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n LEO BllRNETT U.S.A. ( T J April 18, 1991 Mr. Rick Stirlen PHILIP MORRIS 120 Park Avenue New York, NY 10025 RE: ASIAN-AMERICAN MARKET Dear Rick: Per your request, we have taken a preliminary look at the Asian- American market in order to determine what, if any, marketing effort should be directed against this population segment. In order to respond to your specific request, we examined the Asian-American population in terms of size, growth and composition. We also explored media opportunities for reaching this segment and reviewed other agency experience with clients who have addressed Asian-Americans as an component of their marketing mix. Our findings are detailed in the attached report. A summary follows: BACKGROUND The Asian-American population represents 2.9% of the U.S. and is growing rapidly. Asian-Americans are an extremely heterogeneous group with a great variety of language, religion and culture, fueled by a variety of ethnic distinctions. Based on 1990 census data, there are nine ethnic groups within the Asian-American population; Chinese, Filipinos, Japanese, Vietnamese, Koreans, Indians, Laotians, Cambodians and Pacific Islanders. These groups are very geographically concentrated, with more than 50 percentt living in the western United States, most predominantly in California, where nearly ten percent of the population is Asian- American. SMOKER INCIDENCE An independent study conducted by the San Francisco Chamber of Commerce indicated that Asian-American men smoke more than twice the proportion among the general population. Our standard media sources (SMRB, MRI) unfortunately, do not provide statistics on Asian-Americans. 35 WEST WACKER DRIVE, CHICAGO, ILLINOIS 60601 (312) 220-5959 TELEX-254098

-2- MEDIA AVAILABILITY/EXPERIENCE The most prevalent media available for reaching Asian-Americans are local newspapers and out-of-home, primarily in Los Angeles, San Francisco and New York. National print is also available, although on a somewhat limited basis. Additionally, we have access to an extensive Asian-American database through our Direct Marketing Department. United Airlines is currently our only client with an Asian- American media program. To our knowledge, none of our clients uses an outside consultant in this area. RECammENDATION/NEXT STEPS While the dramatic growth and apparently strong smoker incidence among Asian-Americans appear to provide an attractive prospect for Philip Morris, we do not recommend any specific marketing program at this time. Given the, as yet, relatively small size of this group and the fact that there is no common language or culture among them, no single effort, such as our Black and Hispanic programs, would be adequate. For now, we may want to explore the feasibility of isolating this group within our own tracking study to obtain some more meaningful learning about their smoking habits and brand preferences. We will discuss this with our Market Research Department and get back to you. Separately, given the dramatic growth this group has experienced, we may want to consider contacting the Roper Organization to see if they can also provide some statistics. In the meantime, if you have any questions or would like to discuss this further, please do not hesitate to call me or Jack. Cordially, LEO BURNETT U.S.A. Stephanie Massler Assistant Media Director /cb mpmlasia.usa cc: Mses. S. Spicehandler, R. Schneider - PM Messrs. J. Hanrahan, P. Volz, M. Peters; Mses. C. Hill, K. Lalley - LBCo