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h4l , ~%~l`llllll'l! MCA7Of2ANt)UN1 - C 0 N!F I D E N T I A L - TO: Dr. F. J. Schultz FROM: R. E. Smith RE: SELECTED PROJECTS November 4, 1976 ------------------------------------------------------------- So we can all be sure we are on the same tracks - here are my understandings of where the projects we discussed yesterday stand. Please sing out if you understand differently. Newport Lights - The cork tipping paper arrived on 11/1 and was no good!. You will now order a productionrun of the paper we need. This should arrive by 1/1/77. In the meantime, you will develop and internally evaluate Newport Lights with white paper. Thus, production for a~February test market can start in early January. Low Irritation Low Tar Menthol - You now feel that product work will need to go beyond Newport Lights to beat Kool Milds and Merit Menthol. 85mm product should~be available for internal -evaluation by 3/1/77, with product for consumer test ready by 5/1/77. (100mm product will be ready two months after the 85mm:.) Bill Doyle and Al Hudson will w ork out the best type of product research by the end of November. The goal of their meeting will be to arrive at the most useful developmental information - while doing the necessary evaluation job. Bill and Al will keep us all posted. 30 Pack - Bill Doyle will quickly layout the way we will evaluate how product experience affect concept-generated trial interest; perhaps making comparisons to own brand. Based on this intended use, we anticipate Management approval during November to purchase making/tipping machinery (at a cost of about $25M). This machinery will be available by June 1977, alliowing,us to place a product/ ~, concept test in~September, and'.entcr test market in July 1978 ~ (having gotten packing equipment). ~ ~ ~ (colt I i nrrocl ... ) r

2 . (Scparately, Bill will work up how we might evaluate a 100/22mm product in conjunction with~both~economy and women's cigarette concepts. The goal here is to d'o some early 1977 development/ evaluation of two alternative, promising,directions. We'll all have a chance to think this through further in the near future.) 50% Lower Nicotine - We need to reassure Dr. Spears that this , positioning has consumer appeal and is technologically feasible. We believe the consumer trial interest has been strongly indicated~ by quantitative concept test results. (The need~for this type of evaluation system was underlined in several Synectics sessions. The present concept test is our best effort at designing, such a system~. And we have built-in several ways that this system cam be improved wth use.) Separately, we understand from you that this_p.rorlucl~.i_-s> technically doable. I will discuss the consumer Irf J interest aspects of this project with Alex - to try and better understand his hesitation. Developing manufacturing capacity to supply either test market or national quantities is a separate project. This is being worked on, but no cost/timing parameters have yet been established'. We both share the sense that this project should receive greater emphasis; whether for low T&N and/or for low C0 positioning. Also, there is a continuing possibility that this technology can be applied to a slightly higer T&N project which will taste decidedly better than all SHF'competition. OGF Lights - We discussed the Brand Group desire to make a really good'.tasting OGF Lights at 12mg. tar. It was tentatively agreed that l2mg.'s would be our upper limit on tar. We owe you a Project Req;uest on this one, and will get it to you for discussion within the next two weeks. Final Thouqht.- After a few hours reflection I still very much want to improve L.i.m.i_nr7 on bolh ttac l,ow Irri;Lati.nn Low '.Par MetlLhol and the L~arick~ycci NicoLine projects. We boLli cxpecl: Lhis Lo happen with Enriched Nicotine. Let's try and~work toward this on Low Irritation Low Tar. Perhaps the next two rnonth~s (before cork tipping arrives) can beused~ to develop thUs product for consumer test. (continued...

3 We'll discuss all this more. And~ again, yell right away if I've misunderstood anything. RES/j f CC: Messrs. Ave DoyleFlinn Giordano Hudson Lancaster Spears Toti Vila R. E. S.