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~--~!,,~ P¢o-7:~ ~v \,\ THE CIGARETTE MARKET IN NIGERIA Qualitative Consumer 8ehaviour and Brand Status Study Qualitative B&H Advertising and Line Extension Evaluation Prepared for B.A.T. UK & Export Ltd., Expon House, Cawscy Way, WOKING, Surrey GU21 IYB Prepared by Market Behaviour Ltd., 9 Stanhope Place, LONDON W2 2HH Tel No: (071) 723 4257 Fax No: (071) 724 7327 Submitted on lob Number 25 luly 1991 91/047/FH t.rt c~ oo ,.o x£)

List of Contents BACKGROUND AND INTRODUCTION i CONCLUSIONS AND RECOMMENDATIONS CONTENT ANALY~S AREA ONE: I.I 1.2 1.3 BACKGROUND BEHAVIOUR AND A'['T1TUDES RELATED TO SMOKING Smokin$ Behaviour l.l.t Novices l.t.2 Consump~on 1.1.3 Networking/Bonding 1.1.4 Purchasing Attitudes and Belieh Related to Smoking 1.2. t Benefits Associated with Smoking 1.2.2 Negatives Associated with Smoking t.2.3 Pubik t~x~se The Cigarette !.3. t Nicotine 1.3.2 Tar l l i I 2 2 3 3 4 5 7 7 9 AREA TWO: 2.1 2.2 2.3 AREA TRP.EE: 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 CONSUMER STRUCTURING OF THE MARKET Dimensions Mapping Category and Brand Perceptions 2.3.t ASl~rafional/Popu~r 2.3.2 Unfamiliar/New 2.3.3 American 2.3.4 Menthol 2.3.5 Locally Manufactured 2.3.6 Unacceptable FACTORS INFLUENCING BRAND CHOICE Priorities Physical Attributes/Effects 3.2.1 Taste 3.2.2 Smell 3.2.3 Strength 3.2.4 Mildness 3.2.5 Filter Country of Origin Ava~Lb~ty Cost Packaging Advertising Weather/Area Other Smokers 10 10 10 11 11 11 12 14 16 t9 2O 2O 2O 2O 21 21 23 23 24 24 25 26 ~r~ C~ 27 28 CO 29 CO O~ ,,O ,,O

AREA FOUR: 4.1 4.2 List of Contents (continued) BRAND SWITCHING Attitudes towards Switching Behaviour 4.2.1 Substitution 4.2.2 Switching Page No. 3~ 31 33 33 34 AREA FIVE: 5.1 5.2 5.3 BRKS CURRENT STATUS Brand Status Imagery Decline of BHKS 5.3.1 Source 5.3.2 Strength 5.3.3 Mildne~ 5.3.4 Unavailability 35 35 36 38 38 41 42 42 AREA SIX: 6.1 6.2 6.3 BILKS PRODUCT AND PACKAGING DEVELOPMENT Overall Attitudes to New Products/Pack Designs Golden Mild (Enugu and Conakry only) 6.ZI Pack 6.2.2 Product Expectations International iOO's 6.3. l Pack 6.3.2 Product Expectations 43 43 44 44 45 46 46 47 AREA SEVEN: 7.1 7.2 BE[KS ADVERTISING Current Advertising Awareness and Perceptions Reactions to Ihe Stimulus Advertisements 7.2.1 Hands Campaign 7.2.2 'Discover a Lighter Gold' (Enugu and Comkry only) 7.2.3 Technology Executions (Enusu and Comtkry o~y) 7.2.4 Stage 2 Hospitality Campaign (Enugu and Conak~ only) 7.2.5 Existing Intematimal Advertising 7.2.6 Intematimal Surrealistic Executims 48 48 50 50 51 5l 52 53 53 U'I CD Co 03 O~ t.n

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BACKGROUND ANDINTRODUCTION B.A.T. are currently looking at their West Africa Region and reuseuing the status of their brands in these markets. As pan of this exercise, Market Behaviour was commissioned to carry out two qualitative studies in Nigeria: • a general study exploring smoker behaviour and attitudes • a study focusing on the current status of B&H in this market, and exlPlor/ng B&H advertising and possible line extensions. ltes,.,.-eb Objectives The overall objectives of this study were: • to examine the current status of cigarette brands in Nigeria and consumer attitudes and beliefs regarding them • to understand what criwria are important in cigarette purchase and how they are brought into play when selecting brands • to determine how and why brand switching takes place and what have been the most recent influences prompting this behaviour. The were: • to explore the history of specific brands and how the consumer perceives them and their future development • to ascertain what are lee brand personalities and how important are these to smokers to determine what specific pieces of information are important during the brand selection process and how is one played off against the other, i.e. the importance of price, prmnofions, brand imagery, availability, taste, origin, manufacturer, tobacco type, packaging style, type of filter, cigarette length, etc. • to establish whether tar and nicotine levels have any role and whether there is any awareness or interest in lights/milds brands. O Co Co cr', ,,O ,,.o

The objectives of this study were: • to explore the perceived reasons for the declining brand share and status of Benson and Hedges and to evaluate the extent to which current marketing activity is helping or reducing that movement • to understand, specifically, reactions to existing BHKS advertising amongst current smokers and non-smokers within the higher priced standard sector of international brands current B~IcH Hands campaign • to look at new/alternative BILKS advertising (to the Nigerian mm'ket), to evaluate propensity to maintain loyalty and attract new recruits (wholly ncw or lapsed) to the brand and the levels of sophistication in terms of advertising Stage 2 Hospitality campaign (hands with bodies) . existing international advertising (Grotto/Airport) - new intcrnatiotud 'technology' executions - new international 'surrealistic' executions • to look at other developments for the brand, i.e. product and packaging based, to evaluate their appeal (particularly line extensions) - B&.H Golden Mild - B&H lO0's B4C£(;aOb'M) AM) fNI1tODUCTION u1 O~ O~ ,,13 ,,13

iii Method and Sample A total of 12 group discussions, each luting 2 hours, was carried out amongst male smokers. The sampt¢ w~ structured u follows: ~OUp L 2 3 4 5 t # 7 10 lI 12 AGE 18-25 26-,40 L8-25 26-4O 18-2.5 26-4O CLASS higher income averale incQme average income h~ghcr income.. average income hi~m" income higher income tverue inc~ higher income MKher income AREA Lagos Kano i • Enugu SMOKING BEHAV_!OUR Higher Priced Standard Sector lntornadonM Br'd~ds Medium Priced Standard Sector International or Loc~ Brands m Higher Priced Standard Sector lnternado~ Brands i Medium Priced Slandard Sector International or Local, Brands m Higher Priced Standard Sector International Brawls t Medium Priced Standard Sector International or Loc~ Brands In addition, 4 paired 'friendship' depths were carried out in a rural area outside Calabar, representing the same sample structure as above. ~CK(~OUND AND nV'rl~ODUC'rloN CD Qo C~ C~ ,.0 ,,.D ,,O

iv A total of 6 group discussions was carried out amongst current and lapsed smokers of the brand. The sample structure was as follows: 0ROUt' I 2 AGE tS-~ 26-4O 4 P 6 ,r CLASS ABCI ABC! 3 18-~ ABCI Lagos w 2~ tB.-~ 26-4O ABCI &l~t ABCI AgF~ K~no SMOK~G BEHAVIOUR Current and reEulax ~m~ker~ of El.DES Lapsed smokers of BHKS and mn-~ectors of the brand Lapsed smokers of BHKS and non-~ectors ........ of,O~e tmmd Current and reeular smoke~ 9f 8Hlr~ Current and rezular ~ of BHKS lapsed smokers of BHKS and non-~ectcrs of the br~i The fieldwo~k wu carried out in June L99t and an oral pt~.~entafion of the findings wu given at Export House on the 12th July. ~~INTROOUC770N oo oo 0 C~

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CONCLUSIONS AND RECOMMENDATIONS BILKS The Nigerian market is now dominated by Rothmans in the premium sector. This brand has benefitted greatly from the problems experienced by BHKS over the past few years, and appears to have picked up many ex-BHK$ smokers, especiaily younger smokers with less experience/confidence and less commitment to BHKS. It appears that Rothmans currently has three main advantages over BHKS: there is no confusion or question about the ~ (and, hence, quality) of Rothmans - 'there is only one Rozhmans', the English-made, international cigarette the packaging (predominantly white) supports perception of this brand as milder/sn ,,~i~r _~mnlm than BHKS, which gives it a broader target (women as well as men) and tends to make it more attractive to younger smokers the singular nrnno_q;t;nn: with its very rational, product-related basis - 'The best tobacco money can buy' - which is very appearing, particuIady to young consumers, who are generally more cost-conscious and, also, less experienced/ confident and so need more reassurance on brand choice. The re.search clearly indicates that the BHI~ image remains strong, both via the emphasis on gold (something of value/worth buying/prestigious) in the advertising, and via the very attractive and statusful packaging. Essentially, BHKS retains its status as a big international brand that has a strong reputation worldwide (vital elements in brand personality in the premium sector of the marke0. • However, there is much confusion about the origin of the product available in Niseria and, although the local NTC product has not been on the market for some time, consumers are mistrustful and tend to transfer the problems associated with the Nigerian product onto the cigarette available. This encourages discrimination based both on BHKS product and pack: • BHKS happens to be quite a difficult smoke, chiefly because of its perceived high tar content or 'oiliness', and this reinforces concerns • there is fairly widespread mistrust of the 'made in England' pack claim. O ~r4 Co Co "-,d ¢23 CD