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ARKETING EVELOPME INFORMATION User Date

July 6, 1982 n°4n° ~ilPaFiDENiIAL TO: Mr. J. D. Weber Mr. Dr. N. R. J. A. Stevens Lloyd FROM: Ms. N. S. Kaufman SUBJECT: OPPORTUNITY ANALYSES FOR A LIGHT SMOKERS'* BRAND During a recent meeting among Brand R&D and MDD in which new brand ideas were discussed, a cigarette developed exclusively for light smokers was suggested. Therefore, a preliminary search of available data was conducted in order to ascertain who light smokers are and whether or not they represent a large enough opportunity for such a brand. Development of a light smoker's profile showed that women, young adults (age 18-24) and smokers of Coolness and Stylish brands tend to have the strongest propensity for light smoking (see Attachments I and II). Conversely, men and smokers of Tradi- tional, Virile and Concerned brands have a low propensity. Interestingly, income, education and region of the country have little if any effect on the likelihood of being a light smoker. Quite a large number of smokers both in the high propensity and lower propensity categories are light smokers -- 35% and 24% respectively (see Attachment III). This translates to 10% of the total cigarette volume, or 62.7 billion unit sales in 1981 (see Attachment IV). Therefore, it appears as though a light smoker's brand targeted to women smokers (particularly 18-24 age range) in the Coolness or Stylish segments offers a potential opportunity for RJR. It is recommended that this opportunity be further explored. *Smoke 1/2 pack or less per day Nancy Sell'ing-Kaufman Marketing Development Department NSK/djm Attachments cc: Mr. E. J. Fackelman Mr. D. G. Fought IMDD Library t. .

ATTACHMENT I PROFILE OF LIGHT SMOKERS Smoke Total 1/2 Pack Smokers Or Less Index 100% 100% Sex: Male 53 42 79 Female 47 58 123 A~jc. e: 18-34 44 49 111 35+ 56 51 91 Income: Under $15,000 37 43 116 $15,000-25,000 34 31 91 Over $25,000 29 26 90 Education: College 40 40 100 Non-College 60 60 100 Usual Brand: Non-Menthol 67 59 88 Menthol 23 41 178 Traditional 7 6 86 Virile 36 31 86 Mar'l tJoro 17 15 88 WINSTON 12 10 83 Coolness 21 26 124 SALEM 10 13 130 Kool 7 9 129 Stylish 10 13 130 B&H 5 5 100 Moderation 11 10 91 Merit 5 4 80 Concerned 12 10 83 Kent 5 4 80

ATTACHMENT II AMOUNT SMOKED PER DAY BY AGE Male Female 18-24 25-34 35-49 50+ 18-24 25-34 35-49 50+ Smoke: Total 100% 100% 100% 100% 100% 100% 100% 100% Less Than: 1/2 Pack 10.2 9.5 7.8 6.4 9.4 16.1 12.2 9.5 13.4 1/2 Pack 17.3 20.6 14.8 10.1 12.9 27.0 19.5 18.1 21.0 1/2 Pack Or Less 27.5 30.1 22.6 16.5 22.3 43.1 31.7 27.6 34.4 1 Pack 40.9 44.8 42.5 37.2 38.2 39.9 43.5 42.2 41.1 1 1/2 Packs 14.3 13.7 16.1 17.7 15.4 9.6 12.7 14.4 12.0 2 Packs 13.4 8.7 14.1 22.1 17.7 6.1 9.7 12.7 9.8 2 1/2 Packs 1.3 1.1 1.5 1.7 2.0 .5 1.2 1.3 .8 3 Packs 1.9 1.2 2.4 3.3 3.3 .4 .9 1.4 1.0 Over 3 Packs .5 .3 .7 1.3 .8 .1 .2 .2 .3

ATTACHMENT III NUMBER OF PACKS SMOKE PER DAY Less Than 1/2 Pack 1/2 Pack 1/2 Pack And Less $ $ $ Sex: Male (100%) 8 14 22 Female (100%) 13 21 34 Age: 18-34 (100%) 11 20 31 35+ (100%) 10 15 25 Income: Under $15,000 (100%) 12 19 31 $15,000-25,000 (100%) 9 16 25 Over $25,000 (100%) 8 16 24 Education: College (100%) 11 18 29 Non-College (100%) 10 17 27 Usual Brand: Non-Menthol (100%) 8 16 24 Menthol (100%) 14 21 34 Traditional (100%) 8 15 23 Virile (100%) 8 15 23 Marlboro (100%) 9 16 25 WINSTON (100%) 7 16 24 CAMEL (100%) 8 14 22 Coolness (100%) 14 21 35 SALEM (100%) 15 22 37 Kool (100%) 12 20 32 Stylish (100%) 14 21 35 B&H (100%) 13 19 31 Va. Slims (100%) 16 24 29 Moderation (100%) 9 16 25 Merit (100%) 10 16 26 VANTAGE (100%) 9 15 23 Concerned (100%) 9 15 24 Kent (100%) 9 16 25

! ATTACHMENT IV Amount Smoked Per Day % Total Volume Unit Sales - 1981 (In Billions) Total 100% 627.0 Less Than 1/2 Pack 2 12.5 1/2 Pack 8 50.2 1/2 Pack Or Less 10 62.7 1 Pack 36 225.7 1 1/2 Packs 19 119.1 2 Packs 24 150.5 2 1/2 Packs 3 18.8 3+ Packs 8 50.2