Tobacco Documents Online

D~AFT : 1/27/~9 ~e~TI S ING/MA~KET I NG GLOSSARY "A" Volume Store - An "A" volume store sells 500-799 cartons of cigarettes (all manufacturers' brands) weekly. "AA" Volume Store - A store that sells more than 799 cartons of cigarettes weekly. Actual Cigarette Volume (ACV) - A weighing system developed for measuring results of distribution, giving values to stores based on their actual clgarette volume. Highest volume stores are weighed heavier than low volume outlets because distrlbutlon in a higher volume store ~s more valuable to B&W. Actual Sales Data - Sales data obtained from store records such as invoices, order books, inventory forms; or, the store is part of a chain, from the chain offlce or warehouse removal records. Ideally covers an 8-13 week period. Ad Positions In Magazines - Some specific positions are as follows: FC BC 2C 3C front cover back cover inside front cover inside back cover Advertising Material Code Numbers - Alphanumeric codes appear on legal submissions. The alpha portions are as follows: BS CP ES M or MG MI N or NW NC NH NS PA PO RD S SM SP SS bus shelter criterion poster eight sheet magazine miscellaneous newspaper, black & whlte newspaper, color newspaper, hi-fi newspaper, spectacolor paint poster radio mpectacolor selling materials males promotion Sunday Supplement

SX - eix sheet T - television TA - trade TE - transit, exterior TI - transit, interior W - wrapper Aisle Spanner - Temporary cardboard advertising p~ece that nor~nally placed across store aisles with metal rods. All Commodity Volume (ACV) - Indicates the percent of total USA or region store sales that has been contrlbuted by an indivldual store. Used as a measure of the buslness importance of the accounts that stock a brand. Allocation - The limited quantlty of a product available to a direct account, based on an ecp/itable formula such as the account's past purchases. Allowance - A promotion offering the trade a speclal incentive (usually cash) for performlng certain require- ments. Anchor Brand(s) - Initial required brand or brands placed ~n a vending machine for qualification for vending contract pay~ent. Annual Dollar Margin - The gross annual dollar profit expressed as a percent of the selling price. Area of Dominant Influence (ADI) - Market or station having the largest total percentage of media viewlng hours. Assignment - The geographic territory assigned to a Sales Rep. Audit (Vending) - Verification of brand placements and/or compliance of contract payments. Authorized Brands - Those brands officially approved by a buyer or store manager. Awareness - The recognition level of a brand or its advertls- ing. 'B' Volume Store - A store which sells between ~00 and 499 cartons of cigarettes weekly. Battle Kit - Package of promotional items used by Field Sales. -2-

Beetleboard - Volkswagen Beetle cars which are supergraphl- cally decaled with advertising messages. Billboard - A flat, upright structure for the display of outdoor advertising; usually in six or thirty sheet poster size. Bill-of-Lading - A receipt listing goods shipped that signed by both the carrier and receiver. Bleed - An advertisement in which part or all of the illustration or copy runs past the usual margins out to the edge of the page. Bleed Posting - Usage of blanking paper that is the same color as a billboard poster background to bring the design display area up to the inside panel moulding. Blind Product Test, Monadic Or Single Product - The test is used when testing unique or novel products that Nave no direct counterpart to avoid focusing undue attention on the unique point of difference. Blind Product Test, Paired Comparison - This test is used when B&W wants to know how its product compares to another either overall or with respect to one char- acteristic. Blitz - Rapid coverage of an assignment accomplished by special routing. Bonus Product Pack - A promotion in which the consumer Is offered extra product at no increase in retail prlce. Bounce-Back Coupon - A cents-off coupon distributed via insertion inside mf a product or printed on the product, redeemable on the consumer's next purchase of that same product. Brand A/Brand B - A dummy or code name for a product not yet on the market. In some cases, Brand A or B might De only a concept, with no product development having taken place. In 1978, Brand A was Arctic Lights and Brand B was Savor, but these designations were contlnuously cnanglng. Brand Development - A measurement of retail or factory dollar sales per thousand households annually for a brand. -3-

Brand Development Index (BDI) - An index number based on a brand's dollar sales per thousand households. The larger the sales in a market relative to population percentage, the higher the BDI in that market. Brand Line Extension - Spin-off of an established parent brand. For example, 100's, box, low 'tar', etc. Brand Loyalty - Consumer preference for and the continued purchase of the same brand. Brand Mix - The assortment of brands for sale, representing the proper num3Der of each brand based on market share information. Brand Starter Index (BSI) - Aratio reflecting the percentage of starters who smoke a glven brand in relation to that brand's share of the market. Brand Switchlng - Consumer trlal of brand not currently smoked whlch results in changlng to the new brand. Buyer - The person with the responslbllity for the purchase of cigarettes/tobaccos. 'C' Volume Store - A store which sells between I00 and 299 cartons of cigarettes weekly. Call Back - A repeat visit to a store within the same week. Call Coverage - The pattern followed to assure that a sales representative visits all of the retail outlets for which he is responsible, based on call importance/ opportunity. Car Stock - B&W product normally purchased and carried by the sales rep. Carton Capacity - The total number of cartons of cigarettes the fixture in a store normally holds. Carton Fixture - A cigarette storage unit from which cartons of cigarettes are sold to consumers. Carton Method of Sale - There are three methods of carton sales. These are self-servlce, over-the-counter, and show and sell. Cash Sale - When product is sold from car stock for cash. -4-

Category Development Index (CDI) - An index number based on category dollar or unit sales per thousand households. This measure allows a valid market-by-market comparlson of category business development by factorlng out populatlon differences. This index is used to compare category development in individual markets against the national average. It applies the BDI concept for product categories. Canegory Development - A measurement of retail dollar sales per thousand households annually. Center Spread - The two facing pages in the center of a periodical; desirable because the pages are contlnuous, wlth little or no interruptlon. Channels of Distribution - The cycle through which a product travels from the factory to the ultimate consumer. Checklane Display - A display of products placed at the checklane of a reta~l store. Clrculation - The total number of copies of a publlcation sold or distributed. Comparative Sales Aulalysis - See TA-455 Competitive Display - Any type of display supplied by someone other than B&W, including store owned displays. Complimentary Closures - Free tax stamps on sample c~gar- tries. Consumer Panel - A group of consumers who are retained to provide information of interest to an advertlser, advertising agency, or research organizatlon, as reactions to advertising or patterns of purchase and consumption; a consumer jury. Consumer Samples - Free samples distributed to indlvldual consumers. Contest - A competition based upon the exercise of skill to win prizes. Proof-of-purchase is usually required as a condition of entry. Continuity Program - A promotion offering a set of related merchandise items which consumers collect e~ther free or at reduced prices over a given time perzod. -5-

Cost Per Thousand (CPT) - The advertising cost required to reach one thousand persons, homes, or other audience unlts. Counter Display - A display of products placed on the counter of a store. Counter Easel - Small, cardboard counter advertising which does not hold the physical product. Count-Recount Allowance (CRA) - A promotion offering the trade a specified payment on each case of product moved through a retail outlet during a specified period of time. Coupon - A certificate issued by a seller/manufacturer entitling a bearer to claim a stated discount on the purchase price of an item. Coupon - A certificate offering consumers a cash savings at a retail store wlth the purchase of a specified product. Coupon Drop - Widespread distribution of coupons within a given area for the purpose of trial and added sales. Coupon Pack - A promotion technique involving distribution of coupons inserted inside the product or printed on the product's carton. Creative - Creation of an image for a brand (copy and "situations"). Criterion - An outdoor advertising panel 7'3" high by 7'1%" wide. Cross-Ruff - A technique of distributing samples or coupons of one product ("carried" product) by inserting them in or attaching them to the package or carton of a second product ("carrier" product). 'D' Volume Store - A store which sells between 50 and 99 cartons of cigarettes per week. Decals - Appliques depicting B&W product normally applied to retail store windows and doors. Demographics - The statistical study of population, size, ethnic makeup, density, distribution and vltal charac- teristics of a particular area or product. -6-

Depth of Distribution - The state of having all products carrled by a customer stocked in sufficlent quantlty, i.e., normal requirements and backup, so as to not run out of stock from week to week. Direct Ac:ounts - Businesses to which B&W sells and s~Ips ~ts products. Direct Mail Advertising - Use of the postal system as a medlum to deliver advertislng to prospects. Display - An arrangement of goods or advertising, intended to call attention to and prompt the sale of a product. Dzsplay Allowance - A promotion offering the trade the opportunzty to earn payment (or a speclfied glft) per case if they erect speclal in-store display actlvlty on the sponsorlng brand. Dzsplay Materzals - Materlals produced by a promotzon sponscr and made avazlable for in-store use and newspaper trade advertising. Dzstrlbution - Product availability for consumer purchase zn a retail outlet. Dlstribution Gap - Product is not avail~ble for sale in an outlet. Distributor - A business that sells stock to retailers or sub3obbers from a central warehouse. Donnelley - A marketing and research firm which processes store redeemable coupons and aids in sampling activl- ties. It also reports measured product purchases in food, drug and mass merchandiser outlets, using bimonthly sample units. ~ump Bin - A display bin in which merchandise items are dlsplayed loosely, rather than stacked neatly by the carton/package. 'E' Volume Store - A store which sells under 50 cartons of clgarettes per week. Exchange - One of B&W's products is exchanged for another product on a pack-for-pack, carton-for-carton or dollar value-for-dollar value basis. • --7--

Extender - Normally a connecting unit of a caAton rack designed to hold five or six rows of cigarette cartons to a shelf. In order for an extender to be counted as a fixture it must accommodate cartons of cigarettes. Flighting - The method of scheduling a heavy advertising schedule for a period of time, then stopping advertislng only to come back wlth another heavy schedule. Usually used to support seasonality, promotlon periods, new product introductions, etc. Floor Display (20/40/60) - A freestanding modular unit that holds 20, 40 or 60 cartons of cigarettes. Floor Easel - Freestanding advertising piece that does not hold any product. Flyers - An advertising circular for mass distrlbutlon. Four-Color Page - Pertains to halftone printing in yellow, red, blue and black In com~inatlon, to glve a complete range of hues and tonal values to match the artwork. Abbreviated 4/C. Franchise Smoker - A brand loyal smoker. Free Display - One complete unit of product that is prcml- nently placed at or near a primary selling pos~t~on w~th the purpose of brand awareness. No money, product, coupons or gratis material can be paid for the place- ment. Freestanding Inserts - Nonpasted items (usually coupons) inserted in newspapers. Frequency - The average number of times a commercial is exposed to an audience wxth~n a given t~me period. Front Door Distribution - The number of individual stores with distribution. Front door distrlbutlon percentage is calculated by dividing the number of stores w~th brand distribution in each class and buying status by the total number of stores in that same class and buylng status. Front Facings - The number of cartons visibly displayed on a car~on fixture. -8-

Gain - When an outlet which did not previously stock certain B&W product beglns to do so. Generic - Relating to or characteristic of a whole group or kind. For example, a generic display accommodates any of B&W's brands. This display becomes brand speclfic only when riser cards are added. Generic Plastic Module - Used for counter/checklane displays either singularly or grouped. Geographical Weighing - The practice of giving extra consideration to one or more markets because they have more sales potential (due to location, demographlcs, etc.) than other markets. Gondola - Store shelving, open on both sldes, in a self- sea-vice retail store for displaying merchandlse. Gratzs - The discretionary free promotional items or products used for the promotion and display of B&W produc~s as determlned by opportunity and need. Gross Margin - Gross dollar profit expressed as a percentage of selling price. It is derived by dividing gross dollar profit by the selling prlce. Gross Profit - The selling price minus the cost of the item. Gross Rating Points (GRP} - GRPs represent the number of impression opportunities, expressed as a percent of the population of a specific market normally quoted on a daily bas~s. Gross Rating Points (GRP) - The total ratings of all television showm in a given advertising schedule during a given time period (usually four weeks). Program Rating x # of Announcements = GRPs Handling House - A company specializing in all aspects of coordinating, handling and fulfilling promotion programs that are implemented by mail, such as mail-in premlum programs, mail-in sweepstakes, coupon mailings, etc. Heavy-Up - A surge in spending, typically in promotions, to help move a specific brand or push sales in a speclfic geographic area. -9-

Hi-fi/Spectacular Advertising - A full-page, high-quality, four-color rotogravure advertisement that Is preprlnted on coated stock and furnished to a newspaper in roll form for insertion durlng regular run. As the roll is fed into the press, ed~torlal copy or other advertising is printed on the reverse side, and, in some cases, a column of type is imprinted on the hi-fi insert itself. Hi-fi Brands - High filtration cigarettes which have tar levels of 15 mg. tar or under. Incentive - A reward tied to performance. In/On-Pack Premiums - A method of offering consumers low-cost premlum items, packed inside or attached to the product's package. Insert Ad - A pre-printed ad supplied by the advertlser to the publisher for insertion in the publicatlon (e.~., Sunday Supplement insert, pop-up coupon ads). Introduction - Initial placement of a product not previously in distribution. Introductory Allowance - Monetary consideration given to Direct Customers for purchasing a new product. Jobber - See distributor or direct account. Jugular Campaign - This term was an internal code name for the KOOL group strategy to knock off Salem. LMP - Local Merchandising Program. LMP Payment - Allocated funds for the introduction of and/or display of B&W's products. Load Pattern~Plan - In vending, a schematic that specifies certain brands to be stocked in machines. Usually used by large vendors or headquarters of national vendors in order to maximize sales and contract monies from manufacturers. Logo - A brand name, publication title, or the llke, presented in a special lettering style or typeface and used in the manner of a trademark. Logo Tab - Product identifier normally affixed to package and carton fixtures. -i0-

Loss of Distribution -When a previously stocked product is discontinued in a store and is no longer available for consumer purchase. Mail-In - A promotion offer in which consumers participate by submitting a specified requirement (e.~., cash, box tops, etc.) to the company in order to receive a premA~m item or a refund by mail. Mailed Coupon - A coupon distributed in one or more forms of print media such as newspapers, Sunday Supplements, etc. Makegood - An advertisement run as a replacement for one that was scheduled but did not run or that ran incorrectly. Margin - The gross dollar profit expressed as a percentage cf the selling price. Marginal Brands - Low volume brands. Market - A specific political, geographical, economic or demographic area. Market Potential - That portion of a market that a company can hope to capture for its own product. Mark-Up - Gross dollar profit expressed as a percentage of the cost. Market Segments - Identifiable subgroup of purchasers with:n a market who share a common characteristic or special need, i.e., Black, vending, convenience stores, etc. Market Share (SOM) - The percentage of a category's sales, in terms of dollars or units, obtained by a brand, line, segment or company. Match Caddy - Holder for book-matches. The holder normally carries an advertising message. Mechanicals - Photostated elements of a design sealed in the desired position to illustrate the baslc design concept. Media - Any means of audio or visual advertising such as TV, radio, magazines, newspapers, billboards, direct mail, etc. Media Coupon - A coupon distributed in one or more forms of print media such as newspapers, Sunday Supplements, etc. -ll-

Media Weight - Total impact of an advertising campaign in terms of number of commercials, insertions, reach and frequency, advertising and dollars, etc. Metropolitan Statistical Area (MSA) - Population area with a large nucleus at the center and with adjacent areas that have a large degree of economic and social integration wlth the center. Min~-Module - A B&W package fixture which holds up to 25 packs of B&W cigarettes. Multiple Unit Purchase Offers - A promotion which requires multiple product purchases in order for the consumer to receive a special incentive. The objective of thls ~ype of event is usually to generate strong continuity-of- purchase. Near-Pack Promotion - A premium technique wherein the premium is given away or sold to consumers along wlth purchase of the sponsorlng product. It is u~ually packed in a nearby special display unit designed to provlde the focal point for a product display. Net Profit - The selling price minus the cost of an item and cost of doing business (salarles, .overhead, etc.). Nondirect Account - The business or supplier that does not purchase tobacco products direct from the factory. Offensive Spending - Advertising activity intended to secure new business. Overlay - A sheet posted over a billboard poster showing price, date, etc. Also called a "snipe." Package Fixture - A storage unit from which packages of cigarettes are sold to consumers. Palnted Bulletin - A billboard on which the advertising message and illustration is painted directly onto boards, walls, etc. It is 14' high by 48' wide. May also be billboard sheets posted on standard slze billboards. Panels - Regular and illuminated units of outdoor advertis- ing. -12-

Pen Pack - P.O.P. item that is a facsimile of a pack of cigarettes with a pen attached and normally placed at the point-of-sale. A gratis item. Permanent Advertising - Free P.O.P. items that are placed In a store for permanent exposure and usually have a store benefit. These are normally more expensive advertising items. Permanent Display - Product display for which a contractual agreement has been made to place and maintaln at point- of-sale. Pipeline Programs - Methods for getting a product into production and generatlng advertlsing. P.O.P./P.O.S. - Commonly used abbreviations for Point of Purchase/Point of Sale. It is simply the place in wh~c~ a cash transaction for product takes place. Thls Is a prime target for advertising placement. Poster - A printed paper advertisement, taped or tacked up ~n a public place, or an advertisement prlnted on sheets of paper to be displayed on billboards or 12' x 25' poster panels. Predictive Pretest (PPT) - A system to evaluate the ability of advertising to persuade taroet consumers. Premium - A merchandise item or gift offered to the trade as an incentive for performance of a specified requlrement. pre-Pack - Preassembled display unit for retail sale by the manufacturer or wholesaler. Price Reduction Offer (Price Pack) - A temporary reduction in the consumer's retail price, usually "flagged" to the consumer via a b~rst on the product's package or via in- store material. Pseudo Product Tests - Product tests in which respondents are unaware of the true objective of the evaluations. PVA Reports - Purchase Versus Allocation reports track wholesaler purchases from Rapid Distribution Allowance - Payment made to a customer for shipment of our product to retail trade in a specified period ~f time. Normally verified by count/recount.

Rating - The percentage of "TV homes" tuned to a particular program. Reach - Usually a percentage of individuals in a given market area exposed to an outdoor program during a specific time perlod. Reach/Frequency (R/P) - The standard method of reportlng the coverage (effectiveness) of an advertising schedule. A schedule with a reach of 65 and a frequency of 4.0 (65/4.0) means that 65% of total homes saw B&W's message, on the average, 4.0 times during a four-week period. Readership - The total number of individuals who read a given publication. The figure includes secondary or "pass- along" readership and is usually 2-3 times greater than actual circulation. Registration/Trademark Brands - Brands placed in the marketplace in required quantltles to protect a deslraDle name. Reintroduction - Product is currently shown in the system as being in distribution but is not avallable for consumer purchase and must be "resold" to the store. Return Goods - Outdated or damaged B&W stock to be returned to B&W. Return Per Dollar Invested - The amount of profit realized on each dollar invested on inventory. Also referred to as Return Dn Investment (ROI). Rev Weights - Relative expected value of certain magazines (based on nu~er of readers who are smokers) to B&w for placing ads. Rotation - Painted bulletins physically moved periodically to new locations throughout the market. Locations are selected to meet particular marketing objectives. Run-Of-Press (Run-Of-Paper, Run-Of-~ublication, ROP) - A newspaper advertisement positioned anywhere and run at the newspaper's discretion. Also a generlc term used to define newspaper advertising. Run of Station (ROS) - Commercials which are bought by the advertiser and can be run at any available time during the day at the station's discretion. This type of buy -14-

is less expensive than requesting to be in a specific show or at a specific time. Sample Probes - Research projects targeting certain geograph- ical locations and problng for informatlon, such as number of smokers within a given area. Self-Liquidating P-O-P Unit - A unit for which the retailer wholly or partially pays. Self-Liquidator - A premium promotion in which the entire cost of the premium (generally offered as a mail-in) passed on to the consumer. Selllng Samples - Small versions of product that are given the sales force to hand out to the trade (wholesalers) to acqualnt them with a soon-to-be-distrlbuted produc~. Share of Space (SOS) - SOS is usually an allocation of retailer shelf based on each brand's share of the market. Single Unit Marketing Model (SUM~) - A model that determines whlch characteristic(s) of a brand should be advertised to consumers in order to increase the probablllty tha~ they will buy that brand. Spectacular Unit - This unit measures over 16' x 50' and is the next size up from a paint unit. Sp~ll-In (Spill-Out) - The degree to which programming is viewed in adjacent ADI or DMA areas. 5pot Television - Television which is purchased and aired on a market-by-market basis. Spot television commercials are usually aired in a cluster around the network program. Spotted Map - A map showing the locations of the outdoor units comprising an outdoor ad campaign. Store Door - A store door of 80% for VICEROY means that VICEROY is found in 80% of all stores carrying clgar- cites. Sub-Jobber - Supplier who buys tobacco products direct from a wholesaler for resale to retail stores. Sub-Trading Area - Portion of a trading area. -15-

Sweepstakes - A promotion which awards prizes purely on the basis of chance. Product proof-of-purchase cannot be required as a condition of entry. However, facsimiles (~, the word "Windex" printed on a 3" x 5" piece of paper) may often be used as an acceptable substltute. TA-455's - Monthly comparative sales analysis by customer which shows average sales and purchases to date. Supplied to managers. Tabloid - A newspaper of less than standard page size, normally 14%" high by 12" wide. Tackers - Metal or heavy piece of cardboard/paper advertlslng used on a store front or counter. Tape-On - Giveaway item attached to products to stimulate consumer purchase. Tax Stamp - Ink or decal indiGia which is affixed to product to indicate that state tax has been pald by the wholesaler. 1040 - A freestanding B&W package fixture that holds 1,040 packs of cigarettes. Test Market - A geographical area in which a test of an alternate marketing plan variable or new product is con- ducted. 1300 - A freestanding B&W package fixture that holds 1,300 packs of cigarettes. Thirty Sheet - An outdoor advertising space providing a copy area measuring 10'5" high by 22'8" wide, usually covered with a single poster printed in sections on 12 paper sheets. 30/60 Counter Display - A permanent, contracted counter display which accommodates elther 30 or 60 packs of c~garettes. Tlp-Ins - Regional ads that are cut in over national ads or promotional items (~_~, sweepstakes coupons) that are pasted in. Tobacco Merchandiser - Freestanding floor fixture for the purpose ofdisplaying tobacco products. -16-

Topper - Permanent piece of advertising normally placed on top of cash registers. Trading Area - A cluster of adjacent counties in which the wholesale "ship-to" address corresponds closely with the retail consumption pattern. Transit Advertising - Advertising associated with public transportation placed inside and outside vehicles and ~n their stations. Trial - The usage penetration of a category or brand. 12M Case - A container that holds 60 cartons or 12,000 cigarettes. ~enty-Four Sheet Poster - An outdoor advertising structure 25' long and 12' high to which outdoor posters are pasted. Twelve-Wide Carton Fixture - Designed to hold twelve rows of "cigarette cartons to a shelf. Twenty-Wide Carton Fixture - Designed to hold 20 rows of cigarette cartons to a shelf. Unique Selling Proposition (USP): The 'selling concept behlnd a product (e.~., "Finally, the fresh taste of menthol and genuine tobacco flavor in one cigarette"). Unit - A single poster panel or painted bulletin. Universal Sign - A B&W advertising sign for placement in highly visible locations. Vending Easel - Small easel placed on top of a vending machine. Wall Hanger - A B&W package fixture that holds 130 packs of cigarettes. Window Streamer - A strip of advertising posted in a store window. Wrap-Around Merchandising - Alternate method of displaying cartons facing the end of a shelf rather than the front on a carton fixture. laeu\list\adglosry.lst -17-