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PPP 'M Co'v,A.~GT W ~~ !~J ~Q ~1 Cv~' c~AS C,c.LS ~CQ Q% ~~ ~~W- ~ ~ t lv ~ ~ ~ ~ S t t .- ~ Yl i V 1 ~~ ~,t~ l V1 J~h vS s Y}~1 ~-+ ser SQ ~ 1988 MARKETING OBJECTIVES PREMIUM POSITIONING e5~~~ _~~ Rju--cLsl Je s CLSr - U~Leb~ -1-o `E~ - OBJECTIVE; ~ sz~_n" ~.~ ~ p~ PP'ocA BUILDING UPON THE HERITAGE AND PRESTIGE OF THE DUNHILL TRADEMARK, EXPAND THE EXISTING FRANCHISE WITHIN THE PREMIUM CATEGORY, ~~ STRATEGY: ° DEVELOP A NICHE BRAND POSITIONING BY TARGETING A S~FE IFIC USER GROUP WI TH I N THE LUXURY SEGMENT. ff'e-V, A~C~fi ~~ c:;7~vOJ" ° ° BUILDING UPON THE DISTRIBUTION OF THE EXISTING PACKINGS, LAUNCH A REFORMULATED LIGHT PRODUCT TO BROADEN THE APPEAL TO INCLUDE FEMALES, GLUIP f0~-W ku-rnec) r'Vp\/Cl • ° PROVIDE ADVERTISING BUDGET AND RETAIL SUPPORT TO REINFORCE THE EXCLUSIVITY OF THE TRADEMARK, AND EMPHASIZE THE UNIQUE QUALITIES OF THE PRODUCT AND PACKAGING. t~ r t c~~ Ck-o.u-n - ~ L', ° IN ALL-NATURAL, THE PRODUCT USP PROVIDES A 'REASON WHY' FOR THE DISTINCTIVE TASTE, WHICH COULD BECOME A CLAIM WITH MASS-MARKET APPEAL IF THE ENVIRONMENT WARRANTS,

~ Ge} ~yt2 CX ~-~^ ~' Lv ~ i U`Q S S i~ ` 9 (_4 ~ 1988 MARKETING OBJECTIVES ADDITIVE-FREE POSITIONING vl~i-i p po 0-u`cY • OBJECTIVE: IN REPSONSE TO LEGISLATIVE PRESSURE, BE THE FIRST IN THE MARKET WITH AN ADDITIVE-FREE PRODUCT, a)J_ "A, -0Pd©~ STRATEGY: ° LAUNCH STANDARD FLIP-TOP BOX PACKINGS, AT POPULAR PRICE, RETAIN 2-ROW PACKINGS AT PREMIUM PRICE, d~s~+nC_-~ ~ -~l ~ ° DUNHILL'S PREMIUM POSITIONING PROVIDES A LOGICAL 'REASON WHY'-- THE FLAVOR THAT DOESN'T NEED ADDITIVES,

~1~ran rv,~ ~~- ~~ c~ ~~c~- (~rnc~-~n ~ ~~ ~ ~ ~ ~ ~'`."c~ ~t- J~-~ -~t ~-~-~ ~ L o ~ u ~- ,~ " DUNHILL LICENSING AGREEMENTS 4n`l ~ e.~sts~~ a~Pro~f io~ ~s1 (~-tte~s , ~dr-Ho-~ o~ nta.i.n ~~ ~ i~1~~ PREMIUM ALL-NATURAL ~~ e~ ryt6 s os s. rn. o~s ,c;~ e,~n vI ro n rnt e-ors u~. 2-YEAR TEST MARKET PERIOD TEST MARKETING NOT VIABLE FOR THIS PROPOSITION, REPLACE MILDS (BLUE) PACK ADDITIONAL HLP PACKINGS IN TEST MARKET AREA CO-EXIST WITH ORIGINAL PACKS, CURRENT PREMIUM PRICE POPULAR PRICE FOR HLP PREMIUM PRICE FOR 2-ROW REVISE 1985 AGREEMENT ° MARKETING CRITERIA ° MINIMUM VOLUME LEVELS ~, s- --~ pj --;, lG RETAIN 1985 AGREEMENT

e te-'m ~ 0rn f rc c.f DUNHILL ISSUES PRODUCT: -1iC~ 1~ a f 0 rt e-v, _ C l S 1 YIG S; j ` it S `f~l c~h~ L_+.S qo &p-k--Q. L-f-s; 30 - 3,5 tL~~ ~P - re5t po f0-6-~ , kq k aws I a.c.." P~~4' PACKAGING: SOURCE OF MANUFACTURE: TARGET: rrnJ k-Lkrns ° UNIQUE BLEND, NO ADDITIVES 0 15 CMG~ RED AND 8 MG L I GHTS 0 INTRODUCED WITH SPECIAL LIGHTS PACKING, REGULAR AND MENTHOL 0 95 MM LUXURY LENGTH 0 REVISED LIGHTS PACKAGING (PRINCESS) 40 Gv( ~~Ctx~o~~ P~ rnCesSi s t~ 0 U,K, .v-- 5p - p re-rl - p rc c'e &- 0-4. 0 LUXURY U,S, DOMESTIC MARKET 0 SPECIALIZED AUDIENCE RED - MALE LIGHTS - FEMALE (CONTINUED)

DUNHILL ISSUES PRICE: ° PRICED AT EXISTING PREMIUM ($2,00) 0 POPULAR PRICE IF ADDITIVES HEAT UP DISTRIBUTION: ° DEDICATED SALES FORCE ~ ~~, ~~Oa ~ ° LIMITED DISTRIBUTION, INCLUDING RESTAURANTS, l~-, 6 c S6-w - u'~ 16 ~ HOTELS, SPtC 1AL 1 Y SHOPS C~e,_o_5on~-~ ~ro a-d • ° eurnw G-~~k=R MILDS (BLUE) PACKING FROM TEST AREA PROMOTION: 0 NEW PERMANENT DISPLAYS 0 VERY TARGETED VIA DIRECT MAIL a ADVERTISING: 0 IMAGE OR PRODUCT HERITAGE 4o-t) rn `~se- aA-U4s _ 0fpro c-cJ--' 4~ or r,m ( I nu-Xec s"'l_o`vrvAk •

CONSUMER RESPONSE ~ SMOKER TYPE we~-L~ BUSINESS LEADER, SERIOUS, HARD WORKING, PROFESSIONAL ti ct.SSoC.iC-+c 6-V\S ADVERTISING COMMUNICATION y t 5 u.caQ a ZeCL ° MEETS DUNHILL QUALITY EXPECTATION - THIS IS THE WORLD OF DUNHILL ° FOR SOPHISTICATED, PROFESSIONAL, AFFLUENT ° FOR THE SELF-ASSURED, SUCCESSFUL ~ `~vt~-~ s n1 k- rS A_~_Q_ C- 6-6-t~ (ZI)OC9 ic&" . ° BRINGING WOMEN INTO A MAN'S WORLD ° EUROPEAN STYLING cr~_ W PL~

bqGq V-d, , ,,,L4A C-'V, . LUXURY SEGMENT U,S, DOMESTIC ° COMPRISED OF PREMIUM-PRICED IMPORTED BRANDS 0,2% SHARE 0 DOM I NATED BY ROTHMAN S ~~t~ t L.t__ 25-30% (.} SLt:~~t V U1 ~ SHARE OF IMPORT SEGMENT v,~_t"~--R-~ I

Y21 m oJe y-~SA~ ( biI1 cov~ r~~r~~sL 4 wru~s ov~ y-o-t, ~ b cLs c S t~ rmmedA-itc- 4-eh-rm d-.omes~kc DUNHILL U,S, VOLUME AND SHARE TREND 1983 1984 1985 1986 1987(E) VOLUME 224 222 232 255 285 (MILLIONS) M()jco~;) % INCREASE +3,7 -0,9 +4,5 +10,0 +12.0 OVER PREVIOUS YEAR SHARE% 0,038 0.037 0,039 0,044 0,050 SHARE CHANGE - -,001 +,002 +,005 +,006

19_88 TEST MARKET i S 2 P w,.~-s SAN FRANCISCO DEMOGRAPHICS: 2,7% OF U,S, POPULATION PRE-TEST SHARE: 0,12% (SDI 300) PROJECTED SHARE: 0,15% - 0,18% PRE-TEST VOLUME: 18.3-MILLION UNITS zl~ 01se. iI~' ANNUALIZED VOLUME GOAL: 27,5-MILLION UNITS (+50%) NET ANNUAL INCREMENTAL VOLUME: 9,2-MILLION UNITS MEDIA; $5-MILLION NATIONAL TRANSLATION IlU ° SELECT VEHICLES ONLY 0 DIRECT MAIL CAPABILITY U 0--t ~ ~~~~~ TARGET c~~s 54~Lr hskAs - tO -N-o 0 MALE/FEMALE 0 25-54 ° BETTER EDUCATED ° HIGH INCOME ° URBAN RESIDENTS ° NON-MENTHOL AND MENTHOL SALES FORCE COVERAGE: ° EXPAND RETAIL DISTRIBUTION ° EXTEND RETAIL VISIBILITY 0 TARGETED SAMPLING 0- ~c~"e

PRODUCT DUNHILL INTERNATIONAL (RED) DUNHILL SUPERIOR MILD (BLUE) PROPOSED U,S, PROTOTYPE (SPECIAL LIGHTS) PROPOSED U,S, PROTOTYPE (NATURAL) TAR/MG 14,8 8 8 8-10 NICOTINE/MG 1,2 1.0 110 0.8-1.0 PUFFS/CIGT, 9,9 10 10 BLEND L VA/ NAT'L VA NA.T'L MOD, VA?) NAT'L VA LENGTH, MM 94 94 au'k~x 94 roc~ ks-~ 84+100 CIRCUMF, MM 24,9 24.9 24.9 24,9 FILTER TYPE CA CA CA CA LENGTH 25 29 TPG LENGTH COLOR PACKAGING CORK PRINCESS/20 CORK PRINCESS/20 WHITE PRINCESS/20 -;~ ~WHITE?~ HLP/20