Tobacco Documents Online

PM21 Overview April 13, 1999 99Z9£Z8LOZ i

PM21 Positioning Goal To bring perceptions into line with reality PM is an open and socially responsible family of companies, which manufactures and markets the world's most popular brands, some of which are associated with risk. 06Z9£Z8LOZ

PM21 Mission PM21 is an initiative designed to change the public's perception of Philip Morris and to improve the public's attitudes toward the Company and the people who work for it. 69Z9£Z9L0Z z

PM21 Implementation Plan STAGE 4 STAGE3 STAGE 2 STAGE 1 1997 1998 i ~ Benchmark Nov. '98 1999 2000 66Z9£Z8L0Z

Situation Analysis Z6Z9£ZBLOZ

Perception Index Mean Provides a lot of jobs Has a positive impact on the economy Has quality employees Is more than just a tobacco company Is a good investment Produces quality products Donates a lot to charity Is willing to cooperate Gives back to the community 0"/ 20°/a 40% 6D"/a 80"/0 1  Very Descriptive (9-7) 0 Somewhat Descriptive (6-4) • Not Descriptive (3-1) o Don't Know Study conducted 5/98, 1,600n 6.6 5.9 5.8 5.7 5.4 5.3 5.3 4.9 4.9 100"/i 96Z9£Z8L0Z

Push-Back Ballot Now here is another view... Some people say that Philip Morris cannot be trusted. The company lied in the past and continues to deceive us by pretending to be responsible and concerned about youth smoking. Philip Morris is still America's largest tobacco company. Furthermore, Philip Morris will continue to build its overseas tobacco business, and hook a new generation of kids on smoking. They also say that Philip Morris knew the facts about nicotine being addictive and tobacco causing cancer for decades and hid those facts from smokers and the government. They say that Philip Morris only promises to change when it is forced to, and that no matter what it says, Philip Morris will always behave like a tobacco company, seeking to maximize its profits by marketing to kids while denying the dangers of its most profitable product. 00£9SZ8LOZ i;

Message Development/Testing

Favorability of Corporations Kelloggs Kraft Foods Post Cereals General Electric RJR Nabisco Anheuser Busch Miller Brewing Co. R.J. Reynolds The Marlboro Company Philip Morris Brown and Williamson 0% 20% 40%  Unfavorable 60% 80% El Don't Know/ Never Heard of  Favorable Studics conducted 10/98,1,600n, 1,600n Nu.v, I~,ould like lo read ynu snme names of c<nporztions. ior cach one, firsl IcI I mo whether or not vou\e hcard ol lhent; itso, please tell nle vehather ynu have u favoreblcor vnlnoorable opuuon of Nn,» ,' (9. 20-49) Nat'1 A 100% 91 88 86 87 79 58 56 50 36 32 22 0 0 0 -2 0 -1 -3 -6 I -2 0 £6Z9£ZBLOZ G

Pre-Post Message Comparison  May 1997  July 1997 . May 1998 Favorable Unfavorable Don't Know Pre-Messages Favorable Post-Messages Unfavorable Don't Know 66Z9£Z8L0Z 12

Stage 3: Advertising Objective Deliver messages that will better inform the public about the people, products, and principles of Philip Morris. Audience • General Adult Population - Opinion Leaders, Suburban Parents, Generation X Components • Agency Selection • Creative Strategy • Research Results • Execution • Media Plan • PR Plan 8o£9£ZBLOZ 21

V0£9£Z8LOZ Brand Impact 17

Stage 4: Evaluation Objective To track and measure shifts in awareness, attitudes, and opinions about PM over time and to continually evaluate effectiveness of the mix of programs, messages, and communications tactics in support of creating a more favorable perception of Philip Morris. Methodology • Tracking Study • Qualitative • Quantitative • Media Scan 66£9£Z8LOZ 24

Stage 2: Demonstration Obj ective Demonstrate the Company's commitment to meeting the public's expectations of us...to be more opcn and accessible, to take action on tobacco issues, and to enhance our position in the communitics where we live and work. Strategv Phase One Market plan designed to establish a dialogue and provide key audiences tangible proof of our commitment to being a responsible manufacturer as well as a responsible corporate citizen. • Denver, CO • Columbus, OH • Nashville, TN • Portland, ME (control) Audiences • General Public - Opinion Leaders (Political, Financial, Community) - Suburban Parents - Generation X 90£9£Z8L0Z 19

Awareness -- Part of Philip Morris Marlboro Cigarettes Kraft Foods Miller Beer Maxwell House Coffee Post Cereals Oscar Mayer Jell-O 0% 20n/a  Yes is Part of 40%  No is Not Part of 60n/n 80n/n 0 Unsure/Don't Know Study conducled 1/99, 1,200n (200n per brand) 100% Now H2uiking speciHcall_e abont one of those companies, Philip <vlorris._ The tollowing is a list of nther conrpanlos and Products, some arc parl ol PhiliP Morris and some are not hartol PhlliP Morris..Ylease tell me whether N uu think each coml>anF or pmducl is or Is not a P:vt otl'lriliP Murris ur if yuu dun't kuow or unsure. y.26-27) - 7 ti6Z9£Z8LOZ

Awareness -- Part of Philip Morris (p. 2) Camel Cigarettes Seagrams Quaker Oats Sara Lee Kelloggs 0% 20°/u  Yes is Part of 40%  No is Not Part of 60% 80% 11 Unsure/Don't Know Study conducted 1/99, 1,200n (200n per brand) 100% Nor, thinkuig speciPc:dle abou I one nl those companies, Philip Mnrris.. The following is a list of othei (ompanics and products, some arc part uf Philip Morus :uidsome are notpartof Philip Morris__ Pleasee tell me whether pou think each company or product is or is not a part of Philip Morris or if you don't know or unsure q- 2fi-37) 8 S6Z9£Z9LOZ

Stage 3: Advertising Strategv Why the Advertising will be effective... • Stay steadfast • Start • Educate & infonn • Reinforces what they • But not worse compartmentalization •"Sounds like a good already believe „ compan y w9£ZBLOZ

Perception Index (p. 2) Makes some products I like to use Does more than it is required to do Means 4.8 4.7 4.4 Is socially responsible Is concerned about the environment Is honest Is ethical Represents values I believe in Is a place where I'd like to work 0% 20'%, 40°/ 60"/, 80"b, I  Very Descriptive (9-7) 0 Somewhat Descriptive (64)  Not Descriptive (3-1) o Don't Kno Study conducted 5/98,1,600n 100"/0 4.4 4.3 4.2 3.9 3.6 L6Z9£ZBLOZ 10

Pre-, Post- and Push-Back Ballots 80 °/a o 60 0 o/ 6 40 o/ 6 20 0 63% 42% 43% 43% 31% 29% 26% 15% 11% Favorable Unfavorable Don't Know Favorable Unfavorable Don't Know Favorable Unfavorable Don't Knoti Pre-Messages Post-Messages Push Back Study conducted 5/98, 7,600n 14 60£9£Z8LOZ

Stage 3: Advertising Strategy What the Advertising has to do... • Fight Fire With Fire - We have to connect emotionally to people, because the issue is emotional • Focus on the Present/Future in a Positive Way An acknowledgment or apology about the past doesn't help us with most people • Deliver Multiple Messages - There is no one "silver bullet" a Two Types of Messages are Needed... • Positive Tobacco Messages (We Card support, Accommodation) - For some, we have no permission to talk about anything else until/unless we talk about what we're doing here • Positive Non-Tobacco Messages (Hunger Relief, Domestic Violence, Disaster Relief, Arts, Employee Volunteerism) - For most, these are the messages that allow them to compartmentalize and see the many dimensions of I'M 60£9EZ8LOZ 22

Perception Index -- Post Messages (p.2) Does more than it is required to do Is willing to cooperate Is concerned about the environment Is socially responsible Is ethical Represents values I believe in Is honest Is a place where I'd like to work 0% 20% 40'% 60'Y° 80% 100% 1 • Very Descriptive (9-7) 0 Somewhat Descriptive (6-4)  Not Descriptive (3-1) ® Don't Know £0£9£Z8LOZ I studv conducted 5/98,1,600n I 16

Stage 3: Communications Internal Objective To successfully communicate PM21 themes/messages to all PM employees in the U.S. and around the world, and coordinate activities surrounding the launch of the advertising. Audience • Employee Population External Obj ective Craft and deliver messages that will better infonn the public about the people, products, and principles of Philip Morris, which, together with our actions, convey our values. Audience • General Adult Population - Opinion Leaders, Suburban Parents, Generation X L0£9£Z8L0Z 20

Perception Index -- Post Messa~es Is more than just a tobacco company Makes some products I like to use Has quality employees Produces quality products Has a positive impact on the economy Donates a lot to charity Is a good investment Gives back to the communi 20% 40% 60% 80°/n Means Post- Pre- 0 7.1 1 6.6 1 0.5 6.9 5.7 1.2 6.7 4.8 1.9 6.4 5.8 1.2 6.3 5.3 1.0 6.3 5.9 0.4 6.2 5.3 0.9 6.0 5.4 0.6 6.0 4.9 1.1 7000% 1  Very Descriptive (9-7) O Somewhat Descriptive (6-4)  Not Descriptive (3-1) ® Don't Know Study conducted 5/98,1,600n ZO£9SZ8LOZ 19

Volume -- Impact on Brand Purchases Impact on Purchases Kraft Cheese Oscar Mayer Post Cereals Maxwell House Miller Beer Marlboro Ave. of 6 Brands No Imp. 85 87 82 87 88 93 87 Pre-Messages Mor 5 5 Less 9 7 6 6 5 4 5 11 7 6 2 7 Study conducted 12/98, 1,200n (200n per brand) If you knew that (ItEAD/ROTATLJ is manulactured by a company that is part ol l'hifip Morrls, would it impact whether youpurchascd thut product or would it not make a difterencc. (q. 38-43/I're .Messages) $!5 1 -2 Same 77 76 76 78 77 82 78 +8 Post Messages ore 14 16 14 17 14 13 15 Less 8 8 9 5 1 + 1~ I~I 7 4 7 Base = Total consumers of each brand Now that vou know nwrc... no, rr,uld you buy mre less or'the samc amount of each of the fullawing laoducts_.7 (q. 72-Ti/1'ost WssaFes) lh so£sszsLoz