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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CIVIL ACTION NO. 84-878 - - - - - - - - - - - - - - - - SUSAN HAINES, as Administratrix• ad Prosequendum and Executrix OR of the Estate of PETER F. s ROSSI, Plaintiff, s vs. DEPOSITION OF s RICHARD W. POLLAY LIGGETT GROUP, INC., a Delaware Corporation; LOEWS September 18, 1991 THEATRES, INC., a New York s Corporation; R.J. REYNOLDS 9:35 a.m. TOBACCO COMPANY, a New Jersey Corporation; PHILIP MORRIS, : INC., a Virginia Corporation, Defendants. : - - - - - - - - - - - - - - - - BEFORE GAIL WASIK, a'Certified Shorthand Reporter, Certification Number 518, at the offices of BUDD, LARNER, GROSS, ROSENBAUM, GREENBERG & SADE, ESQS., 150 JFK Parkway, Short Hills, New Jersey, 07068, on Wednesday, September 18, 1991, commencing at 9:35 a.m. in the morning, pursuant to notice. ROSENBERG & ASSOCIATES Certified Shorthand Reporters 425 Eagle Rock Avenue Roseland, N.J. 07068 Telephone (201) 228-9100 r~ •

t • 1 A P P E A R A N C E S: . 2 BUDD, LARNER, GROSS, ROSENBAUM, GREENBERG \ 3 & SADE, ESQS. BY: CYNTHIA A. WALTERS, ESQ. • 150 JFK Parkway 4 Sh t Hill N J 07068 or s, . . (201) 379-4800 5 Attorneys for the Plaintiff 6 MUDGE ROSE GUTHRIE ALEXANDER & FERDON ESQS • , . 7 BY: JAMES V. REARNEY, ESQ. and 8 PATRICK J. CARTY, ESQ. 180 Maiden Lane, New York, N.Y. 10038 (212) 510-7145 • 9 Attorneys for the Defendant Liggett 10 JONES, DAY, REAVIS & POGUE, ESQS. 11 BY: PAUL G. CRIST, ESQ. and • I 12 STEPHEN J. KACZYNSKI, ESQ. North Point 13 901 Lakeside Avenue, Cleveland, Ohio 44114 (216) 586-7113 14 Attorneys for the Defendant R.J. Reynolds • RIKER, DANZIG, SCHERER, HYLAND & PERRETTI, ESQS. 15 BY: DAVID ARCISZEWSRI, ESQ. 16 Headquarters Plaza One Speedwell Avenue • 17 Morristown, N.J. 07962-1981 (201) 538-0800 18 Attorneys for the Defendant R.J. Reynolds 19 BROWN & CONNERY, ESQS. BY: MICHAEL J. VASSALOTTI, ESQ. • 20 360 Haddon Avenue P.O. Box 539 21 Westmont, N.J. 08108 (609) 854-8900 22 Attorneys for the Defendant Philip Morris • ARNOLD & PORTER, ESQS. 23 BY: JANET L. JOHNSON, ESQ. 24 1200 New Hampshire Avenue, N.W. Washington, D.C. 20036 (202) 728-6338 25 Attorneys for the Defendant Philip Morris • 0

3 • 1 2 SHOOK, HARDY & BACON, ESQS. BY: WILLIAM L. ALLINDER, ESQ. ~ ALLEN R. PURVIS, ESQ. 3 AND • TERESA K. LUCAS, Senior Analyst 4 One Kansas City Place 5 1200 Main Street Kansas City, Missouri 64105 (816) 474-6550 • 6 Attorneys for the Defendant Lorillard 7 COVINGTON & BURLING, ESQS. BY: PAUL R. DUKE, ESQ. 8 1201 Pennsylvania Avenue, N.W. • 9 P.O. Box 7566 Washington, D.C. 20044 (202) 662-5440 10 Attorneys for the Defendant Tobacco Institute 11 • 12 13 ~ 14 • 15 16 • 17 18 19 • 20 21 22 • 23 24 25 • 40

9 ~ 2 3 • • • 4 5 6 7 8 9 10 11 • 12 13 14 • • 15 16 '17 18 19 ft 20 21 22 23 24 25 .1 J2 iL id A NAME OF WITNESS DIRECT CROSS REDIRECT RECROSS RICHARD W. POLLAY by Mr. Allinder 5 by Mr. Duke 51 by Mr. Crist 58 No. Description Paae 22 Copy of Check 5 23 Data Sheet 85 24 Research Planning Memo 159 25 "Functions and Management 169 of Cigarette Advertising" 26 Letter dated 12/14/53 177 27 "Background Material on 180 the Cigarette Industry. Client" 28 Article 196 29 Hill & Rnowlton, Inc.-II 201 30 Letter dated 1/11/54 206 31 Public Relations Report 206 32 Public Relations Report 210 33 Tobacco Industry Reasearch 213 Committee m ~ L N 00 m ~ ~ • G ~j

S r • • 1 2 3 4 5 6 7 R I C H A R D W. P 0 L L A Y, having been previously sworn according to law, upon his oath, testified as follows: CONTINUED DIRECT EXAMINATION BY MR. ALLINDER: Q Dr. Pollay, I'm going to hand you a check for $2,000 for your testimony in the deposition today. • • • • • L 12 13 14 15 16 17 18 23 24 25 MR. ALLINDER: I would also like to have a copy of the check marked as the next exhibit, please. (Whereupon, the Copy of the Check referred to is marked as Exhibit 22 for Identification.) BY MR. ALLINDER: Q Dr. Pollay, are there recognized methods or models for measuring effective advertisements on consumers? A There are a variety of measures and techniques used. Q Will you list them for me, please? A The techniques typically fall into categories. One major category would be those that are considered recall testing or recognition testing, where consumers, after exposure to the ads, are asked to either identify elements in the ad on secondary exposure or to spontaneous -- the recall of what they can from the ad on an after-the-fact co m ~ co

• 1 ~ 2 ~ 3 4 5 • • 6 7 8 9 10 0 11 12 13 ~ 14 15 .16 • • 17 18 19 20 21 • 22 23 24 • 25 R. Pollay-direct 6 basis. Another class of techniques would be sales affecting this measure. That is, looking at advertising campaigns and advertising expenditures over time and waiting for ultimate sales results of one sort or another. That might be measures of market share, brand loyalty, total sales volume, willingness to pay premium prices. It could be any number of measures. Most of the advertising effectiveness measures that are commonly used fall in one or the other of those two categories. There are other methods used in advertising development that involve group discussion techniques or in-depth interviews or a class of what's known as qualitative measures for advertising evaluation. Q Are there any other categories of methods of testing advertising effectiveness? A Well, there may well be in some different textbooks. There's different terminology that's sometimes used by different authors, but I believe that those major categories would encompass the bulk of the methods. Q What is the title of the text that you are referring to in listing those categories of advertising effectiveness methods? A I was not referring to a specific text. I was drawing that information from my own memory. •

R. Pollay-direct 7 • 1 Q Is there a text or are there texts where this . • • • • 0 • 2 3 4 9 10 11 12 13 14 15 20 21 22 23 24 25 information can be found? A There are quite a variety of texts, yes. Q Do you recall what one of them is, the title of one of them? A Most all the texts are either described as advertising or advertising management or advertising principles of practice, something like that. It's a very competitive marketplace. There are probably a dozen major texts in the market. I mean, at least. Q Do you know who the authors are of some of these texts? A There are a great number of textbooks. The newer ones are by people like Michael Rothchild from the University of Wisconsin and Bill Wells, as the principal author, who was director of research in Needham, Harper & Steers Advertising Agency. Q Would you consider Michael Rothchild to be an authority in the area of advertising effectiveness measurement? A He's an authority in advertising. And one of the component elements would be that. There are some books, not so many in the modern era, but some books that dedicate themselves exclusively to ~ m

• 1 2 0 3 4 5 ~ 6 7 8 • 9 10 11 • 12 13 ~ 14 15 16 ~ 17 18 19 0 20 21 22 • 23 24 25 R. Pollay-direct advertising research and advertising effectiveness. Q Do you recognize Bill Wells as an authority in the area of advertising effectiveness measurement? A Again, that's not the principal focus of his expertise. He's -- he works generally in advertising, but I do recognize him as someone who is highly experienced in advertising. Q Are there other individuals you recognize as authorities in the methods of measuring the effectiveness of advertising? A Those are the names that come to my mind. There may be other people who, if presented with their work and their resumes, I would, indeed, recognize as authorities. Q Is there a recognized model for measuring the effectiveness of advertising on an individual? A A single model? I would say no. There again, there are a variety of techniques used and a variety of measures used and individual practitioners would have different preferences for what measures they preferred. Q Are these measures separable into categories, as are the measures for the effectiveness of advertising on consumers, generally? A Yes. And they would be the same categories. Q Did you use a model or models in your 0

• 1 2 2 ~ • 3 4 5 • 6 7 8 • 9 10 • 11 12 13 • . 14 15 '16 • 17 18 19 • 20 21 ~ 22 23 24 • 25 0 R. Pollay-direct 9 evaluation of effective advertising on Peter Rossi? A My concern was to try to understand his personality and to compare that to the -- what I thought was the nature of the appeals in the advertising. Q Does that evaluative process fit within any of the models you have described? A Y es. Q Which ones? A Well, it would be an underl ying element to most of the models. That is, the -- especially the qualitative work . Q Is there a valid and reliable way to measure a particular consumer's behavior? A Yes. Q How is it that you do that? A One can observe their purchases. Q Are there any other valid and reliable ways to measure a particular consumer's behavior? A Well, I mean, the other measures attended to purchases would be things like brand loyalty, repeat purchase frequencies, and things of that nature; rates of consumption over time, varieties of brands consumed over time, usage patterns. Q What was Peter Rossi's personality? A Well, I would say it had a number of dimensions. I

• 1 2 s 3 4 5 • 6 7 8 • 9 10 ~ 11 12 13 0 14 15 •16 0 17 18 19 • 20 21 • 22 23 24 •. 25 • R. Pollay-direct 10 think he was a person that was prudent, responsible, achievement oriented -- that is, seeking the American dream and working hard toward that, and I think quite successful in that -- quite an affectionate family members he was a sports fan. And there may be more. Those are the ones that come to mind first. He was interested in science and technology and being modern and up to date. I think he was very eager to please; that is, living up to people's expectations, from his parents to his co-workers to his family, as he was attempting to -- in his life to act and behave appropriately, so he displayed self-control. Q Did you consider all these elements of Peter Rossi's personality when evaluating the influence of cigarette advertising on his behavior? A Yes. I had all of those elements in mind when I was evaluating the ads and their likely effectiveness on him. Q Was Peter Rossi's personality different in different periods of time? For example, was his personality in 1959 different than his personality in 1950? A I don't recall evidence that would suggest a dramatic difference in those periods. He's, of course, aging. I mean, he's graduated from college in that time period and assumed some jobs and has started a family. So