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THE Memorandum AMEIZICAN 'IDBACCO COMPANY m4ll(o Mr. J. M. Ockers July 25, 1994 Senior Vice President - Brand Operations C. J. Brown Business Director - New Products Approval Recommendation - RIVIERA U.P.'s The following requests approval to implement RIVIERA 1-W-1 U.P.'s in Baltimore and Wilkes-Barre/Scranton ADI's. Total estimated cost is $125,250. BACKGROUND Marlboro Menthol will be running continuous 1-W-1's in the Baltimore ADI throughout August, targeted in Newport high development outlets. Kool is running $4.00 off a catton and two free packs with a carton in the Wilkes-Barse/Scranton ADI. Both of these efforts and any that Newport may come up with defensively, could diffuse RIVIERA's communication, positioning and price advantage at a critical stage in the brands restart. It is recommended that we provide the test markets with 250 cases of U.P.'s to sustain our price advantage over Full Revenue competition during the initial stages of our test (100 cases for Baltimore and 150 cases for WilkesBmre/Scranton each split 50/50 Kings and 100's). This equates to roughly two weeks of projected sales for each market: 250 Case of U.P.'s = 3,000 Units rJore : FACroICy e P 3,000M Units = 2= 1,50oM Free Units 1,500M Units : 20=75M Free Packs 01K+ fya 3p, o00 75M Packs x $1.67 = $125,250 Gp loss ~eV"' 95 dSU May I have your approval to proceed? 1. 125, 25D ATEESyB CJB/mak

APPROVALS RIVIERA U.P.'S c~U Yt7 ?12j- _ J. M. Ockers Date T.A.~ Jb / ert Da 4- B// A. R. Corrente Date Date ate JL) ~- ~&9 D. Gray ' Date