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2500002189

THE CIGARETTE CONSUMER

IWHAT WE'LL COVER ~HO SROKES - INCIDENCE HEAVINESS OF USE - CONSUMPTION BRAND LOYALTY - BRAND SWITCHING

APPROXIMATELY O[~E-THIRD OF U,S, ADULTS SMOKE 1980 1981 19821983 1984 34.5% 33.4% 34.3% 33,8% N,A, SOURCE: ROPER REPORTS SOURt'~.~ - NO SIGNIFICANT OVERALL CHANGE IN PAST 4 YEARS - YET, OVERALL CIGARETTE VOLUME DOWN PAST TWO YEARS - HISTORICALLY, INCIDENCE IS DOWN, ESP, AMONG MALES M F 1935 18,1 52,5 1955 24,5 52,6 1965 33.3 51,1 1970 33.1 43,5 1974 31,9 42,7 1976 32,0 41,9 1978 29,9 37,0 1979 28,2 36,9 U,S, DEPT, HEW (CONDITIONS OF SURVEY VARY) SLIGHTLY UNDER ONE-THIRD U,S, ADULTS ARE FORMER SMOKERS ABOUT 40% NEVER SMOKED 0 C, 0 0 BDPPTCC -3-

WHO SMOKES INCIDENCE FAIRLY FLAT ACROSS AGE GROUPS UP TO 55 M F TOTAL 18-24 39% 38% 38% 25-34 39 34 36 35-44 40 38 39 45-54 40 33 36 55-64 32 29 31 65+ 19 14 16 SOURCE: ROPER: 5 WAVES; 1983 THE INCIDENCE AMONG OLDER AGE GRDUPS WAS MUCH HIGHER WHEN THOSE GROUPS WERE YOUNGER THE DIFFERENCE BETWEEN MALES AND FEMALES NARROWING - ,WOMEN APPEAR TO BE LESS LIKELY TO QUIT As THE POPULATION AGES, THE INCIDENCE OF SMOKING WILL DECLINE'--- - ONCE A PERSON~REACHES AGE 25, HE/SHE IS UNLIKELY TO BEGIN - FEWER AND FEWER PEOPLE ENTERING SMOKING AGE BRACKETS - BABY BOOM OVER - NO SIGN OF DRAMATIC INCREASE IN PERCENTAGE BEGINNING SMOKING RPMPTCC "~-

l" WHO SMOKES SMOKING A MASS MARKET PRODUCT - SOMEWHAT DOWNSCALE GRADE SCHOOL SOME H,S, H,S, GRADUATE SOME COLLEGE COLLEGE GRAD POST GRAD TOTAL SMOKERS POPULATION % % 8 i0 21 16 41 37 19 20 8 11 4 6 INDEX 80 131 iii 95 73! 67 ToP MANAGEMENT/PROFESSIONAL EXECUTIVE WHITE COLLAR/CLERICAL SEMI-SKILLED/SKILLED LABOR UNSKILLED SERVICE 4 6 66 11 17 65 12 14 86 33 24 138 9 8 113 i0 9 111 MARR I ED 64 66 SINGLE-- ~- 18 18 WIDOWED 6 i0 SEPARATED/DIVORCED 13 ' 7 97* I00 60 186 SOURCE: ROPER- 1980/1981 IF SPOUSE SMOKES YOU'RE TWICE AS LIKELY TO SMOKE. PEM~CC -5-

CIGARETTE MARKET IN A KIND OF EQUILIBRIUM FED AT ONE END BY NEW sMOKERs COMING INTO THE MARKET EACH YEAR AS THEY REACH SMOKING AGE AND DIMINISHED EACH YEAR BY THOSE QUITTING OR AGING OUT THE MARKET - NOT UNLIKE A GLACIER ADDED TO AT ONE END FLOWING OUT VERY SLOWLY, STEADILY OVER TIME DIMINISHED BY MORE RAPID MELTING AT THE OTHER C) RFMPTCC -6-

IHEAVINESS OF USE i ~/ No GOOD DATA MOSTLY SELF-REPORTED AND FAR TOO LOW MEAN DAILY CONSUMPTION ROPER 21,1 P, M, TRACK I NG 23,5 DOMESTIC UNITS U,S, ADULT POP INCIDENCE = ,,,,' 600 BILLION ANNUAL = 168MM = 34% 168 MM X ,34 X 23,5 X 365 X 21.1 490 BILLION UNITS (ABOUT 20% TOO LOW) 440 BILLION UNITS (ABOUT 27% TOO. LOW) MEASUREMENT OF CONSUMPTION VERY DIFFICULT - SMOKERS UNDERESTIMATE ~____=-REPORT MODAL CONSUMPTION - TEND TO ROUND OFF TO 10, 20, 25, 3,0, ETC, SUSPECT PURCHASE QUESTIONS WOULD YIELD GREATER ACCURACY SMALL DIFFERENCES IMPORTANT RPMPTCC -7-

I HEAVINESS OF USEI LONG TERM CIGARETTE VOLUME HAS TRENDED STEADILY UPWARD THROUGH CENTURY (UNTIL 1982) BILLION UNITS '78 603 '79 610 '80 617 '81 627 '82 622 '83 596 PER CAPITA CONSUMPTION HAS DECLINED SOMEWHAT SINCE 1964 - LONG TERM DECLINE IN INCIDENCE INCIDENCE HAS DECLINED SLIGHTLY FASTER THAN POPULATION HAS GROWN - NET FEWER SMOKERS ARE SMOKING MORE CIGARETTES Two REASONS: - QUITTING HAS TAKEN PLACE AMONG LIGHTER SMOKERS - SMOKERS SMOKE SLIGHTLY MORE LOW TAR CIGARETTES RPMPTCC -8-

HEAVINESS OF USE ] CIGARETTE VOLUME HAS STEADILY TRENDED UPWARD THROUGH CENTURY (UNTIL 1982) BILLION UNITS 1978 603 1979 610 1980 617 1981 627 1982 622 1983 596 PER CAPITA CONSUMPTION HAS BEEN DECLINING 0 o 0 o RBvpTCC ,9-