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MARTIN NE7Jn;AN, C. S. R. OFFICUIL COIIRT REPORTER 856 nn_ follo"ir.~ is .a report o°_ c=ndi-..c.-. ic'-d ?° *c_ t.`•e cert^ of 2:.:y, 1970. ~ Aneric nn "b: irco Cc^:oanv sales rcpresencat:,: cs cont'_aLi: ; to prc=ote Pa11 l:ai? 10'vs, both Gold and Gree=., at c:.rrc- level outlacs b- czo4-^ ---•-~~ t~:o ac:e^es free to each carton. This is he:.-,g dor.o indiscrir-ir.a:c.. tnrouSt:out tn: zield, and also ,:ey arc L_~~iisnla:s in ;.acary e`..= ^s nd '-^de?end_nt featt:r ''• i;.__ `_caa_ seR : to Le so-e sl-~ta prcC:•eae. but t: . cos: t iccaL ic•:al a?p,._-_ :O on th= :.rOL.... of -_C.. ~.COd: .._ .::- STOt!~:•~ ....' it: CG6:.° L:d3linc- 1;-,E.e ttus bCe1 in t•~:. LZle O- .°+i~:.C_ Thins, but oistrib::tion rr~ins Gcod, The entire L--_'. S:ril:e lir:c is of= in silcn. Pall ::a11 F.ed alec is losing sales tc^trc :i'ccr brclds aad the de=1i^•e sec-•_s to be rwore no:icca1--la d::ring the last severe': mc ::c:s. Tare_; _oz E5s and 100s are holZir.b thcir oc.•r= a:d• did ..ot seo to do tnr--sc.lves too cuch har~ in t:.is field 'cy r-~ov:ng the vendi::G sachine Piac^rent pa}+=ent on the 85s. ~. .T, sale_.-en spent tila last tt:•o r.ont;s crorki.•.; a_C.`. vcr.,:- __ ,crc_.._, s____ ^1c__.-_...__ ior D;-_ , ----__ an_ ?icn:hoL. of the ner.th was du-,-. _ed to t:._ ';l:r. .._tnwinstcn °::ceas.z::c: pr~otion in s.izicC they -_,t up .~ny base dis~~la;:c -••_ co~.t _. uac'a;s cutl_ .._ :,v t`is p=-_ot__n tc~ _ thcr ~-r_:c e,Ltr uS1sr.:a. Sales ~f • inscon E3s and L0Os~ eont: .uc to an i••_-essc, :ut ~_..- ston 100 t;_nti:oi aetivity ap•o?_ ars to be 1i: itc_. Salea iGOs ar.c S5s arc aLOut the s:. :e as last rel+ortcd cnd do r-o_ se=o to bc _evi.-ig ~ p . dc.•_• on t'.'e salec _ chart, cc: _ir.tcin ;uotte_.ttr1 pereenta?c of t`e :er,ll =-^t --vo1L_. _o-t= Dorals _ve ^,a, =•d scc_ in c:~e pas. ___ clsc^_-ccZ-.. :o1L_^ it :::s =rket. Ga=-- •--_-_ Lc.~; no: cs~ to i,e -rc~-- desp ~ :- -- =_-----z .c ae_ c^ t4'__ c- :.... 1o==t 1-• --• - :.. -..t r:-i= -==- ._.,::z ,.c-.._ c , tr.._ .°° --_~ alr--- =h: or _r.. 'or:.r.:?s _.•.c_ a- ... .. _.. C:". :;i.l. ... _..: Z.°. ,.- cL:1 it !.=3 ...._ _._ ..a___ __-- ~~ . _

PLAINTIFF'S EXHIBIT 2 857 - L - ~ su?°r'.._a_'.:'-ts featurir.,=--:. .._: style Chesterfield paclaSes. t.:o diffe=cn., pr=otions at po_.._ c: p•:rcz;c_e locations. crori::n,; 30-pacic Philip nr=:= Filterand .:entLol d'. -.... crecko: z points, but pr_sentin^ bcro Pro_otion" to ch..:'.. $5.00fo= 50-carton displays of 2:ariboro i.ed, IOOs ar,i. ,(3 sizcs). Also usino their 5e-_ch Ta:el and Pi12o'-7 self-liquidsting dcal in this field (two e=pty paclcaGes of :.'arlboro ard $2.50). :} t_ Marlboro ..ed keeps increasing in sales, creas the iOCs are *"_ _u o:.•n and the =enthol dointi e::ce2t:on- ally poor. It just do:.':.^1^'"P-cea possible that.in spite of the con- tinued grcwtn of t'ie 85"`_ pack there is no :orwa.-d t;ove=er.t on the 10C:~d, and si:ca littlc on the 2Senthol. The new Phili? ::orris Filter 'package lus nec difference in sales since its arrival. Benso*t ~ R°d•-es eon*'ru^s to be cme of t~~ 1~"ea• ar.e'-as. Sales are sT-.;'ttiy increasing on both the Gold and Green. Virginia Sli=- h._ve sc'_. - etry sales _.% this rarket and appA.r to tave uette_ c:arrants. Thc-e ii:;s been sc_=_z :h~it lva of a s:y'^::L- o._ of '`1:' -^a-_--tes. S,-_ have seen very lzttie 53.lva Ti:irs orVirgir.ia Sli=s~protlotio: al activity. Parlia.:.cnt 100s do not. ser= to be very =_h. Cfain store sales are very li~it^_d on this product, as is distributic .^.- grr..cr~ ;~ t;ill'_-^so^ - Kool tiizz and 1COs continue to show substanti.al sales increases. Both these products have been getting very little help at local level fro= their sales organization, yet they continue to increase at an, ur.baatable pace. Local reprecent=cives pro=otin; `-cat__iao t::_ 3-carton dis?la with the ^ld Seli-11yL•id2ting ccunon5 attache:d to the cartc-, c2=^'_ Thls producL is _•aoout _CS o out -:e 1G _Ldoes not seer to be :z'r.inC any proZress e::cept for sTe _ spotty areas. At the end of t:'_s r_onth their t:^_n startrd buvin,r, ''IZir displays as a supple=entary in all locations ahere they featc-.:: a reSular ccunter dis;.lay. This product is sup-ported by a ueeay color ad .._ tha Sunday additioa of the Co ::cr 3ocr-i:c'-, This is the only cdvertisinS we see on tiis',produce. Sales- wic_ t too does not see= to be =:.,_ro __c.`h prcZ;ress. So=c Sela'_r cn_ a-d ..:o carten ecuntcr displ~:;•s are ap;•--r_ as s:..pl-•_n__ry dzsp_ ,- in 'zcca_:ons car.not °_c a_r dces no= s== ce `.._- any hcsc.._, and tae overal: iCZ.=' an_ sales vo:~- d:.cs no; se= to haYe s%:.passcd its peel. L5:_i sales vo1`... T --' - : _eld : o" `.iad an c:;ce -:cr.=_1 conth __.. ._.._ 10Cs. _.... -•ro~_c_ c=- =2:._ ~ C'._-y c_•_-_ It is 01r FS.,tc_r_ Jv

PLAINTIFF'S EXHIBIT 2 853 ~ advc= _- - ro. o brand and I:_ :.at t:aa=^_vc r_vcr t~_ is t e_` for ci7are_tes o.^n ei_c_=o::__ cedia _..., _d be ae•;c_ed to _: is __ _- c;;d ,.__:.. _ K°r.S is doir.,, q•jit- ,.el'_ : s_-es si.•__ _•s cvcr_1'_ sale= :oss _s ni..iyal. It aprears tca- if `:c c;e are er.; -=e====g is L-ai...::; S:.'_ OL OL= ..C.-.T Ll bL'S_~iCSS we C^___-~:af =_ : ba p__.._ up a $ozid C:e.°... of i=..i ~ii1g Si'.e bt1s:.^.ess t0 -_-_.._C:i.^n t...e cu_re nt Vol'._~e ve no:r have. ':1tLM 51ua and Grccn both had a good month. 4:e .~ o:. i;e have tu^.ed the curre e n this prad:.,.,t and it see=s to ce ccr.t_..__ its upward sales tre^.d once aSa_... =Ii;)^_ too, _s clt-g bing its lowest level, but C.`.ere is a lo.^.; *,:ay to Eo to bring t::is p:od~ct back to t: e vo1`._ it -^je}•ad be?o:c t.._ pac:•.. _, and blen_ chan~P. OLD GC?,7 Ti1t_r 1•ad sc-e sliaht sales increase and ~re feel t=t the Hil:ta_y ?ro-_otica ~ e have had this year have helped this brand co :- sidcr~oly. Sx.RI:}v still does not seem to be doing anything other ..r•n t*:Zat we hti e i~^. :v_ ;1ie _-d a.'e __, . _ ed oreviously. not t as _ le d_• ai . csoee'_ _1~ °_1i - o/t: _o- cz 011- iicneruz 'or T e p===ot vecr oecause cc t:;e Cacve.t c__=-_ _ D2 cit bv^u - - ` sir--ents. ?r.-otic-_1 Itecs -:;11 of eu: personnel in Field :1E have -n dicated t`:at tae p1ccar_s -re not as ef.-".ective as l:o'.:ters at roint o: sale pro- .___ing with -.... .•:o-ysoN 2urchase. It is obvious, of course, t::_- every- ay :^,, body ~:.`.e sna~ es coulci _se a 1iZ;'.a_r, but not .•P_,._ssa_ay a deck of pg cards. Nc find t:_bcst place ic= the pla;_-:; ..a__s to be used is _•!o pacYs tzped to the cs.,.oz or one dc_.. .aped to ":o ._~aoes o: c_o=r_..-es placed on t:ie cc....-t,.isrlay a: o= ru=_-cse. r ii tle C. - T`:c=_ are -acon~rzdictcr, .cpo-ts _.n ta_s `:-__ on botn .O:s and =.. ,crg_..?} Ove=a1' _. aopasrs .r._t =.,..- :oauc=s _..- were s.:t- s::.ct...:ly •s_.•_ted cn d dispiayed ,•_ -o:.._ of joy: t:esC repeat businass at vaaxs dco ees cn see._s to be do:_ oest of our three stat=s. T: _ pr___ a.-_ ecc ~ic 5=- -t_ - no cigar ttx :actor enters into .::is because of t`e poor in this sta_e. i:en.u_!y aces _°C='c".:: at less on t-..°_se pre?ucts s:nca c_o- arettcs o_ iC t., 1C: ?^_r pac._ c=c_ =er _-_ _s c='_ .a ncr , or t--o _.___ -.:.c`.- -_ c: Tczn__sce coz-.:_ _ascc ,,.n a ?e= =ck cn .----e c_--r . .,-.._ -- icvel ar.d _: ap7:ezrs -..t _.._ ..__1 = :: p= =- ..cl' s.•.c_-co....=-_ acccpta..__ on Sc_.. _ -___ts _s .,-. e?_te 0_ „z_ c ~--- a:rr=a -s ccc _ aole a.._ Ne ..a.c }'c: Co ••co= cur =__.,., c-?:- .

859 cLC..ia- ccbacco has -ade so=_ little pro; _ss Lo-_._ _..sy ....z not to ss__..fy cu.- o:z sales forec_scs. It ap?ears _t ,._ .._c not arc:.:g t th e= s::c: s pece a _ PR e d _ .. . L-. ~;ec_ Viroinia, this .....n_ _., cc: _.._ntly a_._ad ofand is the ,=n ti:it1 cac: ,pcssing day. iaere are eiso r_any retailers and t:aole- sclers in t::'_s r=por_ that .._~ Fc_. is -rc-,: g at ur ::.ccllcnt paee, and also outs~-lling E?7Cii-tiUT. Aed iiorse too, has sur2cssed us ia sales in sevcral of the jobbin,; couses, ,..a L'nien .;ori--n cc :tinues to sio^• but st: ad? increaoas. N~i1 Pouch also has inarccsed its vo1c=: beccuse of a"fluy6 Get 1 Free" deal tt.: t_an during Ii<•y. T.`.roug`xut th_ balance of the terri c=y Red 'rLen is still our b''ggest co=petitor. It is giving us rore cL=?etition th:n we care to have, and there is no doubt th_-t their sales iacrcases are continually dtsiadlir.o a:.7ay our share of ~arl•et. T;:e anstrer lics in a better product - - we have t:e best distribution, displays and a plus that no other tobacco ccapany can boast; residual gcncraticn lo•ralty. So -znv cc^petitive c.`.et:ers we .,wple nention t:ac ._t.^ ._ ..^.~~..._..__- ._.^.d f_thCrs unc3 to cPCtJ $r:.C.:.-L.-U7 and too, st?._ tL•G c:-C ir, h.!r gn.: ?uay inecautie of the bzcter taste an_ pro•iuct L:~~L our ccpc'-'_tor_ to nave. :Iot being a che!mr myself, I eannot atmat to this, b=3t y s=piy pa,,..;--.g ca to you the inforaation we receive. t:c%,i Products - The Laredo Filter Hakiao Kit and £.efill Kits have drifted into the Parkcrs.`_urg Divisicn due to its geographical to the Scate of Penr.sylvania and the poor eco nc.::ic situation. From all avaii- able sources t._ can o.zly report that this product is `av'_co p`enc=ennl success. T7e, toc, ac4.-oalecloed its appeal -_ f:r_t, but t:c conaistent renuat sale on refill kits indicates t hat t'.:e r.et•t cons-ers e= tbis product are not ready to put their toy do:.•n yet. I do believe that there is a definite need for our Co_pany to Qct i.to t'.as business. 'F::e continued ta:: pressures bci:;g applied co ci-.arettes `:.'.ce this type o: ;...- ' product more and =ore appeaiinG. The State of ;2est V'_rgir.i:., ::.`.ich fortunately is a depreesed scate, is going to get a state increase in ei;;ar e[t^- t._ effective Jui y 1, 1970 (fro= 7C to 12C per pacIc). This Stite, too, si:ould be anot;-ier Lucrati•:e area to bring t,product like ti:~5 in to. yecause of this situation, 3ro,m & Wiliia=son ila's scheduled '.:est Virginia as the n=a state to rarket Laredo.