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00000005 (2544x5500×2 tiff) PH .~, P MORRIS USA TO: Roy An L',¢ INTER-OFFICE C ORRES PON D ENC.,~ ~ 20 PARK AVENUE, NEW YORK, NY 10017-5592 DATE: December20. 1993 FROM: SUBJECT: LITERATURE REVIEW, U.S H1SPAN1C CONSUMER The tolh)wmg highiighLs key findings from a li',¢ratur¢ ~'eview ~at ¢x~ av~ mlo~au~n ,,n L'. S. H isp~cs (Ap~ndix I con~s a fist of sou~ used. ) ~¢ pu~o~ .f ~=s rcv~cw ~ ~o ~umm~/~ p~viously g~ncd know~dg¢ concerning ~ ~pu~don TIlE IIISPANIC SMOKER R¢:,ulL,. Ir,,m t~e Study ol Hi.spat~ic Smokers, ¢onduczcd m ~m~r 1993. ~¢ co~b~nt cu~cnt sludy ~d ~so inc~mora~s ~sulLs from ~¢ HLsp~ic Tr~king Study lbr ~ not addressed m ~¢ ¢u~nt Mudy. • M.~ih.ru ~ the le;1ding brand among Hispanics and various subgroups, including, • M,Irlhor,) ha.,. the i~gcst sh~c ~ong Hisp~ics from ~l counties of ohgm exit Pucrh) 1£=~,~. among x~l~()m Newport ix ~c leading br~d. . M~lh~ro , ~h~c ~¢)ng Ilisp~ics is higher ~ iC~ shW; ~ong Whi~. • ~c Di~¢,~um ca~go~" shows grow~ ~on~ ~is ~gment but sh~ ~mmns below Smoker Trends • I|i:,p,utlC Y.L.u'lhoro sm~)kcrs prefer king sb'c. full Ilavor or lighcs ~d hox pack,as. • Hi~p~ na~ c ]o~cr ~moklng incidence ~d lower consumption ra~s ~ ~i~. U,S IIISPgNICS: DEM~RAPHICS & PSYCH~RAPHICS The L:. S. I I=~pamc popul;1uon i.g a divurse segment that varies from Total populalion .~ among key demographics ~d psychographics, h is impor~t m idcn~'y ~e dfffemnc~ ~ ~d undergird the impact they h;1ve on purchase behavior. ~¢ following highligh~ ~ impon~l )indlng~ ~ong both ~esc dimensions ~d provid~ ~sigh~ into U.S. ~ N 8 z

00000006 (2544x3500x2 ~iff) H i~,panic Review December 20, bx)?, Page 2 Demogruphics • The U.S. Hi.~panic populauon represents a large and growing segroem of the U.$. populauon. From 19~0 to 1~91, inis populadon showed ine largest increase in ~ U,S, Growth is pnmatily driven hy immigration but also rct'iects a higher bir~ra~ versus Total. populauon. Hi.span~cs account l,)r 9.9% of floe ton U.S. population and 6.5% of total households. • U.S. Hispamcs an: g~x)graphica/ly conccntramd, wi~ over 3/4 of this population residing in fi~'c s~ ~C~if~mia. Text, New Yo~, Florida ~d llanos). • Kgy demographics ~on~ which ~e H~p~i~ population v~ froro ~e To~ U.S. Populauon ~c as tbllows: - Y~)ungcr - ~cr Household sw~s - More Bluc Coll~ - ~ Educa~d • U, S. Hispanics vary in choir degre~ of -~ssimilation with close m half of the ~lull population rcmmning un~ssmfilamd. • The U.S. Hi.spanic population includes people from severaJ countries (Mexico. Ccnu'~.USouth America. Puerto Rico. Cuba, Dominican Republic). l~t'fcr~nce.~ among LI. S. H ispanlcs can he traced to counu'y of origin and exis¢ in ~h¢ following areas: demographics geographic conccmrations wiinin [hC U.S. dcgrcc.s o) ~.',siro)lat|on • Gcncrali,'.ations about L'. S. Hispa~ics ate ot'~n based on individuaJs hailing froro ,M,Cxto.) bccau,~c ~is popula0.on accounts lot t~e large,st percentage of U. S. This l~, not ~ aecural~ way of understanding all U.S. Hispanics. however, since total population com¢.,¢, I'r()m several counLr]es. Psychographics o tti:,pan)cs vary frt)m Total population hy placing greater emphasis on Ihc following: Fm'nily Matert',.d Security Soci~ Respectability • Hi.,~p~ic consumers h,)Id lh¢ following hclicl's. Bencfit.,~ delivered from brand selection is aJ[ that calegoty offers Products have mul.plc end uses Emphasis placed on appearance and propriety Problems ate not prohlem.~ - tolerance for deviation from norm Prefer dealing with "now" rather t~an future 8 m 0 -I 0 O O

00000007 (2544x5500x2 tiff) H i,¢pamc R~vi~w D~c~mber 20, ]9~3 Paste 3 Previous Research • The ~lhoro Li~hLx r~;~¢h ~mon~. Hispanic smokers showcd ~c fo|lowmg: The image ~)t the Li.~ht.s smokers is the opposim of the image for Red smokers Packing a~ld advcru.'~m~ creadvc can no[. conl"Ect (i.c, do no). have a Red pack or). "A.sp~n Copylinc.~ ,~houtd bc ~xmplc. avoid ~o word "~" ~d commun~am "l~s ni~e" morn cl~iy. I~IPLICATION S %laz'Iboro' s pcn'ormancc ~m¢~ng Hispnnic smok.c"rs indicates that mazk~::tm~ effor~ have h,.~m ~,ucccsslul in appcaJing to this audience. Curmndy, we'nocd [o monitor Mm'lboro and c~)mpcuu,,'¢ pcrtormanu¢ ~o on,sure tha[ we maintain our posi~on among ~is segment NEXT STEPS Durm.e 1994 wc w=lI conduct another ))'acking study to monilor pcrformancc and address ,:~)mr, cuu~..c pcrformanc'c, including lh¢ Discount category, among Hispanics.

APPENDIX ! Od 1993 Sludy of Hispanic Smokers S~e I Metltodology 1,066 Telephone Inlervlews Among Hiopanw.s 18+ years Olds in 5 markels Early ~ "Oemys.tdyi~:J the U S, HL~panic Sources include: PM Hispanic General ovecview of Hispanic 1992 ~ Market . presenlation prepared Tracking. Census. Yankelovrh markel, mcludieg demogmphcs. by LBCo H=spanlc Monitor. Slralegy psychograph~cs, ass~mdal=or= Reseamh Corp. and o~he~ ~-ohles sec, oc~da q~ sources ~ 990. Hispanic Tracking Sludy 1.800 nal=onally repcesenlative Exlenswe categoW infofmopon Discontieued alter 199 t heldrng 1991 Hispanic smoker English and Spanish Ongoing Roper Report Nationally representative, RDD ! h~ciderce, regular brand. Represents predominantly and Ooor-lo-Door; Engksh consumplion trends EngliFh-speaking Hiopamcs: speaking inlerviewers possibly exck~ding up Io 50=/., less assimilated Hispanics Ongoing Co~ieuous Tracking Nationally repfesenlaUve ROD; Exlensive calegoq/in|ocmalion Represents p~edommmdly Engl=sh speaking int ecv=ewers English-speaking Hispanics. possibly excludu~:j up to 50% less as.slmdatnd Hispanics 10/90 Madboro Lighls Q ualilalive 60 one-on-o~es among 18-35 ! (]~and imagen/and crea~e I evalualions yore old Hispan¢ smokm-s, m~l. Reds/Lighls, in Miami. LA, and NYC NOIIVDIII'I O0OVg01 YIOSqNNIIN :'IVIIN3OI:INO0