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128-page document: ~~ that, within the context of this paper, I nave crmsen not to cover. Things like price OnmOs szi zlally less a zesult of what

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Page 1: 0100501581
~~ that, within the context of this paper, I nave crmsen not to cover. Things like price OnmOs szi zlally less a zesult of what people want to smoke than they are a zlactlon to very specific environmental pressures• It's not that trmy ate not valio, it is simply that Ir~y aEe not truly tiea to tl~e long term evolutl~ of smokers' ne~s. The~fore, l'm going to p~t~ for ~ ,na~t that rJ~ese l)mvezTul c~t~rs ~'t exist• Moreover, I Int~ to be fairly ~tlc ~t tne overall dl~ti~ of new cm~ve1~t. Opportunities clearly exist for oz'anOs ~ich go "against trle flow" of underlying consumer needs. This paper reflects a view on the criteria of new Oevelopmants diz~ctly attached to longer tern consumer neeas. Hew OZ~O 0eveloF~ent r~s the cr~nce to go all wrong for people like us as we struggle in the wake of a major convulsion like ligrrc cigarettes. Thane ate four tempting Out c~ngerous routes: I. To oecome proOuct insteaO of Oz'anO aevelopers - assuming that tecr~oloQy holds some magic key to the future. SmoKers ~ave, ao ancl will always ouy otands. Forcing new Ozan~ development into a pz~mture marriage wit~ ptoc~t tecr~ology will quickly see us selling what we can make instead of what people want to I~Jy. •../2 =,===~ 0 0 o U~ co
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2. To say "now the party's over" and in conjunction with a proouct/tecr~iogy oriented mentality aoOicate today's maz~et in favour of some vague notion of designing for the "long term" - as if the future coula oe separated from next wee~. 3. To succuao to the -nat haven't we cried yet" school of orarKJ development, "has anyone tried a 01ue dot on tne filter?" ~. To refuse to see the last convulsion - light cigarettes - as a fact of life insteaa of an opportunity tnereoy draining valuaole time and resources into smaller and increasingly less relevant nicnes on the tar scale. The real c~lenge of new orang development is the next convulsion - or next series of aini convulsions. In Cane0a, and I'm sure in many Oevelo~ mazkets, light brands nave significantly changed the underlying motivations of smokers. ~e must understand these changes. To do so we must understanO ,ny the pnenomenom occurz~,.cl, in what context - ,nat chips are Left on ~ taole and in nat form, and ~nen turn t~is un0erstanding of new needs into relevant, mzKetaole orands. New otan0 development cannot occur in isolation from the past. LIGMTS-NEGATIVE ~ AND THE NEED FOR "LESS" PouiOly mote than in any otheE industry, our mz1<et development is gulcNd 0y negative pz~Jsuzes. ~1~ether it is scientifically vaiia or not, the simple mzqceting tzuth is that saO<ers 0elieve that smO<ing .../3 O o o t.~ Co r~
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Jeopar:izes t.~eir personal *ell-Oeing. The proportion of smokers who agz~,cl with the statement "smoKing Is dangerous far anyone" (versus heavy users at people who were unwell) rose steaclily from 48Z in 1971 to 67~ in 1976. They aicl not indict specific 0rancls, products or immoderate use. lndlcted smoking. ~lmost one in two (46g), when asJ<ed now many cic~urettes a clay could be safely smoked, answered - none. They Pre-lights, these concerned consumers had a limited range of options open to them - essential~y Qult or cut down. By the middle of the decade, the majority of Canadians wno smoked wece tz~ing or intending to try these alternatives: 1976 m "S~OKING IS DANGEROUS FOR ANYONE" 6"T~ INTEND TO QUIT 26~ INTEND TO CUT OOWN }3% TOTAL INTEND TO MODIFY 59~ TRIED TO QUIT - PAST YEAR 41~; TRIED TO CUT 0OWN - PAST YEAR 57~ Fortunately for the toOacco industry, nelt~ez of these two appzosches proved very successful for smokers. In 1976, altnougn 41~ had tried to quit and 2~I were ready to give it another go, t~e actual z-ate of quitting "within the past 6 months" was fairly staDle at a little less •../~ LJI m LJ~ C~
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than 2Z. Fewer tnan this made it to a year. Despite the vast numOers of smokers t;yin9 anO intending to cut down, the claimea rate of daily usage rose fz~m 20.5 to 21.1 cigarettes a day (1971-76). Our calculated daily" usaoe rose from 21.1 to 23.8 cigarettes per day (1971-76). Very simply put - people who wer_~e ~okers increasingly wished that they weren't, in the face of mounting information on smokin9 and health - Out could not find a means of 0ealin9 ,ith their concern. Lionter oranas were alzeaoy availaole - they ,ere milder things that old women smoKeO - but the proOuct solution wa_~s available for intereste0 SmOkers. Alt~ these 0rancLs snowed moOest development in the early 1970's. was not staggering and 9enezally, was not well unOerstooO Oy the ~tKetets: it 1971 1972 1973 197/~ 1975 HIGH 0ELIVERY - 19rag + 41.2 40.8 39.9 38.9 37.6 MID 0ELIVERY - 14-18 m9 38.2 37.4 J7.8 38.5 39. i 1.0# OF.LIVERY - 10-13 ~J 7.6 7.7 8.3 8.4- 8.8 VERY LOW DELIVERY - 5 ~ .3 .3 .3 .3 .3 NE]~ITHOL. 6.4 6.5 6.8 6.9 7.2 OTHERS 6.3 7.3 6.9 7.0 7.0 SNOKING I5 FOR ANYONE ~1~ 59'X, .5~ 63'~ 6~ .../5 O w (j'i cio j:~
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"Lights" in Canaoa was a Oran_.__oo not a product revolution. The industry tried filters, cnarcoai, tooacco olenos, advertising claS~LS attempting, generally unsuccessfully, to solve the health proolem in product terms ~nile virtually ignoring the paradoxical nature of the smokers' dilemma. Aitnougn they wished they weren't, they were and virtually every effort forceo tne~ to give up tne things they continuea to smoke for. Telling smO<ecs that you had a product was not the prooiem. Telling them they coula smoke it with nonour was. In 1974, manufacturers agreed to put tar anO nicotine numoers on the siOes of packages. 5mo~ers who wisned to do so could now rate orands on a scale of "oanger". Ligntness, instead of oeing an a~solute, 0ecame a relative thing. Close on the heels of this key piece of information and the even ~ore important foundation of relative mildness that it created, manufacturers Oegan to introduce lighter Oz-anOs instead of products. =Lighter', was successfully defined in language smokers could understand as "All the experience of Player's in a lighter cigarette - Player's Light." Although we remain comitted to making good products, it would oe incorrect to suggest that corporate success in this naz~ fought Oattle has really had mUCh to do with ~o made the best cigarette at a given level of strength. Winning has been predicated on good 0rand marketing. Co¢~es ,ith strong, clear, well defined trademarks ana the courage to intzockce them in a way that was true to their essential nature won. Companies with less relevant or indistinct trademarks, anO companies who tried to twist the 0asic rationale for the tzac~mazx, lost - and lost Oadly. .... /6 I 0 o 0 Co
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The commercial success of light oranOs speaks for itself. New branOs were hilly successful, anO cnere were lots of them: BRANDS LAUNCMED ).974 - 1984 1984 ~ (12 MOS. MAY) ITL - PLAYER'S LIGMT EXTRA LIGHT ROR - EXPORT A MEDIUM LIGHT MILD EXTRA LIGHT ROTH- ROTHM~ SPECIAL MILD EXTRA LIGHT ITL - OU MAURIE~ SPECIAL MILD LIGHT ROTH- CRAVEN SPECIAL MILD ITL - ITL- ROTH- 8~M- ITL- BAH- ULTRA LIGHT MENTHOL SP. MILD MATINEE EXTRA MILD 8ELVEI~ EXTRA MILD & LIGHT PETER OACY~N EXTRA LIGHT NO. 7 LIGHT B & H LIGHT CAMEO EXTRA MILD VISCOUNT #I AND lO0'S R~ -VANTAGE R~ -V~TAGELIGHT I~ - MEDALLI~ B~H - ACC~ R~ - SELECT 11.7 2.7 1.6 2.3 .9 .4 2.8 .6 2.7 2.5 1.4 .} 2.4 1.4 .8 .9 .7 .6 1.1 .5 .9 .6 .S TOTAL EXTENSIONS ~T~N~ mT~ • 41.3 .../7 L;1
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Smokers oegan to experience rea.__~ product change. The sales weighted average tar levels for the market, essentially staoie through the eariy 1970'S, dl'O~N~"d significantly. 1973 74 75 76 77 78 79 80 81 82 83 17.0 16.9 17.0 16.6 15.8 15.0 la.2 13.7 13.~ 12.9 12.7 The rate of switchin9 rose su0stantially to the point ,here, in the late 1970's, almost I in 5 smokers claimed to have changed OranOs in the past year, twice the pre-light norm. Now, r~wever, it would appear that the party is over. Virtually every nook and cranny In the tar spectrum is filled. Although they continue to grow, the rate of expansion of light Drands is reducing. Retailers are Oeglnning to refuse to accept lower potential Or"ands, the rate o? switching is do,n to a much more normal level, every major track,harK is exten~-o to at least two offspring. With Canadian smokers' neeO for "less" apparently sated with options, it is easy to understand marketers' tendency to look nervously at their hands when asked "nat's next?" Already we 0egln to see (a~ yes possioly participate in) "some of the more flae~oyant out less relevant new br~ clevelopment that characterized our industry oefore it emOarKea on marketing predicated on the relentless logic of "Lights" as new orand developers look for novel means or difrerentiatin9 their OrarzLs. .../8 O o tj-I 0
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* The CanaOlan market Is not seen oy Canaaians as non-Cark~dian - there are no international oranos that are perceived as such despite their increasing prominence in the rest of the world. C~L - R JR - TEST MARKET - WlTHORAWN. * The Canadian .~az~et is a uni-taste maz1<et. With the exception of mentnols, it is almost entirely flue cured Virginia. Smokers are ooreO. Smokers have compromisea on taste. Smokers try a lot of American cigare t tes-occasionally. PLAYER'S SPECIAL BEND - NATIONAL - FORECAST FORECAST i.2~ ACTUAL 0.5~ • All Canedian cigarettes cost the same anO smokers are increasingly under Oucess due to rising taxes. Fine cut volume is up. Price segzentation wOrKS in a lot of other places. saved in the USA Dy generics - wny not? GEINERIC.~ - 8ASTOS - ESTIMATED SHARE - O.2P~ A company l~as oeen AnO recently a couple of new ones: 0 0 (_m •../9 O (./i oo
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* 100mm are growing in Canada - mayoe it's style, mayoe it's value for money, mayoe it's a little of ootn - it mus___~t oe oecause it's 100m: ROTHMANS SPECIAL MILD 10O's ) ROTPI4AN5 EXTRA LIGHT i00's ) ROTHRO~ HENTHOL 100's ) S~lare unknown Financial FCospects ... 0ouotful * .~=ORT~ NATURAL LIC~IT??? ROTI-E4A~ - NOTIYE AND F~r.RF~ - ANYONE'S GUESS. Ano we nave a few of our own on the books waiting patiently to oe further developed: * 5PEARHINT??? * JPS??? Here's an approach capable of keeping prc~tct and pack 0evelopers hopping for a decade. New things, different trdJ1gS, innovative things, new packages, purple cigarette paper, 120mm orarzls, polyvent gas trap, crmzcoai filter, new smoking material - a staggering array of Orands stnJggling to oe different. It ,ould oe foolish to indict these iaeas. Some of these entries will sell - some will make money - some a;e viaole. But there is an important difference oetween these entries and lights. Smokers neeOed llgnt Oz~mds for tangible, practical, undeEstandaDle ¢usons. It is difficult to see Droad needs answered to 0y these intzoOuctions. ...Ii0 G O L.n Co
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POST "LIGHTS" If these laeas are not oz~aoiy relevant, then what is? It is possiole even now to see now smokers' reactions have Oeen modified oy one success of lights, and, if not aefine specific ozand options, at least isolate trm characteristics of products that have a gooO chance of success. How have lignts modified sm~(ers' neea for "less"? I. In spite of tneir commercial success, lights nave not moderateO tne oasic force tnat caused them. Smokers continue to oe very concernea with the affe:t of smoking on their health. They continue to indicate tt~t they intena and nave attempted to change their Oenaviour with respect to sm~ing. Lights nave not zeduced this either over time or amon9 smokers .~o nave emo~-~ lionter OranOs. In fact, their concern has increased In spite of the new aiteznative: "SMOKING IS 0At, W,~OUS FOR ANYONE" INTEND TO QUIT INTEND TO CUT 00gN TOTAL ZNTEN.) TO NODLFY TRIED TO QUIT TRIED TO CUT DOWN 198a 1976 1984 MILD OTHER 74% 79~ 72~ 26 45 50 a3 ~3 Z9 19 i9 59 64 69 62 41 43 44 43 57 59 61 58 •../ii (jm xO
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2. In spite of its commercial success, the new option of switcnin9 to a miloer oranO Ooes not surface as one equivalent to quittin9 or cuttin9 oown either in smokers' intentions or their efforts. Smoking itself continues to oe isolated as a oenaviour to oe avoided despite the emergence of relevant new ways to smoke less. 1984 ALL ~S IN PAST YEAR TRIED INTENO TO: TO: QUIT 4~ 4.5e~ CUT ~WN 59 19 SWITCM MILOER 30 3 S~~ 29 ). Although light Orands have clearly estaolisr~ tr~selves as offering aore or less stz~gtn in terms ol" tar and nicotine, this discrimination is only loosely related to "health". In fact, there is very little 0ifferentiation of oranOs on an image statement "For smokers concerned aOout their health". A oranO like Neaallion (Im9 K.5.), positioned to De "synonymous with ultra milCness", condemne0 oy 99.2~ of CanaOian smokers as "smoking air" manages to achieve only 5.9 on "health" on a 9 point scale. •../12
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198} IMAGE RATINGS LAUNCHED LAUNCHED PRE 1976 PRE i976 ~-IARE STRONG HEALTH STRONG HEALTH F_XF~T A 7.9 PLAYF.~' S FILTER 6.6 ROTHMANS 5.5 qu N~RIER 11.6 F.XF~T V~IUH|'B NO. 7 1.7 BELVEDERE 1.8 CRAVEN A 5.4 R.AYER' S LIGHT 11.7 EXIST MILD .9 EXPORT LIGHT 2.} MATINEE 3.2 Ckl NAURIER LIGHT 2.5 ROTHMANS SPECIAL 2.8 PLAYER'S EXTRA LIGHT 2.7 Ou M~V~RIER SPECIAL 2.7 VANTAGE 1.1 BELVEDERE EXTRA MILD 1.2 CRAVEN A SPECIAL 1.4 5E~T .5 CRAVEN A ULTRA .3 MATINEE EXTRA MILD 2.4 VISCOUNT .7 VISCOUNT #1.6 ACCCRD .6 MEDALLION .9 8.0 }.I 7.4 }.5 6.} 4.6 6.1 4.1 5.6 4.1 5.4 4.1 5.2 4.5 4.3 4.8 5.6 4,4 4.9 5.0 4.4 4.8 4.3 4.9 4.2 5.2 4.2 5.3 4.1 5.. 3.5 5.4 3.4 5.3 3.0 5.5 2.9 5.7 2.7 5.6 2.6 5.9 2.5 5.9 2.5 5.9 2.a 5.9 2.4 5.8 2.3 5.9 Ligl~t oranos nave not, apparently, been the smoking anO health panacea that tl~eir success might leaO us to expect. ~n smokers are asked the question outrlgnt, the inferences in the infozmation are confimeO; even among milO sneers. AUGUST 1983 "Do you oelieve that Io. tar an~ nicotine cigarettes, llke ultra milO and extm lignt cigarettes are less narmful to your health than l~tar anO nicotine cigaEettes?N TOTAL MILD OTHER YEs T NO 52 46 .~ DON'T KNOW 9 I0 9 ...I13 c~ r~
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Clearly Lights have ofrereo one solution to the smokers dilemma. But it 1 is a far ~mre partial and imperfect solution tr~an sales would leaO us to suspect. 5mokecs remain prepossesseO oy exactly the same concerns that brought aOout the prollfezation of successful lighter brands. They, presumaoly, remain open to anO need new ways of delivering LE55. The underlyin9 premise for the last convulsion is unchanged and incompletely satisfied Oy LIGHTS. It is useful to consiOer lights more as a thira alternative to Quitting ana cutting down - a oranded hybrid of smokers' unsuccessful attempts to moaify their naoit on tneir own. IM~ - POSITIVE VAU,F.5 This alternative r~s not been acnieveO, regaz~less of how well these Orands have oeen marketed, without a heavy price being paid Oy smokers on the positive emotional imagery-laden side of smoking. Our market estaolisr~d these introductions Oy traaing on the image equity that existed in major traOa,arks. The executional elementS, oy and lazge, OattereO away at creating correct product perception. "Lignt-ligntet-ligntest. were achieved Oy insistance on lighter pz1~sentations - ptoauct stow imagery - white pac~s - pale colours - milcrmss ck~,Inated copy - common generic ~ualif~ers, all struggling to estaolisn a precise place on a sliding, relative strength scale. m o C. •../14 t_m t~m
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The cost of this approach over time and over the numoer of variations on ~ne theme that nave oeen atte~oteo, has oeen a diffusion, if not exn~Jstion of tne i,~ry that t~ese traOemaz1<s teptesented. The price of getting smokers to unOerstand one positioning element preclsely has been paio out of the orano personalities. Brand perceptions in the Canaoian market nave been largely collapsed into tna pragmatic ano the ooservaole. The aoility of ~okers to differentiate oEanas on the more emotional dimensions is suostantially impairea. LIGHT ~RAN0 PATINC~ (24) 1983 9 I FOR A SUCCESSFUL PE~50~ 5HOKED MORE BY ¥0UNGER F'EOR.E 5NOKED NORE BY MEN FOR A PERSON PARTIOJ.P~ ABOUT PACX A FO~U~ BRAND RANGE 5.~-4.5 5.8-~.3 5.8-3.1 6.0-~.4 6.8-2.7 1 NOT FOR A 5UCCF_~L PERSON ~OKED NORE BY OLD~ PEDPLE SHOKED MORE BY WOMEN FOR A PE~ NOT PP~TICL~ ABOUT PACK AP~ NOT A POF~ 8RAND BranOs in the new lignt market ate oOviously cnaracterizeO oy blandness. This proolem is compounoeci by tJ~e fact t~at as manufacturers nave attmpteO to return to more of the relevant emotional imagsry that cigarettes de~end on, they ~ave found tremselves conflned Oy the relatively narrow range of imagery lighter products will presently tolerate- outdoors, active, healthy, natural, =oats, planes, wate:, neat young people Going neat young things. Trying to solve t~e proOlem has actually coq~ounded it anO orands ate better differentiated today oy their graphics t~n Dy the visual depiction of their image. •..Ii5 CD ~rl CD ,,O
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The result is tnat smokers are ooreo. In a market where personality in orand cnoice is such an important part of tne positives of smoking, they are faced, increasingly, with a olar,~, amor~s lump. Increasingly. ,e see oifference - any difference - as a thing causing smokers to sit up ana take note. SOCIAl. I:~ESSJRE - THE NEW NECATIVE TheSe effects of light intzoc~ctions nave Oeen further oOscurea Oy the emezgence of new po, erful pressures that nave little to ao with personal health, nat Oegan as a small group of fanatics has ballooned into the major anti-smoking thrust: * Municipal oy-laws define ,here a smoker can and cannot acceptably "light up." • He pays more and more for this product pecause of taxation policies that increasingly seem punitive. • Medla and Indlviduals encouraged Oy media increasingly press mira on passive smoking issues - personal confrontation. • He sees non-sazxing increasingly emerge as a positive marketing platform for ,J~ird perties - life insurers - saoke-onc~rs - rent-e-cars - hotels, etc. ...I16 m 0 0 w ",.o Lm
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* He faces the prospect of higner health care costs to oefray his purporteOly grea~er sr~re. * etc. * etc. * etc. Canaalan smokers in 1983 trz~gnt secona nana smoke was very (35Z) or saaev~ac (~7~) harmful to the health of others. They had refrained recently from smoking so as to not annoy non-s~o<ers (47%). A significant minority (3~) claimed smoking was only barely acceptaole. Ten percent (10S) ciaime0 it was not acceptaole at all. Asked what restrictive action they would support: supported further restriction of cigarette aavertisin9. 3~ supported a complete advertising 0an. 29S supported restricting the sale of cooacco products. 71Z supporteo increasea advertising on the dangers of smoking. A an amazin9 28~ supported ~axation aimeo at making smoking unaf f0r0aole. Social Olsapprcoation forces smokers to accept the same self-deprecating y~ke they accepted with smoking and health. Even as they agreeO with ana trieO all the right health preserving strategies, t~ey now have all of the correct social responses. But there is the same Quiet desire for a smoklng-related solution. They re~ain sn~<ers who wish they weren't Out know they are. • ../17 I o 0 LJ~ 0 t_m
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"0o you think the tooacco inouscry should aefend the rlgnts of smokers?" YES 51~ NO OON'T KNOW IS These numoers will presumedly increase with time. Social pressure, cou~ine~ with increasing prominence as smokers' numoers dwindle (either in fact or in puOlic admission), will force the smoker, only imperfectly satisfieO by liohL Orands, towards an increasing self-perception that he is not only a less healthy, Out also a less ~olesome individual. And still, he will continue to smoke seeking less cnargeO alternatives. SO WHAT? In oroa~ terms, relying only on this wide information, it is possinle to see, in nuum terms, the Oeginnings of the type of needs driving the majority of smokers. They do not emerge from the "light" era with fears that have Dean su~stantially allayed. In fact, the need that created the opportunity for lights has intensified. In a world v~ere you coulOn't smeke end you coulc~'t not smoke, lights offered a hyorid solution Detween equally unsatisfactory alternatives - less smoke. But they were a short-tern solution, arguaOly more reassuring to smokers ~ they were in the act of swltcning to a mild brand than they were when the smoker rN~ finally acclimatized and their new tar level represen~-~ the status .../18 m ~> o m
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quo. LiOnts nave stoopeO oein9 tn__~ealterna~ive and nave oecome an alcerrmtive - pernaps an increasingly unreliaole one as we puolicly cut our own throat wicn Barclay - like tar squaOoles. The Smoker faces t~is "relapse" in an environment of new unfamiliar pressures, ,mere mUCh of the emotional pleasure has Oeen strippeo from his brand. "Great taste", "ennanceO taste", "taste OreaKtnrouon", - the mainstay of the new OEanO developers low-tar-plus t~9 of tricks, do not seem like ~Jor options altnou~ they are sure to please discreet groups. Les._.~s- attenuation of the smckin9 experience - new innovative ways of delivering perceptually les_.._ssproOuct appear far more promisin9 - comOined with relevant, new, evocative imagery. "Less smoke-more emotion" should Oe a maxim against which, it woula appear, the real saliance of new orar~ concepts shoula De testea. Not surprisingly, this fits with ,nat consumers claim to want in terms of oran~ improvement. They want ~ysical and sensory attenuation of smoking, rnere is so,~ evldence (and a wealth of qualitative evioence) that they want more emotion. .../19 0 t J1 0 t_n CO
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9 LABEL "HEALTH" VARI/~S - STRONG - FOR StO(ERS CONCE.RN~ P, BOUT HEALTH '~Y"VARIABLES - LOTS OF TASTE - GO00 ~TERTASTE - IRRITATING TO THE THROAT - SATISFYING "IMAGE" VARIABLES - FOR MEN - FOR YOUN~ 5NOK~ - FOR SUCC~ PEOPLE - P/~I/ICULAR ABOUT PACK - A POPULAR BRAND OWN IDF.AL SALIANCE EXT./VERY It4OT. NOT IMPT. 5.0 - .6 42~ 17~ 5.0 +1.1 51~ 15~ 7.1 + .} ~ 5~ 6.3 + .9 54~ 1}~ 3.7 - .8 6~ 9~ 7.5 + .3 5~ 5~ 4.9 + .1 6~ 72~ 4.7 + .1 .5~ 7.5~ 4.8 + ..) - - 4.0 + .8 9~ 6}~ 6. ~ - .1. ,~',~ 4~ In consumer terms, this view of the future can be summarized as follows: IB The Oas~c neeO of sm~<e~ will be fo¢ less, as it has been. In or0er tnat they may continue to smoke anO in order that we may remain competitive, we will nave to conceive and macxet an increasing array of p~ucts that are c~loly ano relevantly "~kced". e These proOJcts will nave to oe sol0 as branO.____ss. Images that return emotional value to cigarettes in new an0 0tffe~ent ways" will be necessary both to re-establish a positive link between smokers ana ozands ar~ to increase the precision of our appeal. There is a goo0 possibility tJ~at this Imagery will have to ex~nO outsibe t~e parameters of t~adltional toOacco aceas. A pack design U~at 0oes not look llke a cigarette pack may 0e a strong asset for futuze 0rands. •../20 .~ "-0
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3. Relevant, distinct, well-~anageO trach~narks will oe an even more scarce and valuaole commooity. Lights leave us with one further legacy that is far more mchanical. It is unlikely that smokers will relinauisn the tentative foothold light Oranos have given them. We see almost no evidence of s~kers switchin9 to stronger 0rands. All previous convulsions in the market nave presenteo smoKe~s with differences truat were aDsolute - filter versus no filter, menthol versus no menLnol, Kin9 size versus regular. Llgnts nave createO a relative difference that has fragmente0 the market armtically. The aays of offerin9 an innovation to very 0roao groups in the market are gone. For tne foreseeaOle future, even for highly relevant concepts, a suostantially larger number of discreet 0rands will De requirea to spread any innovation across the tar spectrum. New orand developers are feced with the prospect of more, smaller launches - an expensive, frustrating resource-drainin9 proposition. C0~CEPTS This is not expected to De a popular position. It not only asks taoacco-men, generally traditionalists (wi~ good reason), interested in selling satisfaction, to start selling ~uat must look like car0onated wine in cans, but it is also hard to imagine realistic means of providin9 "less". In fact, it is prooaoly not as difficult as it seems. The rapidly expandin9 smokeless toOacco market is in fact an expression of "leSS". •..121 O G O C
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Pipe tooacco, seen as not imaled and therefore presumaoly safer, certainly less socially loaoed is another tantalizin9 proposition. Ho,ever, tneze are also pragmatic options within the tailor-made market tnat are less raoical. The following two sumaEies outline current ITL development projects that are 9ovez~eo to varying extents (and with vazying ~-grees of conscious application) 0y t~ese principles. The first, "SLIMS" is a highly specific, we expect low potential concept (2.0 snare total) that Oirects these rules against a very confineO taz~et. The secon~ is a far less evolve0 project we ourselves aze still stzu991ing to c~flne, where the application is suOstantially more specific and ~nere, if "cracKed", gains should Oe suOstantially lazger. .../22 O Q
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SLIM CIGARETTES 51ims were originally conceived as a small scale, tactical intrusion into a small out growing lOOmm segment. lOOmm 198o 19a..._L1 19a 19 (May ) 2.5 2.6 2.8 }.2 }.7 Our option in this arena was basically a lighter variation on du Maurier Special Mila with wnicn we representeO about ~ of the segment. Our competitors haO recently introduceO a lOOmm length into the highly female }-9m9 segment which, while it was not overly successful (about .3), was enough to indicate that we should at least lo~k at possibilities in this pz~OJct area. Very early in the exercise, the difficulty of making a 10bin brand financially viable in a unlmorlce market became obvious. Lowe; maEgins meant that the brand nad to be more tr~n 90~ net new, regardless of its snare perfoz~wnce, to make money. Slims as a concept emez~ed from this basic problem. We assumed that style and image benefits were playing a significant role in the growth of lO0's. Slims seemed capable of providing tr~se benefits in conjunction with a cost zeduction that we coulO tolerate. . ..123 0 c~
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The Canadian market currently has only one slim preduct (Contessa slim, - .I~). CanaOian smokers' familiarity with slimmer Drands is largely a result of the unsuccessful attempt Dy Philip Xorris anO R3R to introOuce the 120ram Plus anO xore oranOs in Canada in the early 1970's ano a result of overflow advertising of Eve and Virginia Slims from the U.5. These ~e assumed ,~ulO define the parameters of the concept as essentially imgery baseO. Propositions of this nature In CanaOa have historically sho,n themselves incapaoie of acnievin9 significant share levels. We were tnez~fore pz~areo for a minor introduction. However, we agreeo to attempt to establlsn a proouct rationale to support the imagery. We assumed that if we could ascriOe a motive for making the Orand slimmer trot was product ~aseO rather tnan image based, we could, if not expanO the potential, at least offer it a degree of resiliance and longevity. As a result, a series of potential product claims revolvin9 arour~ reduction (irritation, tar, etc.) were Oeveloped. •../24 L.,m 0~, (..,,,a
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STRENGTH ~E ~T IMAGE SHARE TOTAL ITL m u F.XR~T A 8.1 3.0 PLAYER' S FILTER 7.6 2.8 HARK 10 FILTER 6.8 2.9 o.~W- du MAURZER .6.2 10.8 EXPORT NED. 6.1 ..... ~.1 NO. 7 6.0 L,2 ROTItNP.'~ 5.8 3.7 PETER 3AO<SON 5.7 1.3 BELVEDERE 5.7 2.1 PLAYER'S LIGHT 5.1 8.0 CRAVEN A .5.0 5.0 EXPORT MILD 4.5 .7 PLAYER'S X LIGHT 4.5 1.9 EXPORT LIGHT 4.4 1.7 NATINEE 4.4 3.7 ROT~ SPECIAL 4.2 2.2. 4.2" ..... du NAURIER LIGHT ~ ......... NO. 7 LIGtT 3.7 .7 du mIJR~J[R EPECZAL 3.6 3.7 ROTt4q~ X LIGHT 3.5 .7 PETER 3AO(SON X LT. 3.5 .7 BELVEDE~ X HZLD 3.2 1.5 VANTAGE 3.2 1.9 CRAVEN SPECIAL 2.9 1.4 CRAVEN ULTRA 2.7 _ __4 .ATZNEE x .zLo .... ACCO~ .6 VISCOUNT X HILD 2.4 1.4 IqEDALLI.ON 2.3 .9 VLfiCOUNT #1 2.3 .5 8.7 9.2 8.7 . 2.8 12.1 18.0 4.4 4.4 5.9 8.1 9.6 4.8 4.3 TOTAL. 74.4 41,.7 32.7 C C C~,
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Tne initial wave of research suggested tnat tne potential for slim pro~Jcts was greater than we had anticipated. It also uncovered a crediOle, relevant product rationale for smaller circumference cigarettes that promised a wider appeal for a wider tar spectrum than the Natin~ trademark coula effectively commano. As a result, the concept of 8etamax changed in two major areas: II Slim cigarettes would 0e marKeteO as a new segment instead of as an emoellisnment on a single orar~. 2. I.T.L. would, initially, market three different options in oroer to increase the precision of our appeal: a) around 13-14 KJ az~no 8-9 ~J c) azoun0 3-~ ~9 - 0u Naurier Slim - du Naurier Slim Light - xatinde Slim These slim entries were defined as follows: .,.126 m 0 L,r'1
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POSITIONING SLIMS TneEe is little Question that a slimmer proouct, oy its pnysicaJ Oimensions, clearly communicates style-fasnion-Oistinctive-female imagery. These image oenefits along witn the "feel of the proOuct" appear to constitute powerful motivators for women. However, tne~ is slim hope that large numoers of ,omen will aoopt these orands if image oenefits represent the only zeason for their existence, and t~e only explanation of why the cigarette is slim. It is, t~erefore, critical tnat the segment oe estaolisheo in smokers' minos on a proouct/sJrcN<ing experience claim that is directly attrioutaole to the reOuced circumference. Tnls is not to say tnat the i,~age ano tactile oenefits are not important. These ,ill, in all prooability, represent a large part of the real reason for purchase If the oranOs are successful. T~e proOuct claim should, however, "deflect" smokers away from the uncomfoEtaole position of acKnowleOging that their branO selection is oaseO solely, or even primarily, on image consiaezations. Tnerefore: • Brancls intzoOuceO un~ler tfL-se two projects will stzess that tna basi.~c reason for the manufacture of slim circumference cigarettes is to provide a proouct benefit. The benefit will Oe t~at, because they. contain a little less to~acco~ slim cigarettes deliver lower tar Out .../27 0 0 ¢..,"i 0 o", cD 0",
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/ /' ",,,d
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provioe ootn taste anO ease of Oraw comparaole to ~ranOs of relatively nigher Oeliveries. Slim prooucts will, in essence oe positioned against "lignts" as an innovative means of acnievin9 lower tar smoxing. 1 PToOuct Oecoration - package format - p~age Oesign argo c~mmunications will all attempt to tastefully project - out in no waN emphasize - tne imagery that is already at work in the proouct Oimensions. We will not struggle to tell the ~oKer what she alreaoy knows through overt, special, unique or "a~normal" treatments of any marketin9 element. The only "special" element of these oranOs will oe their slimmer ~ircum- ference. ~o The main use of imagery will De to place relatively greater e~sis on one or more of t~ image asp~ts of slims (i.e. a oranO is Oistinctive/ fasnionaole as opposeO to more for women). •.. 128 Co
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PROJECT vM5 Project vN5 covers tne introOuction of slim oranos under one du Maurier tra0warK. VHS will involve two options - a "parent" oranO at arounO 13 mg of tar ano a llgnter "extension", to oe introouce0 simultaneousl7 at 8-9 mg of tar. ~IC IMAGE ANO POSITIONING VERSUS Ou MAURIEH Brat,s ~er project VHS wili oe oeveloped as extensions of the du ~t~urier traOemarK. They will nave their own ioentity as opposea to claiming direct derivation from any one of the three existing Ou Maurier 0ranOs. VHS will present tne fasion, style ana 01stinctiveness of slim proOucts as a logi~al extension of tne ou Maurier traaemarK's "contemporary class anO quality" image. Tne project will not attempt to represent itself in any executionai area as overtly ano directly female. A more direct female position will oe reseEvea for the ~atin~e option. du NBurier Slims representation of "contemporary class and quality" must remain quiet anO tasteful an0 at all costs avoid any sense of pretentiousness. .===~ o •../2"3 O c~ c7~
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TARGET MARKETS The primary target for ~ne nigher delivery entry will oe sm~<ers of King Size and I00 mm Oranos 14 mg of tar and nigher. The primary target for the mi~oer component will oe s~O<ers of King Size ano I00 m oranOs in the 9-13 mg range. In Oemoojrapnic terms tne oranOs ,ill focus on females unOer 35 years of age. If the simul:aneous introckction allows for any greater precision between the two entries, tnen the nigher tar entry ShOuld compromise in favour of the younger half of this group while the lower tat entz~/ compromises in favour of the oloer half of it. PROOUCT Tar Circum- Fil ter Tipping Leve___.~l ~ fez~nce* ~ Lencjtl~ 13 mg 84 mm 23 mm 20 mm 2~. mm 14 fag I00 mm 23 mm 25 ~ 30 mm 8 mg 84 mm 23 mm 20 m 2~, mm 9 mg 100 mm 23 mm 2.5 mm 30 mm * Standard I.T.L. ciz~Jmference is 25 ram. I If ventilation is requireO for these proOucts it should De invisiole. Care should oe taken to ensure treat puff numOer ano ouz~ rate are comparaole to non-slim pz~ducts of similar tar levels. In terms of suojective cnaracteristlcs, the taste of the product shoula oe ckJ Nmurier baseo, flue cured, virginia. The proOucts should deliver per puff taste and smO<ing mechanics that compare favouraOly with those of non-slim oranas aoout 2 mg of tar higher t~an the individual slim ratings. .../30 m o c.n 0 0
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Any "decoration" on the ~roouct itself will oe suotle, tasteful ano "normal" . N~ m The east names for the oranos within VHS are the most oovious - Ou Haurier Sllm (13 rag) and Ou Maurier 51ira Light (8 rag). Our oasic thrust in ire project is to "normalize" slim ptoOucts in ozoer to ,haKe their powerful ~nage~/ ana tactile 0enefits accessiole to smokers in the context of everyOay use. Within this framewoz~ these names achieve two things: First: they relegate the concept 0f "slim" to a role where, like "lights", it represents singly one more categorical way of making cigarettes. Second: it positions these Orands as essentially "Ou ~auriers" w~icn have Oeen modified to provi0e cne oenefit of slimness instead of the other way arouno. ~ING In terms of g~ic desi9n the package srmuld Oe clearly Identiflaole as a direct aerivative of the ou Naurier tmc~mazk. It sr~uld not, however, ~e directly refez~nceo to any other specific orand currently within the trademazK*. •../31 m o o
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It snoulo avoiO faocy-sDecial-unlque-eleganC treatments. InsteaO the desi9n must finO a oaiance that allows the pack to Oe "oroir~ry" enough for evem/aay use while at the same time suotly reflecting the fashion-style- distinctive components of slims within du Maurier's "quality contemporary class" fralaework. Although the oesign snould oe attractive to females it should not Oe intentionally or overtly feminine. Pack designs must reflect erie two appropriate tar levels within the project (13 ~ and 8 rag) anO, aitnouo~ they snoulO oear a "family resemolance", they must effectively oifferentiate the light from tne non-light version. ~ICATIONS The communication of this proposition should avoid platforms which are either clinical or scientific. It should, insteaO, Oe atticulateO ,itnin a context that reinforces the fashion/style/distinctive image of slim cigarettes as a creoiole extension of du Maurier's quality contemporary class image. As with pacXaging, creative snoulo nave a female appeal, out not oe overtly or uniquely feminine. Creative s~d include cues ~ic~ suggest t~e oetter feel of the product in the hand. •.. 132 0 0 L,m 0 o-,
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PROJECT BETAMAX CONCEPT Betamax is t~e Natin~e entry into the slims aEena. The nrand will de differentiated from tr~ du ~eurier entry in two Key cnez~cteristics. Io o It will offer a product Er~t is commparaole witn the smoking characteristics of current 2-5 mg Or~u~Js. Co, red to du ~urier it will stress relatlvely more of tne female attriOutes of slim product although the central t~rust will remain a "product story". BASIC I~ AND POSITIONING VERSOS MATINEE The orena will de an extension of tne Hatir~ ~raoemaz1< as opposed to claiming direct derivation from either one of the two existing Natin~e orands. In most executional areas, however, it will drew heavily on ~tin~ Extra Mild's positioning and design cnaz-dcteristlcs for its alrection. In conjunction with r~e oasic pz~c~ct story, Beta, nax will exploit the female chaz~cteristics of slims. As is the case with Netin~e Extra Nild, tr~ female appeal st~uld be implicit Out not overt. •..133 o o c.am m
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Given ~he entry of the ou Haurier image ano tt~e "reouction" of the projecteo 8etamax proouc~ to a 3 mg level, a oirect aoaptation of the current Nattnde Extra MilO imagery would oe very appropriate. T~,~..,E T HARKET5 Tne ptima~ target for eetamax will oe current smokers of 3-5 m9 orands. In 0emograpnic terms the target is females oetween the ages of 25-s49 witn primary empr~sis plac_~o on tnd unoer 35 portion of tnis group. PROOUCT A $tazZing point for pro0uct development is: PR00UCT Tar Circum- Filter ~ve__.! ~ terence 3 mcj ~ mm 23 mm 2~ mm 4 mg I00 mm 23 mm 25 mm Ti~oin9 Length 30tnm • 30ram CaEe snoul0 0e taken to ensure that puff numOers and 0u~n rate do not differ significantly from those of non-slim products in the 3-5 mg range. IJ~ tezms of subjective cnazlcteristlcs, the proO.mct taste should oe Natin~e oaseO, flue-cureO, virginia. A menthol version of ootn lengths will also 0e 0evelopeO. •../34 O o G c~
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1~e proaucts snoulo aeliver #er puff taste aria smoking mechanics tnat compare fav~JraoZy with those of oranas 1-2 mg nigher tnan tne siim proOucts tar ratings. The tipping colour will oe ,nite. Pny Oecoration on tne pro(~Jct itself will be suotle, tasteful ano "normal". m Tne Orano will oe calieO Matinee Slim(s)• PeCKAGING The initial wave of development appears to have left us close to a realistic pack expression. Any further development will be a refinement of the oest of these initial prooes. COMMUNICATIONS As with VHS, the primary ooJective of 8etamax aOvertising creative will Oe to position it as a oranO ~ich delivers specific proauct oenefits as a result of reOucea circumference - a little less tooacco ~t~icn gives lower tar while maintainin9 the taste and ease of Oraw of relatively higher delivery orencls. •../}5 ~> 0 0", t~m
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lJniiKe V~iS, creative for Betamax must ensure tnat these oenefits are seen to oe oelivereo specifically in relation to the very miio level of smO<inq (3-5 4) ~at Matinee oest represents. Clinical or scientific platforms are to oe avoiaeO. The pro0uct claim snoulo oe articulateO ,itnin a context that exploits the "more for women" image area of slim pz~ouc~s. Given trmt VHS will offer elements of "contemporary class anO quality" and given Lnat the revise0 product specifications for @etamax are in line witn the .Matinee Extra Mila product position, the "active woman" posture currently useo for Matinee Extra Mila is an acce otaole ~latfo~.~. Aitnou~ the sales potential for the orand appears to be in excess of a category "8" launch, Bet~nax may 0e communicate: witnin the same "aavertisin9 dollar" as Matinee Extra Mild. The increased precision of appeal and the reouced tar entry point makes this aavantageous from ooth a strategic and communications point of view. Creative snoula not, noweveE, restrict itself to slashes and two pack ads. rne Matinee Extra Mild creative can ano snoula form an integral part of communicating w~at @etamax is all about. •../)6 o o
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8etamax work ~roceeoea largely as outlined. The nigher tar options posea proolems, wnen one smoke cleared, we found that although tnelr concerns were very similar to the mathematically mindeO smokers in the ultra-low area, the language anO level of unOerstanaing of light oranos was significantly less. In order to get tne~ to recognize the proauct oenefit, we virtually naa to explain how light Orands were currently oeing maae. The exercise of oringirg them to understand ,nat we were doing reouirea significantly mor___ee comunication than we coulO hope to effect through our availaole channels. The higher tar project was simplified significantly. The lack of need for a direct oranc comparison allowed us to explore a wider range of imagery options. ]he final position was defined as follows: •../37 _.... (..,m C~ ~=.m, -...,j
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~O~CTVH5 ORIGINAL concept Because it is sli._~m, it is also mooern ano aistinctive. Pzo~uct USP Slimness gives you a lighter cigarette witn tries a me taste. ~and/ Traoemark Derivation A direct 9eneric off- st~ot of Ou Haurier Red anO/or Light or Special. Treatment of Slims Integral part of name. I~Ey Contemporary, distinctive, classy - non-feminine. Tarqet Strencjth Slightly milder than du ~utier patent. NEW ALTERNATIVE Because It is mooern and distinctive, it is also slim. "Slimness makes it milder". Oerived fzo, Ou xaurier ~ut done either as a new du Maurier (Ou M X) or an endorsation (X oy du H). predict, Out teouced component on the pack (liKe the treatment of "filter" on £xport A or kir~ size on ~otnmans). Contemporany, distinctive, classy, non-feminine - casual (not "nightlife", not tP~T~- tional/classic). Slightly milder than ckJ Nauziet Red/ ~J Naurier Light. ...138 L..r-I Co
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~4 ..eles unOer 35 pre- sently s.~.~ing 10-12 and 15-17 ~j K.S. 100 ~ n~anos. NEW ALTerNATIVE NOt specified in comunication. ProduCt should tazget for same as du Maurier Red/Ou ~aurier Light. Females ano upmazl(e~ males unoer 35 years of age smoking I} mg+ anu iO-12mg K.S. ana lOOmm oranos. Both orands are virtually aeveloped at ~nis point am are scheOulea for flrst introduction in the fall. •../39 N C:D CD (...r'1 C:D O', ',,O
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,° 5ENS~Y THPR0~T "tess" can, anO we assume must, oe offerea to smokers in ways other than tar reouction/healtn improvement. The followin~ project, "C~A~I~ORO" in uur vernacular, looks to capitalize on what appears to oe a significant anO increasing need among Canadians with respect to the suojective quality of smoking. ~RA'dFORO" oegan as an exploration of how we coulO make snort term tactical gains in ~ ,~entnoi segment. Nentnol oranos account for a slowly Oeciinin9 6.3~ of the Canadian market. ITL's corporate weakness and opportunity can oe clearly seen oy looking at the performance of our oranOs relative to the distrioution of menthol ous Iness. 1983 i TAR SEGMENT m 13rag ÷ 1.8 9-12 mg 3.5 -5 mg 1.0 CAMEO ~ ITL I I 1.4 78~ .8 23~ I I T OTAL 6. ) 2.2 3.5~ .../~0 I 0 0 (_n I 0
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After tne initial extension of Cameo Extra Mlio in tne miO 1970's, we were forceo, oy priority pressures on our resources, to eliminate further marketing effort on menthols. Competitive activity ano the natural evolution of tne segment left us Oe~ind ano in tne early 1980's we oegan to consiOer means of improving our performance at the Lower tar levels. Facea witn virtualiy no current information in menthol perceptions and motivations, we OeciOed to Oegin Oy revlewin9 menthols on an overall Oasis. This Qualitative work on the perception and role of ment~l was coincidental with a major project on O~and images in Canada. That exercise proouceo some startlin9 evioence on now smokers saw orar~s, what they thought they neoeno ~nat they claimed to want. The comolnation of these insights significantly alte~-d the airection of trm project. Alt~ou~ the initial concept of a new menthol option remained a development priority, this new input suggesteO that there were larger things at stake. It was summarized as follows: P~OECT CRA~ORO POSITIOH #I DID WE ST~T? I. CzlwfOrO's oojective is to improve our ~eclinin9 snare of smokers movin9 from non-~aenthol to menthol orar~ls. .../41 0 0 Ljm o r~ .===~
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2. Basea on tnis oojective, the exploratoIy phase of Crawford has focused on ur~ers~ar~ing the fnotivation for smoking menthol aria their current perceptions in oz~er to lay tne ground woz~ for a better menthol/ menthol-like alternative. A ~30R GAP 3. There is a significant need among smokers for a product that reduces or el£~inates the unpleasant things t~at occur in their throat and oral cavity as a result of smoking. Thirty-seven percent (37~) of smokers claim "less irritation" is an extz~mely important quality in their cigarette. T,enty-eignt percent (2~) of sma<ers make "oetter aftertaste" ~heir single oiliest pz~auct i~orovement. They want this moaezltion to a 9reater oe~ree than taster low tar or any other single proauct attrioute. 4. Non-menthol smokers nave not identified any orands that respond directly and acceptaoly to these concerns. The only standing perception is that lower tar oranOs are less irritating. The attribute in these oranos is paid for with taste and satisfaction. In spite of tneiT desire for improvements in aftertaste, sackers do not perceive significant aftertaste aifferences among existing orands. ... 142 0 0 0
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5. This need for a "cosmetic" improvement is Oroao and, in effect, without distinct oe~rapnic skew in terms of age, sex or current tar level. It tends to oe focuseo in Erglisn CanaOa, specifically in Ontario and British Columoia. "C051~TIC" CONCEAN5 - M~ITHOL 6. Nentnol aoes oeliver these "cosmetic" improveaents ano can aevelop a mz~et position as a result of them. -Tne oasic va~ue of ~,entnolation is its aoility to moOerate or soften certain aspects of ~ne saoKin9 experience. It recbces the oral ana upper respiratory Orawoacks of cigarette smoKin9, accordln9 to R 6 0 and according to qualitative responses from Canaalan smokers. - It a~ears that tnis reduction of "cosmetic" proOlems is the primary motivation for the use of menthol cigarettes in the mrket today. - The potential in the ,arKet for a ,ell-designed menthol pro0uct positioned as a solution to these "cosmetic" proolem~ is reflected in the 30~ snare achieved oy menthols in the U.S. market on precisely this platform. •../4~ O CD t.J'i C~ P,,D (_,,,I
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Ii. As a result, non-menthol smokers presently reject mantnols out of nano oasea on: TaSte: m smokers say ~hey do not IL~e the taste of menthol. There is a reason to oelieve that these taste cojections refer less to the actual taste of ,~enthoi than to an unaccepta01e reauction in tobacco taste wnicn is projected ~y smokers into a z~ducea satisfaction. 5ma<ers we could deflne as real "seekers" or "cosmetic" 5~provement rate rich tooacco taste and satisfaction to ~e mor_~e important than the market in general. Irritation: non-menthol smokers finO cuzz~nt menthols provide too much coolness. By oefinition, uno~Llanced menthol does proauce lower tobacco irritation, out it re, laced it with Its own form of irritation - menthol "~urn" - a cure worse than the disease. THE U.5. ,(I@:~ROAO'I - VALID IN CANADA? 12. whereas our mentnois force s~kers to pay for the desizaole sensations o? coolness (irritation reduction) and ?resnness (aftertaste Improvement) with the loss of non-mantnol sensations trmt tney find necessary to smoKin9 satisfaction - ~m~erican ment~Is more selectively el iminmte/reauce neqatives, allowing the smoker to experience the attrioutes ne flnc~ desiz-dole. .../45 m O G m
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SO WHAT'S WRONG WITH ~NTFI3L5 IN CANADA? 7. In Canada, menthols are not wldely trw:uo~ht of as acceptaole solutions. They are no__~t percelvea to deliver "co~etic" Lmprovement. Their use, even on an occasion oasis, is aecllnlng. 8. E.~osion of z~gular/occasional menthol use can prooaoly oe attrioute~ to: a) ~ne rate of introduction and growth of low tar proOucts which nave successfully competeO with menthols for t~e position of a less intense smoking experience - assisteO by o) tne wit~rawal of meaningful mantnol support levels x~uirea to reinforce their crenentials as acceptaole solutions - at a time w~ c) menthol brar~s "non-product" i~es r~cl nlrroweO to an unacceptaole level of oloer femininity closely tied to ~ac has so elegantly been oescrioed as '~oroiOity" - illness related use. 9. More importantly, current Canadian menthol product design anO the smawinQ experience they proviae severely limit the potential for wide acceptance. I0. ~ant CanRdian menthols are "unDalanceN~". In Cannat manthol-related sensations are the dominant characteristics and the more aesiraole tooacco Characteristics are oOscured or lost altoqether. .../4A o o o
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15. The validity of tne "0alance" P~nerican pzoouct concept in Canada is reflecteo in smokers' positive response to two concepts: a) "The coolness of a menthol that lets the full tooacco taste come through witnout one taste of menthol"; ano o) "Afresn new taste experience that outshines menthol - it not only tastes fresZ~ex wnen you smoke it, it even leaves you ,itn a clean fzesn taste". I~NTHOL SMOKE]~- THE ~ ~.)T OIFFE~ENT 14. Mentnoi smokers are motivated in tneir OranO selection by the same desire for an alleviation of the "cosmetic" proolems of smoking that appeals to non-menthol smokers. They are differentiated from non-untnol users in terms of nat t~ consider to oe positive sensations in smokin9 and their importance. Haskinq of toOacco flavour for current menthol smokers is si~nirlcantly less of a ne~ative~ indeed it is a positive. 15. However, they also express an interest in furtr~r reOuctlon of "Cosmetic" negatives. w •../z~6 r,...,m 0",, r,~
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P~T LIEVELOFMENT IMPLICATIONS 16. As a result, test pzxxlucts proouce two responses: a) alternative flavours (spearmint) ,1~Icn furtner extend tooacco masking appear r.o nave a reasonable likelihood of success against menthol smokers. They are juOgea to have a little more than rag appeal to non-mentnol smokers. o) Balanceo prooucts have a reasonaole potential against non-menthol smokers wnereas tr~y are a step oackwaros for mantnol smokers. ETC. .mmmmm, 17. Hantnols apcear to imply an impo¢tant smoking and heal~n moOeration - not surprising in light or the reasons for their selection. ~T IMAGES - Ti~4~E;,e~ 18. The range of non-ptoouct I¢~ attrl~utes exploiteo oy ~entnols is ..r~rzo. and unflattering. They are olOez female anO strongly associate0 with occasional use during illness. 19. drands are not well oiffez~ntlated. .../47 C~ C~ (,.,r-I 0
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20. As a result, Cameo, or virtually any existing menthol trademaz~, is not ac~ropziate for tnis ne, oevelspment project. Tnere appears to oe no major liaOility in using a non-~entnol trademark, du Haurier, Player's, Matinee anO Sweet Caporal were tested among smokers as potential parents for tnis concept. In vez7 preliminaz7 work, smokers perceiveO no significant incompatioility. SO M~AT? The size anO performance of the menthol segment in Canada today does not reflect the complete potential of our industry to market products with "cooling-Eefres~ing" attrioutes. It reflects the potential for menthol Orends at the extreme level of moderation. To a significant segment of the market, mentnol effects are highly Oesiraole out are inaccessiOle in toaay' s products. The exploratory work on Cra.forcl indicates t~t r~ere is a meaningful opportunity for a Orand concept wnicn uses menthol/menthol-like additives to selectively reauce or eliminate undesirable "cosmetic" aspects of cigarette smoking, while leaving the positives intact. • that tnis~ can Oe ex~loitea ~ orano. The =selective" reduction or elimination of undesiraole "cosmetic" aspects of cigarette smoking will mean different things to different smokers, w~at do they want reduced? By how much? M~at ,ausc oe left intact? How much m r~3
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traoeoff will they accept? Ioeal proOuct movement is not ?ocuseo in any one age, sex, or tar group - anO we know these groups alreaoy select oifferent attriOutes wit~ different levels of importance in their present pz~oucts. Tnese conclusions leO to the followin9 project Oefinition: POSITION #2 2. Positioning C~awfoz~ will oe positioneO as a cigarette v~icn Llleviates the undesiz~ole sensory aspects of cigarette smoking. The main conditions it will actress are dryness, irritation and aftertaste. 3. Tamet Group All of our infomation at t~s point indicates t~t smokers, interest in the Crawfoz~ concept is not skewed to any one tar l~vel or C~mOgl~4ohic 9rouP. As a result, the target 9rouP ?or C~awforO Is define~ as the greatest numOer of" intez~st~ smokers who are likely to provide an opportunity rot exeoutional consistency. ...I~9 t...m c~ cr~ ,.,,o
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Crawfozo will initially aim for an introduction of one oranO at two levels of strength. An upper strength level will De targetec at unOer 35 year old males and females currently smokin9 nigh, nigh light ana mid tar Drands. A milder "companion" will De targeted at male anO female smokers of mid light, special and traditional low Orands. The primary en~nasis in terms of executional direction will De the nigher tar smokers. The milder option will Oerive from tnis central design Direction. If a milder derivative of the nigher tar option turns out to De less appropriate ~nan other unrelated conce~ts at the lower tar level, a separate development project will De isolated to meet the needs of thiS group of smokers. i It snoula De noted that tnis approach leaves other significant gaps in the market open. There is little doubt that the Crawfo~ concept is also relevant to a meaningful numOer of smokers currently using Orands under 5 rags and existing menthols. These development options will De pursuea as separate projects (Projects 3~zz and ~ellow - see chart). 4. ProOuct The Crawfozo product will use menthol or menthol-like additives to achieve tr~ desired improvement. It will continue to explore along two paths - a "better" menthol cigarette - and a new taste (spearmint). As opposed to existing cigarettes that use coolants, nor,aver, the ?inal .../50 _.. o 0 o 0
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Crawforo will initially aim for an introduction of one orar~ at t,o levels of strength. An upper strength level will oe targetea at under ~5 year oi0 males and females currently smokin9 high, nigh light anO aid tar branOs. A milaer "companion" will oe targeted at male and female smokers of mid light, special and traditional low ~rands. The primary emphasis in terms of executional direction will loe the nigner tar smokers. The milder option will derive from tnis central design oirection. If a milder derivative of the higher tar option turns out to Oe less appropriate than other unrelated concepts at the lower tar level, a separate Oevelo~nent project will oe isolated to meet the neeos of this group of smokers. ]t snoulO oe notea that tnis approach leaves other significant gaps in the mezXet open. There is little douot that the Crawfoz~ concept is also relevant to a meaningful nun~er of smokers currently using orands under 5 ngs and existing mantnols. These development options will De pursueo as separate projects (Projects Jazz and Mellow - see chart). 4. Product The Crawfozo product will use menthol or menthol-llke additives to achieve the desired improvement. It will continue to explore along two paths - a "better" menthol cigarette - and a new taste (spearmint). As op~x)seO to existing cigarettes that use coolants, however, the final .../5O 0 0 tjn w w
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100501632 I I High I I Highlight I 6.6 I Hid I I I I Mldllght I I ~eclals I 0.6 I Trad lows I I I I -Smg Smokers - 35 years old Male Female Total i Smokers + 35, years old I I Hale Female Tota~-I I I I 3.3 I 1.7 I 5.0 I 16.o I I I I I I I I 1.} I t.3 I I I I I Mentllols I 0.6 I I 1 I I I o.1 I I fotal I 7.9 I * Chart ex ProJect crawford: I 7.0 14.9 I / market. ~nokers who wanted Ied aftertaste as a percentage of the total Project Mellow: Project 3azz: • ~kiles and f~.ales - 35 years or age smoking brands 13 .xj and up and all ~.okers of 9-13 mg"~'ands - r~n.-menthol • 15.SZof all smokers • 59.1t of all smokers who expressed a desire rot Improved aftertaste . All smokers of nat-.enthol brands - 5 .¢J • 2.8=; or all smokers lO.~iof all smokers who expressed a desire for Improved aftertaste • Current menthol smokers • 1.~ of all mokers • 4.81; or all smokers who expressed a desire for Lqproved aftertaste
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proouct must deliver the positive effects of the coolant with as little re~JCtion as possible in the oesiz~a~ze attributes a smoker experiences in nis current cigarettes - in effect, a good smoke foremost that als__~o Oelivezs the benefits of cooling aooitives. The necessity of maintaining strong non-menthol smoking characteristics in trm face of the moderating influences of the cooling additives may necessitate the use of "tastier" toOacco blends than current flue-cured virginia toOaccos and/or flavorings and casings. The possibility of this proouct oesign consideration is not excluded under Project Crawf0rd. The likely tar levels of the two options are 13-15 rags and 9-II rags. King size and regular lengths will Oe Eequiz~d at Ooth tar levels. 5. Communications Communications must also express the olsic product benefits ano crmz-actezistics without creating rejection Oy being too reminiscent of either current menthol products o.~r curz~nt menthol imagery. A_ range of conceptual approaches will be developed with the two-?ol~ objectives of: a) Cotzectly end credibly esta~31ishing the prockJCt'S chazecteristics. b) Validating the procluct concept in non-proc~ct image terms for a target that is distinctly younger and more male then current menthol CD c~ brands, t.n ...152 -" 0",
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0evelopment ,ot~ after tnls focuseO on oran..~d oevelopment. Proauctl tecrnology was relegateo to explocato~ work as we attempted to un~erstar~ tne neea more completely as well as how to express it. The situation was akin to that of a premature light Orand. How do you tell smokers that this oranO is Oetter for their health wnen they have aOsolutely no fram~wor~ or vocaoulary with whlch grapple with the proolem? "All cigarettes have aftertaste - except this one?" The real crux of tne proolem is now to tease out the suotle interplay of communications elements. Some of the early, rough, unsuccessful attempts follow. Significantly many of tne pre-lignt strategies emerge in tnis new context. Significantly proOuct technology and what is possible is not at stake. • ../5$ o L,'-I
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I00501655 • i m, t !
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I .,.i 9~910~001
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° ! i /-% Z~910~;O01
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| ! --% Sure. ochers hove rilkad suoorh Seem even tasted smooth. At first. Then, • f,v cLsarertes tater. gmooth wasn't Imooth any Bore. Until nov. l Thta one lao*t Just smooth st the fill stere -- tt's smooth ,11 the way [~JJ chrouih. ~~ Smok, a|te[ suok, J~y lack after pack J( Ic took , ,,hSle. If II GLnd I vatted. IJ U N N l t3 910 ;001
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Your first puff tells YOu It's dlrrerent than ony otr~r (19ofette you ever s~mke4. Smother. Clear. |rigflter. Vith the u~i~lstokoble pleosure or fine prime tObOCcO. Try I t. kKI sultch Mver Ogolo, 61910 001
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Q u pn I ~:~~,~ ~ WA~I~r.~ I~ WNI'W~s ~ro.,~ ? 017910S001
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-% I I I II ii i i i WHO MADE CISAR dS TASTETH IS GOOD ? C 0 ~ l ~ 0 D 0 R E tl _ ~ I I I l"l~ere's • fr@oh n~ caste i~ el8a~etcea. A taste chac colas tram • smoother blend of tobaccos. And fro~ Player's |00 years of knovtnll h~. IIzglO~O01
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f% In -II mnnn in I il U III ,m , ~L, gLO~OOL
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0 i 100501643
Page 64: 0100501644
r"- ,a, ' ,oI .od ~ ,alp' • ~, we,ll' IWlUnUJl~ bllO'e. I - - • _ :~. ~.,,.,~'~-:.; ~.... ~,,~,.r, :~..d....],_~ ..........,,, .o . ..~"mii~i "~| ".'11~' ,~'1- / -'~_~~'~..'~.: .,~,~~.~. ~.';3,~'~P~.:l ,,., ........,-,. ' ~~~...~:q., .... ,,-'.,,',,- t - . - ' ----'.:~'..,~,1T,*,~,,.1 ","" '" ...... / . - . -" _ . L,.~..,~:,4J'~'}.:~'~.'~I~,,~"~ ..... ,,. ,, ...... ,. I ~.~ ~~ ~.{s~.~);~ ~.,~-'_~.~'i "; .~ _'~t~.~,~,~"''" I ,~.,,, • ,.,, ..... ,. 1 ~~l~.~~..~:,~i,~.-~. :,1 ,-.,..-,.-. n -.I ;]lr, .~|" -' * • I 1717910 00l
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.oo ~Cl;,910SO0 L
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t You know how you look and |ook for something, and then find ouc there's no such chlng ? Like, you k,tow, the perfect woman, or the restaurant chac's Just right. Well. I found one of chose chlngs. A cIgareCCe l'd been chinking about for a long clme. Suddenly chafe LC was. Very very smooch. Just like I'd imagined ic. Oh, I notice you're smoking it coo. A whole new scory 9 '910S00l
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f.. l[~9[O~O01
Page 68: 0100501648
--- -- ii iim ii i • iii ~fn • . v_ |! 4G~Sn°¢ |t~ve on | or,,r.,os,¢. I . ~s,,, R, or, I or stale. | All It Oots Is tqste | terrific, J Isn't thO¢ ell You | • mr ? ! l E sr THIN61TXI$ CI RETTE 81~910c~001
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we realizeo tnr~e cri:ical facts in terms of tne concept: I. We oio not neeO to explain now we achieved the proOuct oenefit. 2. "Fresnness, cleanness" ,ere not creOiole oenefits. Smokers were not interesteo in one iOea ,hen it was "smoke tnis cigarette to make ~our ~ouLn feel clean". This ,as a oenefit not relateo co • ~o, ing. ~oz~. pleasuraole smoking oecause of the elimination of negatives ,as motivatincj. 3. we neeo.~o a ,,eans of expressin9 the proDlem that raiseO it ooliquely within ~ne context of ennanceO pleasure. The following concepts were far more successful to a point ~ere numOers I anO iA nave most of the ela~ents oetween them necessary to get ~ne point acceptaoly across. ...15a c~ ~=~ C~
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I % "1") It I L ) ......... :;:! AVANTI
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t~3 I|3 C~ ,l". ! AVAN'J' Q~ "~°|. • ..o.~ li.~- • ,I o ,° I'."~. !;.~..
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I1) !
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"4"P~'~" L a, °._ ! c'-~iC~O0[
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;" :::.. -y ~cgLO~O0[
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i' t_(') L..I'-") "l,'--'-- du MAURIER, ~; ~"~"~,~'~ .|T " I
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Trm followlr~j was teQuLz~ of any potent£al products: 1) A z~luctJ~n on some scale of the side effects experienced Oy sc~ers. 2) Good tooecco taste. 3) /~sence of /Oentit'ied menthol taste at the Oe~Lnning... and over tlme. We have 1easel that In a purely ClUalitatlve sense: 1) The use of OetectaOle levels of spea~,lnt Is not vlal~le. 2) The use of ol~vlous levels of conventional menU~l ls not vlaole. 3) The use of' "low" XeveXs of menthol can acl~eve perceived pz~luct benefits In the area we ate looking for pz~vtdecl t~e level does not mask the smoklng pleasure - real toOacco taste - of the product. 4) mile some tespo~lents may be a~le to Oetect a lo, level of menthol, 0triers may not. 5) A ,mirlm recipe (i.e. an A.M.8.) might enhance t~e samklr~ chL~ctettstlcs sufficiently to pemlt a low level of mentl~ol to achLeve cezt~atn sensotLal tmprovemenLs. (If you boost the smokLn9 experience, you have gtute~ latltude Ln allowLng mnthol to a~ll~ms LttLtatLon and haziness (aftertaste)). ThLs may De more dLff'Lcult to ach/eve wLLh a conventLonal flue-cured cl~Ltette. •../55 O 0 cj'l (_n
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6. We must oe very careful as co what is Oone with the smoking satisfaction s/de or the equation. 7. "CrawforO" proOuct candiOates cannot have a detectaoly non-tooacco paL'K aroma or sidestream. . Some of the test cigarettes were perceived Oy the respondents to oe uzT/stale and have a fast ourn rate. It remains to oe determineO if this was a function of the menthol load or the cigarettes themselves. 9. ~en mentnol levels ace at the "suo-thres~old level", respondents appear less likely to identify sensorial improvements in aftertaste an~Jlor rmrsP~ess than ~ menthol levels are at/or arouno a threshold level. The project remains In active development. Its fate is currently in the hands or R~O who are working towards reasonaole proOuct alternatives. 0 0 tjm o L/I -..4
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IAN ROSU .-° { INDIVIDUALLY HEAT SEALED CIGARETTES I. 3trate£ic Objective: By off(~ring cigarettes in peak smoking condition in a,,y unit volume to increase: .94e b. C° Total sales through increasing price accessabJlity. Market share through a genuine product benefit. Profitability through reduced variable cost reduced F&SV costs control of distribution up to the End User. 2. Constraints: 1. Innate conservation of target smokers. 2. Resistance of trader to lJar~ margios on stick salos. ~. lncreasin~ accHssabilitv 1:o young. 4. Physical protection of the ci~arett,:. 5. Ease of opening - consumer acceptable? . Visibility of individual stick VS. cost constraint of clear films. 7. G~mater bulk - shipping costs. 3. Product Specs: - standard product and hot foil dye stamp. - continuous rs~ or board backed units. - printed film or blisters. .I/II 0 0 o
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,? 1..,:t,r,i -':,~1 How: miccowave conditioning on maker, - Adopt existing technology for heat sealing on maker thus ,jiiminatEng packing unit. • Marketing How: -- *l,l,:L,,ry 5u,~l,:d for Perfect Ouality" U:-.-,,LdIImE * v,jlu,: ,iddud image must be enhanced by n,:;w packaging. Product branding (Hot Foil} Film branding Dispenses Self liquidating Permanent Packs - oDo- 0 CS) LTI 0
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I AN ROSS I'RU3EC.T BLUE SKZES I. Strategic Objective= To capitaZise on a potential retum to fullFlavour and s,zn~ory expectation shows low tar be discredited by offering cigorutte with markedly superioo smoking characteristics. paJ'LiuuIarly qualitatively at physiologfcally acceptable ,J,,lLv,:ry levels. . • Constraints= I. No empiric evidence of a consumer demand. .'. V,JrLable cost imp]icatJon. jo Unconventional technolo£y would be a long tt~rm dew~lopment iF Feasible at all. 4. Can the concept justify a price premium? S. Strength of exiting full Flavour brand images. ". t'r',l,lucL SpeciFications= B0/84 x 24.8/27.0 X 20 mm. KC or SC US or Va Blend PMWNF 14 mgs approx. Nic: 1.4 mgs I. I,:,:h.Lcel How, - Blend and/or - Annular/semi-annular conGtructLon - Front end lift - Aerosol dispersion me/.. =mmVb 0 0 0 CP~ O
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/2 • I 5. MarketinR How: - Direct appeal to nostalgic o~ the good old cigarettes. - Strong. supportable product claims. High image consonant with product characteristics. -cOo- 0 0 o
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:.!-~klRl CIO WURMSER ;~1t11'~[ SNUFF =. 1;trategic Objective= To capitalise on the potential downfall of the smoking habit as the only mean to achieve nicotine satisfaction by participating in a parallel product market which is free of social/health concerns, and with attractive profitability potential. .'. Constraints: ,~) Alleged slim irritation. b) Potential criticism from the medical/dental profession. ,:l It:cnr, olosical know how non-existent within BAT :; I'l,Ijf). ~. Product Specs= Loose snuff in lJ to 2 ounce can in oval form or 20 pouches in rectangular can. ~DI :;Larti~r low tar, with menthol and full flavour extension. 4. Technical How: To be developed based on currently existing industries in thn US, Sweden and Denmark. . I'].Jrkut lID~ HOW: - Open to creative treatment - Product category free of any advertising restrictions. -o0o- 0 0 L]3 C7~ C~ r~O
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MAURICIO WURMSER LOW SIDESTREAM SMOKE/PLEASANT AROMA I. Strategic Objective: To pre-empt/avoid potential volume decline from consumern pressed by the uncomfort and distress caused to non- omokcrs in social and work environments by providing: Lh,.,'. with and offer that brinks reasurance to social smukir,£ whilst delivering good taste and satisfaction. 2. Constraints: a) Risk of government enforced extendebility to all brands. b) Difficulty in achieving parallel taste satisf~Li(),~. c! Potential negative consumer reaction to strange non- tobacco taste. d) Questionable real psychological pressure releas~ for. cortsumors, 3. Product Specs: e] Minimum actual reduction in SS smoke of 50~ to be visually perceivable. b] Use of Ecusta velvet paper or equivalent. c) At least 20t of expanded tobacco in blend to maintain puff no. d] Delivery levels open to market specifics. 4. Technical How: Further development work required. .eJle 0 C~ t..yl 0 C~ (,,,,j
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~,:j':-.,.I. iftt,~ Iluw: t;n,xl~ur, ic~tion platform bnsud un sociabiliLy £ocus wit.h p,;rceived lower SS smoke and pleasant aroma on i't:inf'orc,,rl~n t el~.menLs. -0o0o- 0 0 c]%
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=;I dlF BROOKS .'4~=tJlF[LiJ M[.NIHOL/SPICE FI.AVOURED PRODUCTS I. 5trato~i c Objective: To develop a product which would offer something extra to~and potential menthol smokers who require either menthol plus an overt modifier or a cooling/spice alt,rnative to menthol. • I'u,,~ LrainLs : I. [he spice modifier must be highly tobacco compatible. 2. Thuru may be a carry ovt~r /build up effnct which would r~oult in an undesireable aftertaste. 3. Thu concept may be confined to existing menthol markets or only be applicable to certain geographical rugions. 4. Retention of flavour during shelf life and after pack opening. ]. Product Spec: A nomal king size filter, ~ull flevour US blended product with a strong supporting blend. 4. Technical How: Feasible using current technology unless ~lavour retention requires the use of micro-encapsulation either distributed in the blend or incorporated on the cigarette paper. ~m/e= 0 0 0 C~x O~ ~3q
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• ! a" ',. Marketln~ How: I. R,~quires extensive testing to establish type and l,.v,~l u? modifyin~ spice. .'. R,:quires qualitativu wurk Lo establish inability of concept. 3. Positionod as Froth, cloan, hl)~h taste alt~:rnatiw~ to menthol. ~. Frush breath assuranc~ and &ood reoidual a~tertaste. G. Possibil~ty of less o?~unsive sidestceam tha. normal cigarettes. -o0o- 0 0 0
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,.lJCfF BROOKS FREE BASE NICOTINE :. :;t__r_a_te£ic Objectives : More efficient utilisation of in situ nicotine in cigarette smoks. ~Q Constraints: I. Reliable measurement system for free base nicotine. we require a better understanding of how to produce the effect. 3. Unknown effects when applied to Virginia blends. J. Product Spec: U~; blundud cigarette in general. • I. r,:f:hnical How: I. Use of ammonia treated sheet material. e Use of di-ammonium phosphate on blend on sheet. 3. Other 'basic' treatments for the blend 0 [hu same uffuct is nol achieved with alkalLnr F i I~ tars. 5. Rarketin& How: 8 Full £1avour brands - either no message or reinforced flavour message. 2. Low delivery - better tasin~, special process etc. -o0o- 0 0 0 C~
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DAVID CREIGHTDN FRDNT END LIFT 1. Strate2ic Objectives: To improve the taste and flavour of the first few puffs on cigarettes. l) It is assumed that smokers are most likely to make judgements about the cigarette quality in the first few puffs. 2) It is assumed that "need" for smoking is highest when s cigarette is lit. 2. Constraints: People do not smoke like machines. It is understood th,~t they Oo Lake lonzer puffs at the b~£inninE of ~ ci~,~r,:l!, which will give an effective front en~ lift. Any additives 'front end lift' should be modest to remain c~dible. People will not want to change their 'normal' smoking patterns. Front end lift is likely to disturb normal smoking patterns. Smokers may have to learn how to smoke these products. 3. Product Spec: Can be applied to all cigarettes, but not effective on low delivery products. 4. Technical How: Several ideas in R & O: I. Blanced normal continuation with ventilation. 0 Q ==~==6 Co BaTie
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2. Codevac design e Structured cigarette with high ~lavour tobacco at Front end. 4. Low eFFiciency blocking Fllter such as HEE. CSF. 5. Blocking ~ilters o~ other designs. G. Addition oF volatile Flavour. '.. M,!,'k,.~._~t in H~H_~.: Uu iL a-d say "a better Flavour product" IJ~ .or stress "Front end lift" or anything technical. -o0o- 0 0 tj"l 0 C~ c~
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DAVID CREIGHTON CORPENSATIBLE FILTERS 1. Strate2ic Objective: To make it easier for smokers to take what they require from a cisarette. This means in effect that the filter will be compensatible and implies a high taste to tar fetus. 2. Constraints: e Is this an ethical thins to do? People why buy an B n~ product expect to set B ms. It is also undRrstood that people smoke cigarettes diffurunLly undur dJFfuru,,l. conditions of stress and relaxation so must bt~ ,Jwar~. that they can adjust the delivery oF individual uicdr,:Li,..; as well as snmoking, different numbers of ci&arettus. If a declaration that this product is elastic is made (which is the honest thing to do) the~ it could upset thu apple cart. If we do it without a declaration will a ,:,~ml),:tiLion blow tho whist, l,~. Should we monitor competition produnts Lo s,~u LF t.h,~y already do have "elastic designs'? Product Specs Orizinal concept aimed at low and ultra low products. Rust be careful with blend strength or a credibility gap will be found. Thus a low or ultra should be just moru than a prorate increase in deliver for the increan0~ in puff vnlume. It may be desirable to take thn~f~ chv~n~..-. sLup wi~u rather than as an ultra low that om(,k,~s li~,. full flavour. 4. Technical How: Not known but R & D ideas. 0 0 L jl 0 cr~ 0
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I. Optimise combinations of conventional maturial 2. Velocity sensitive ~ilters. '~. Marketin~ How: [f il. looks convnntional then just a better cigarette t.hot hulps you get what you want more easily. If visually different sell it as low tar with more taste end $1avour. -oOo- 0 0 o
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TED PARRACK ULTRA SLIM CIGARETTES 1. Strategic Objectives: le US Market : Develop new, mainly female-oriented style segment. 2. International : Develop new, higher margin, low price o~erlng. Constraints: 1. Physical product assembly 2. Consumer acceptance: a] Handling b] Mouthier1 c] Smoke quality d] Social acceptability e) Male VS Female appeal 3. Product Spec/Technical How= 1. US : 17 X 94 - lOOmm, 20 * sticks, unique box 2. Int: 17-20 X 80 - 84, 20 sticks, STO lO's Box 3. Average pu~=~-, taste/flavour profile" 4. Packaging configuration 5. Filter/Rod Assembly 4. Rarkettng: US 1. Female 2. Style 3. Secondary Bene~tts: a} Economy b] Low stdestx'eam -o0o- 0 0 c jl o i
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• . .° BOB BEXON AMELIORATED CIGARETTE I. ~trnte~iC Objectiv,~: Capitalise on the potential for a cigarette which produces less of the unpleasant aftereffects of umukirti~ irritation, aftertaste, dryness. 2. Constraints: Ability to make a product. 3. Pz'p, duct Spec: Regular and kinz size. Around 14mg , around 10 mg Noticeable relative reduction o? after,zPfects M.=[r,t,'r, anco or d,;=iruablc fL.mcte s,3tisfaction] cheractP.r- i sLJ,:3 durinf. ~m,,kJ,,{,,. 5. ,1. r,.chn i c.,~l HOW: Cuulants? Low~:r l,~vt: Is? New coolants - additiv,:s duolite filters cit.rus pack aromas saliva generators ventilation? blends? usinol Market inK How: position as positive, more enjoyable smoking experience. ,Io not conc~mtrate on pcoblem do not stigmatize Q 0 Q CTx -nOr)-
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. . I 'I I ha SCOTT I. StrateEic Objecti..ve: [o appeal to smokers of existing full flavour Kingsize Lrends through the concept of a fuller more substantial looking product. !:u,,L;Lr,~ir, Ls : "l.jl:tl [ I'hJ ry ~. Product S~ec: Conventional packaging material :",|/~G mm circumference long/kin~ size t <l,.~l,d,:d tobacco - Virginia/rood. Virilina/blundud ~ccordJn). • ,J m,jr.k,;t, requirerrkents, • ~. technical How: Already available (three castles) Product quality improvement possible but needs va)idatinc. • |.ml'~ ," I. ~ Imp'. ituw: {;ouLd be marketud as: a luxury ciEoretLa with appropriate packaging added value - extra tobacco, tobacco quality, smoking quality. For ti~e 'macho' male ;~ b.~i:k Lo th~ old days taste, type of product. wlluld require quantifyirm&. Ih,; uv,:r,~ll appPal oF th~ cuncnpt and thH Marketin~ appro,~ch 0 -oOo- O~
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.':LhL 'J~UI r ~IIORTER LENGTH/REDUCED TOBACCO CONTENT 1. Strategic Objective: To offer consumers value for money through our technical ability to provide the same taste/satisfaction as conventional cigarettes with a considerable reduction in tobacco content.* U,,ty structures will in most markets a11ow significant ,-u'~L '~.,vL,r~s being b~st.-d Lo varying degrees on tobacco w.: ; i'lll.,;,ld v~J lU r',-m. " Uased on the fact that only a small proportion o~ tobacco is actually smoked, the rest being disoipated during Lhi~ omoking process. CmJn:'; 1. ra i n ts : :;;,.'u~fLu duty structures whur,~ appli,~d will not allow For comparable cost savings. The product will be unconventional in appearance and it may be difficult to communicate th,~ concept in a believable manner• '. Product Spec= .I ....,,? sp~JcialLst paper [Papyrosa?] to achidve ol~w bur-=, ,-,=1.~, thurP.by cutting down dissipation. Posoibl,- u.;~, o? extra length holder. l'uo~JhlJ~ us~ or "ZO Luw circumferonct¢/,~xLro lengLh rather ..., small si~u cigarettes at same price as normal lt:n~th ~oy ~ cigaruttes. ~. I,:r:hlmicJt ilow: N,JI.i=ing new suggest,.:d in making technology - standard bl,:nd3.O~ Papers alrear~y available. PackagLng may require n~.w machinery dependent on filter type used. --- C7~ • ./.. (~-1
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• Market ir,~z How: Market as a new, unconventional breakthrough smoking really different. Pack design/advertising should reflect this difference. Pricing could be based on more cigarettes for same price (25 for 20 price) or even at a certain premium. Possibly 20 cigarettes for lower price especially if slim size/ extra length concept used. Side benefit of low sidestream which could be the main marketing concept under appropriate market conditions. -o0o-
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Hr. &.Ms llenth. ~ MI', ItoP. lrerr£81 / ^ I&D~rketlnF, Lie/son ~A tstru©tured creetlvltyt Iroup The a~has been sent I:o the foZlov/nl: )~r. I/.J,. Dt~IM~, WokLnii Pc. Nr. B. Broc~nun, 14LsrketJnlc Dept. / Mr. P. hithfull, Grsn CAnari& co. lcr. J-L. Mercier, Canada cc. Hr, 2~,t, Sandnfur~ l:.S.A,ee. Mr. E. S81o, FLnlsnd cc. ~r. J.JL.B. ICnl~l~hert co. Hr. N. I~urueer, t~trketLn£ Dept. Hr. B. Bezou, )4erketLn& Dept. Hr. T. Farrack, KsrketiN~ Dept. Mr. Z. Ross, 15arket/nj Dept. Nr. C,O. Brooks. R.Po PE.IUtTS ¢C+ Or. L,C,F. lleckun. ~lr. I,L. lleard. Dr. T. IUrJL, .tomb O',
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De&, s R£D/)tsrketius LtsioQn t A estrmi~tured el~stLvity' jtrouD &s you asy kaw the 1984 Research and DewLlopuent conference As to be ezpnnded tot• 8n |&D/NsrketLq Jo£nt Couterenen, This represents • sLnzLfXcant further step La our celt•sent to pc•An4 the wet out of the 16D/Nsrketin8 lntnrtace~ parttculnrly Ln terns of provldlnl sarkat£nS relevant Xeads for I~D project activity. SpecLfLctlly, ut ident/fy severnZ ke7 features of pre-proJeet plane/n| u~lch vouZd represent • heals for smrkatJj~ Lnimt to R&D activity. JrldlyD these ire that prospect/v• projects should have s clear consumer oz~entstion, be focussed on • d e44ned uarket sceaaz/o and ldeLUy • defined stamen• tarter, be 8ccompan/ed by at least provision81 thouehts en ccmunScatien streteKy for eventual project on•cone, and be or~sntsed tn such • ray as to 1•torpor•re live nsrket vslLdntLo•. An ot~rlou8 •ppruc~ to u~ttll/ IfLO/)brkttin/ thl~U~ on the pure•inn stud ev81utLoa o2 pro~¢t leads i8 to hrin8 •eXected R&D and HsrketinS pro~easioas]4 top•bet In discussion. The 1984 Co•terence represents • forusX opportunity to do thlsp hoverer ve are convinced, • 1on8 vLth Nlke Reath. that • snsllew scale concentrated creative session could be • ann• ~tluable preaabl• and poealble tnput to th/• Cou~erence. To this tad ~t have careful17 •elected • 8--11 Stoup (c.lO) of i~D/Kszltstl~ people to be approached to Jo£n this •structured crastlTltyt sroup, end ve • re pleeasd that you have been •ble to con~Lrn your tuber•hip of it, &11 too often 'creativity' seasious f811 tbrou~ lac~ of structured outcom, nor this reason ve are takS~ an approach uhlch enpttsllses oa 8spects of recent GIkDC Product Applies•ions group experience in the use of • stretesLc pro~tct •election systen. The npproach ts one to v~lch Stoup psrtLcSpants 8re lndtvlduaUy in•err/eyed durln| the course of • 3 cLo.7 seas/on usin~ • psych•In•ice1 technique destnned to identify the types of personal ~dsenants suede by each lndlv£dosl In decldln~ vhethar n given pro~ect vL11 be pore•tinily C7%
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• needful or not. These personal °Judgmmutal sets0 •re fLnally ~led lu s 8rcmp setooXoup and the ccmso14datmd Jet As used 88 • frsammrk for Sroup-e~ust£u8 any project Ldeu vhleb the Stoup £s exposed to, or has Ate•L( Saner•ted over the 3 days. GI&DC experience co~f/zu8 that thAs acts 88 s useful means o2 etrueturLn8 our evsXuatAsn of pot•ntis1 project Xnsds. &aether •omen faL1Ang of creative groups L8 the Zar.k of AnLt~L81 :input for the group to work ~th. Zn order to taekfe thAs, the eprLeem of your Joining tlzlLe sessAon mL~L be the req~lLroment ts provXde • t - 1 hour presentation for the |rOUpo lhtch 8z~up tuber provAde8 • press•tefLon, no Day I u~LL1 eoaprioe up to 10 bouts presentstLou flue. The theme of the prnseutatLon suet be • personal LnterprstatAsn of (8) the current tube•co usrketAu8 seeurXo, Ass key constraints elutlleng~ and opportunLtle8 (b) • prediction of future market trends, direetLous, constraints and opportunLties| (¢) s personal vLev of the current sad future deveZopnent of •crammer needs, 8ttAtudel, snd 8sgnent8; end (d) views em current end future produet trends, needs end opportunlt:Le8. The presentation should be structured An ouch • ray •s to end u~th two fully epecLfAed product project proposal8 JecoupjnLod uvlth reasonable epee.LfLeatAons of product pare•seers, consumer relevance, market scenario and. AdealJ.y, terl|et seam•st and eo~unlcat~cm strstelff. Xt £s most /mlpOZTJnt thst eopAes of the pressntatAon are -'de evs:iZable to sZI group tubers after the proseutatXon Ls gi~en. The qualAty of thLs group process viii rely lar|ely on thLs £nlmt, therefore certaAn poAnt8 should be berne An mind: l) Tou should not be eoutrsAnsd by local experience, your proposals shou]~l AdeaLly have same 8lobaZ relevance. Ai) You should feel free to be as croutAvely free-rsngLng as possAble An your product type proposals. Technical constraints usually apply to the teaZle•fAun of any LnnovstLve uotAon, bet they should be rolrArdad 8s open for diseussAon and not es exLstAn8 and l~Lndins. AU) You shou~Ld be aware that there are usw7 eels•place and pro•aXe themes u4~Leh BuSs•st them•Ires to shy R&D or NarketXng person consAderAnlB Adeas. A~Lthoush these asy be very real and everyday theses (SOS. de~Lvery reduetAon prolLrauns8 8ustat-tLng tSlltS) they ~L not be novel tO OcCupeutll of thAs group, nor v£11 they be d£scsrsabZy ernstLve, d 0 0 0 C~
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I JJOTEt To aid your personal creative process we append a rendou list of product fscts/ldeas/cumstr•lnts which •re offered as on lnlt~s2 triSeCt and perhaps dCsc~pl/ns tO vhatevar trains of tbou4~t you may wish tO pursue. Since your project propos•$s are to be firmly based on product, we viZl be pleased to advise on any detailed technical queries you nay have as 8 result of your pre-uork. These should be addressed to GI6DC Product Applications Group through DR. T. RZRJX. The substance of these present•rise8 vail be sub,acted on Day 2 of the esealon to Stoup discussions and further creative process. Day 3 vill be devoted to group couso~detlou of the psycholosical lnterTlevs to produce a systeu uhlch can then be used by the grcup to evaluate the project propositions alums with • selection of currently relevant R&D projects. The structure of the 3 days will therefore be as tellers: naJ_! DAT____~2 DAY 3 ~CTI0~ 1'0 STIATEG'r C PIOJECT SELECTIO~ COnCEPTs DISCUSSXONS OF PitESENTATZONS CONSOLXDATION OF INDIVIDUAL INTERVIEWS IgTO AN EVALUATION TE(~NIQUE Pmnrr~Tl0ffs INDIVIDUAL myra) ADDII"ZONAL CIF.qTZVE PROCESS (EVSNZIgG s I~DIVZDUAL Tm]tv2mas) GROUP EVALUATION OF PitGJECT PltOPOSXTIONS (SOURCZ : D~S 1 & 2 PLUS SELECTED |&D I~VT) d~thoush the core of this approach is crustive, the quality of input is detetu~ned~y hish and moat ~npcrtently, the outcome is a structured and systeaJtic evaluation of pruJoct propositions. The three-day eeasiou coumsQcas at 8.00am Tuesday 26th June and ends ou the evening of Thursday 28th Juue. Each day viii be hishly in.salve and oven~n8 york £s anticipated throughout. The venue viii he ~RE JJONTAGUE ARKS, KEKULXEU, ~RZRZ, and you vl2~ be advised c4 fuzT~er detail8 and co~irmad accosmodation upon our recept of your travel srrenpent details. 0 0 0 0
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I~ see this spptmch 8s providing an inportt~t ~d in oTnerj£ein~ tiOhbzketLq effort and pote~tiaLty provLdLLI • kay input to the 1984 HD~udutttn8 Coeferenee. eeee oSsin our ~mdus for respmdi~ to tMo • iu/tJLatlve. Please do not hesitate to contact It if you have further questions, psrtieubrly in respect of your indLvtdual presentation. WXth best reprds. Tours sLnceTr~TD I.Po TEIIZS C~Q Hr. A.H. Besth. Dr. LoCoF. BZack~tn. Hr. AJL. Meutrd. Dr. To l/rJ£. 0 o 0 oo
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o APPENDIX The fo11~ poluts ere ~silpnd m~17 as an £~ti~ otiuu~s for t~~ a~t creat£~ product pres~itie~m. They do not represent an ezhsustlve //mtiuS, but record meme prism product issues and constraints. Re/yin| on this lilt beyond its use 88 an initial mtiulu8 would be undesirable as it would produce a convergence of thinking at the 3 Day session. o Only 151 of the tobacco availa~le in s cijsrette i8 actually used (as drawn and inhaled smoke) by the smoker. 2. Hen•he1 the only overt flavour videly used on c/saree•as. o 4. Top dressing flevour 48 usually added for pack aroma and Its effect is Senmrally not 8ustat~d throughout the life of a pack of clear•tees. In terms of current technology n 'Sag cigarette that smokes lihe 8 loss* cigarette tends In reality to musks to 5mS in machlue euoked terns, and lOng in human (compensated) terms. o Conventional cigarettes rely on the c~bustton of tobacco releaslus nicotine and flsvour volatiles carried in smoke nerosol. o The majority of the vorldes c£prettes converse on eve main types, Vlrsinla flue end Sleuded. 7. Cigarettes produce • lsrse amount of debris and s~nell. o The machine smoked puff by puff delivery profile of a conventional product is an accelerettn$ functions where first puffs are lower deltvery and final puffs are higher delivery. o Clsaratte papure and filter materials are a potential subs•rate for cos•lug or including materials. &re we maklug optiuma use of ctssrette papers and filter materiels? 10. ghat does the smoker smoke for? Rw can we opt/mime it? is the role of visual and tactile series•lena? What II/. Pack•slug /::ovation ... shpa, saterlnl, size, clsarette appear•ace? 12. Feat is value for ~ney in consuur terms? perception? Hey do ~ exploit this 13. gby use shredded tobacco? Vhy conventional CA filters? 1~. Is the conventional shape, else, appearance of cigarettes tnmutsbleT 15. Uhmt i8 the desired 1J~e t/he of 8 sin|l• clear•tee? .... lens and l/ngertu8, short and 88tilf~6J~T o 0 c~ c~
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!I:;H iSYR) ROI .~x :Y I0 I.'OMMUNICATE LARGE TARGET MARKET .:I~II.~I LEAD TIME TO ,'IAN'I F AC riJRAB I L I T Y ='d~JITIVE MANUFACTURER ;~IJST IMPACT =iLUH BEHAVIOURAL VALIOATION ltIGH EXTERNAL RISK ~lil;|! COMMERCIAL .tI.'PLICABIL£TY LOW (SYR) ROI HARD TO COMMUNICATE SMALL TARGET MARKET LONG LEAD TIME TO MANUFACTURABILITY NEGATIVE MANUFACTURER COST IMPACT LOW BEHAVIOURAL VALIDATION LOW EXTERNAL RISK LOW COMMERCIAL APPLICABILITY C~ 0 {..jr'l (Z3) ...,..I= (3O
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HIGH V LOW BEHAVIOURAL VALIDATION A measure of the evidence which exists to support a proposition i.,~. nvidenco versus speculation, where high = specific consumer buhavinur and low ~ Lnferential speculation. LARGE V SMALL TARGET MARKET the size of the target market expressed in equation terms as the nund3er of potential markets X the projected size of each affected segment within those markets. SHORT V LONG LEAD TIME TO MANUFACTURABILITY The time x~quired to design the p~oduct and develop the necessary technology in antlcipation of scale production (where short = ~1 ymar and long =~>3 years.) EASY V HARD TO COMMUNICATE Ability to express the claim clearly within the constraints of the given market. HIGH V LOW EXTERNAL RISK rhu probability of provoking a significant attack from external groups which could undermine the ability of the company and industry to continue to operate profitably, ee~ee 0 c~ co
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POSITIVE V NEGATIVE MANUFACTURER COST IMPACT A measure of the economic benefit to the manufacturer considering vartable costs, fixed and semi-variable costs, and asset utilisation. HIGH V LOW ROI (S YEAR) Defined by: 1) by: Total offer development cost 2) Total marketing investment requirement by: Variable margin yield derived from unit volume potential HIGH V LOW COMMERCIAL APPLICABILITY Master construct. m..m~ C~ 0 0 e.~a, O~ Co
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U~~ O~lreZmlei~tl~ C~t~Pl' COMM~3~I1L~ Ut4K~ 0 0 0
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H~e f~T ro~~ .............. ~ f~:IT taT~,'r~. ...... N ...... . - "r~pm.~m~I /~~ I)~ H~B i~wCiX~#~ Kvpos O C~ ",4
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~.~~ ~Pt~-~.~ 0 0
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T~ NE-U L~~ H~,IT (:x.rrs~oe ~ Teo~c:)e,I fjS~ To~~~ RteH I~~ ON TOTAL LO~ RJE:TOP-~ ON TOT/K. ~S~" ~'~U~P.C'~ e~" N~,wrlv~ t>~ Lr-i CO
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,~~ o~,'o,I' M~L~I~. ~l~ . C~T s~,~,C) rj~lurH Low £-,v,O£-~r-~ oF • Hmr,,,,(~ oPl'ot:n~,+ t~ 6.etf' IHf'/~.'[ VOLUHE BUIIJ)ING C~ 0
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---
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ql-.-..... "H~1.14.1.3 321~..}~11SzIGI~I 1-I~I~ "It~ICL':)NO
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FA~u~L £,~~ Ca, m4u~~ Piw~c oi~r,x,s~ ~,~ ~ or-nMr~mer,~ co,a~ C~3 C~ C3~
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V i0 ! 0 0 STRUCTUREO CREATIVITY COMPONENT I V5. I I 2 All T~I~A~ o 3 1.17,~ SS 5 ~11~1 13 911111 ~o 9 n J~'IFI o I0 ~ NIl 0 i o !1 ~g~T CIG i 12 AII].IO C]G o 13 o 14 0 0 0 176910~00l b / / // C F (- (. (: (. I o, ( !
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cr~ o u-') o o I-¢ 0~ ,lb, ,,,,.I db. I-4 ~3 ~ M r~ r4 pc M ,-3 w ~ O w ID q~ |, 4~ ~,J ~ ~D eJ ~ W • | i,=, • D W 0 W ~ ~ O ~O O~ ~ ~ t~ ~D 0 ,1~ ~. ".4 0 m ~ ~.~ ill. t~ i ZNDZVZIX~M~Y C ZGA.R~L'~ BL~.~ SI~ES i ULTI~ SLZN ULTRA SLIM i FELT m SKITR |,,|. NOOZFZZD FREE BASE NZCO'Z'DiI~ SHORT CZ~"Z'Ti~ NiI.ZOI~TZD o CZ~S RUGBY LOCO
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STRUCTURED CREATIVITY CROUP PRESENTATION ii , i J i, D.£. Creishton C,urrent Tobacco HarkotIn6 Scenario - Its Key Constraints, Challenges end Opportunities. The current scene differs dramatically from country to country. ge can contrast state monopolies In developed countries vIth competitive markets In developed countries. We can contrast developed countries vIth or vlthouC restrictions with developing countries with or vlthouC restrictions. Similarly ve can take effluent or poor segments In all these markets. There Is therefore no simple or typical case. Each market Is In a different scare of development, but many of the developing country markets are copying the more developed countries) by Introducing restrictive legislation and Increased taxes. To this can be added the almost vorld vide economic recession and preosure on loau repayments and restrictions on foreign exchange avallablllty. Thug In many developing countries they must become more self sufficient, use more locally produced materials lnclud£ng tobacco and hence "International brands" must either be reduced In availability or (generally) reduced In quality and altered In Caste by the use of local matec£als. Many countries take a significant part of their Income In tobacco tax, thus the severn=eats h~ve a veered Interest In the ~alntenancc of the Industry, espQclally If It IS a tobacco exporter as well, as this generates foreign exchange. The government also has to at least p,c ~zp a front that It 1~ concerned for tl~e health and welfare of [Ca people and because of th£s fe~] It Is right to fo!lov the lead of the d~v~].oped countries In placL~z restcict£ons on the To1~a~co Industry operat/on and C~ L3~ 0 Cr~ ~D
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-2- smokers. Some of these resttlctlons have been Imposed as the result of orsanIsatlons such as WHO etc. placLns coudltlons on ald whlch Include the tobacco restrictions. I suspect that these pressures on the Industry will not decline. I do not see the maln attacks being on the health front more on the nuisance front. Various pressure groups are asking for and getting more restrictions on where smokers can smoke. Smoking Is banned in many cinemas and theatres, most of most public transport and smokers are only allowed Co occupy the least desirable seats In aircraft. The smoker is In many places made to feel the odd one out, where as historically smoking was the social thing to do. Many people In developed countries have glven up or reduced their smoking because of these pressures; namely health concern, anti- social bebavlour and economics. Man), of these people are lost to us for ever. Generally, in my experience, It Is the ex-smoker who ls the most vociferous in the/~r anti-tobacco vlews. In all markets that I know, probably better than 75% of sales are in the full flavour category. Low delivery products have been disproportionally supported and promoted but this segment has grown comparatively slowly. The total market Is generally static In developed countries or declining, although there Is growth potential in developing countries If they c~.n get the materials to m.~ke products. We therefore have Co compete to /ncre~se our market share mains every trick th~t we know but making sure that the of germ we make are both credible and good value. For the forseable futu,-e the full flavour market looks the most lucrltive as the product Is generally both cheaper to make and easier to sell. 0 0 0
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te o o ~Q e o e SO Future ldarkec Trends,. Dlrectlpns c?ustralnts and Opportunities I predLct: Slow grob-Ch in the low del£very market unless/unt£1 legislation and /or taxatlonmakes hlgh tar and mLddle tar unattraetlve te consumers. Increased pressure freasntl soc1•1, nuisance aspects cause further restrict£ons or where It Ls permitted te smoke. Thls would not be stopped by eg. low 81destream products, even If all products were low sldestreau - there 18 st111 exhalatel Bee•use of (I) 8 new generatlon of low dellvery products of which BAECLAY is the fLrst. These wI11 be products vlth • high taste to tar ratlos whlch nay be cempenutable. Vlth restrictions on uaxlmwa perulcced delXvery levels~ the cXassXc Vlrglnla product w111 decllne due te lack of taste, te be replaced by uodLfied VLrgln/a (East Atlantic taste) mevlng steadily Lovards the West Atlant£c and US blended style of product. Increasing use of flaveur addlt£ves and novel f11ter8 to achleve the 1acreage In taste relative to tar delivery. lncreaslnE use of expanded tobacco, with the use of new growths 8rownvlth more desirable characterLstlcs after expansJon. Here atCenClen te pack desLgn and preduct dlsp1ay In consumer outlets and to the trade. Th18 may bc the enly forn of product conmunlcatlen available to us Ln the future. Conpetltion vlth Cannabis, glue sniffing and posslbly hard drugs - hereln and cecalne. We must £1nd a way to appeal to the young, whe want to protest se that the product Lmage, and the product w111 satlsfy thls part of the market. The Ci~ar and Pipe =arket has an "old" Image. Cigarette8 v111 follew as something "My father
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-4- o I0. 11. 12. and Grandfather did" unless ve are careful. Additional constralnts on delivery to Include Cyanide, Acroleln Acetaldehyde, Heavy Kecals, NlCroaamlnesj NlCrlc Oxide and Senzpyrenea. Nlcotlne classLfled as a scheduled polson and sold "on prescriptlon only" to reslsCered users. lncreaJln8 use of "novel f11ters by coupeClclon as yell as 8elf - some coupensstable soue selective filtration types. ILesCrlcClons on produce namess parallel adverC£sLng, promotion of spore and pack deslsas co follow #dverclslngb~ns. C~ Cr~
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-5- Current and Future Development of Consuaer Needs~ Attitudes and SepenCe 1. New Smokers may well start on a low tar brand and stay with lt. Such smokers would not vent a low tar that smoked l£ke 8 middle taro 2. Low tar that smokes Xlke middle tar Is most appropriate for middle Car smokers swltchln$ down due to concern over "health'. 3. There Is a fickle market segment of "concerned" smokers who will try co switch down, 8eneralXy find the product less satisfactory than their original middle tar product so keep trying different low tar propositions Co find one Chic works for them, this may never be achieved. High on the list of consumer needs le nicotine, which I believe to be the main motivator and sustalner of smoking hahavlour." W£thout nicotine In sufflclent quantity to satisfy the needs oE the smoker, the smoker can (a) give up altogether, (b) cuC back to a low purchase leveL, (c) keep swltchlnc brands. $. Irrespective of the "women's movement" Z believe Cbac ~ny males and females see themselves as different vL~h different aspirations. Thus there are two distinct segments; with a .masculine and femanlnc Image. Furthcr segmentation leads Co other Identifiable groups in the community, e-8. sophlstlcated (or wanting a sophlsCZcated Image), ~orklng Class (or ranting vorklng class Image) Sporting (or vlth a sporting image) Adventurous, Reassuring, Traditional/Conservative, Romantic, Cencle, Rough etc. All of the above can be displaced by a good quality lo~ cost product, 1£ the " product has a neutral l~age, i.e. not offensive to anyone but wlth sustained lay cost. ==.m4b 0 0 0 0 0
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-- 6 m e e Any consumer Is going to nmke Judgements about a hey product, probab17 w/thin the first few puffs on the first cLgarette from the pack. Yh18 Judgenent will reflect quality and strength of taste, as well as Inpact and Irritation. F/rat LapressLons are therefore very Important. A further Judgement may be made at the end of the pack, which could relate to how long the pack lasted, end whether there Ls any res[dual taste, Irritation or lack of satLsfact/on. The flrst few puffs need 8pucLal attention. Consumer attitudes say be segmented Into those who only beILeve health probless affect other people, "If Z gLve up I can still be run over by : bus', "My father has smoked 40 • day for 60 years and In 8tLll nowLng the la~m'. "If I give up I rill put on weight', "With all the polutLon around Ln the atmosphere smoking can't -.ke any different', etc. These hard core vLl/ probebly be the a-In source of consumers who either do not worry, do not believe or deliberately wish to project a hard Image. The worried/concerned noker shows little brand loyalty and Is 1/kely to give up 8ny~ay. Yhe target market L8 therefore, the hard core and those that can be recruited to Join It. Znportant aspects there£ore are: Good value. Low price Adequute quality Enough nicotine No a£ter taste/lrrLtatIon No offensive .Image Easy to draw smoke. ....,rob 0
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- / - Current and Fpture Product Trends~ Needs and Opportunities 1. As su88e•ted earlier, high on the list of product requirements 18 an •dequate level of nlcotlne to sustain the smoking hab£t. Smokers have a nicotine threshold below which It Is Ineffective. (In my case thls Is a tradltlonal product with no less then 1.2mg nicotine when measured by standard uach£ne smokl~.) Such n£cotlne threshold• w111 vary wlth dlfferent consumer segments, but for the uaJorlty of smokers who buy cigarettes end smoke them regularly levels of nlcotlne below 1.0ng •t•ndsrd delivery w111 be unsatisfactory. 2. Many studles of smokers Indlc•te that a l•rse number w111 compensate for reduced dellvery by Increaslng the amount of smoke taken from a cigarette wlth lover delivery. It Is •Iso true that most smokers rill take lees smoke from • el&create w£th hlgher delivery than theLr usual brand. Clearly It Is easier, (lena effort) to take lens smoke from a cigarette than to take more smoke. Thus a moderate delivery product can easily satisfy s smoker with s low smoke requirement, whereas £t 18 much more difficult for • product with low delivery to 8atlsfy • smoker with • hlsh requirement for smoke. If the high requirement smoker smokes the low delivery product with hash £ntenGlty then smok£ng becomes Intrusive on normal activIty. Smoking ks usually a ~sslve behavlour which accompanies other activities rather than be£ng an active pursuit. 3. Following on from this theme, any feature og the cigarette desl&n which Is remarkably different from the smol~rs usual product will stand out nnd draw the ~mokers attention nway from what he Is doing and onto the clgnrette. The smoker may then analyse the
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• t --8-- e . B 7. . . "i0. cigarette critically to say vhat the differences are In taste, harshness: mechanics etc. Host smokers are therefore very conservative and not unhappy with their current product. Changes In the product should be alnlmal as far as the smoker Is concerned. Thus any £nnovatlons should not be Intrusive In either appearance, feel or smoke performance. As a rule of thumb, changes of less than 20Z In delivery are not notlcesble to the untrained consumer. The tolerance bandwldth w111 however vary from aspect to aspect. Changes In taste could be more obtrusive than changes In impact level. For economic and pollt£cal reasons I expect to see an Increase In the amount of expanded tobacco used In products. I would also expect longer filters and shorter tobacco rods. Smokers vlll be weaned gradually to expect fever puffs, but each puff wlll have more presence. Thls Is a way to glve satlsfactlon In smoke at overall lover delivery: whilst maintaining price. Due Co the "veokness" of Virginia tobacco taste ac lover delivery levels, ~ expect to see Virginia prod.eta fortified vlth stronger tasting tobaccos - i.e. Modified Virginia Blendsj and the lncreaslns use of flovour additives as end when sultable "enhancers are developed. Because of the dlfflculcleo of saCls£actory low delivery (sub 15mS) Virginia products, s trend co US and German blended style products will be esCabllshed and increase. Because the recession Is world wide, the developing countries v111 not begin to catch up but fall further behind developed countries. Packing may change In developing countries to smaller pac~s, for 0 0 UI 0 0
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-9- International Brands or lndLvldnally wrapped cLsaretces In say plastlc sausage skins for stick sales of domestic product. 11. Cigarettes with compenaatable filters will be developed. Such products will have lov dellvery when smoked under standard conditions, but, being velocity sensitive, a smoker may readLlly take hLsher delivery than the standard delivery, If he so wishes. • 12. Selective filters will be developed for specific markets and sesments which remove specific delLvery components which do not affect smoke taste; eg. Heavy metals, nItrosamLnes acroleln, and acetaldehyde. 13." VIth an assumed reduction In the availability of advertLslnE and promotLonp the presentation of the product st all stages becomes of Increasing Importance. Every opportunity should be taken to check the visual Impact of pack designs for the market segment and In the total market context - Cash and Carry. 10~ Cases, 200's cartons or bundles and Individual packs. Wlth the loss of ability to sustain a brand Image by advertlsLnE the product £n the pack must be of even better quality than ever before. Especially £roa the point of view o£ physical, taste and flavour and good value attributes when compared with competition. 14. With the Increasing use of Expanded Tobacco a new problem starts to arise due to the equilibrium moisture of DIET. DIET both picks up and loses water nora rapidly than normal tobacco. Thus a new style of packaELnE may be developed, which besides provldlnE e barrier to the gain or loss of moisture when sealed acts as a self condlclonlng cabLnet for an opened pack. If this can be ~de to work, then the last cigarette fro= the pack would stnoke as well as the first. It would also help to Lncrease the she)f llfe of traditional products. C:D <:D
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- 10 - Specific Proposals From the foregoing my thesis Is that nicotine, flavour and quality are of paramount Importance to smokers. If this can be offered together with delivery reassurance and the option that the product can be -'de to deliver anything from ultra low to middle Car with only a moderate increase In smoking effort, we have close to a universally acceptable produce. 1. A Compensatable Filter Product The design of a cigarette with a compensaeable filter will have a hlsh taste to tar ratio. The flrst Important component Is a good blend wlth hlgh Caste. Such a blend Is likely co contain DIET aC say 24Z - 36Z. Because of the comparatively high DIET level the tobacco rod Is going to burn fast so either a burn retsrdant on the tobacco Is needed or at lease a slow burning paper to reduce smoulder rate. Diagram. The HI! filter. This wag designed In nAT Hamburg sod has been tested on consumers, who found She clgareetes too strong. As the sanple cigarettes had a machine smoked delivery of about lu~ tar, the produce must he very conpensatablc. Our men tests both subjective and objective s;tggcsCed m 0 0 cj~ 0 0
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• L - 11 - that It 18 • co•pens•table fllter, when smoked •8alnst eonvent£onally constructed controls. The ohJectlve test we have used 18 to smoke at 35 and ~ puff volumes and to see If the Increase In delivery, at the hlsher puff volume Is pro-rata or more. Wlth I~, the dellvery was more than pro-rata. Although the end appearance of h~ 18 sInllar to Actron It does have one advantage over Actron In that It Is not susceptlble to the Ph111p Morrls lnsplred 8mokln$ reglme whlch blocks off the ends of the grooves at the :ouch end. Wlth Actron the ventllatlon should fall to zero under these conditions but wlth I~ the ventilation falls from 76:[ co $6Z as there Is an slr pathway forwards to the tobacco rod and through the filter. The RCL Filter A second attempt to sake a compensacable fllter was to try to exploit the special properties of a s£ngle orifice. Thls speclal property Is that the relsclonshIp between pressure drop and flay through the orifice Is square root whereas through a parallel bundle of flbres It Is llnear. Th18 Is a very old prlnclple f£rst publlshed by l]ernou11 In the 17A0's. This means thaC If the ventllatlon to the filter Is 1:y a slngXe hoXe then as the fXov race through the clgoretce Is Increased then the ventilating alr would not Xncrease 11nearXy because the pressure drop of the orlflce adulceln8 the venc11=tln~ alr vould rlse. We have nmdo up oamples using three comparatively new technologies combined Into one fllter, namely spin moulding, thermo-pl~=tlc plug wrap and laser • perforation. The structure Is: DlaEram 2 HCL Filter O 0 0
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• t - 12 - Other advantages of this deslsu are: a) The end appearance Is conventional. b) The sta£nlng petcern Is vhlte centre, dark outer - l.e novel. e) Vmntllatlon Is contro3~ed by the hole In the filter not the tipping so "flnzer blocking" Is almost Impossible. d) We can see a way to manufacturing this aC reasonable cost end h/sh speed. e) No assembly problems env£saged on standard production machinery. The two volume smoking scheme wa8 used to obtain objective data as well ma subjective smoking against a conventionally constructed control. However, It does not work" st low and ultra low delivery as a eompena~ttable filter. The hole size £s too large for a human smoker to move onto the non linear part of the curved and the fibres under the hole are Interfering with the flow petterns. Tt Is likely to be more effective for t 14mS product which smokes like an 18mg product as a smaller hole size con be used. 2. Our next stage Is Co cry plasttc cubes In the filter which lead eg. *KIlt" Filters from the groove to the mouth end through the filter. Diagram O O N
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- 13 - Second Proposal - Front End Llfc AEaln my concern for suokln$ quality Is shown by the choice of s project to enhance the taste, flevour and Impact of the first fev puffs on a cIserette. It Ls these puffs vhich are most likely to be noticed and assessed by a smokerj particularly with s new product, before he uses smoklns as an sJunct to other actlvLtles. I do not have a speclfIc seglent for this objective bat consider It to be almost universally appllcable, but probably most appropriate lnltlally for lov delivery products, and lowered delivery products. ge know that the use of high paper permeab11Itles wlll have the opposite effect to the one ve want. This Is because the air entering the paper during puffing Ls at Its maximum, vhen the cigarette Is lit. As the c18erette Is burned down, so the dilution mechanism 18 burned avay and the concentration of smoke In the puffs rises. A more even dilution of a/r per puff can be achieved by t/p ventilation In association with a lowered paper permeability. This concpt of "Front End Lift" can be further extended by the use of added flavours vhlch tend, Lf volatile to have the hlghest concentration Ln the first fev puffs. Other rays vould be to use (a) a structured cLsarette rod so that the most flavouraome tobaccos vere located at the lighting end of the cigarette. HachlncmofllfIcatLons to make such cigarettes are poss£ble as was delonstrated vlth the CODEVAC products. Alternative rays vould be to use sections of different tobaccos assembled and over.rapped. Using this approach there ate some Interesting possibilities for example a US blended start moving to a VlrgluJa middle ~ectLon an~ larBely stem end part, which Is usually thrown a~;ay and no~ smol;ed. A higher level of O C:D <:D --..j O C~D

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