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! ! E ! I I I I PROJ ECT CRAWFORD Phase !: 7 Group Discussions June, 1 982 jE #...~ , L Prepared for : IMPERIAL TOBACCO LIMITED Montreal Quebec ClibPDF- www.lastio.com 0.OQ • OQOO0 00 • 0000 t • 000000 000000000000 • 0000 • • • 0000 ~. :'.-: . - - The C,r~lJve Research-- Group ",-4

TABLE OF CONTENTS Page No. w Section A: The Route to Menthol ........................ 8 Section B: The Role of Menthol .......................... 15 Section C: Brands of Menthol ................... . .... . . 25 Section D : The Gaps in Menthol ........................ 30 Section E: The Advertising for Menthol ................. 32 Section F: The 2 New Brands of Menthol ............... 3q Section G: The Alternatives to Menthol ................. 39 The Appendix Q C7% CO C7% ClibPDF-www.fastio.conl . °. • . o - • . . • ° . • .,, ,o ~,"o. "~ • ° "e

I. I I 1 I ! I FOREWORD Clii~PDF-wwwfastiocom • . .. ~. ¢ . • - .° • • m C~ C:~ "',,d

FOREWORD Background It has been a number of years since any intensive research has been undertaken on the menthol market. Activity in other segments of the cigarette market has meant, in effect, that the 2 Cameo entries have been largely ignored and virtually unsupported. Perhaps partly because of this, the menthol sector is experiencing marginal declines annually, and certainly (at less than 7tt of the market) has not enjoyed the rapid growth experienced by U.S. menthols (now approaching a share of 30~J. Cameo and Cameo Extra Mild neglect the lower end of the T & N scale. At 17 and 11 milligrams of tar respectively, they have nothing to offer the 3 to 4 to 5 milligram .menthol smoker or, indeed, the regular 3 to 5 milligram smoker to whom a menthol presents an increasingly attractive alternative. Cameo could simply spawn a third entry in the lighter sector. It could be recognizably a Cameo, obviously "lighter", with the Cameo imprint clearly in evidence and all that this signals~th positive and negative. It could elect to remain with 2 brands, but to "lightena CEM both technically and perceptually. It could "sponsorm a totally new brand--- Brand X by Cameo, in effect. Or ITL could launch a different light menthol totally unrelated to Cameo. A further dimension to the flavoured segment could be added by intro- ducing other flavour notes: spearmint, for instance. Before pursuing any of these avenues too far, it was decided to review the entire menthol market in some detail. What ore current perceptions ClibPDF - www.iastio.com - - b • • 0o • o • " . - • • 0 (3", O0 0~ ,.,,,,j

and attitudes.7 From a consumerts point of view, where are the 2 Cameos today.~ How do they relate to competitive brands2 What is the "meaning" of menthol.~ What is its role? This volume reviews the results of the first phase of this undertaking. Objectives The essential objective is to investigate what amounts to oll aspects of the menthol market--first on a quolitotive basis, later on a broader quontitotive basis. A detailed listing of the specific topics to be addressed can be found in the several briefing and review documents put together by ITL as background for this research. They will not be repeated here. (A copy of the "Discussion Outline" in the Appendix itemizes these same topics and questions.) Methodology In total, 7 group discussions were conducted~3 in London, q in Saskatoon. The groups were screened to meet the criteria set out below : London Monday, June 21 6:00 p.m. Males 18-3q years Potential and occasional users -2- .'° ; • . 6 • ~ . o . o • • . . ~ % C7~ CO -,,j CO.- .° J ClibPDF - www.lastio.com

Monday, June 21 8:00 p.m. Tuesday, • June 22 9:30 a.m. 5oskotoon Wednesday, June 23 6:00 p.m. Wednesday, June 23 8 p.m. Thursday, June 2q 9:30 a.m. Thursday, June 2~ 1:30 p.m. Mixed males/females 25-50 years Over 11 rag. (12+) menthol smokers Users Females 25-50 years Mixed T/N menthols smokers - emphasis under 12 rag. Users Males 1 8-S0 Mixed T JN smokers Users Females 25 & under 11 rag. menthol smokers only Users Females Under 25 years Potential and occasional users Females 25-50 years Poten~:ial and occasional users With some (inevitable] exceptions, the criteria were met reasonably well. Most groups consisted of 7 to 10 participants, but one of the London sessions, a morning one, proceeded with only 3 respondents. (ironicaJly, it proved to be one of the more productive discussions. ) As part of the procedure, respondents were given the opportunity toward the end of each discussion of smoking a spearmint-flavoured cigarette. m, ClibPDF - w~jvvJ.lastio.com ii -- 3--- . • ° . • , -° t," .. 0 P~ C~ CO) C~ -.,,j --..j

As mentioned earlier, a copy of the discussion outline appears as an Appendix to this report. Coloured photos of 2 prototype brands are included as well [Cameo Super light and Cameo Avanti). The Findings The findings are presented in the following pages under two main headings: 1. A Brief Overview 2. The Findings in Detail The reader is reminded that 7 group discussions does not constitute a quantitative study. These findings should be viewed as directional only: essentially hypotheses or insights which require validation in a larger investigation. July 12th, 1982 Study No. 609-82Q THE CREATIVE RESEARCH GROUP Limited P,.) O~ CO C3~ CO ClibPDF - WV,JVV.fastio.colll

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A BRIEF OVERVIEW Menthol Conversion to menthol seems to be circumstantial rather than deliberate: borrowing a friend's menthol, trying a package during a cold and staying with it afterwards. Rarely do people make a specific ~ priori decision to switch to a menthol cigarette. Once having made the commitment, however, it seems to be an unusually strong one. Even when they try, as they sometimes do, they typically are not oble to revert to a non-menthol brand. it is the roofing effect which constitutes the major attraction, this and the concomitant reduction in both harshness and tobacco taste. The actual menthol flovour, while pleasant, is not itself a signifi- cant reward. At a deeper level of consciousness, there seems little doubt that smoking menthols functions also as a guilt-reducing mechonism. Since it successfully alters the total smoking experience, providing its own kind of =filter", as it were, it manages in some small measure to subtly disguise the sin. Some smokers go further, ascribing medicinal properties to the mentholation. Current menthol users are either happy with their present levels of mentholation, or would welcome a heightened impact. Non-menthol smokers express mild interest in a very lightly mentholated product. -5- r~o c~ c~ c~o r~3 ill CLibPDF - ~,Ii,l~J'J\'!/.~astiO.cOR1

The Cameo Family This research confirms that Cameo and CEM, whatever their former merits, are currently perceived as part of the "establishment"~ behind the times, that is. This image is generated largely by the packaging, considered to be unimaginative, dull, and old-fashioned. It also makes a distinctly feminine statment. t Cameo itself is known to be a "strong" menthol cigarette. But because the segment 3s a whole tends to be perceived as "milder" (than regulars), Cameo is actually thought of a lower in T ~ N than is, in fact, the case. The same is true of Cameo Extra Mild. Thus, to introduce a new, still lighter Cameo would seem im- practical. And to further "lighten" CEM would seem risky. Moreover, any new Cameo, or for that matter, any Cameo-sponsored brand is not an attractive prospect to the non-Cameo smoker. Cameo A vonti 8 Cameo Super Light Both of these prototypes illustrate clearly the constraining ino flu,rice of the Cameo name--at lease insofar as broadening the menthol market is concerned. ClJbPDF - v,#wvv.f~stio.c~)m Cameo Avanti, however, provides useful insight into what can be accomplished potentially with a dramatically different package. Although this particular execution is not without its problems, the concept of a radical departure is well worth pursuing--but not with a Cameo affiliation. o o • • • • . . • • ~ B o .o . - ,, .'t i • m CO C~ -,,,,j Co