Tobacco Documents Online

1990 New Marketing Ideas Summary of Programs Multi-Brand 1. Marketing Via Direct Mail 2. Factory Fresh Product 3. Special Occasion Promotional Tie-ins 4. Mindset Advertising Poolouts 5. Pack Offer Coupon Solution 6. Carton Merchandiser Pack Offers WINSTON 1 . WINSTON Factory Seconds 2. WINSTON Sports Trivia Connection SALEM 1. SALEM Refreshest Olympics AME 1. CAMEL Smooth Moves Adventure 2. CAMEL Rough Rolled Cigarettes 3. CAMEL Convenience Store Parking Lot Program CAMEL/MAGNA 1. CAMEUMAGNA Instant Winner In-pack Game Special Markets 1. Inner-City Black Targeted Brand

Program: Marketing Hi9hly Targeted New/Established Brands Exclusively__ Throuah the Mail Objective The objective of this program is to develop a unique marketing strategy for marketing highly targeted new and established brands by using direct mail as the exclusive medium for introducing, advertising and promoting the brand. Description • NOW, MORE and potential new brands which are highly targeted, with an older and more female target, will no longer use magazines, newspapers and OOH to market their brands to their target. Instead they will utilize the company's smoker list and direct marketing expertise to deliver more relevant and impactful advertising in a more cost effective manner. • This new marketing strategy will also incorporate the principle of customized communication using mindset segmentation to increase the relevance and appeal of each of these brands. Rationale • Direct mail is a more personal and direct medium for reaching consumers. Using direct mail will enable the company to precisely control the type and frequency of marketing communication with the consumer. Further, this strategy will enable the brand to increase its relevance to the consumer by consistently incorporating customized communication using mindset segmentation. • Marketing brands directly, through the mail frees up corporate resources which can be applied to other brands and reduce the demand for scarce company resources such as OOH inventory. • NOW and MORE are RJR's two most targeted brands. Further, their targets tend to be older and more female. Both of these groups are more interested in and responsive to materials sent in the mail versus other demographic groups. • The cost to market a brand through the mail is much less expensive than using traditional approaches in terms of delivering recalled advertising impressions to the intended target. Traditional media for a highly targeted cigarette brand have a lot of waste. Most of the advertising impressions go to non-smokers, the majority of smokers reached are not in the brand's target and the recall of advertising in magazines, OOH and newspaper is significantly lower than for direct mail. Attached is an analysis of the relative costs of using direct mail versus other media forms to deliver advertising impressions. As the analysis shows, direct marketing is significantly more efficient than any other media in making target smokers aware of (recall) the brand's advertising.

Relative Media Efficiency of Delivering Recalled Advertising To Target Smokers Assuming target size to be 5% of smokers MEDIA DELIVERY COST~ SMOKING INCIDENCE % RECALLING % HITTING COST ADVERTISING - TARGET COMPARISON2 OOH $1.39 28% 29% 5% $ 342.36 MAG. $3.55-$24.51 28% 21 % 10%3 $ 603.74- $4168.37 NP. $20.73 28% 21 % 5% $ 7051.02 M A I L $ 2 0 5. 0 0 100% 65% 100% $315.38 1 COST TO REACH 1000 ADULTS FOR GENERAL MEDIA AND COST TO REACH 1000 HOUSEHOLDS FOR DIRECT MARKETING. 2COST TO REACH 1000 TARGETED SMOKERS (ASSUMING 5% OF SMOKERS) WHO CAN RECALL THE ADVERTISING. 3ASSUMES THAT MAGAZINE SELECTION CAN DOUBLE THE NUMBER OF TARGET SMOKERS REACHED.

Program: Factork_Fresh Product Objective The objective of this program is to provide consumers, particularly franchise smokers, a way to get factory fresh cigarettes thereby providing a unique benefit for RJR brands and also increasing the loyalty of our smokers. Descri t~i_on • All RJR brands will offer consumers the opportunity to order their cigarettes, via an 800 number, direct from the factory, with a guarantee that they can't buy fresher product anywhere. • The opportunity to order factory fresh cigarettes will be flagged on all RJR cartons for a 6 month period. Following that period, the offer will continue to be mentioned on all cartons, but in a less introductory fashion. • The products wilf be guaranteed to be two weeks old or less when they are shipped, and will be at the consumers' home one week from the time of their order. • A minimum order of 5 cartons will be required with RJR to pay the shipping. The consumer will pay the same price per carton they would in their own state. • The five carton shipment will sent in a sturdy, poly-wrapped box to ensure freshness. Rationale/Benefits • Product freshness is a key area of smoker interest. Currently many RJR products are deficient to competition in their perceived freshness. Factory direct sales for RJR brands enable them to provide a competitive advantage in the area of product freshness. • Offering factory fresh product should also provide greater purchase loyalty to those consumers who order their product in this way. Also, the 5 carton minimum will help create consumer loyalty by taking them of out of the purchase cycle for an extended period of time.

Program: Special Occasion Promotional Tie-ins Objective The objective of this program is for RJR core brands to provide promotions that are more directly tied in to special occasions, holidays or other relevant dates. Description • Promotions will be developed to correspond with special times of the year including: -Christmas -Memorial Day -Halloween -New Years -St. Patrick's Day -Thanksgiving -President's Day -4th of July -April 15 (taxes due) -Valentines Day -Labor Day -Consumers' individual birthdays • Consumers' individual birthdays ( both franchise and competitive smokers ) will be honored with a special gift from the appropriate RJR brand. The consumer will be sent a greeting card which will include a birthday greeting, and a coupon good for three free packs of cigarettes. Rationale/Benefits • More closely linking promotions with special times during the year will increase the relevance and appeal of our offers and provide a seasonal flavor to our promotions ( as we do with our advertising ) that is unique in the industry. • Giving consumers a gift on their birthday can create a special relationship between a consumer and a brand that is not possible with any other promotion. • Date of birth information is available for nearly 40 million smokers via the Direct Marketing data base. •

Program: Mindset Segments Advertising Poolouts Objective The objective of this program is to provide additional relevance to our advertising poolouts by leveraging the concept of mindset segmentation. Descri tion • All brands will develop executions which will be targeted to the appropriate mindset clusters based on their strategic focus and other marketing considerations. -Yearning adults -Achievers -Hard core socializers -Gender-role traditionalists -Practical goal oriented -Mature socializers • These targeted advertisements will be placed in the media vehicle(s) that will most effectively reach each mindset group. Rationale/Benefits • The mindset clusters developed in the Direct Marketing area can be used to develop advertising messages which are more relevant to the consumer based on incorporating how each segment views themselves and the world around them. Developing advertising poolouts aimed at each segment will increase the relevance and appeal of the brand.

Program: Pack Offer Coupon Solution Objective The objective of this program is to increase the business building potential of the Coupon Solution program. Description • Rather than receive a coupon good for a discount on a carton of product, competitive smokers will receive a pack oriented coupon as their initial offer in the Coupon Solution program. • Following redemption of the pack coupon, the competitive smoker will be given a dual pack/carton offer. If that is redeemed for a carton, a lower value carton continuity coupon will be provided. If the dual coupon is redeemed for the pack portion, a lower value/ high purchase requirement pack offer will be provided. Rationale/Benefits • A significant number of consumers buy only by pack. Further, competitive smokers are unlikely to buy a carton of another brand without first trying the product on a more limited basis. • The Coupon Solution provides a unique feature of being able to deliver promotional incentives exclusively to competitive smokers; however, currently it is being utilized only to deliver carton promotions in supermarkets. An opportunity exists to deliver pack oriented offers in the supermarket environment.

Program: Pack Offers From The Carton Merchandiser Obj, ce tive The objective of this program is to provide impactful competitively oriented pack offers in carton oriented outlets. Description • The carton merchandiser will be modified to provide an area where RJR can deliver pack oriented offers to more effectively attract competitive smokers. • The modified merchandiser will enable RJR to promote varies. brands throughout the year without having to sell in special displays. Rationale/Benefits • Currently RJR promotes its major style on a quarterly basis in supermarkets. The programs are defensive in nature, however, attracting primarily franchise smokers. • Providing a permanent area where pack promotions can be featured will increase the competitive appeal of the offers and also increase the company's ability to reach the significant number of smokers who do not buy by the pack.

Proqram: WINSTON Factory Seconds Objective The objective of this program is to provide WINSTON with a new method for moving volume and at the same time defending itself against savings segment brands. Description • WINSTON will offer, at retail, cigarettes/packs which are slightly imperfect at a reduced price--Factory seconds. • The nature of the imperfections will be minor and will not impact the smoking properties. Examples of the types of imperfections are light or smeared ink on the barrel, packs which have some irregularity, etc. • The price of these cigarettes will be $3.00 less than the regular WINSTON retaiF price. Rationale/Benefits • Many products offer slightly irregular products to consumers at a reduced price--golf balls, t-shirts, towels, etc. • Offering WINSTON factory seconds will enable the brand to sell its imperfect cigarettes and at the same time provide WINSTON with a way to compete with the savings brands without discounting its regular, first quality, product. • Offering factory seconds which show only minor imperfections may have the benefit of reinforcing the quality of its regular product.

Program: WINSTON Sports Trivia Connection Objective The objective of this program is to reinforce WINSTON's claim as the sports connection by providing consumers access to sports trivia. Description • The WINSTON Sports Trivia Connection will establish WINSTON as the source of sports trivia information. • The program will involve both pack inserts as well as OOH support to deliver sports trivia to the consumer. • Four sports trivia questions will be included on an insert in each pack of WINSTON.. The answers to the questions will be on the back of each insert. • Thousand of questions on sports will be available for the consumer to test their sports trivia expertise. • OOH will also pose sports trivia questions. The answers to these questions will be incorporated in the pack insert. Thus, to get/ confirm the answer to the OOH trivia, the consumer must purchase a pack of WINSTON. Rationale/Benefits • Sports enthusiasts are very interested in sports trivia. As the sports connection, WINSTON will also be the connection for sports trivia. • Pack inserts provide an opportunity for WINSTON to provide consumers with on-going trivia questions/ answers that will create and maintain involvement with the brand and serve to reinforce the brand's positioning. • Involving OOH in the program allows greater awareness of the program and serves to create consumer interest that will lead to purchase (to get the answer to the trivia question).

Program: SALEM Refreshest Olympics Obiec tive The objective of this program is to develop a unique consumer participation special event to reinforce SALEM's refreshest positioning. Description • The SALEM Refreshest Olympics will incorporate numerous consumer participation events that relate to SALEM's refreshest positioning and advertising. Events would revolve around symbols of refreshment such as water and ice. • Teams of consumers will compete in a number of events for medals, ribbons and prizes. • The Refreshest Olympics Trials will be held in numerous cities across the country. Winning teams from across the country will be flown to the site of the Olympic Finals where gold, silver and bronze medals will be awarded to the top finishers in each event. Rationale/Benefits • Younger adults enjoy being involved in unique activities with others. The SALEM Refreshest Olympics will provide a fun and exciting event. • Developing the event to be oriented completely around the "refreshest" theme will provide strong and relevant support for the brand's positioning .and advertising.

Program: CAMEL "Smooth Moves" Adventure Objective The objective of the CAMEL "Smooth Moves" Adventure is to increase the level of involvement by younger adult target smokers with the CAMEL brand and to reinforce CAMEL's Smooth Character advertising imagery through a unique and involving treasure hunt. . Descri t~ • The CAMEL Smooth Moves Adventure will involve consumers solving the mystery of the lost Golden Camel. • The "Archeologist" CAMEL will lead the expedition to find this lost treasure and collect the reward. • Clues in the form of puzzles, riddles and logic problems will be contained in each pack of CAMEL via a pack insert. • Consumers will solve each individual clue and then put that information together with information from the other available clues to determine the mythical location of the lost Golden Camel. Approximately 50 clues will be available in total. Four to five new clues will be arriving at retail each month with all the clues distributed by the end of a year. • At the end of the year consumers will send in detailed descriptions of the location of the lost Golden Camel based on the information provided in the clues. Those correctly identifying the precise location will split the large reward offered for the treasure's safe return. The value of the reward will be based on the equivalent value of the gold in the lost Camel (specific value to be determined). Rationaie/Benefits • Younger adult smokers enjoy games, riddles and puzzles. The CAMEL Smooth Moves Adventure will leverage this interest in a unique and involving way. • This promotion will create excitement and on-going interest in the brand as consumers solve individual clues and make progress toward solving the mystery. • This promotion will further encourage team involvement by consumers making CAMEL a frequent and exciting topic of discussion among target younger adult smokers. • In addition to each pack insert being a clue to the mystery, these inserts will also be a fun and challenging exercise even for those who do not wish to become fully involved in the adventure and attempt to solve the mystery.

Other executionai elements • The CAMEL Smooth Moves Adventure will be supported by a strong introductory advertising to develop awareness of the adventure. Over the year the "adventure" will be periodically featured in print, OOH and POS to remind consumers of the on-going nature of the adventure. See the attachment for a potential OOH/POS execution. • The reward for solving the mystery can range in size depending on the desired budget for the program. A minimum of one million dollars would be required to generate strong consumer interest. As the reward will be split among the winners, the brand's payout liability is set by the size of the reward.

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Program: CAMEL "Rough Rolled" Cigarettes Objective The objective of this program is to reinforce the uniqueness of the CAMEL brand to younger adult smokers through the introduction of a line extension that is visually unique. Description • CAMEL "Rough Rolled" cigarettes will be a line extension for CAMEL which will be a rough, uneven cigarette that will be uniquely different and create an unmistakable visual identity for those who smoke it. • To support its masculine heritage, this line extension will be introduced in only a full flavor 85mm box style. • The product will be targeted to younger adult smokers who desire to make a statement with the cigarette they smoke, even after it is out of the pack. • The product will be positioned as a real cigarette with real tobacco taste, for those who really enjoy smoking. Rationale/Benefits • Younger adults are attracted to product and images that allow them to make a statement about themselves. • CAMEL Rough Rolled cigarettes will enable the younger adult smoker to use a product that is unique and a cigarette that makes a statement about the user even when it is out of the pack because of its clear visual difference.

Program: CAMEL's Convenience Store Parking Lot Program Objective The objective of this program is to provide CAMEL with a unique and impactful alternative media form that will reach target younger adult smokers where they tend to purchase their cigarettes most often. Description • CAMEL will dominate the parking lots at convenience stores through the use of an innovative approach- providing and maintaining parking space markings, curbs and direction arrows that include the brand's logo, name or cigarette facsimile. See attachment for example program. Rationale/Benefits • Younger adult smokers tend to buy their cigarettes at convenience stores. • The CAMEL convenience store parking lot program is a unique way of providing CAMEL with continuous advertising presence at a key retail outlet type. Further, this program can be tied in effectively with the national Pack Action Program on CAMEL. • The store owner will appreciate CAMEL providing a service that he would otherwise have to pay for (i.e., relining the parking lot periodically).

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Program: CAMEL/MAGNA Instant Winner In-pack Skill Game Objective The objective of this program is to increase the appeal and relevance of CAMEL/MAGNA though the use of an in-pack game of skill that will provide instant winners. Description • CAMEVMAGNA will develop a skill-based ( approved by the BATF ) game that would be delivered via in-pack inserts. • The game would involve subjects/topic that are of interest to younger adults including trivia, music.and fashion. • The game will be configured such that a correct answer will enable the consumer to receive an instant reward in the form of a discount on his next purchase of the product (e.g., 250 off a pack). Rationale/Benefits • Younger adults enjoy games that provide instant feedback as to whether they have won or not. Developing a game which provides instant feedback will gain high levels of younger adult smoker involvement. • Pack inserts provides -an effective way to deliver this game to the target given their low involvement with other media forms. • CAMEVMAGNA are both positioned against younger adult smokers and thus represent logical brands to feature this game. • The younger adult focus to the game will help to reinforce the brands' images and younger adult targeting in the consumers' minds. • Using the winning game card to encourage further product use can provide both volume support and business building support to pack purchasers. In addition, the winning game ticket may not have the same image as a coupon and thus may be more likely to be used by this target group.

Program: Inner-City Black Targeted Brand Objective The objective of this program is to develop and introduce a distinctive cigarette brand targeted at the inner-city Black smoker. Description • This brand will leverage the Black consumers' desire to use products which: -are distinctive and are associated primarily with Blacks, and -are more "potent" (e.g., Blacks drink malt liquor rather than beer). • This brand will incorporate many distinct features which will appeal to the Black smoker. -Product Description -menthol with strong tobacco taste -20+ mg. of tar -cork tipping -larger circumference -shorter filter inl -Black smokers primarily smoke cork tipped full flavor menthol cigarettes. -Blacks are less concerned with tar and nicotine levels. -The larger circumference and shorter filter will provide a distinctive look and feel. It wil! also and provide support to the more "potent" delivery benefit. -Packaging Descri tion -soft pack and/ or box with 10 cigarettes per pack. -The cigarettes will be placed in the package with the filter end down and the tobacco end up. -The packaging will have an inner city look to it--possibly a graffiti look (see attachment for a potential package design). Rationale -Blacks smoke fewer cigarettes per day and have less money making a 10 pack an ideal o configuration. N 0 W 4 0) 4

-Many inner-city Blacks open their packs from the bottom to keep the filter end from getting dirty when they/others remove a cigarette. Placing the cigarettes upside down in the pack will be a unique feature which will demonstrate empathy toward the target and this unique behavior. -The packaging must be seen as making the brand primarily for Blacks to increase its acceptance among this group. An inner-city look will help to make this distinction. -Advertising Descri tion -As with the packaging, in order to be as relevant as possible, the advertising should relate to the environment and the interests of the inner-city Black. It is recommended that the advertising utilize the popularity of "Rap" music among this group to create relevant and appealing advertising. Both the visuals as well as the copy should reflect the "Rap" trend including copy which has the strong rhyming style of "Rap" music. See the attachment for a potential advertising execution. -The cigarettes should be referred to in the advertising as the "bold smokes" to reinforce both the stronger delivery of the product and also the statement this distinctive brand makes about its users. -The brand will utilize outdoor advertising exclusively to deliver its advertising, including many unique placements to distinguish it from other brand (e.g., paint ads on walls of buildings) Rationale -It is important that the brand be relevant to the inner-city Black target. "Street" symbols and popular Black music, such as "Rap", are to key opportunities to make the brand relevant and appealing to the target. -Blacks are most effectively reached through outdoor advertising due to their low involvement with other media forms. _Name Descri tion -The recommended name to support the product and advertising image of the brand is Fat Boys. Rationale -Fat Boys provides a tie with both the larger circumference/stronger delivery of the (A product and the "Rap" music theme of the advertising. o N 0 W .P Q3 o)

-Other marketing programs Descri tp ion -The brand will sponsor events within the inner city which are consistent with the interests and activities of the target including "Rap" music concerts, amateur "Rap" contests and graffiti art exhibitions. Rationale -These activities will increase awareness of the brand among the target and create an association between the brand and culturally relevant activities for the inner-city Black smoker.

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