE TR|NOS VOUI.D START VlTN ROCKERS OR

FA~/TR~H~S -- HOH DO THEY ~TARTIGRDV? DIFFUSION ~ECHAN]SH °° SEED AND ~PNEAD ~STARTS WITH SHALL GROUP ~~[CAUS[ ~. *° ECONOMIC FACTORS ~"" SOCIAL CHANGE DEHOGRAPHIC HIX CHANGES "" |NADEOUACY OF PRODUCT CATEGORY ALTERNATIVES -- DESIRE FOR THE HEM, THE DIFFERENT O AT THIS STAGE''CALLED A BUZZ t EXAMPLE: MOHAWK HAIRCUTS IN THE VILLAGE CX 8-Z-56 84M03168

FU~YAS SOCIAL GROUP SPECTRU# • N,Y ARE FUBYAS so WRAPPED UF IN FADS/TRENDS? FADS & ]RE.DS ARE VERY INPOR]AN] TO THE. IN SEVERAL rAYS -- T,ev ARE CRITICAL TO EACN GROUP'S IDEgTITY ~ SERVE AS CUES/SYMBOLS ,~" STM I)IFFERENT GROUPS NAVE CREDIBILITY TO START CERTAIN TYPES OF TRENDS NICE CLOTHES "" PREPS REAL BOOZE "" ROCKERS FADS & ]RENDS HELP SATISFY FUBYAS NEEDS1 • ~0 BELONG T I} THE GROUP • 70 BE DIFFERENT ~]A THE GROUP FOR EXCITEHENT IN BEING IN ON A TREND 8 9 • FOR SUCCESS IN SHOWING YOU'RE IN ON A TREND CX 8-Z-57 ~,4M03 ! q.9

~ (coN,.) ~o OROW/GAIN ~OnENTUn'-NUST mE PICXE~ UP BY LEADING EDGE IN OTHER GROUPS e CALLED CROSSING OVER ZPERHAPS SOFTENED, FIODIFIED TO APPEAL ~" )~. VARIATIONS OF THE PIOHAWK, UPTOWN CELEBRITY ADOPTS ONE/HAGAZINES SHOld' THEN t TH[ FAD BECO.ES THE FASHION FINAL STEP " ADOPTION BY THE HASSES -- mAKES IT IN KANSAS CITY °- ]HE "BUZZ" HAS mOVED ON, CX 8-Z-58 8 5

(CONT.) ~HUS, THOUGH YOU VOULD NOT TARGET A |RAND TO PUNKER$, ONE NISHT CONSIDER A HEY BRAND IDEA IN LIGHT OF VHETHER OR NOT THERE IS AT LEAST ONE GROUP UflER[ THE BRAND COULD FIRST eSlED.a FOR AN ESTABLISHED BRAND,, ITS ABILITY TO START A REV "BUZZ~' HAY DEPEND ON THE BAGGAGE IT BRINGS BACK FROH i~ANSAS C|TY. Z Z R 8 CX 8-Z-$9 84M03171

~HE AS|L|TY TO IHPROVE PERFORHANCE DEPENDS ON THE ATTITUDES AND BELIEFS THAT SHOKERS ]8°20 HAVE ABOUT CIGARETTE BRANDs1 DOES ~ARLBORO'S STRENGTH IN THIS SEGHENT HEAN THAT THEY ebOVE IT', THINK THAT IT IS THE e|EST BRAND°, OR DO THEY SINPLY CHOOSE IT a|ECAUSE EVERYONE ELSE DOES" (VHY NOT?) XATE I~|NSTON OR IS IT SIHPLV IRRELEVANT? THEY LOVE OR HAlE CERTAIN BRANDS? TYPES OF TXlNGS TURN THEH ON OR OFF? CX 8-Z-60 8 5 84M03172

&. ~RAN~ ATTITUDE VERY FEW SHOKERS ]8"20 ARE AHARE OF CIGARETTE ADVERTISING'°HOH THEY ARE "POSITIONEDe. BRAND PERCEPTIONS ARE HORE LIKELY TO COHE FROH USERS THEY SEE, • 2- ATTITUDES ABOUT CIGARETTE BRANDS ARE NOT EXTREHE IN HOST CASES "'~.~.~LLY THEY ARE NEITHER LOVED NOR HATED. 1HIS SEEHED TRUE EVEN;lrOR MARLBORO° 3, ~ ~HLY ATTITUDES THAT HERE STROhG ENOUGH TO ILOCK A ~RAND HERE ~ U~A~Y PRODUCT DRlVEN'-:THEY ARE REALLY ROUGH IEC~USE THEYeRE NO~ILT[RED~ OR ~THEY TASTE LIKE STALE ~ARL~OROS~, OR ~THEY T&STE~LIKE COTTON~. ~HIS HAY HEAN OUR PRODUCT PERCEPTIONS NEED TQ~TURNED. AROUND "" AS BUDWEISER~S HERE, 1HE HOST SENSITIVITY WHEN IT ¢OHES TO IHAGERY IS LOOKING PHONEY --OF TRYING TO BE HORE THAN YOU ARE, SOHEWHAT LIKE THE ROCKER~S ATTITUDE TOWARD PREPS. ~ESPONDENTS TENDED TO ASSOCIATE BRANDS WiTH THEIR GROUP S~[REOIYPES AS FOLLOWS~ "PREP" BRANDS: PLAYERS, V. SL|eS, BAH, VANIAGE, NEWPORT. "ROCKER" BRANDS: CAMEL, WINSTON, MARLBORO, AND KOOL. O")VIOI~SLY, ~ARLBORO WAS '~kCCEPIED" IN ALL GROUPS. CX 8-Z-61 8 5 ~4M63173

bRAND CONCLUSIONS MARL|ORO CAN bE ATTACKED. THEY DO NOT HAVE INSURMOUNTABLE STRENGTHS IN IMAGERY -- THEY SMOKE IT SECAUSE EVERYONE ELSE DOES AND THEY DON'T SEE VIASLE, ATTRACTIVE ALTERNATIVES. 2- THERE ARE MAJOR OPPORTUNITIES TO USE NONTRADITIONAL CHANNELS TO EFI~C~iVELY REACH THE ~8-20 SMOKER HARKET "" TO REACH THEM, SPEAK IN~IR OWN LANGUAGE INCLUDING THE RIGHT SYMSOLS AND CUES, AND B~EVANT. THIS IS THE HEART OF THE JACK DANIELS AND BUDWEISER 3. |~POSSIBLE TO IMPROVE PERFORHANCE MITH CAMEL, HINSTON, AND SJ~P~ BUT EACH HAS DIFFERENT STRENGTHS AND HEAKNESSES* • £AMEL "" TENDS TO RECEIVE MORE POSITIVE COHKENTS THAN OUR OTHER SRANDS ALTHOUGH ITS NON'FILTER HERITAGE IS STILL PROHINENT. IT'S STRONG VISUAL IDENTITY HAKES THE bRAND INTERESTING AND LENDS ITSELF TO SPECIAL PRO~OT|ON. PEOPLE NOTICE EASEL. WHILE ITS NON-FILTER SUGGESTS PRODUCT NEGATIVES, IT DOES FORH A SOLID LINK TO AUTHENTICITY AND PRODUCT DUALITY -" ITS ORIGINS IN THE "GOOD OLD DAYS" IS NOT A NEGATIVE.- NIHS10H/SALEM -- IGNORED ~ORE THAN HATED. THESE BRANDS CARRY THE BAGGAGE OF BEING IN KANSAS CITY FOR SO LONG ... AND THE USER IHkGE ASSOCIATED WITH THIS. ~HE BRANDS ARE SIMPLY NOT VERY INTERESTING -- PACK, ~AMEw ETC. TN~SE ARE SEEN AS CLEAR ~ SRANI~S WlIH PRODUC1 N~AT:VE~o CX 8-Z-62 R B 84M03174

~ARKETIH~/RO0 IHPLI£ATIOH~ "[HE ABSOLUTE eOTTOm LINE IS THE NEED.fOR ||, |mAGIHATIVE STRATEGIES AHD EXECUTION. ~r.--~OLLO~ING QUOTES VERB TAKEN FROH THE "EXPERT HORKSHOP" iN ~ORK "" AND EVERYONE IN THE ROOM SMILED AND NODDED. ~P MANAGEMENT COMH|TmEHT ~ITHOUT HAVING SOLD AUGUST BUSCH ON THE NATURE AND THE ~!SKS,. OF YOUNGER ADULT mARKETING, ~E COULD NEVER HAVE ~URNED AROUND BUDWEISER* YOU JUST CAN'T DO IT ~ITHOUT THE ~PPORT OF TOP ~ANAGEmENT*e e ~IDDLE MANAGEMENT COmHITmENT "THE PROBLEm ~HEN YOU HAVE A SOOD IDEA FOR THE YOUNGER ADULT MARKET AND YOU HAVE TO GO UP THE CHANNEL FOR APPROVAL IT ~ETS WATERED DOWN VERY GUICKLY- EVERYBODY ~ANTS TO TAKE RISKS AND |E THE ENTREPRENEUR, ~UT HHEH THE ~RAND ~ANAGER~$ JOB IS ON THE LINE BECAUSE NE~S GOT TO SELL A CAHPAIGN TO AUGUST ~HERE YOU'RE GOING TO THRO~ BEER AT PEOPLE "" HIS PRODUCT, YOU'VE GOT TO KNOW AUGUST BUSCH "" YOU START TO LOSE THAT RISKING ABILITY INSIDE. ~HE IDEAS GET ~ATERED DOWN AND THE COHPANY FAILS AT YOUNGER ADULT HARKET|NG-e CX 8-Z-63 8 5 84M03175

JUNIOR LEVEL COHMITHENT ~ONcE AUGUST BUSCH REALLY SHOVED HE NAS COH~|TTED YOUNGER ADULT MARKETING, DOORS OPENED UP AND NO ONE AFRAID TO COME UP M|TH IDEAS. BEFORE THEN, THE IDEAS MERE THERE BUT PEOPLE MERE AFRAID TO TALK ABOUT THEM. IDEAS FOR ~HIS MARKET OFTEN COME FROM JUNIOR PEOPLE. ~HEY'RE THE ONES V|TH THE ENERGY TO PUT INTO FIELD MARKETING. BUT THEY DON'T HAVE THE CREDIBILITY SO $ONEONE AT A HIGHER LEVEL MUST BELIEVE IN THEM AND GET THE IDEAS TO THE TOP PEOPLE~* WE NEE~,.REME~||R THAT |tG PAY-OFFS MAY TAKE ~ OR q YEARS TO ACH|EV~TOH'L|NE RESULTS. A SOLID STRATEGY IS NEEDED AS YELL AS T.E~.fOURCES TO IMPL~.E.T ~Y A.O .O.~TO~ ITS PROGRESS. FOR f.,XM~PLL~, T~~ME BUD*EISER PROGRAM HAS GROMN FROM ] MAN/$1~ TO 18 CX 8-Z-64 84M03176

I!. ~TRAT~GY A~ ~X£CUTIDN THERE ARE ~AJOR ISSUES/TRENDS THAT HUST BE CONSIDERED IN DETERMINING THE |[ST DIRECTIONS. |N SOH[ CASES, FURTHER RESEARCH IS HEEDED. |. THE COOLNESS SEGlU, ENT (AND HENTHOLS) SEEK HEADED FOR INEVITABLE DECLINES IN SHARE- 1HE BUSINESS THAT IS LEFT HILL GROW INCREASINGLY BLACK, ~)~-~'~~REPS DON'T SIqOKE -° THE I'iARKET IS LIKELY TO BECOHE ~NCREASINGLY ORIENTED TO THE VALUES OF NON'COLLEGE ~:$~O~E~S, ~OCKE~S. ~HE SOUEAKY CLEAN LOOKS VlLL IE OUT- ~ARLIORO IS THE KEY TARGET ~iTH NEWPORT BEING I~PORTANT ~FOR HENTHOL PRODUCTS IN THE BLACK SUBGROUP. ~|N HARKETING TO YOUNGER ADULT SHOKERS, THE CRITICAL ~EACTION "HEY, THEY'RE ~E.# THIS SUGGESTS IS TALKING TO ~THAT VIASLE POSITIONINGS AND EXECUTIONAL THEMES HUST ~---~ORE THAN JUST "APPEAL" TO YA, THEY ~UST APPEAL TO YAS IN A WAY THAT ~DIFFEI{ENTIATESe THE~ FROM ALL OTHER GROUPS AND DIFFERENTIATES OUR BRAND FROH ALL OIHERS IN A ~EANINGFUL HAY. R CX 8-Z-65

II. STRAtEgY AND EXeCUtION (CONT'D) ~. A PROCESS POR DETERMINING EFFECTIVE STRATEGIES NEEDS TO BE IDENTIFED. KEY PROBLEMS HUST BE OVERCOMEI • A SEGMENTATION BY DEMOGRAPHICS~ SEGHENT~ OR CATEGORY IS NOT ADEGUATE BECAUSE SMOKER MINDSETS GO BEYOND THESE BOUNDARIES. POSITIONING AGAINST mDRIVlNG HOTIVES: -- BELONGIN6~ DIFFERENCE~ UPWARD STRIVING, EXCITEMENT AND SEX "" CAN POSE PROBLEMS, SINCE THESE WANTS FORM A TIGHTLY KNI~ BUNDLE To 18-20 SMOKERS. IT IS SOHEWHAT ARTIFICIAL TO SEPARATE THEH -- TO PICK ONE AND POSSIBLY VIOLATE THE OTHERS. ~HE HEART OF AN EFFECTIVE STRATEGY HAY BE AS HUCH THE MEDIUM AS THE MESSAGE -- FIELD HARKETING, SPECIAL EVENTS~ ETC.~ AS OPPOSED TO HAGAZINES. WE MUST ClRCUHVENT THE PROBLEMS THAT HAKE BOTH RJR AND OUR ADVERTISING AGENCIES INCREASINGLY OUT OF TOUCH. AS YOUNGER ADULT SMOKERS BECOME INCREASINGLY NON-COLLEGE AND NON-PREPPY, THE ATTITUDINAL GAP BETWEEN MANAGEMENT (EVEN AT LOWER LEVELS) AND 18-20 SMOKERS IS LIKELY TO W|DEN. ~HIS HAKES IT HARD TO BE CREATIVE AND IMAGINATIVE IN A RELEVANT WAY. CX 8-Z-66 8 5

I~RK[I'IN~/flDD II~PLlCAI' !|. STnATE~Y AND EXSCUTIO~ (COXT~O) CREATIVE AND IMAGINATIVE EXECUTIONS HILL BE THE KEY TO IMPROVING PERFORHANCE. RJR's CHALLENGE IN ADDRESSING THIS ISSUE PROBABLY LIES IN ESTABLISHING THE RIGHT PROCESS RATHER THAN SIMPLY CREATING SPECIFIC POSITIONINGS AND EXECUTIONS. A POSSI|kE PROCESS| R~LK TO ENOUGH SHOK[RS TO ENSURE THAT W[ FIND A REU_ ~"TARGET GROUP ~|TH A ~COMMON MIND°SETB VORTH P~RSUING. ~E.TIFY SPECIFIC 18-~0 SMOKERS ~.0 ANE PART OF T.AT IND-SET AND NAVE INSIGHTS AND JUDGEMENTS ABOUT PEOPLE ,,:~o.~N0 ARE LIKE TH[H. USE AS A PANEL TO HELP PROVIDE CONTINUOUS FEEDBACK AND DEVELOPMENT EFFORTS ~)VERTISING, PRODUCT PROMOTION, ETC. ~OOSE CREATIVE PROFESSIONALS (AGENCY OR OTHERWISE) r---~LATE TO THE TARGET ~IND°SET AND CAPITALIZE ON GROUP DYNAMICS BETWEEN THE EXPERTS AND THE PANEL. USE THE RESULTING SYNERGY TO BE CREATIVE AND IHAGINATIYE WI1NIN ~J~ MANAGEMENT GUIDELINES, 5 n n u CX 8-Z-67 84M03]79

I~RKE11NG/MDD IMPLICA110#S 1[. Sx~xzGY ANn THERE ARE SEVERAL GENERAL GUIDELINES THAT SHOULD BE CONSIDERED IN ANY EFFORTS TO ADDRESS SMOKERS ]8"20. s USE PULL STRATEGIES "" DRAW CONSUMERS TO THE BRAND. AVOID THE HARD SELL- FEEL FREE TO BE A LITTLE IRREVERENT ABOUT THE BRAND. PAT, INSTITUTIONAL ADS LACK APPEAL. BE CLOSER TO THE DON'T CHASE A TREND THAT HAS ALREADY HAPPENED. 7 ~'~GOOD PRODUCT |S CRITICAL BUT PRODUCT SELLS DON'T YORK. ~OID PROBLEM-SOLUTION POSITIONINOS. ~-~N'T ,[ PNONV. FOR EXAMPLE, ENSURE EXECUTIOHS HAVE _~NTERNAL INTEGRITY IN TERMS OF PREPPY VSo ROCKER LOOKS ~!D ACTI¥1TI[S. ~.~OID PRICE DISCOUNTING TACTICS* THE MARKETING FIT • * * |. TODAY, NOT TOMORROW 2- SLAYING YOUNG/NoT IN THE RUT 3. ON 1HE EDGE, NOT THE MEDDLE OROUND SEE IH]NGS THROUGH IHEIR EYES, NOT OURS. CX 8-Z-68 84M03180

RARKE]|NG/~D0 I~PLICA]ION$ FUnTHER RESEARCH IS NEEDED TO DUANTIFY ~HIS LEARNING, SPECIFIC ISSUES CAN |[ IDENTIFIED BY END USERS* GENERAL IllU|l ARil ]. JI~POR~ANCE Of VALUES/MABTS (RELATIVE AND A|SOLUTE) 3. ~eCEPTIONS Or SOCIAL SEGI~NTS q, ASSOCIATIONS OF ~.~VEL/NATUeE OF BRAND ATTITUDES ~B ~GN.l~]ee IS NEEDED, JT ~ILL ALSO BE NECESARY TO ~ONITOR PROGR~.GAINST STRATEGIES ADOPTED. CX 8-Z-69

1. LEVERAGE IN ~ARKETPLACE ]RENDS (¢ONT'D) ]NEe[ DOES NOT APPEAR TO ~[ POSITIVe LeVeRAO[ ANO.S VNIT[ YA SeOK[RS ON [IT.Re FF ('TASTE') OR FFL] ('LOV TAR'). COOLNESS/~ENTNOL/FF PROPOSITIONS STILL hAY RETAIN SORE POSITIVE LEVERAGEAB|LITY A~ONG J]LACK YA S.OKERSo CX 8-Z-70 8 5 8

2. tFVERAGE IN DEBOGRAPHIC SHIFTS ~ SMOKERS SLOWLY SAINED IHPORTANCE OVER THE LAST DECADE, BUT HAVE HELD EGUAL WITH YAS HEN FOR NEARLY THREE YEARS* FEHAL[ q6 Z |EpORTANCE ~ITHtN |~-?q 52 52 51 50 50 50 q8 q8 q9 50 50 50 IT IS NOT CLEAR WHETHER YA FEMALE SMOKERS WILL CONTINUE ~O BE A GROWTH SECTOR, BUT IT IS UNLIKELY THAT THEY WILL ~ECO~E LESS IMPORTANT THAN MALES. ~*:~NIS DOES NOT, HOWEVER, NECESSARILY IMPLY k DEHAND FOR ~FEMALE" BRANDS. .e~"~ISTORICAL ANALYSIS SHOWS THE HOST SUCCESSPUL FIRST USUAL ~RANDS HAVE BEEN DUAL*SEX* ~ YANKELOVICH DATA FROH ]975-80, COVERING ]8 TYPES OF ~ PRODUCTS SHOVED THAT THERE HAS LESS INTEREST IN MALE/ • FEI~iALE BRANDS OF SEER, CARS, AND CIGARETTES ('THE CONSTANTS IN LIFE*) THAN IN ANY OTHER OF THE PRODUCT TYPES. "~[LIEVE THERE SHOULD ~E DIFFERENT PRODUCTS FOR men AND ~OHEN~ Beer 9 C|GARETTES CARS 18 PRODUCT Ave. 38 |T DOES I~PLY THA1 FEMALES AND THEIR KEY WANTS ~UST BE GIVEN FOUAL AITENTION IN YA HARKETING. CX 8-Z-71 R 8 8 n -~MO~ 183

LEVERAGE IN ~EHO~RAPHIC ~HIFT~ (CORT'D) THE GREATEST DIFFERENTIATION OF SHOK|NG AMONG YOUNGER ADULTS APPEARS TO IE THE COLLEGE/NON-COLLEGE SPLIT. RJR DATA IS NOT AVAILA|LE, NUT TWO OUTSIDE SOURCES AGREE THAT IN ]983 THREE-FOURTHS OF EDUCATED THROUGH HIGH SCHOOL OR [!tto 1983 1982-8q MHONS YANKELOV ION HS OR L(SS 781[ 731[ PAST HS 22 27 CX 8-Z-72 84M03184

LEVERAGE IN DEMOGRAPHIC SHIF]$ (COHT'D) e SEVERAL SOURCES SUGGEST THAT THIS GAP NAS BEEN HIDENING STEADILY. YANKELOVICH SHOWS THAT NON-COLLEGE YA SHOKER IHPORTANC[ HAS SEEN GROWING BY A~OUT A POINT A YEAR.,,- S.OXERS 1980 1981 1982 1g83 HS OR LESS 70% 721 73I ~3I PAST HS 30 28 27 27 IN COLLEGE 1~ 13 13 12 "3 -2 ~~HICH IMPLIES THAT INCIDENCE IS NEARLY TWICE AS #ISH ~AHONG THE NON'COLLEGE AND ALSO A GROWING SAP. ~MOKING DEYELOPMENT (YANKELQVICH) 1983 18-2q TOTAL 100 HS OR LESS |25~1-9:1 PAST HS 67~" IN COLLEGE 58 ON NF0, IT APPEARS THAT THE GAP IS SIMILAR AT AGES ]8-20 AND HAS BEEN HOLDING OR SLOWLY EVOLVING FOR A DECADE. 18-20 TOTAL ]00 100 ~ HS 131 I~5 ~ cx e-z:v ~ M03185 8 5 8 6

2. LEVERA&E IN DEHO&RAPHIC SHIFT~ (CONT'D) vs. £OL[,~e (CONT'D) S |N TERHS OF IHAGERY, YANKELOVIC~ DATA INDICATE THAT COLLEGE IS NOT A KEY ASPIRATION OF THE HS-EDUCATED SMOKER ANY MORE THAN THE NON-COLLEGE ROUTE APPEALS TO SHOKERS WHO 60 TO Z22-]6A. eTHE WAY FOR YOUNG PEOPLE TO SET AHEAD IN LIFE IS TO'''"e ]8-2q1OTAL q2 S? HS Oe LESS" ~! 69 PAST HS 6~ ~| "HA~ ~CLUOE HS STUOE.TS w.o PLAN TO ATtenD COLLEGE. $0UR~E: YANKELOVI¢~ ~ONIXOe, ]980°8~ COeBINED. CX 8-Z-74 8 5 8 n I

2. LEVERAGE IN DE~O&RAPHIC ~HIFT~ (CoNT'D) THESE @UANTIFIABL[ RESULTS SUGGEST THAT CURRENTLY, THERE ARE THREE KEY SECTORS VHICH HAY BE LEVERAGEA|LE AHONG YOUNGER ADULT SHOKERS Of THE MID-|980'$1 1. YA FEMALES, WHO ARE LIKELY TO [OUAL OR EXCEED MALES IN IHPORTANCE*,, eWANTS: VHICH ARE KEY TO FEMALES, BUT MAY ALSO BE HELD BY HALES, SHOULD BE HORE LEVERAGEABLE THAN LARGELY HALE WANTS. NOT NECESSARILY "FEHALE BRANDSm ~A~ BLACK SMOKERS AFFORD POSSIBLE LEVERAGEABILITY OF ,¢..~RODUCT..::.~i. BASED COOLNESS/~ENTHOL/FF BENEFITS AS WELL AS ~4~HAGERY ELEMENTS. ~H[ NON-COLLEGE SHOKER IS THREE-FOURTHS OF THE TOTAL YA TARGET, A TREND WHICH APPEARS TO STILL BE EVOLVING. THIS SUGGESTS THAT WANTS, EXECUTIONS, CUES AND SYHBOLS VHICH SUIT THE NON-COLLEGE IDENTITY MAY BE MORE LEYERAGEABLE AHONG YAS THAN THE COLLEGE-ORIENTED OPTIONS, LEss OUANTIFIABLE BUT PERHAPS MORE HEANINGFUL IS THE CONTENT OF YOUNGER ADULT SHO~ER LIFESTYLES, ATTITUDES, AND VALUES -- THE:R M:N~SET 10~AY. CX 8-Z-75 8 8 U 8 ~4M03187

DIFFERENTIATING YA$ TODAY FROH YESTERDAY How FURYAS S~ "THEIR GI~NI~RATION" VS. Txt~ eOLl)l~ll • HE ARE .UCH .ORE OPeN ABOUT EVERYTHIH6 e HE NAVE $O .UC. FREEDI~I "" HE DON'T NEED TO REBEL -- 6ROY UP FASTER -- MORE OPTIONS ('PRI¥1LESE| Mmml~ LIBERAL ATTITUDES ABOUT SEX DONeT GET ~ARRIED, HAVE BABIES AS YOUNG (:RESPONSlBILITIESe) |NTO DRUGS AND DRINK TOO MUCH RESPONSIBLE FOR CHOICES MAKE ~ISTAKES EARLIER GENERATION IS GOING TO HUSTLE FOR THE MATERIAL THINGS EXPENSIVE TOYS -- NOT SAVE THE VORLD 5 8 • ~YVORD OF THE GENERATION • GOALS. HE DONeT RESPECT PEERS ~/0 GOALS -- BUT AL.OS; AN~ OOALS rILL DO B THE "OLDER GENERATIONe IS IN A RUT, 9 CX 8-Z-76 84M03188

"FUBYA$ GENERA11ON" VS. "OLDER GENERATION" NO REBELLION''SO MUCH °- S~OKING NOT REBELLION % PARENTAL PERPISSION 10 SPO~ ~HEN 18 t~ 8 NO REBELLION'-NO G(NERkT|ON 6AP CX 8-Z-77

DIFFERENTIATING H|THIN YAS TODAY~ FUBYAS VS. SHITCHER~ 18-20 YEAR OLD S.OXERS " FUBYAS 21-2q vein OLD S.OK[RS o S~ITCHERS NOT ONLY HAVE 2] YEAR OLD$ ALREADY CHOSEN THEIR FUB, BUT THEIR ~HING BEHAVIOR IS HARKEDLY DIFFERENT* Z NF0 NE'r Swi'rC.l.O: 1976-83 ]OXAL R JR "5.98 .1.39 ;OTAL P. HORmlS '*'7.82 -1.67 GAP CX 8-Z-78 8 8 84M03190

DIFFERENCES WITHIN YA~ ON KEY NFFD£ DIFFERENCE FUBYAS vs. SW|]¢HERS • RELEVANCE TO NARKETING Five KEY NEEDS "" UPWARD STRI¥1N~ -- EXCITEMENT -- Sex ALL HIGHLY [NTERRKL&Tr~/~ CX 8-z-79 8 8

5 08-~-8 XD #I "t

• bUT THEY AI.SO • • • ENJOY ~£1NG DIFFrRENT 0 BELONG/F|T IN ~ND DE DIFFERENT A SOURCE OF CONFUSION TO OURs.NON'FUB MINDS "" UNTIL WE LOOK THROUGH THEIR EYES •ATHER THAN 8 5 8

• THE NATURE oF THESE NEEDS POe FU|YAS Z "" BELONG|NG TO THE FA~I~Y (SECURE) REPLACED DY BELONGING TO SELECTED ~ (NOT AS SECUN[) "" BELONGING TO SELECTED PEER GROUP REGUIRES ~L~ ~]FF[P~J~ FROH: - FAMILY " OTHER PEER GROUPS G FOe FUBYAS, T.[ 2 ARE INSEPARABLE CX 8-Z-82 8 5 8