Tobacco Documents Online

MARLBORO MUSIC 1994 MARKETING PLAN OVERVIEW The following provides initial direction for the implementation of a Marlboro Music program in 1994. The program will represent one of the promotional arms in support of a more comprehensive platform that will communicate the "Marlboro Country" theme. INDUSTRY OVERVIEW In the past three years, Country Music has experienced the largest growth in terms of listeners, buyers and media exposure than any other musical format. This growth has outpaced the boom Country Music enjoyed during the "urban cowboy" phenomena. Most Country Music industry leaders credit Country Music Television (CMT) as having perhaps the greatest impact in the new "look" of Country Music. Critics and label executives agree that the economic uncertainty of the 90's has turned people towards the solace of Country Music. Its uncomplicated music made by accessible stars for people who are dealing with difficult and complicated real life issues. Furthermore, the songs have changed. For decades a country song included rowdy working-class every man loving, cheating on or crawling back to strong women lyrics. Topics were limited to cheating, prison, religion, drinking, trains, mom and when in doubt the American Flag. Today's songs range from a young field hand learning about sex from a widowed farm woman in Garth Brook's recent hit "That Summer" to the male empowered "Better Man" by Clint Black who ends a relationship by saying "I'm leaving here a better man/knowing you this way/things I couldn't do before now I think I can/and I'm leaving here a better man". Similarly women aren't sitting home crying over their loves and cheating men. Mary Chapin-Carpenter's songs on her latest album range from the track "He Thinks He'll Keep Her" about a 36 year old mother of three who's been so taken for granted by her husband that she packs his bags one day and tells him "I don't love you anymore" without any regard for the future to an irreverent fantasy of winning the lottery and having two of her favorite country stars Dwight Yoakam and Lyle Lovett fighting over her in the song "I feel Lucky". There is also sassy Lorrie Morgan who tells her cheating man "If you think I won't go, just watch me". Her most recent hit, "What Part of No Don't You Understand?" is indicative of the attitude most women take with them to the Country Dance Clubs these days...as

Page 2 Lorrie says in the song "I am not interested in romance or what you have in mind". Today's country artists are younger, better looking and better educated than their predecessors. They are more likely to have graduated from an Ivy League school than a prison cell or the School of Hard Knocks. According to several prominent sources in the music industry, the future for Country Music continues to be very promising. The audience is getting younger and many exciting young acts are coming on the scene. The picture has improved in Nashville because the record labels have been able to develop new artists, and country rodeo has been willing to play them. The media is now focusing more attention on Country Music and the artists due to increasing popularity. All this means good news for Marlboro as the premier sponsor in a growing industry. PROGRAM BACKGROUND Marlboro was one of the first national sponsors of Country Music. Among the industry and several members of the media, Marlboro is still considered the premier sponsor of Country Music and is credited by many as the catalyst for the expansion of Country Music. Although Marlboro has been visibly absent from the scene since 1989, the reputation of quality and integrity remains intact. Marlboro Country Music past tours were recognized as the premier Country Music tour in the United States. 1993 marked the eleventh year of Marlboro Music, which evolved from a two market test program in 1983, a 17 city national tour in 1987 and presently leveraging its music equity at five state fairs. It is important to note that the core program remains the same as it was in 1983, by keeping top artists on the bill and intensifying the publicity aspects of the program. The Marlboro Country Music Tour evolved as an extension of the Marlboro Country Advertising Campaign, and helped to fill a void in Marlboro's promotional plan. At that time, the only promotion supporting Marlboro was the Marlboro Cup at Belmont Park. Simultaneously, there was also a void in the area of Corporate sponsorships in Country Music. This ensured Marlboro a dominant presence in a growing industry. In addition to being the dominant corporate sponsor, Marlboro provided a program which was unique within the music industry because it offered spectators a variety of features: A Talent Roundup competition, multiple headliner format, state-of-the-art production technology and low ticket prices. 1992 CONCERT TOUR Marlboro Music just passed another milestone with the culmination of its tenth year of sponsorship of Country Music. The 1992 Marlboro Music program

Page 3 featured stellar entertainment at five of the nations largest state fairs and concerts at ten U.S. military installations. The past year saw Marlboro Music enter a new dimension of Country Music with successful sponsorship of major concerts at five of the nation's largest and most prestigious state fairs -- Indiana, Michigan, Oklahoma, Virginia, and Texas -- with artists including Ricky Van Shelton, Vince Gill, Brooks and Dunn (Ronnie Dunn, a Marlboro Music Talent Roundup national winner), Rodney Crowell, Ricky Skaggs, and Pam Tillis. In the past ten years, with state-of-the-art production and the biggest names in the business, Marlboro Music has gained recognition among industry leaders as THE premier sponsor in the field of Country Music. Since 1982, Marlboro has claimed many industry "firsts". Ten years ago, Marlboro Music brought together many of the biggest names in Country Music for arena shows. Names like The Judds, Ricky Van Shelton, Waylon Jennings, Kathy Mattea, Alabama and Randy Travis are all veterans of Marlboro Music's arena Tours. Marlboro Music concerts were the first in Country Music to use video projection to augment spectacular sound and lights. Working with the prestigious Country Music Foundation, Marlboro Music conceived and produced critically acclaimed festivals that brought to a market more than a week's worth of concerts, club performances and interactive workshops with instrumentalists like Chet Atkins and Albert Lee and songwriters such as Guy Clark, John Hiatt and Lyle Lovett. For the fourth year, 1992 saw Marlboro Music concerts on military bases across the United States. The Marshall Tucker Band, Lynyrd Skynyrd, and the Kentucky Headhunters were among the artists who played to tens of thousands of American servicemen and women and their families with the proceeds of the concerts benefiting the Morale, Welfare and Recreation Fund on each military base. From concerts at Madison Square Garden to our military base at Guantanamo Bay, Cuba, to the State Fair of Texas, Marlboro Music sponsorship is synonymous with top quality, first class entertainment in demand by audiences across the United States and beyond. CURRENT PROGRAM REVIEW The 1993 program combines a variety of elements, and consists of a five city State Fair tour featuring top names in Country Music geared towards a young adult audience.

Page 4 1993 Marlboro Music State Fair Tour State Fair of Virginia 10/1 Alabama Diamond Rio Mid South Fair 10/2 Brooks and Dunn Pam Tillis Greater Jacksonville Agricultural Fair 10/21 Mark Chesnutt Rickv Lvnn Greqc Alabama State Fair . 10/22 Mark Chesnutt Confederate Railroad Rickv Lvnn Greqq Louisiana State Fair 10/24 Mark Chesnutt Tracy Lawrence Rickv Lvnn Grea a One of the most successful elements of the program, was the partnership achieved with each State Fair. Sponsorship rights at each venue consist of on- site exhibit space, signage placements, rights to sell product and generate fresh names for the database throughout the run of the State Fair. Each State Fair is also responsible for concert production (i.e. staging, lights, sound and labor). Marlboro is granted all of the above for just providing top quality entertainment. Marlboro also determines if the concert will be ticketed, ticket price or free to the public. The 1993 tour will once again return to military bases across the country. Through a joint effort with Military Sales, we have identified six key markets where Marlboro Music will feature top legendary rock/pop artists. 1993 Marlboro Music Military Tour ... . .. . . Norfolk, VA Little Creek Sub Base 8/13 : Joe Walsh : John Anderson Columbia, SC Ft. Jackson 8/15 : Damn Yankees € Jonell Mosser Pensacola, FL Pensacola Naval Air Station 8/20 E 38 Special Joe Walsh Ft. Riley 8/22 Damn Yankees 38 SDecial Jacksonville, NC* Camp Lejeune 8/28 Lynyrd Skynyrd Damn Yankees Joe Walsh Drivin 'n Crvin Dover, DE 1Dover AFB 1 8/29 Lynyrd Skynyrd Drivin 'n Crvin

Page 5 One of the most successful elements of this year's tour is the satellite feed of the Camp Lejeune concert to twenty additional bases giving Marlboro a total reach of twenty-six military installations across the country. Military Sales will conduct bar night activities at each location consisting of name generation and raffling off an electric guitar autographed by the artist on the tour. Community Event Marketing has provided Military Sales with incentives in order to execute a two-pack retail tie-in at all twenty-six bases. This element creates an advertising and promotional vehicle for Marlboro on base among a young adult male audience. Marlboro Music continues to enjoy the position of being able to attract the top talent in both Country and Rock. In addition to the concert performances, the artists are also spokespeople for Marlboro, so it is important to include artists who are appealing to the press, and who are genuinely supportive of the tour. Each of these features help to maximize national media coverage and to broaden the scope of Marlboro's sponsorship. COUNTRY MUSIC DEMOGRAPHICS Research has been conducted to measure who is listening to Country Music and to define the audience demographically as well as psycho-graphically: • Traditionalist - Country to the core. Age range is 21-50, but their artist preference is narrow. Artists they will listen to include Conway Twitty, Ricky Skaggs and Randy Travis. Geographically these listeners are concentrated in areas from Canada through the Midwest into the Tennessee and Ohio Valley. Few to none reside in the Northeast or West Coast. This group represents about 25% of the Country listening market, but only 15% of album sales. They purchase cassettes to CD's 5 to 1. • Transition 30's - Includes people in their early 20's to ea0's who lis en o country as their primary entertainment-.-Tff -is-audience grew up not listening to country and now prefer it to other formats. They like it because its understandable and is more in sync with their values and passage through life. This rou comprises 45% of the country market population, but it buys % of the product. These consumers have an aversion to older country product which they perceive to be of poorer quality. They buy a mix of new artists and traditionalists. They watch some TNN and CMT video shows, but religiously watch the award shows. Most listen to three radio stations of which 2 are country. This group is nationwide.

Page. 6 • Country Convert - This is the fastest growina sec ment. These consumers listen to country but also look for artists like Elton John and Phil Collins. This group a~counts for 30% of the country~rientedm pogulation and buvs about 30% of the product. They are likely to buy Wynonna Judd, the Bodyguard soundtrack and Phil Collins at the same time. This segment is mid 20's to late 40's and predominantly in their 30's. This is the market that has expanded country Music to the Northern and Western corridors. The convert market is more likely to buy based on artist and not format and their tastes will change rapidly. The transition 30's will buy based on artist and format and will probably stick with it once they buy. The traditionalist is very selective about their purchase, but intensely loyal and once you've hit, you're theirs for life. Overall, CMT viewers buy an average of seven country albums per year which record labels categorize as an active consumer. Videos plays a role in which albums they buy. 48% of 21-34 year olds are.enlo ing Country Music more this year than Iast vear 41 % of 35-49 year olds are enjoying Country Music more -this year than last year. Radio compositions showed growth among 21-34_Iisteners and a noticeable decrease in the 35-54 year old groupinle listeners' time spent listening was down while male listener totals were up. More ecology-minded adults listen to country radio than other formats. These people consider themselves to be active in recycling and promote banning products that are perceived to be bad for the environment. Over a five day cume, an audience of 17,379,000 country radio listeners considered themselves to be ecology-minded. In one week country radio reached 11,528,000 adults who consider themselves to be brand loyal, more than any other radio format listener. WHO IS BUYING COUNTRY MUSIC AND WHERE? As reported in a recent Billboard magazine article, Countr Music product sales increased from a share of 12 5% of total product purchasecLin 19~1 to 16.5%°=in _ . 992. Rock music purchases dropped from a 1991 share of 36.3% to 33.2% in 1992. Its important to note that Country Music's share almost doubled since its 1990 share of 8.8%. Overall, each of the labels queried believed that most of their sales are generated nationally in only three retail stores and through Walmart and K-Mart stores which receive their product from Western Merchandisers. They list Musicland as number one, Superclub which includes Record Bar and Turtles second and then Camelot Stores as their top sellers. Unilaterally they felt that Tower Records sold very little country product and have been uncooperative in the past with the

Page 7 Nashville labels and too expensive. Record stores comprise 62.1 % of the sales, other stores 22.8%, tape and record clubs 10.6% and mail order 4%. Country product is sent to retailers on consignment. Promotions and end aisle displays are planned well in advance for the label, however, which artists product goes on display can change up to the day the displays are set up. This gives the record labels a lot of flexibility in changing release dates on albums and holding off on product that doesn't seem to be getting a good reception on radio or on the video channels. If product is sent to retail and is returned, it typically signals the end of the album's promotional life and the label will pull support or change strategies midstream. Despite the growth of Country Music nationally, each record label marketing team gears a good deal of their promotional campaign to appeal to Texas. The old axiom in Country Music still holds true today...to break in Country Music, you've got to sell in Texas. COUNTRY MUSIC DANCING AND MERCHANDISE Dance has always been a part of the Country Music experience ranging from the honky tonks and dance halls of Texas and the Southwest to the barn dances in the Midwest and Southeast. Today we're talking about more than two-stepping and cotton eyed Joe dancing. In the past two years the number of Country Music dance club has increased 60% to number over 1,200. More than 500 of these clubs have a capacity of 1,000 or more. The concept of incorporating dance into Country Music is not new. However, it took on greater significance in 1992 when Mercury Records met to determine how to launch Billy Ray Cyrus and his first single "Achy Breaky Heart" and Arista Records was looking for a new angle to promote Brooks and Dunn's next single "Boot Scootin' Boogie". Both record labels decided to take it to the dance club before releasing a copy to country radio. Both labels had plans to create a special dance and a contest tie-in. Arista remixed the Brooks and Dunn single to include a disco extended play version of the song to send out with their contest. When Arista executives got wind of the plans for Billy Ray Cyrus, they dropped their contest and released the first dance remix to the clubs. Mercury went ahead with plans to teach the Achy Breaky dance and hold local dance contests to promote the song. These promotions launched the artists careers and propelled them into superstardom on their debut albums. A precedent had been set and since then almost every artist has released at least one remixed song to the country dance club along with their videos which show people doing a dance step either created or specially selected for the song. Nashville record company executives now include country dance clubs in all marketing campaigns in much the same way as their New York and Los Angeles counterparts do for their Pop and Rock promotions.

Page 8 The popularity of dance clubs prompted CMT to create a Saturday Night programming look of dance-oriented videos called the CMT Saturday Night Dance Ranch. TNN has been broadcasting the dance show club dance for several years. This show is so popular that TNN has added a second dance show called Dancin' at the Hot Spots. Dancer Rebecca Holden and her co-host James Hill go on location to the hottest country dance clubs nationwide. They also demonstrate some of the newest and hottest dances in each of the clubs. All of this has spurned a new and growing market for instructional dance videos. TNN already offers an instructional home video from its Club Dance Show featuring the fundamentals of Country Dance, the Two Step and the Waltz. Club Dance Series II will feature the East Coast Swing and the Triple Play. The lessons are given by award-winning dancers who are joined by some of the Club Dance regulars. Choreographer Melanie Greenwood, creator of the Achy Breaky dance, has a new instructional video series entitled Country Gold Dance Instruction. Giant Record's artist Libby Hurley host the series and teaches the steps to dance created for songs by Brooks and Dunn, Collin Raye, Chris LeDoux, Steve Wariner and Libby herself. Another very successful series is sold on TNN and CMT entitled Country Dancin' USA. This company has recently launched a new magazine that's country which includes tips on clothing and accessories for the dance club lifestyle. Country Music fans have always been avid consumers of artist's promotional merchandise. The Country Music industry grosses $3 Billion in merchandise sales according to Winterland. In 1991, Winterland sold $1 Million in merchandise at Country concerts. In 1992 that figure jumped to $12 million. The reason for such a dramatic increase included signing more country artist who were achieving success faster than ever and the fact that retailers Penney's, Walmart, Target and K-Mart started selling country artist's T-Shirts in their stores. Penney's carries a variety of country artist's T-Shirts in 300 store nationally and Garth Brooks product in 1,400 stores. When MCA recording artist Marty Brown started his tour of Walmarts in the South and Southeast he was drawing hundreds of fans who wanted to buy his merchandise on the spot. Country fans are so loyal that the Country Music Association believed in the potential for a National Fan Club offering members merchandise and discounted cassettes, CD's and videos. The CMA licensed its name to Omni Marketing systems of Detroit. Omni utilizes Fantrac, a direct marketing system which solicits members from names acquired from various Country Music publications. Omni used Fantrac in 1988 for the superstar group New Kids on the Block which is recognized as the most successful Fan Club in the entertainment industry. All country artist utilize a Fan Club to send out newsletters, advance announcements of their tour schedules and offer discounted merchandise through direct mail as well as to include other items of interest to their fans. Country artists have always been dedicated to their fans and this is never more clear than during the

Page 9 Annual Fan Fair event in Nashville. This event has become so popular that the State Fairgrounds can no longer accommodate the number of fans that want to attend. The fairgrounds has a capacity of 24,000. In 1992, another event called Fan Jam was created and takes place the third week of May in Dallas. The facility can accommodate over 50,000. Beyond T-Shirts, country artists are walking advertisements for Western apparel. In order to fit in at country dance clubs, new customers are hitting the stores looking for the boots, shirts and hats worn by the popular artists. The Western and English Trade Market Association reported an upswing in overall sales with some stores showing increases of 33%. They attribute this growth to the popularity of country dance halls. In addition, they believe that when the economy becomes shaky, people return to their roots and country roots are in Western wear. The biggest selling items are boots and hats and after that brightly colored Western shirts. LIVE CONCERTS AND NATIONAL TOURING Country artists tour more often and consistently than any other genre of music. Unlike Rock or Pop, a country artist will release one new album every year and sometimes they will also release a greatest hit or Christmas album as well. In order to promote their product, they tour up to 300 days a year. Country shows take place primarily Thursday through Sunday. Monday and Tuesday are travel days and in. the South Wednesdays is still considered Church night. In 1992, touring revenues for the top 12 country acts grossed $84 million, a 60% increase since 1990. These acts played to nearly 5 million people nationwide over the course of 7 months. Each year talent buyers converge on Nashville during the week of the CMA Awards show to attend an entertainment buyers convention at Nashville Convention Center and Stouffer's Hotel. During this week 80-90% of all country tours and booked for the following year. Due to the proliferation of amphitheaters who have started a weekly country concert series, a number of dates are held a year in advance for these venues. Younger acts who had a successful first album, like Sammy Kershaw or Tracy Lawrence begin headlining in clubs with a capacity of 500-3,000 throughout the year. As they move up to playing small theaters or appearing on a packaged arena tour, their schedule shifts to the "live touring season". This season begins in April with theaters and some arena shows, moves into State Fairs, Festivals and Amphitheaters June through September and then back to theaters and arenas in late September and October. Some artists will stay out performing in arenas through mid-November. Very few artists tour from November through March unless it is at the club level.

Page 10 Country artists have always started out making more money per concert than their rock counterparts. Many say this is to cover the cost of their tour bus and fancy stage cloths. However, fewer country artists rise to the superstar status of Michael Jackson or Mariah Carey as quickly. This year's amphitheater and arena headliners include: Garth Brooks Alan Jackson Clint Black co headlining with Wynonna Judd Dwight Yoakam Billy Ray Cyrus Alabama Travis Tritt Hand Williams, Jr. Reba McEntire Brooks and Dunn Headlining in theaters with a capacity of 1,500-3,000: - Lorrie Morgan - Marty Stuart - Mary Chapin-Carpenter - Vince Gill - Tracy Lawrence - Sammy Kershaw - John Anderson Headlining in clubs with large capacities: - Ricky Lynn Gregg - John Michael Montgomery - Joe Diffie - Billy Dean - Confederate Railroad CORPORATE SPONSOR OF COUNTRY MUSIC The difference between Marlboro and other sponsors is the fact that Marlboro created events that artists wanted to be a part of and virtually all other sponsors have only attached their name and product to an existing tour by a singular artist or touring package. No other sponsor in Country Music has taken the time to find out what benefits the industry and the consumer and still achieve the sponsor's goals and objectives.