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i3=IT'tC-i L+`t ~ NEWPORT DEMOGRAPHIC SUMMARY THE DATA INDICATE THAT THE NEWPORT FRANCHISE: . IS SKEWED HEAVILY FEMALE. . HAS AN IMPORTANT CORE OF 18-20 YEAR OLDS. . HAS A HIGH PROPORTION OF 21-35 YEAR OLDS. HAS A HIGHER CONCENTRATION OF 25-34 YEAR OLDS THAN IN 1974 WITH AN ACCOMPANYING DECREASE IN 21-24 YEAR OLDS. . HAS THREE TIMES AS MANY BLACKS AS WAS OBSERVED IN 1974.

4 NEWPORT SUMMARY OF SELECTED BEHAVIORAL AND ATTITUDINAL CHARACTERISTICS , NEWPORT SMOKERS WOULD SMOKE SALEM AND KOOL AS SUBSTITUTE BRANDS. , ON THE PROJECTIVE LOYALTY MEASURE, NEWPORT SMOKERS INDICATE THAT THEY HAVE LESS BRAND LOYALTY THAN EITHER KOOL OR SALEM. , A NOTICEABLE PERCENTAGE OF NEWPORT SMOKERS MENTION VENDING MACHINE AVAILABILITY AS A DESIRED IMPORVE- MENT FOR THE BRAND. , MILDNESS IS THE SPECIFIC REASON MOST FREQUENTLY GIVEN BY NEWPORT SMOKERS FOR CHOOSING THEIR BRAND. , NEWPORT AND SALEM SMOKERS RATE THEIR BRAND MORE MILDER/SMOOTHER AND HAVING LESS IRRITATION AS COMPARED TO THE RATINGS OF KOOL SMOKERS TOWARD THEIP BRANDS. . NEWPORT SMOKERS HAVE A HIGHER PROPORTION OF SINGLE PACK SALES WHEN COMPARED TO TOTAL SMOKERS. \.'

NEWPORT SUMMARY I. THE DATA INDICATE THAT THE NEWPORT FRANCHISE: . IS SKEWED HEAVILY FEMALE. . HAS AN IMPORTANT CORE OF 18-20 YEAR OLDS. , HAS A HIGH PROPORTION OF 21-35 YEAR OLDS. , HAS A HIGHER CONCENTRATION OF 25-34 YEAR OLDS THAN IN 1974 WITH AN ACCOMPANYING DECREASE IN 21-24 YEAR OLDS. . HAS THREE TIMES AS MANY BLACKS AS WAS OBSERVED IN 1974. II. SMOKERS WHO SWITCHED TO THE NEWPORT FRANCHISE IN THE PAST TWO YEARS: , CAME PRIMARILY FROM KOOL . CAME FROM NON-MENTHOL BRANDS ALMOST AS FREQUENTLY AS MENTHOL BRANDS. SMOKERS WHO SWITCHED AWAY FROM NEWPORT IN THE PAST TWO YEARS: . WENT PRIMARILY TO OTHER MENTHOL, MOST FREQUENTLY KOOL AND SALEM. . WENT TO NON-MENTHOL ONE FOURTH OF THE TIME. r

III.. NEWPORT SMOKERS WOULD SMOKE SALEM AND KOOL AS SUBSTITUTE BRANDS. , ON THE PROJECTIVE LOYALTY MEASURE, NEWPORT SMOKERS INDICATE THAT THEY HAVE LESS BRAND LOYALTY THAN EITHER KOOL OR SALEM. . A NOTICABLE PERCENTAGE OF NEWPORT SMOKERS MENTION VENDING MACHINE AVAILABILITY AS A DESIRED IMPROVE- MENT FOR THE BRAND. . MILDNESS IS THE SPECIFIC REASON MOST FREQUENTLY GIVEN BY NEWPORT SMOKERS FOR CHOOSING THEIR BRAND. , NEWPORT AND SALEM SMOKERS RATE THEIR BRAND MORE MILDER/SMOOTHER AND HAVING LESS IRRITATION AS COMPARED TO THE RATINGS OF KOOL SMOKERS TOWARD THEIR BRANDS. . NEWPORT SMOKERS HAVE A HIGHER PROPORTION OF SINGLE PACK SALES WHEN COMPARED TO TOTAL SMOKERS.

(' DEMOGRAPHIC PROFILE SUMh1ARY Old Gold • Same M/F composition as in 1974 • Strength in the "25-34" and "over 50" age groups for both males and females • Substantial decline in the "21-24" age group for both males and females • Tend to be at least H.S. graduates; 1/3 some college • Earn at least $7,500- many earn $15,000 or more • Tend to be married rather than single • Are white rather than black Marlboro • Same M/F composition as in 1974 • Somewhat more heavily skewed toward males than competitors • Over 1/3 of Marlboro's franchise is in the "25-34" age group • Relative to Old Gold - few "over 50" smokers; twice as many "very young" (18-20) smokers • Same education and income pattern as O.G. • Are white rather than black 11 • Tend to be married - 1/3 single vs. only 1/5 for 0. G. Winston • Same M/F composition as in 1974 • The "25-34's" strong development area for the brand • Winston smokers tend to be older ... certainly in comparison to.Plarlboro C' -- • Income and education distribution very similar to O.G. and Marlboro slightly less Winston smokers have some college training • Highest married ratio; Highest black composition

~ RECAP OF THF PRINCIPAL FINDINGS 1. OLD GOLD STRENGTH IP! TERNS OF ITS USERS IS l•JITHIN 2 MAJOR AGE CATEGORIES - "24-35 YR" OLDS AND THE "50 AND OVER" 2. MALES AND FEMALES ARE EQUALLY IMPORTANT SEGMENTS WITHIN THESE TWO AGE CATEGORIES, ALTHOUGH MALES RETAIN THE MAJORITY COMPOSITION OF THE FRANCHISE 10 3. OLD GOLD IS A DECLINING BRAND. WE ARE LOSING PEOPLE TO A GREATER EXTENT THAN WE ARE GAINING THEM AND b!E ARE NOT ATTRACTING THE YOUNG (NEW) SMOKERS 4. SWITCHING PATTERNS FOR OLD GOLD SHOW GAINS FROf•1 LO-FI'S AND STRAIGHTS AND LOSSES TO LO-FI'S AND ESPECIALLY TO SHF BRANDS 5. SINCE MAJOR COMPETITORS - MARLBORO AND WINSTON HAVE BEEN ABLE TO RETAIN LARGE PERCENTAGES OF SMOKERS VIA SHF LINE-EXTENSIONS AND SINCE OLD GOLD IS LOSING HEAVILY TO SHF BRANDS, AN OLD GOLD SHF LINE EXTENSION SHOULD BE SERIOUSLY CONSIDERED. 6. THE OLD GOLD SMOKER CHOOSES HIS BRAND PRINCIPALLY BECAUSE OF TASTE 7. SUGGESTED AREAS OF IMPROVEMENTS FOR OLD GOLD CENTERED ON REDUCING ITS TAR AND NICOTINE AND PACKING THE CIGARETTE TIGHTER. 8. ONLY 8% OF THE OLD GOLD SMOKERS HAVE JOINED OUR FRANCHISE WITHIN THE LAST 2 YEARS; NEARLY 2/3 HAVE BEEN SMOKING OLD GOLD FOR AT LEAST 5 YEARS. 9. SUPERMARKETS ARE THE MAJOR OLD GOLD BUYING OUTLET (45Z,); OLD GOLDS ARE USUALLY BOUGHT BY THE CARTON (59%) 10. 10w OF OLD GOLD SMOKERS MENTIONED THE COUPON AS A KEY REASON FOR SELECTING THE BRAND. 3/4 OF OLD GOLD COUPONS ARE SAVED. 3/4 OF THOSE SAVED ARE REDEEMED. 100/0' OF OLD GOLD SMOKERS ARE LIKELY TO DISCONTINUE S1,iOKING OUR BRAND IF THE COUPONS WERE NOT OFFERED r-

' r i:Cfir DI_f"OGf;l1{'IIIC SlJ(S7AItY The Data Jndicate Th:rt the Kent Franchise: Is Currently Skeyed Toward Fu,?ales, Apparently ['ecpiise of High Conccni.ration of Fen,ales Smoking tl;e 100 Packing. . Has a Substantial Proportion of Smokers 35 Years of /',ge and Older. . Is More Upscale in Income, Half Earn $15,000+. Compared to 1974, Has Somewhzt Hi gher {'roporti on of Mal es but No Si7nificant Change in Age Profile. Piost Major Competitors of Kent: . Have Fairly Even Distribution of Under and Over 35 Year 01ds in Their Franchises. . Have the Same Da .o0raplri c Profi 1 es as i n 1974.

('~ !•! N-i Y,.. , „~. 1. lhe U;ta Inr!ic:,,f;: TFIS the I:c nt (-1-:,l;cIli<.c. . . Is Sl:ewc(; Tr=d I cwales, llpparentiy Cecausc oi Ilicih Proportion Pi Fenol('; S;;;ol:inn 10;1's. . IIJs a jUb:;r:7ili:lul f i"CGi)i1i'tlon of Swoi:e},s 35+ lfedl"s of . Is Mo•re Ur~-~i•~ in 11•~cn,n;~, Hzlf f:~,l~n ~~1f~,0C0:. ~- - . Has roiiici''ii& I-Ii(jheY' i'!'ollar't10n o( I•Io1Cs tllclil 1974 (.)Ut no Sionl i lCoili; CllailgC' 'ln ACjC' Profile. II.. Kent Losses in the Past l,;o Years: . We:"e Pr-il„ .r;,,. ~ ~0 Sl,,•-,r~~l..I 1 Cl"aliu~,-, , ~1'CuUli~In~ ,~ ~ n0y KGL dl iU Were Shared Equally by True, Vantage, Winst.on Lights and Carl ton. , . Were to I_o-{=,'s Onc-ll;ircl of the Time. In Co1111,1'ils L, I:I':n L' s G,!'1 n; I n the PcasI: Il':o YCiI l's : flilVE' Pt't'(In!Il 1;:'n f Iy ('(•,m;' I l'(1;'1 Mon-4.^i'iLIlo I L!)-F 1 Ci}': Ild q . f'rimari Iy ',JinVon „nd M.11•1f,ol•o.

C, i l".ri111 i;0;1 l' tl i:ilo !! 0-! i'j il ri'i `;Ilj`r'1' ! j' s i il U:II,y 1 5'.`, <(nc! lU.' of !!ir, Irl,~U,r;crs, re'.!lcctively. Cn Selr2cLec1 BWhiv ior~l Milc!•lltLitudinwl Cillrr•dc(:er isLie:s, the Fol1o~,•j irl`) is . t:ent Silioi:er,, !; ulu :;„loke {lostly Lo--Fi's, [1aillly !,"Ilrston and .f1Jrl5nro i~_ `.! :.ii! p ,.I--. !,tar:r;_. . Keni: SIllrll;ers lii':i a IllCi!1C'.1' [)E'.qrC'e C+(• [il'i.il(1 L(ovul Ly tlii.ill COlli{)e!; Itloll. .Hilch-ic:ss is i.!le f;c; ;c~rl i•iost Ft`eq+.ieni.ly Vollrnteerecd by !;erlL SI cl!:/~rs as I:` i i !'c ;r^n i ol• Choos i nr! t!;e l3r~n~J . Tar and !',icotili- Rcciuction is the Dcsireci Inlprovcn;mnt f•lost F"('quC'rii;ly iieili.iotit-fCl by I;(?ilL ,ciliiuK(:r;. Most l!,ttrihuIP, I;i-if.-ings for Kent are 1lboui: Equal to or Somewltilt Iligl~~r than Th, •e for f1:+jor Coin;~et~ii:or•s. Ilo,,-,cver, of all /lttrihutcs, f:enl- Sn--Aers Rate Their [;I•arl;! I_o,;,est on "Doesn't Taste Dr•y" and "!i?ils a Full-!'oc!ied •faFtf:". !~L : GI .,i.rr ... 1 rl ' • i l ( C i.I !' ~ ' : l t ; ~ r r Sc~ ~ ~ u!. e r : ~ac:l; l(1 !' (1' al(`r [+l"`'l''' t!1?Il il S-I'CZlltly c !1,il•1 !>cwo

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