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Page 30 C) INNOVATION The mjor thrust of innovation and development that will take place in F'85 will be a complete revamping of our survey in- formation into an integrated whole which will see us through the 80's. The C.M.A. and Monthly Monitor have served us well, but they no longer suit the current dynamics of the market nor take advan- tage of today's level of informtion processing technology (in£ormation processing covers the areas of data collection through to computer reporting and analysis). Project Brand ID and various other studies leading up to that project, plus numerous opinions in and out of Research have identi£ied the draw backs of our current survey tools. An overall approach to overcome these flaws, that is not cost prohibitive, will be tackled and resolved in F'85. This undertaking is a major one and involves the formulation of a critical path which will aid us in meetinE our commitment. The main focus of this restructuring is titled Project Survey, which basically calls for a monthly telephone survey O r~D Cl- OD "--4 CD BatCo document for PFSFC 1 March 1999

Page 51 supplemented by an annual tandem in-home interview. The monthly survey will replace the C.M.A. with a shortened' computer assisted questionnaire concentrating on switching. Image data will be collected in the annual in-home survey which will also probe on issues which require, or are better delt with, using a visual stimulus. Tracking cur- rently being done in the C.M.A. over the telephone is un- responsive in providing proper measures o£ new brand or ad performance, and will be removed and replaced with a sore appropriate methodology. In summary then, the focus of the Research Group for F'83 is on three major projects: Survey, Image, and Track. There are numerous secondary projects to these three but all have implications on one another. They are currently scheduled and managed independently. In April, a master plan will be developed to indicate the critical points and implications each has on the other. The following is a description o£ each of these projects. 0 r~O Or, oo BatCo document for PFSFC 1 March 1999

Page 32 I) Project Survey The C.M.A. is currently conducted using a quota sample of urban smokers collected monthly using a telephone method- ology and typed questionnaire with numerous skip patterns and VQB' s. Various inadequacies exist because of such a methodology: - a brand identification problem due to the inability through the restricted use of words to identify the proper brand; - length of questionnaire as it is weighted down by tracking, image statements and various other questions is driving down the completion rate and quality of response and at the same time driving up cost; - because of time restrictions and the type of scaling used, image data is currently inadequate; and - lack of random sampling methodology imposes restrictions on the fore of analysis that can take place. Project Survey will initially be a feasibility study on the use of a computer assisted questionnaire administered to a urban sample which probes primarily on demographics, usual brand, cZ~ r,,J O'- CO o r,,J BatCo document for PFSFC 1 March 1999

Page 33 and previcus brand. A computer assisted questionnaire can make better use of deep probes for proper brand identification by allowing detailed question blocks for every brand on the market. Built in editing can occur to help reduce coding and secondary editing. Flow of questionnaires will be flawless and less time- consuming thus reducing length of questionnaire, thus reducing cost and increasing quality of response. As a means to secure the right supplier for this proposed design, we will be considering a proposal to be submitted by Adaom before the end of F'S/ as well as explore what other suppliers have to offer. O ~o co O ? BatCo document for PFSFC 1 March 1999

Page 34 2) Pro)ect Im~e Project Image is an umbrella project. Its ultimate goal is to develop and implement a comprehensive, quantitative instrument to measure and interpret consumers' attitudes and beliefs towards cigarettes. Phase I of this project was the development of a cons~ner smoking vocabulary. Constructs, dimensions, and their meanings, as employed by smokers, was eval- uated. Phase II of this project was a refinement of our cigarette typology, the relative positioning of brands on image dimensions, as well as further assess- ment of methodological considerations. Phase III of this project will be a large ad hoc research project designed to give relative positionings of relevant brands on image dimensions; in order to provide a comprehensive description of brand images in the Canadian cigarette market. A pilot stud)' on 40 brands and 10 dimensions will be undertaken. Areas such as: switching, smoking & health, price sensitivity and "ideal" needs and wants will be collected at the same time. The use of ~itivariate analysis will help uncover the complex relationships that exist and help in our understanding of the marketplace. 0 0 oo BatCo document for PFSFC 4 March 4999

Page 35 3) Pro)ect Track There is a need to set up and implement a system incorporating a set of benchmarks (criteria, standards) that can be utilized to track new cigarette brands both own and opposition. We presently track new brands with various tools: - retail audits; - C.M.A. - awareness, purchase, trial; and - focus groups. The system that will be set up may or may not differ fr¢m our present system. Present tools will be evaluated and possible additional/alternate tools will be looked into. Benchmarks will be set up utilizing a combination of our historical data [i.e. a~reness at time intervals of first generation, second generation, etc.) and possibly some external consultation. 'No money has been set aside for such consultation, however. 4) C.M.A. Reporting Currently, we are reporting C.M.A. consumer data based on crossed tabulation of key variables for market analysis. It is difficult for users to identify when trends occur. Also, our information is sometimes not very meaningful to most, in certain areas such O C~D CD F-O BatCo document for PFSFC 1 March 1999

Page 36 as imagery, tracking, etc. Hence, they usually rely on market research to hand out comprehensive summary. and analysis. In order to respond more adequately to our users, we must take full advantage of system flexibility. Thus, in F'83 we will undertake the necessary, steps to do so by validating, testing, and implementing modifications to our survey reporting system. The presentation of the information will be in response to various identified needs such as target group switching, imagery for non-users of a product, media target groups, etc. The project will be broken into phases that will see separate examinations of the different components of the information. Implementation of new approaches will most probably be staged depending on the above. 5) Cordcall Project Cordcall is to establish a means of measure of consumer data that does not generate a bias resulting from consumer memory. Currently under investigation is the implementation of a diary panel study of smokers to monitorat different times of the year, consumption levels of cigarettes, product defects, and purchasing behavior. Phase I currently under progress, which is a test-study 0 r,o C~ o BatCo document for PFSFC 1 March 1999

Page 37 of this methodology, should have results available by mid-March 1982. Upon positive assessment o£ the test, we would proceed with two waves of diaries. 6) Plus/Minus Project Plus/Minus delves into the areas o£ our market which we cannot predict accurately. The specific area = o£ interest is young smokers between the ages o£ IS and 19. Among the things that we do not have, besides quantitative incidence and branded information, are the causal factors that create these responses. In 1978, exploratory research was done on this issue. Subsequent to this study, switching data shows that the young are following their elders with regards to starting on lower tar products. As the youth stream from the baby boom diminishes and market potential matures, we should better understand what their smoking and quitting behav- iors are today. Have these attitudes and behaviors changed in the past three to four years? Are we respon- ding to their needs? How do they perceive current advertising trends? The purpose of project Plus/Minus is to update our portraits o£ starters and quitters, ~=~ cZD r-o C~D CZ3 BatCo document for PFSFC 1 March 1999

Page 38 explore starters' smoking history, attitudes and behaviors, explore causal factors leading to quitting and ultimately provide better predictors. A two-pronged approach will be taken on this proj- ect, one involving quantitative desk research on starters and quitters among the young as well as qualitative work on the youth, both smokers and non-smokers. 7) Smoking & Health We are currently gathering in£ormation twice a year on smokers' perceptions of smoking and health. The method o£ obtaining this in£o~tion has been con- stant since the early 7O's. Among the latest results, one can find little change over time on the issues. Horeso, our actual means of collecting the data nmy not reflect the concerns that exist today, such as social environment pressure, prices, quality of prod- uct, CO issue, etc. Project Image will explore this issue initially with the use of the consonance/disso- nance approach employed by B.A.T. The structure of our questions appear weak and could benefit from a redesign. The purpose of doing a smoking and health review is to better define and bring up-to-date 0 C~ co --4 BatCo document for PFSFC 1 March 1999

Page 39 our methodology (i.e. more in tune with reality and pertinent to the concerns of mokers). Possible ap- proaches to resolving these issues are: 1] qualitative work on smokers around a point time when certain issues are more relevant; 2] evaluate relative strengr~hs of different itess of concern :in. smokers' mind; and 3) redesign the VQB adopted for the 80's for smokers' concern. 8] Regional Information A project to be undertaken byMarketing Research in response to informtion needs involves providing better regional information; a response to the establishment of regional marketing analysis. The current information forwarded to regions is not meeting their market analysis needs. The strategy for establishing what regional infor- mation needs are, involves having the four RIA's participate on an orientation program in Research the first two weeks of March. They will be putting together a positionpaper on their in£ormationneeds. This paper will be presented r-o cr~ co BatCo document for PFSFC 1 March 1999