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RJ Reynolds

State of Maryland Vs. Philip Morris Incorporated, Et Al. The Videotaped Deposition of Lynn Joanne Beasley.

Date: 21 May 1998
Length: 749 pages
518014280-518015028
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2 1 A P P E A R A N C E S 2 3 On Behalf of The Plaintiffs: 4 E. DAVID HOSKINS, Esquire, 5 NEAL GORDON, Esquire, 6 Law Offices of Peter G. Angelos, 7 P.C., One Charles Center 8 100 N. Charles Street, Suite 810 9 Baltimore, Md. 21201 10 (410) 468-0640. 11 12 On behalf of Defendant R. J. Reynolds Tobacco 13 Company: 14 STEPHANIE E. PARKER, Esquire, 15 GEOFFREY K. BEACH, Esquire, 16 Jones, Day, Reavis & Pogue 17 Metropolitan Square 18 1450 G Street, N.W. 19 Washington, D.C. 20005 20 (202) 879-3939 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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5 1 SUPERIOR COURT OF THE 2 DISTRICT OF COLUMBIA 3 CIVIL DIVISION 4 - - - - - - - - - - - - -x 5 SAMUEL ALBERT REED, . 6 Plaintiff, : Civil Action Number 7 V. : 96-05070 8 PHILIP MORRIS . 9 INCORPORATED, et al., . 10 Defendants. 11 - - - - - - - - - - - - -x 12 13 The videotaped deposition of LYNN 14 JOANNE BEASLEY was taken on Thursday, May 21, 15 1998, commencing at 10:57 a.m., at the Law 16 Offices of Womble, Carlyle, Sandridge & Rice, 200 17 West Second Street, Winston-Salem, North Carolina 18 27102, before Alfred A. Betz, Notary Public. 19 20 Reported By: 21 Alfred A. Betz, Registered Merit Reporter AL BETZ & ASSOCIATES, INC. (410) 752-1733
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3 1 Mildred C. Richardson, et al. ) In the 2 Plaintiff ) Circuit Court 3 ) For 4 vs. ) Baltimore City 5 ) 6 Philip Morris Incorporated, ) 7 et al., ) 8 Defendants ) C.A. Number 9 ) 96145050/CE212596 10 11 12 The videotaped deposition of LYNN 13 JOANNE BEASLEY was taken on Thursday, May 21, 14 3.998, commencing at 10:57 a.m., at the Law 15 Offices of Womble, Carlyle, Sandridge & Rice, 200 16 West Second Street, Winston-Salem, North Carolina 17 27102 before Alfred A. Betz, Notary Public. 18 19 20 Reported By: 21 Alfred A. Betz, Registered Merit Reporter AL BETZ & ASSOCIATES, INC. (410) 752-1733
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10 1 marketing assistant on the Now brand, correct? 2 A. That's correct. 3 Q. And Now is a brand of cigarettes, 4 correct? 5 A. Yes, it is. 6 Q. Sold in the 50 states? 7 A. Yes. 8 Q. You then were transferred to the Salem 9 brand and became a marketing assistant for Salem, 10 correct? 11 A. If you're going to ask me just to go 12 through my resume', I asked Stephanie to bring a 13 copy of it. I'd like to refer to it because it's 14 hard to -- 15 Q. Please do. 16 A. If you don't mind. It's hard to just 17 remember each position. 18 Q. No. Please do. 19 A. All right. Thank you. 20 Q. Was your next position after the Now 21 brand being a marketing assistant for the Salem AL BETZ & ASSOCIATES, INC. (410) 752-1733
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8 1 MR. HOSKINS: Good morning. My name is 2 David Hoskins. I represent the plaintiffs in the 3 Richardson, Reed and State of Maryland cases. 4 With me today is Neal Gordon of our office. 5 MS. PARKER: I'm Stephanie Parker. I 6 represent R. J. Reynolds Tobacco Company. And 7 Geoff Beach is with me today. 8 Whereupon -- 9 LYNN JOANNE BEASLEY, 10 a witness, called for examination, having been 11 first duly sworn, was examined and testified as 12 follows: 13 EXAMINATION BY MR. HOSKINS: 14 Q. Ma'am, could you give us your full name 15 and spell your last name? 16 A. Certainly. Lynn Joanne Beasley, 17 B-E-A-S-L-E-Y. 18 Q. Could you give us your maiden name and 19 spell that as well, please? 20 A. Certainly. It's Breininger, 21 B-R-E-I-N-I-N-G-E-R. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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7 1 P-R-O-C-E-E-D-I-N-G-S 2 THE VIDEOGRAPHER: This is this 3 videotaped deposition of Ms. Lynn Beasley taken 4 by the plaintiff in the matter of Samuel Albert 5 Reed, Mildred C. Richardson and the State of 6 Maryland, plaintiffs versus Philip Morris, 7 Incorporated, et al., defendants. Case numbers 8 96050709145050/CE212596 and 96122017/CL-211487. 9 This deposition is being held in the 10 law offices of Womble Carlyle Sandridge & Rice, 11 located at 200 West Second Street, Winston-Salem, 12 North Carolina. 13 Today's date is May 21, 1998. The time 14 is 10:57 a.m. 15 The Court Reporter's name is Alfred 16 Betz, with the firm of Alfred Betz & Associates, 17 located in Baltimore, Maryland. 18 The videographer is Larry Schadle with 19 Video Visions, located in Cary, North Carolina. 20 Will counsel please identify themselves 21 for the record. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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1 1 State of Maryland ) In the 2 Plaintiff ) Circuit Court 3 ) For 4 vs. ) Baltimore City 5 ) 6 Philip Morris Incorporated, ) CONFIDENTIAL 7 et al., ) 8 Defendants ) C.A. Number 9 ) 96122017/CL211487 10 11 12 13 The videotaped deposition of LYNN 14 JOANNE BEASLEY was taken on Thursday, May 21, 15 1998, commencing at 10:57 a.m., at the Law 16 Offices of Womble, Carlyle, Sandridge & Rice, 200 17 West Second Street, Winston-Salem, North Carolina 18 27102, before Alfred A. Betz, Notary Public. 19 20 Reported by: 21 Alfred A. Betz, Registered Merit Reporter /CC C reG ~x h %h t'rs AL BETZ & ASSOCIATES, INC. (410) 752-1733
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23 1 2 which Salem also competes with but those would be the key ones. 3 Q. There are three executive vice 4 presidents at R. J. Reynolds; is that correct? 5 6 A. Q. Yes. So you're one of the top three 7 management people at R. J. Reynolds? 8 A. Yes. I would say that's true. Well, I 9 mean, there's the President, CEO, so -- I don't 10 know if you're including him or not. That would 11 be four, I mean. 12 Q. Okay. Do you believe that there are 13 health risks associated with the products that 14 you market? 15 A. Yes. 16 Q. What are those risks? 17 A. I believe that there are increased 18 health risks associated with it. You have an 19 increase, if you're a smoker you have an 20 increased risk of developing lung cancer, 21 emphysema, heart disease, complications with AL BETZ & ASSOCIATES, INC. (410) 752-1733
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19 1 Whether you're talking about Winston or Salem, I 2 mean, More, again they're included as adult 3 smokers. 4 Q. So your testimony is, for example, that 5 the Salem campaign was not developed to advertise 6 to inner city Black markets? 7 MS. PARKER: I object to the form of 8 the question. I think that mischaracterizes her 9 testimony, and is argumentative, and assumes 10 facts that are not in evidence here. 11 A. Again, as I said, almost all of our 12 brands and most of the campaigns were developed 13 that includes African-American adult smokers as 14 did Salem. 15 Q. What position did you hold on January 16 16, 1989? 17 A. Director of Special Markets. 18 Q. In that position did you know a Ms. 19 first initial C, middle initial S, Hunter? 20 A. I think that's probably Cindy Hunter. 21 I'm not positive but that's who it would sound AL BETZ & ASSOCIATES, INC. (410) 752-1733
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15 1 involved with as Director of Special Markets? 2 A. It was looking at all of our brands but 3 relative to those specific special markets. 4 Q. And the African-American special 5 market, what brand does R. J. Reynolds have that 6 targets that market? 7 MS. PARKER: I object to the form of 8 that question. I think that's misleading and 9 assumes facts not in evidence. 10 A. We don't target the market. Adult 11 African-American smokers buy all of our brands, I 12 mean, so each of, you know, adult smokers buy 13 each of the cigarette brands we make, and adult 14 African-American smokers buy our brands as well. 15 Q. Is your testimony that there is not a 16 particular brand that Reynolds wants to market, 17 or wanted to market to African-Americans? 18 A. No. What I'm saying is each of our 19 brands we want to market to adult smokers, and 20 African-Americans would be included as adult, 21 African-American smokers would be included as AL BETZ & ASSOCIATES, INC. (410) 752-1733
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6 1 A P P E A R A N C E S 2 On Behalf of proposed District of Columbia class 3 action Plaintiffs: 4 E. DAVID HOSKINS, Esquire, 5 NEAL GORDON, Esquire, 6 Law Offices of Peter G. Angelos, 7 P.C., One Charles Center 8 100 N. Charles Street, Suite 810 9 Baltimore, Md. 21201 10 (410) 468-0640 11 12 On behalf of Defendant R. J. Reynolds Tobacco 13 Company: 14 STEPHANIE E. PARKER, Esquire, 15 GEOFFREY K. BEACH, Esquire 16 Jones, Day, Reavis & Pogue 17 Metropolitan Square 18 1450 G Street, N.W. 19 Washington, D.C. 20005 20 (202) 879-3939 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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28 1 all those sworn statements? 2 A. No, I have not. Our legal department 3 maintains them. 4 Q. Do you know what the term affidavit is, 5 what that means? 6 A. I think so. 7 Q. Okay. It's kind of a statement that 8 has an affidavit and very often you sign it in 9 front of a notary? 10 A. Yes. Now -- yes. Uh-huh. 11 Q. Other than sworn statements and 12 affidavits, have you ever prepared a written 13 discussion, just a written statement, for anyone 14 dealing with your job? 15 MS. PARKER: I object to the form of 16 the question. I think that's overl y broad. It's 17 unclear what you're asking. 18 A. I mean, have I ever like summarized 19 what I do on my job for anyone? 20 Q. Let me ask it this way. Have you ever 21 prepared a written narrative at the request of AL BETZ & ASSOCIATES, INC. (410) 752-1733
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17 1 A. Special projects. 2 Q. Were there any particular brands you 3 were involved in in that position? 4 A. Well, I oversaw development of brands, 5 if that's what you mean. 6 Q. Did R. J. Reynolds at any time develop 7 campaigns for inner city Black markets? 8 MS. PARKER: Object to the form of that 9 question. I think it's unclear what you're 10 asking on that. 11 Q. Go ahead, ma'am. 12 A. We developed campaigns for adult 13 smokers, current smokers of our brands as well as 14 competitive smokers. So we obviously have 15 developed advertising for appeal to adult 16 African-American smokers as well as other adult 17 smokers. So it would be included, yes. 18 Q. What campaigns has R. J. Reynolds 19 developed to appeal to African-American smokers? 20 A. Well, I couldn't tell you literally 21 every campaign because, again, many of our brands AL BETZ & ASSOCIATES, INC. (410) 752-1733
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4 1 A P P E A R A N C E S 2 On Behalf of The Plaintiffs: 3 4 E. DAVID HOSKINS, Esquire, 5 NEAL GORDON, Esquire, 6 Law Offices of Peter G. Angelos, 7 P.C., One Charles Center 8 100 N. Charles Street, Suite 810 9 Baltimore, Md. 21201 10 (410) 468-0640 11 12 On behalf of Defendant R. J. Reynolds Tobacco 13 Company: 14 15 STEPHANIE E. PARKER, Esquire, 16 GEOFFREY K. BEACH, Esquire 17 Jones, Day, Reavis & Pogue 18 Metropolitan Square 19 1450 G Street, N.W. 20 Washington, D.C. 20005 21 (202) 879-3939 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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18 1 over time African-American adult smokers are 2 included with other adult smokers as part of the 3 opportunity, so, I mean, there would be ads in 4 many campaigns. 5 Q. Are you unable to identify a single 6 campaign that R. J. Reynolds developed to appeal 7 to African-American smokers? 8 MS. PARKER: I object to the form of 9 that question. I think it's been asked and 10 answered and mischaracterizes her testimony. 11 A. Again, I did not say that I couldn't 12 identify a single one. I said it was many. Are 13 you asking me to identify one or -- because 14 there's many. 15 Q. I'm asking you to identify all 16 campaigns by R. J. Reynolds developed to appeal 17 to African-American smokers. 18 A. Well, they are developed to appeal to 19 African-American adult smokers as well, you know, 20 white smokers as well as adult Hispanic smokers, 21 and that would include most of our campaigns. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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25 1 Q. Okay. What's the Mangenie case, do you 2 know? Does that name ring a bell? 3 A. Yes. That was one of my depositions. 4 Q. Do you know what the relief that was 5 sough t in that litigation was? 6 A. Well, I'm not sure what you mean by 7 relie f. That sounds like a legal term. 8 Q. Yes. What were the plaintiffs seeking h i ? 9 n t at case 10 A. They were seeking for us to, I think, 11 stop ru nning the Joe Camel campaign and then, you 12 know, c ompensation or money. 13 Q. Okay. That was one of the three 14 depos it ions; is that correct? 15 A. Yes. 16 Q. The other one that was recently in '97 17 or '9 8, do you know what case that was in? 18 A. Yes. It was Engle. 19 Q. Engle. Do you know what that case was 20 about ? 21 A. I think it's one of these class AL BETZ & ASSOCIATES, INC. (410) 752-1733
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22 1 that if you have an idea and you're not sure it's 2 going to work or you want to see how well it 3 works, then a lead market would be a market you 4 go to first before you go to other markets to 5 assess how it's doing. 6 Q. Okay. Are you aware in 1989 of any 7 attempt to develop a new campaign for Salem 8 cigarettes for the inner city Black lead market? 9 A. I would say I don't remember exactly 10 the timeframe. It could have been `89. But we 11 definitely looked at advertising for Salem that 12 was for adult African-American smokers. And I 13 don't know if that's what you are,referring to or 14 not. I haven't seen the document. If you show 15 me, I'll let you know. 16 Q. What other competitive brands was Salem 17 attempting to compete with in that timeframe? 18 A. Salem's key competitors are Newport and 19 Kool. They're the, Salem is a menthol brand and 20 the biggest menthol brands are Salem, Kool and 21 Newport. Now, there are other menthol styles AL BETZ & ASSOCIATES, INC. (410) 752-1733
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9 1 Q. You are the Executive Vice President of 2 Marketing for R. J. Reynolds, correct? 3 A. R. J. Reynolds Tobacco Company. 4 Q. You've been in that position since 5 November of 1997, correct? 6 A. That's right. 7 Q. Your responsibilities in that position 8 are for all of the marketing for all of the R. J. 9 Reynolds Tobacco Company brands; is that correct? 10 A. That's correct. 11 Q. You are also in charge of all 12 advertising for those brands, correct? 13 A. Yes. 14 Q. You are also in charge of all promotion 15 and packaging for those brands as well, correct? 16 A. Yes. 17 Q. You report to Mr. Schindler who is the 18 President and CEO of your company, correct? 19 A. Yes, of R. J. Reynolds Tobacco 20 Company. 21 Q. Your first position at the company was AL BETZ & ASSOCIATES, INC. (410) 752-1733
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29 1 someone that you didn't swear to? And I guess it 2 would be related to litigation. 3 MS. PARKER: I'm going to object 4 again. Just unclear what you're asking. I think 5 Ms. Beasley will be glad to try to provide you 6 with that information but -- 7 A. I don't really remember. 8' Q. Okay. Have you ever participated in 9 the preparation of interrogatory answers? 10 A. You know, that's a legal term again. 11 Q. Okay. 12 A. Interrogatory. I mean, you'll have to 13 tell me what it means. 14 Q. You've never heard of the term 15 interrogatories? 16 A. I have, but, you know, I'm not a 17 lawyer, I don't know exactly what that means. 18 Q. What I'm wondering is very often 19 parties will serve written questions called 20 interrogatories on an opposing party, and I'm 21 wondering if you were ever asked to assist in AL BETZ & ASSOCIATES, INC. (410) 752-1733
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12 1 Q. Was it a White Man or a Black Man? 2 A. A White Man. 3 Q. The campaign was in place since 4 sometime in the 1970s, correct? 5 A. I'm not really sure exactly when it 6 started. 7 Q. Was your next position after assistant 8 brand manager of Camel to become a brand manager 9 for the Century brand? 10 A. Yes. 11 Q. What is the Century brand? 12 A. It's a brand of cigarettes that has, 13 instead of 20 cigarettes in a pack, it has 25 14 cigarettes for the price of 20. 15 Q. Is it considered a value brand by your 16 employer? 17 A. Yes. 18 Q. Did you also pick up responsibility for 19 the other brands at R. J. Reynolds at the same 20 time? 21 A. I picked up responsibility later. I AL BETZ & ASSOCIATES, INC. (410) 752-1733
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13 1 mean, not the same time I started with Century, 2 first it was just Century and then it went to 3 some other brands as well. 4 Q. What are the other value brands that 5 you had responsibility for at this time in your 6 ? career 7 A. The other value brands would be Doral 8 and Sterling and Magnum. 9 Q. In 1987, approximately, you returned to 10 the Camel brand in the position of senior brand 11 manager; is that correct? 12 A. That's correct. 13 Q. You held that position until 1991 when 14 you became vice president in charge of the 15 Winston brand; is that correct? 16 A. No. That's not correct. 17 Q. Okay. Could you correct that statement 18 for me, please? 19 A. Certainly. I went from being senior 20 brand manager on Camel and then my next position 21 was Director of Special Markets, and after that I AL BETZ & ASSOCIATES, INC. (410) 752-1733
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31 1 Q. Do you maintain a home office? 2 A. No. 3 Q. Do you have any files at home? 4 A. The only thing I have at home are 5 articles about the litigation issues that have 6 been published, you know, by outside people. 7 Q. Could you describe these articles for 8 me, please? 9 A. Oh, like there might be studies 10 published in JAMA, you know, like the JAMA 11 articles or something like that. 12 Q. Do you also maintain copies of these 13 documents at work? 14 A. Yes. 15 Q. So these would be extra copies at home? 16 A. Yes. Because sometimes I want to 17 refresh my memory and read through them. 18 Q. Do you have a computer at work? 19 A. Yes. 20 Q. Do you have e-mail on that computer? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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11 1 brand? 2 A. Yes, that's right. 3 Q. And then did you get promoted to be the 4 assistant brand manager for the More brand? 5 A. That's right. I was assistant brand 6 manager on More. 7 Q. And in October of 1984 did you move 8 from the More brand to a position as assistant 9 brand manager for Camel? 10 A. Yes, I was assistant brand manager in 11 Camel. 12 Q. What campaign was Camel using at that 13 time? 14 A. It was what we call the Bob Beck 15 campaign. 16 Q. Can you explain for the ladies and 17 gentlemen of the jury what the Bob Beck campaign 18 was? 19 A. Sure. It was this man alone and he had 20 curly blond hair and he would be doing things 21 outdoors on his own. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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27 1 A. Yes. 2 Q. Okay. And could you tell me every 3 instance that you did that that you recall? 4 MS. PARKER: I want to object again. 5 Are you referring just in connection with 6 litigation, or any sworn statement like getting 7 her driver's license or -- 8 Q. I'm referring to -- well, why don't 9 you tell me what you recall in response to my 10 question, giving sworn statements. 11 A. I have given them in legal cases. 12 Q. Okay. What legal cases have you given 13 sworn statements in? 14 A. I couldn't tell you exactly which ones. 15 Q. Did they involve litigation brought by 16 the states or smokers, to your knowledge? 17 A. It's litigation against the company, 18 you know, like it could have been an individual 19 case where a smoker is claiming health 20 ramifications from smoking. With the FTC. 21 Q. Okay. Have you maintained copies of AL BETZ & ASSOCIATES, INC. (410) 752-1733
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33 1 whether or not you had certain documents? 2 MS. PARKER: I want to object to the 3 extent that that might ask for privileged 4 information, but otherwise you can respond to the 5 question. 6 A. Are we talking about Minnesota? 7 Q. Yes. 8 A. Just Minnesota? That's what we're -- 9 Q. I guess we'll start about just 10 Minnesota. 11 A. No. I don't remember any interview on 12 -- you know, we maintain our documents, the 13 legal department routinely goes through and picks 14 up all those documents, but no, I wasn't 15 interviewed on it. 16 Q. Do they put a pink sheet in your files? 17 A. Yes. 18 Q. And then all new documents have to be 19 in front of the pink sheet; is that -- 20 A. Exactly. 21 Q. I guess what I'm trying to figure out AL BETZ & ASSOCIATES, INC. (410) 752-1733
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34 1 is whether you were ever interviewed by anyone 2 seeking to provide documents to an opposing party 3 in litigation as to whether or not you had such 4 documents, just whether you were interviewed. 5 A. I guess with regard to the FTC case our 6 lawyers have talked to me about that. 7 Q. Okay. Leaving aside the FTC case, was 8 there any interview with respect to, did anyone 9 ask you questions about what documents you might 10 have? 11 MS. PARKER: I want to object. 12 Q. Just whether you were asked the 13 question. 14 MS. PARKER: If you could just answer 15 whether or not you had that discussion, without 16 going into any detail about the subject matter of 17 the discussion. 18 A. No, I don't recall any interview on 19 that. 20 Q. The FTC litigation you referred to, Ln N 00 21 what is that? m ~ ~ w ~ w AL BETZ & ASSOCIATES, INC. (410) 752-1733
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38 1 the attorney general litigation? 2 A. Are you talking about Minnesota? 3 Q. Yes. 4 A. Any of my documents destroyed? 5 Q. Right. To your knowledge. 6 A. No. 7 Q. To your knowledge, were any documents 8 removed from your files prior to the search? 9 A. No. 10 Q. Do you know whether or not your 11 computer files were searched and produced in the 12 Minnesota litigation? 13 A. I don't really think I have any 14 computer files. I don't do anything on the 15 computer. 16 Q. What do you use it for? 17 A. Just my calendar. 18 Q. Do you have e-mail? 19 A. Yes. My secretary gets it and gives it 20 to me. 21 Q. What e-mail program do they use? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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37 1 you're asking, and it is overbroad. 2 Q. You have identified this one 10-minute 3 discussion with attorney Blynn. Were there any 4 other similar discussions relating to the FTC 5 litigation? 6 MS. PARKER: Same objection. 7 A. You're asking me any other discussions 8 on what documents I have? 9 Q. Right. 10 A. Is that the question you're on? 11 Q. Yes. 12 A. No. 13 Q. As a result of the recent discussion 14 with attorney Blynn, did you identify additional 15 documents for production? 16 A. No. I mean, they were all the ones I 17 had anyway. I mean, I just said whatever is in 18 my files, that's what I have. 19 Q. Okay. To your knowledge, were any of 20 your documents destroyed prior to the search by 21 the legal department for documents responsive to AL BETZ & ASSOCIATES, INC. (410) 752-1733
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14 1 became vice president of strategic marketing 2 planning and then I became vice president of the 3 Winston BU. 4 Q. Would you tell the jury what BU stands 5 for? 6 A. Business unit. 7 Q. What were your responsibilities as 8 Director of Special Markets? 9 A. Overseeing, looking at special markets 10 for the company and doing analysis on it and 11 making recommendations. 12 Q. What special markets did the company 13 identify? 14 A. The three special markets that I was 15 focused on was the military market, the 16 African-American market adult smokers and 17 Hispanic adult smokers. 18 Q. How long were you in that position? 19 A. I was in that position from 5-88 to 20 7-89. 21 Q. What particular brands were you AL BETZ & ASSOCIATES, INC. (410) 752-1733
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26 1 actions. 2 Q. Do you know who it was brought on 3 behalf of? 4 A. I don't remember. 5 Q. Okay. And in 1992, what was that case 6 about? 7 A. It was Kueper and it was, I think, a 8 smoking and health case. 9 Q. K-U-E-P-E-R, something like that? It's 10 not C-O-O? 11 A. No, I don't think so. I think it was 12 with a K. 13 Q. What do you mean by a smoking and 14 health case, ma'am? 15 A. I think it was a smoker who was 16 claiming some health problem from smoking 17 cigarettes. I think that's what it was. 18 Q. Have you ever given anyone a sworn 19 written statement? 20 MS. PARKER: Object to the form of the 21 question. I think that's overly broad. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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20 1 like. 2 Q. What position did Cindy Hunter have 3 with R. J. Reynolds Tobacco Company on January 1, 4 1989, if you know? 5 A. She would have been in marketing 6 research, but I don't know the exact position. 7 Q. Who is Ms. Creighton, 8 C-R-E-I-G-H-T-O-N, if you know? 9 A. Fran Creighton. 10 Q. What position did she hold in January 11 of 1989? 12 A. I'm just -- I'm not sure. I don't 13 remember exactly in January of `89. 14 Q. Have you ever heard of documents that 15 are known as marketing and research reports at R. 16 J. Reynolds? 17 A. Yes. 18 Q. Could you tell the ladies and gentlemen 19 of the jury what a marketing research report is? 20 A. Well, it can be many things but in 21 general what I would say it is, it's when we do AL BETZ & ASSOCIATES, INC. (410) 752-1733
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16 1 adult smokers we market to on several of the 2 brands. 3 Q. There is no particular brand, I take 4 it, that R. J. Reynolds intended to sell more to 5 the African-American community than any other R. 6 J. Reynolds brand; is that a fair statement? 7 MS. PARKER: I object to the form of 8 that question. I think that assumes facts that 9 are not in evidence and mischaracterizes Ms. 10 Beasley's testimony. 11 A. Again, as I said, several of our 12 brands, again we are, our market is adult smokers 13 and several of the brands appeal to adult 14 smokers, whether it be white or African-American 15 or Hispanic. So it would include several brands. 16 Q. What were your responsibilities as vice 17 president of strategic marketing planning? 18 A. In that position I was involved in 19 strategic planning for marketing our, marketing 20 brands and new brands. 21 Q. Were there any -- AL BETZ & ASSOCIATES, INC. (410) 752-1733
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21 1 research among adult smokers. It could be 2 general research or advertising research, or 3 product research or packaging research, but it 4 would be a report that summarizes what we've 5 learned from adult smokers. 6 Q. Now, in your position what does the 7 term campaign mean? 8 A. Usually a campaign is, it's bigger than 9 one ad, it would include a whole idea that would 10 include many ads. 11 Q. And is it usually related to a 12 particular product? 13 A. To a particular brand? 14 Q. Yes. 15 A. Yes. 16 Q. What does the term lead market mean? 17 A. It means if you -- well, you know, it 18 can mean different things to different people. 19 I'll give you my interpretation. 20 Q. Okay. 21 A. I would say what a lead market means is AL BETZ & ASSOCIATES, INC. (410) 752-1733
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55 1 A. Yes. 2 Q. The title of the telecast was Growing 3 Up In Smoke, correct? 4 A. That's what it says. 5 Q. And it makes reference to an Anne 6 Browder, an employee of The Tobacco Institute, 7 correct? 8 A. I'd have to find that. 9 MS. PARKER: What page are you on? 10 Q. It starts on page 3. 11 A. This says Browder. 12 Q. Okay. Do you know Mr. Browder's first 13 name? 14 A. No. 15 Q. Okay. And do you recognize this name 16 John Banzaff? 17 A. Yes. 18 Q. Who is Mr. Banzaff? 19 A. I think he's an anti-smoking advocate. 20 I don't really, I don't recall what organization 21 he's aligned with. Ln r AL BETZ & ASSOCIATES, INC. (410) 752-1733
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54 1 of, took place on October 20, 1983, correct? 2 A. I don't recall. I mean, I was shown 3 the transcript of the interview, but, you know, I 4 -- I don't remember the exact date. 5 Q. It was a 20/20 program with John 6 Stassel, correct? 7 A. Could have been. I don't remember the 8 specifics of it. 9 (Whereupon, Beasley Deposition 10 Exhibit No. 10400, 20/20 Telecast Growing Up In 11 Smoke, October 20, 1983, marked.) 12 Q. Ma'am, the reporter has placed before 13 you an exhibit that we will mark as exhibit 14 10400. Do you recognize that document from your 15 testimony in Minnesota? 16 A. Yes. 17 Q. This is the transcript of the 20/20 18 telecast, correct? 19 A. Yes. 20 Q. The date on the document is October 20, 21 1983, correct? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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24 1 pregnancy. 2 Q. Are there any other health risks that 3 you believe are associated with the products you 4 market? 5 A. I would say that would be the key ones. 6 Q. How many times have you been deposed 7 before? 8 A. Let's see. Just give me one minute. 9 When you say how many times have I been deposed, 10 if there were like two different cases involved 11 but it was the same deposition, would you count 12 that as once or twice? 13 Q. I'd count it as once. 14 A. Then I think it's three times. 15 Q. Can you tell me approximately when 16 those depositions were? 17 A. One would have been I think in about 18 '92 maybe. 19 Q. Okay. 20 A. And one I think was last year, and then 21 one earlier this year. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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30 1 providing answers to interrogatories that were 2 served on your employer? 3 A. Well, like, for example, in the 4 Mangenie case, they had a list of questions and 5 subject matter and they wanted someone designated 6 to speak to them and I was the person designated, 7 and like the lawyer went over that list of 8 questions with me. So I did that. 9 Q. Can you think of any other circumstance 10 where someone actually had shown you a document 11 that said interrogatories and said we need your 12 help in preparing the answers to these 13 questions? 14 A. I don't recall that. 15 Q. Have you ever been asked to sign 16 answers to interrogatories? 17 A. I don't think so. I just don't 18 remember that. 19 Q. Do you maintain files at R. J. 20 Reynolds? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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1 Q. 49 Were you shown documents to prepare, as 2 3 part of that preparation, yes or no, were you shown any documents? 4 A. Yes. 5 Q. Were you shown any documents from your 6 outside lawyers, yes or no? 7 A. Yes. 8 Q. Other than those documents, did you 9 review any other documents in preparation for the 10 Mangenie deposition? 11 MS. PARKER: I want to object. Are you 12 asking did she review any documents separate from 13 the ones that she reviewed with the lawyers? 14 Q. Other than the documents that were 15 shown to you by the lawyers, did you review any 16 other documents in preparation for the Mangenie 17 deposition? 18 A. Again, just probably published 19 articles. I don't recall specifically but I 20 think I probably reviewed some published articles 21 as well. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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41 1 the jury what steps you took to prepare yourself 2 for that testimony. 3 MS. PARKER: Same objection. 4 A. Okay. So I met with outside lawyers on 5 it. 6 7 Q. Okay. How long did you meet with them? A. Well, when I was actually there I had 9 to go out on, I think it was, a Wednesday because 10 we didn't know when I was going to go, so I was 11 basically with them Wednesday, Thursday and 12 Friday before I went on on Monday and then we 13 probably, I don't remember exactly, but we 14 probably had one or two meetings in Winston-Salem 15 before that. 16 Q. As part of these preparations, yes or 17 no, were any documents shown to you? 18 A. Well, yes. A lot of documents because 19 like before I testified live, you know, the other 20 side designates all these documents that you have 21 to look at. So I looked at lots of them. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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40 1 A. No. 2 Q. Did you review your previous 3 testimony? 4 A. No. 5 Q. You also testified live in Minnesota, 6 correct? 7 A. Yes. 8 Q. You did not review that testimony? 9 A. No. 10 Q. In preparation for your trial testimony 11 in Minnesota what did you do, if anything, to 12 prepare for that testimony? 13 MS. PARKER: I want to object to that 14 question to the extent it asks for the disclosure 15 of information that's protected by the 16 attorney-client privilege, but otherwise you can 17 answer the question. 18 A. Would you ask it again? 19 Q. Yes. I'm directing your attention to 20 your trial testimony in the Minnesota attorney ~ ~ 21 general litigation and asking you to describe for m AL BETZ & ASSOCIATES, INC. (410) 752-1733
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57 1 A. Yes. This was not speaking for our 2 company and -- 3 Q. Okay. 4 A. Our company's position, and it was very 5 clear from when I joined the company, was that we 6 market to adult smokers. And society's 7 definition of adult smokers is 18 years and 8 older. And I don't really know, I don't know the 9 specifics of this, who this person was speaking 10 for, but I do not believe that -- I think you 11 said it was a he, didn't you? 12 Q. It may have been a he, may have been a 13 she. 14 A. I don't know. Was speaking for our 15 company because that was not our company's 16 position. 17 Q. To your knowledge, did R. J. Reynolds 18 ever advise The Tobacco Institute that it did not 19 agree that the age of maturity was anyone over 20 the age of 21, to your knowledge? 21 A. I have no way of knowing. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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52 1 A. We marketed to adult smokers 18 and 2 older. 3 Q. What happened in 1992 -- strike that. 4 Since 1992, who has Reynolds marketed to? 5 A. Adult smokers 21 years and older. 6 Q. What happened in 1992 to lead to that 7 change, if you know? 8 A. Yes. I do. Our head of marketing 9 changed the policy to, from 18 to 21, and he said 10 the reasons were that he was, felt like given, 11 one, the criticism that we were under about 12 people thinking that we were targeting under aged 13 people when we weren't, that it would be good to 14 build in a buffer of, even though they're adult 15 legal aged smokers 18, 19 and 20, build in a 16 buffer and only develop our marketing programs 17 for 21 years and older. 18 Q. What is The Tobacco Institute? Could 19 you tell the jury? 20 A. I don't really have much to do with The 21 Tobacco Institute. My understanding of it is AL BETZ & ASSOCIATES, INC. (410) 752-1733
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62 1 those that were 21 and over. But I have no 2 argument with states on deciding their legal age 3 of smoking. 4 Q. Certain documents are labeled secret by 5 your employer; is that correct? 6 MS. PARKER: I object to the form of 7 that question. 8 A. I don't know as the company labels them 9 secret. I mean, individuals may have stamped a 10 document secret. 11 Q. That's what I'm interested in. Could 12 you describe for the jury the process that goes 13 about when an individual decides to stamp a 14 document secret at your company? 15 MS. PARKER: I object again to the 16 question. You haven't laid any foundation at all 17 for her to be able to answer that. She can 18 certainly say what she knows and what she does, 19 but you haven't laid any foundation for her to be 20 able to answer a broad question like that. 21 Q. Do you have my question in mind? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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32 1 Q. Do you have a laptop? 2 A. No. 3 Q. Do you have a computer at home? 4 A. No. 5 Q. Were you aware that your files were 6 searched for documents in response to the 7 Minnesota litigation? 8 A. Yes. 9 Q. Can you tell us when that search was 10 conducted? 11 A. No. 12 Q. Were you present when the search was 13 conducted? 14 A. No. 15 Q. Do you know who conducted the search? 16 A. Our legal department. 17 Q. Did anyone from the legal department 18 interview you as part of this search for 19 documents? 20 A. Interview me? No. 21 Q. Were you asked any questions about AL BETZ & ASSOCIATES, INC. (410) 752-1733
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39 1 A. I don't know. I'm not really a 2 computer person. 3 Q. Do you get e-mail, you get hard copies 4 of e-mail messages, is that fair to say, your 5 secretary prints them out for you? 6 A. Yes. 7 Q. What do you do with those messages when 8 you're done with them? 9 A. Well, I read them and that's it. 10 Q. Ma'am, what did you do to prepare for 11 today's deposition? 12 A. I met with -- 13 MS. PARKER: Go ahead. 14 A. I met with Stephanie and, yes, for a 15 couple of hours yesterday. 16 Q. Yes or no, were any documents shown to 17 you at that meeting? 18 A. No. 19 Q. Other than meeting with your attorneys, 20 thing else to prepare for your Ln did ou do an 21 y y N co deposition? ~ ,P. w 1~ co AL BETZ & ASSOCIATES, INC. (410) 752-1733
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50 1 Q. Okay. Can you think of any specific 2 articles that you reviewed? 3 A. No. Same answers as the last time. 4 Q. Okay. Were any nonlawyers present 5 during the preparation session for the Mangenie 6 deposition? 7 A. No. 8 Q. Do you know what time period is 9 involved in the cases that this deposition is 10 being taken in? 11 A. I read the complaint and it looks like 12 it goes way back. 13 Q. To 1954; is that correct? 14 A. I couldn't -- I don't know exactly 15 1954, but it talked about things way back then. 16 Q. Okay. And remind the jury again when 17 you started at Reynolds? 18 A. In July of 1982. 19 Q. What does the term YAS stand for? 20 A. How I have used it is Younger Adult 21 Smoker. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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66 1 been going through it with me. I just don't 2 remember if he was in the meetings with me or 3 not. 4 Q. Were you provided any documents at the 5 orientation? 6 A. Yes. You know, upon being hired I was 7 provided with the cigarette advertising code, 8 other documents, yes, I don't remember 9 specifically but yes, I was. 10 Q. How long did the orientation last? 11 A. Gosh, I don't remember. 12 MS. PARKER: Are you asking about the 13 overall orientation? 14 Q. No. No. The legal department 15 orientation. 16 A. Oh, just the legal department 17 orientation? I think it was probably a couple 18 days but, you know, I don't really recall 19 exactly. 20 Q. Have you had other orientations with 21 lawyers since that first orientation? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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42 1 Q. So we have a group that were designated 2 by the plaintiffs that you reviewed? 3 A. Uh-huh. 4 Q. Other than those designated documents 5 did you review other documents, yes or no? 6 A. Yes. 7 Q. Did you review your previous deposition 8 transcripts? 9 A. No. 10 Q. Did you review previous affidavits that 11 you had given? 12 A. Just let me think about it. I'm trying 13 to think if I read any of those. I may have. I 14 don't really remember but I may may have. 15 Q. What documents did you review? 16 MS. PARKER: I object to that 17 question. I think that asks for information 18 that's protected by the attorney-client privilege 19 and the attorney work product doctrine. 20 Q. Who showed you the documents, this set 21 of documents that you reviewed? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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45 1 Q. Right. 2 MS. PARKER: I want to state my same 3 objection, but you can go ahead and answer it. 4 A. Okay. Let's see. I had probably, I 5 think, two meetings before it with an outside 6 lawyer, and that's about it, I think. 7 Q. Did you review any documents on your 8 own in preparation for that deposition? 9 MS. PARKER: I object to the form of 10 that question. I think it's unclear what you 11 mean by "on your own". 12 Q. Let me break it down. Yes or no, did 13 you review documents prior to the deposition? 14 A. Yes. 15 Q. Yes or no, were some of those documents 16 provided to you by attorneys? 17 A. Shown to me, you mean? 18 Q. Yes. 19 A. Yes. 20 Q. Other than those documents did you 21 review any other documents in preparation for AL BETZ & ASSOCIATES, INC. (410) 752-1733
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43 1 A. These outside lawyers that work for 2 us. 3 Q. And where did they show you these 4 documents? 5 A. Like I said, we had, you know, a couple 6 meetings probably in Winston-Salem and then once 7 I was out in Minnesota. 8 Q. Were you accompanied by anyone to these 9 meetings? 10 A. I don't remember being accompanied with 11 anyone in Winston-Salem, but when I went out to 12 the trial, yes, one of our lawyers, company 13 lawyers went with me. 14 Q. Were there any nonlawyers present with 15 you or present in the room when these documents 16 were shown to you? 17 A. Not that I know of. Now, there were 18 people in there, I, you know, I'm not positive 19 they're a lawyer but I'm thinking they were since 20 they, you know, were working with the law firm. 21 Q. How many people were in the room when AL BETZ & ASSOCIATES, INC. (410) 752-1733
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36 1 counsel the chance to preserve any objections. 2 A. Okay. 3 Q. This discussion, how long did it last? 4 A. Maybe 10 minutes. 5 Q. Was it a formal meeting? 6 A. No. 7 Q. Who participated in the discussion? 8 A. One of our lawyers and me. 9 Q. What's the lawyer's name? 10 A. Guy Blynn. 11 Q. Guy? 12 A. Blynn. B-L-Y-N-N. 13 Q. Is that an in-house lawyer at Reynolds 14 or outside counsel? 15 A. Well, our lawyer, he's a Reynolds 16 employee. 17 Q. Other than that discussion, did you 18 have any other discussion about litigation, this 19 FTC litigation? 20 MS. PARKER: I object to the form of 21 that question. I think that's unclear what AL BETZ & ASSOCIATES, INC. (410) 752-1733
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65 1 with the legal department. When did that 2 orientation take place? 3 A. When I started with the company. 4 Q. Where did that orientation take place? 5 A. In the company. 6 Q. Who presented at the orientation? 7 A. Gosh, there were probably several 8 people. It probably covered several issues, and 9 it would have been several company lawyers but, 10 you know -- 11 Q. Were they in-house lawyers? 12 A. In-house lawyers. 13 Q. Were there any outside lawyers present? 14 A. I don't remember any outside lawyers. 15 Q. Who else was at the orientation besides 16 yourself? 17 A. I don't know if there was -- I can't 18 really recall if there was anyone there. It 19 could have been just for me. There may have been 20 two of us there, there was another guy that was 21 hired about the same time as me and he could have AL BETZ & ASSOCIATES, INC. (410) 752-1733
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46 1 that deposition? 2 A. Well, yes. 3 Q. What documents did you review? 4 A. I looked at, just refreshed my memory 5 on some of the articles that I have. Published 6 articles. 7 Q. All right. Are you the author of the 8 published articles? 9 A. Oh, no. No. 10 Q. What articles do you recall that you 11 looked at at that time? 12 A. I think I went back and looked at the, 13 there were some articles that were published in 14 JAMA that I went back and looked at, and there 15 were some others, too. I can't recall 16 specifically what they were. 17 Q. What was the subject matter of the JAMA 18 articles that you reviewed? 19 A. The JAMA articles were about primarily, 20 as I recall, it's about advertising and cigarette 21 advertising and in general teen smoking. I would AL BETZ & ASSOCIATES, INC. (410) 752-1733
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1 2 A. Q. 35 It's on the Joe Camel campaign. Is that litigation under way? Is it 3 still ongoing? 4 A. Yes. 5 Q. Okay. And you stated you were 6 interviewed with respect to that litigation. I 7 just would like you to tell me the times or the 8 dates that you recall and how many instances you 9 recall being interviewed. Let's start with that 10 right now. 11 A. I would say once, and it's been within 12 the last, I don't know, three weeks. 13 Q. Okay. Now, did that interview take 14 place in Winston-Salem? 15 A. Yes. 16 Q. Did that interview involve -- 17 A. Well, I really wouldn't call it an 18 interview. It was a discussion. I mean, I don't 19 know -- 20 Q. Just bear with me because I want to do 21 this kind of one step at a time so I give your AL BETZ & ASSOCIATES, INC. (410) 752-1733
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64 1 matter if it's stamped secret or not. If it came 2 to me and it was stamped secret, well, then, I 3 would read it, of course. 4 Q. Do you know what the numbering system 5 refers to in these stamps? 6 A. No. 7 Q. Okay. When you started at R. J. 8 Reynolds did you go through an orientation? 9 A. Yes. 10 Q. Could you describe for the jury the 11 orientation that you went through? 12 A. Sure. I went through an orientation 13 with our legal department on all of the voluntary 14 and legal requirements for marketing and 15 advertising. I went through an orientation with 16 R and D, with purchasing, with marketing 17 research, I mean, pretty much most of the 18 departments of the company I spent some amount of 19 time in getting an orientation about what they 20 do. 21 Q. Now, you talked about an orientation AL BETZ & ASSOCIATES, INC. (410) 752-1733
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48 1 A. That's what I recall. 2 Q. Okay. The next previous deposition was 3 the Mangenie deposition, correct? 4 A. Yes. 5 Q. What did you do to prepare for the 6 Mangenie deposition? 7 A. And do you know it included Arch? That 8 was the one where I asked you the question, you 9 know, because they were both there. 10 Q. Right. 11 A. What did I do to prepare for Mangenie? 12 I met with lawyers, outside lawyers. 13 Q. All right. How long did you meet with 14 ? th em 15 A. I'm just trying to remember, but I 16 suspect there were probably three meetings 17 before. 18 Q. Okay. About how many hours? 19 A. I'm going to guess, you know, I really 20 can't recall exactly, but I'm going to guess like 21 four or five hours each time. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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47 1 say that's a general subject. 2 Q. What were the conclusions of those 3 articles? 4 A. Well, you know, I'd have to have them 5 in front of me and be going through specific 6 articles. I couldn't generalize. 7 Q. Do you recall any of the conclusions of 8 the articles? 9 A. You know, a specific article, I'd want 10 to have it in front of me, I just wouldn't feel 11 comfortable characterizing a conclusion of an 12 article that I haven't looked at in a while. 13 Q. Okay. When the documents were shown to 14 you by lawyers, were there any nonlawyers 15 present? 16 A. No. 17 Q. Have we discussed everything dealing 18 with the preparation for the Engle deposition? 19 MS. PARKER: I object to the form of 20 the question. I think that's unclear what you're 21 asking. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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59 1 correct? 2 A. Schroer. 3 Q. Schroer. And what position did Mr. 4 Schroer hold? 5 A. He was Executive Vice President of 6 Marketing and Sales. 7 Q. Is that the position you now hold, 8 ma'am? 9 A. No. I'm Executive Vice President of 10 Marketing. 11 Q. Is there still an Executive Vice 12 President of Marketing and Sales or did they 13 break it in two? 14 A. Broke it in two. 15 Q. Who is the Executive Vice President of 16 Sales? 17 A. There isn't an Executive Vice President 18 of Sales. There's a Senior Vice President of 19 Sales. 20 Q. And who is that individual? 21 A. Jim Maguire. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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51 1 Q. And what does FUB YAS mean, in your, to 2 your knowledge? 3 A. How I have used it is First Usual Brand 4 Younger Adult Smoker. 5 Q. And what is a YABS? 6 A. I don't know, YABS. I don't remember. 7 Q. How about YAHS? 8 A. Could -- you know, it sounds like it 9 could be, I don't recall exactly but it sounds 10 like it could be Younger Adult Hispanic Smoker 11 maybe, or Younger Adult Black Smoker. I'm not 12 positive of that, though. 13 Q. What is a younger adult smoker, ma'am? 14 A. You know, generally -- it's used 15 differently, but generally it can be 18 to 24 16 adult smoker, or 21 to 24 adult smoker, or 17 sometimes it's even used as 21 to 29 adult 18 smoker. The actual age that goes with it has 19 varied some over time. 20 Q. Prior to 1992 did R. J. Reynolds market 21 to younger adult smokers under the age of 21? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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69 1 MS. PARKER: I want to state the same 2 objection I stated previously. 3 A. What was provided with me was our 4 company's policy, really before the legal 5 orientation, back when I was interviewing, but it 6 could have been covered again in the legal 7 orientation, which is we only market to adult 8 smokers. And at that time it was 18 years and 9 older. And everything we do was oriented, all 10 things we do, research and otherwise, are 11 oriented around adult smokers. 12 Q. Ma'am, are you still a smoker? 13 A. Yes. 14 Q. What brand do you smoke now? 15 A. I smoke all of our brands. 16 Q. That was going to be my next question. 17 Haven't you smoked all the brands? 18 A. Yes. 19 Q. When you were running the Camel 20 campaign, what brand did you smoke? 21 A. It was probably Camel, you know, since AL BETZ & ASSOCIATES, INC. (410) 752-1733
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60 1 Q. Okay. And, ma'am, this is the 1992 2 document you made reference to before changing 3 the policy from 18 to 21; is that a fair 4 statement? 5 A. Yes. 6 Q. To your knowledge, did anyone at RJR 7 from 1982 up to 1992 warn the public that it 8 should not smoke because smoking was an adult 9 custom that you could not make a mature judgment 10 on until you reached the age of 21? 11 MS. PARKER: I object to the form of 12 the question. If you're reading from a document 13 -- perhaps Ms. Beasley could review it. It 14 sounds like you're quoting from something. I 15 object to that, without giving her the document. 16 MR. HOSKINS: She can't have my 17 outline. Wouldn't make it any fun. 18 Q. Do you understand the question? 19 A. Could you ask it again? 20 Q. Yes. To your knowledge, did anyone at 21 R. J. Reynolds from 1982 up to 1992 warn the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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75 1 A. I don't think she's retired. I think 2 she still does project work. I mean, you know, 3 kind of retired but -- 4 Q. She's not at the company on a daily 5 basis, to your knowledge? 6 A. No. 7 Q. The title of this report is Younger 8 Adult Smokers: Strategies and Opportunities, 9 correct? . 10 A. Yes. 11 Q. And this copy lists, although you're 12 not on that list, you recognize that these are 13 people from the marketing department; is that a 14 fair statement? 15 A. They're marketing, marketing research 16 department, you know, the research department 17 being there's overall marketing but then there's 18 marketing, the people that develop the 19 advertising and packaging and promotions, then 20 there's marketing research, the people that do 21 research on consumers, adult smokers. So some of AL BETZ & ASSOCIATES, INC. (410) 752-1733
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74 1 2 Orlowsky, in 1984 do you know the position that person held? 3 A. Marty Orlowsky. 1984? He could have 4 been head of marketing. Like I don't know, a 5 senior vice president maybe. He could also just 6 been in media. He had held several different 7 positions during the '80s. 8 9 Q. A. Mr. Lees? He was in marketing. He was probably a 10 marketing director or something. 11 Q. This report was sent by a Diane 12 Burrows, do you see that, ma'am? 13 A. Yes. 14 Q. Do you know who she was in 1984? 15 A. She was in the strategic research 16 group. 17 Q. Is she still at R. J. Reynolds? 18 A. No. 19 Q. Is she still alive? 20 A. Yes. 21 Q. Is she retired? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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58 1 Q. During the same time period from 1983 2 all the way up to 1992 you would agree that RJR 3 marketed to 19 year olds, correct? 4 A. Yes, we marketed to adult smokers. 5 Q. And during that period from 1983 all 6 the way up to 1992, you would agree that you 7 marketed to 20 year olds, correct? 8 A. Yes, we market to adult legal age 9 smokers. 10 (Whereupon, Beasley Deposition 11 Exhibit No. 10414, memo re: advertising 12 practices, dated May 28, 1992, marked.) 13 Q. Ma'am, I'm handing you what the 14 reporter has marked as exhibit 10414 in this 15 deposition. Do you see your name on that 16 document? 17 A. Yes. 18 Q. Okay. And that document is dated May 19 28, 1992, correct? 20 A. Yes. 21 Q. That document is from a Mr. Schroer, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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56 1 Q. ASH, does that ring a bell? 2 A. Could be. 3 Q. Can you tell the jury what ASH is? 4 A. No, I couldn't. 5 Q. And do you see there that on the bottom 6 of page 3 Browder is quoted as saying, quote, we 7 feel very strongly that cigarette smoking is an 8 adult custom that one should not even consider 9 until they have reached the age of maturity, do 10 you see that, ma'am? 11 A. I see that statement here, yes. 12 Q. And then Stassel's statement is what's 13 maturity? 14 A. Yes. 15 Q. And then Browder's statement is, quote, 16 anyone over the age of 21? 17 A. Yes. I see that. 18 Q. And as we've discussed before, however, 19 during, from the date of this statement up until 20 1992 R. J. Reynolds continued to market to 18 21 year olds, correct? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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72 1 dated February 29, 1984, marked.) 2 Q. Ma'am, I'm handing you a document that 3 the reporter has marked as exhibit 10401, this is 4 a document you reviewed as part of your Minnesota 5 testimony. Do you recall that, ma'am? 6 MS. PARKER: Object to the form of that 7 question. When you say reviewed in connection 8 with her Minnesota testimony, do you mean at 9 trial? 10 MR. HOSKINS: That's right. 11 A. I'm sure I saw a document, you know, 12 there are several of these on this subject, so 13 I'm assuming it was this one. 14 Q. This is a strategic research report; is 15 that correct? 16 A. That's what it says. 17 Q. Could you tell the ladies and gentlemen 18 of the jury what your understanding is of the 19 purpose of a strategic research report? 20 A. Well, there was a strategic research 21 group, it was a subset of marketing research, it AL BETZ & ASSOCIATES, INC. (410) 752-1733
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76 1 these people are research people, som2 of them 2 are marketing people, like it looks like a 3 lawyer, so, I mean, there's a variety of people. 4 Q. Okay. Ma'am, prior to your involvement 5 in the litigation had you ever seen a copy of 6 this document? 7 A. No. I don't ever recall seeing it 8 prior to litigation. 9 Q. Are the strategic research reports kept 10 in one place for people to review if they wanted 11 to? 12 MS. PARKER: Currently? 13 Q. Yes. In the normal course of your 14 siness b . u 15 A. I don't really think so. No, I mean, 16 we don't have a strategic research group 17 anymore. I mean, we haven't for some time. So 18 19 Q. Ma'am, I'd direct your attention to the 20 page with the last four Bates numbers 8465. Do Ln f~ 21 you see the heading there The Importance of m H AL BETZ & ASSOCIATES, INC. (410) 752-1733
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79 1 Let's go down to the first bullet point, the 2 renewal of the market stems almost entirely from 3 18 year old smokers. No more than 5 percent of 4 smokers start after age 24. 5 Does R. J. Reynolds still believe 6 that? 7 MS. PARKER: I object to the form of 8 that question. You're assuming facts that are 9 not in evidence, and is argumentative as well. 10 A. I don't know as R. J. Reynolds ever 11 believed this. This was Diane's opinion or else 12 maybe she got it from governmen t studies. I 13 don't know. But I don't really, there's -- as I 14 recall, the government studies show that about 15 the average age at which people become daily 16 smokers is between 18 and 19. How many start 17 after the age.of 18, I don't really know. I'm 18 sure there are government statistics on that. I 19 don't know. 20 Q. Well, the JAMA articles you read, did 21 they support this statement? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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78 1 contradiction of it. 2 Q. Is Camel brand a clear contradiction of 3 that statement? 4 A. I would say that for Camel, it's a, I 5 wouldn't say it's exactly true, I think younger 6 adult smokers have been important to Camel's 7 growth but Camel's, I mean, you know, over 40 8 percent of Camel smokers are over the age of 35, 9 so I wouldn't say this is an accurate statement. 10 I would agree that younger adult smokers are an 11 important part of Camel's business, but I 12 wouldn't agree that this characterizes that. 13 Q. What's the most popular cigarette brand 14 in the country today? 15 A. Marlboro. 16 Q. Would you agree that younger adult 17 smokers have been the critical factor in the 18 growth of Marlboro? 19 A. I would say they have been one of the 20 important factors. 21 Q. And to your knowledge -- strike that. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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82 1 Do you see that statement, ma'am? 2 A. I see that. 3 Q. Then if you go down to the bottom of 4 the next paragraph, it reads by not attracting 5 its fair share of 18 year old smokers, RJR 6 yielded a .5 point ingoing share advantage to PM 7 in 1983. 8 Do you see that statement, ma'am? 9 MS. PARKER: I want to object to this 10 line of questioning. The document speaks for 11 itself, and if all you're going to do is read 12 parts of it and ask her if you read it correctly, 13 I think that's improper. 14 Q. Do you see that statement, ma'am? 15 A. I see where the document says that. 16 Q. To your knowledge, have you seen any 17 evidence that suggests that by not attracting its 18 fair share of 18 year old smokers, R. J. Reynolds 19 lost .5 points of an ingoing share advantage to 20 Philip Morris in 1983? 21 (The record was read as requested.) AL BETZ & ASSOCIATES, INC. (410) 752-1733
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80 1 MS. PARKER: Object to the form of the 2 question. It's not clear which JAMA articles 3 that you're referring to. 4 A. I can't really recall reading that. 5 Q. To your knowledge, ma'am, is there any 6 document in, you know, that Reynolds or anyone at 7 Reynolds prepared since this report was issued in 8 February 29, 1984, that contradicts or questions 9 the statements that are contained in Ms. Burrows' 10 report? 11 A. Well, certainly we have lots of 12 research that confirms how important switching is 13 to our brands and how successful Doral is. 14 Sure. We've got lots and lots of documents. 15 Now, they don't refer back to this statement but 16 if they -- they contradict it clearly. 17 Q. To your knowledge, are there any 18 documents prepared by Reynolds that shows that 19 anything other than the fact that the renewal of 20 the market stems almost entirely from 18 year old 21 smokers, no more than 5 percent of smokers start AL BETZ & ASSOCIATES, INC. (410) 752-1733
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68 1 Q. What subject matters were covered at 2 the orientation? 3 MS. PARKER: I object to that question 4 to the extent you're asking her to disclose 5 information that's covered by the attorney-client 6 privilege or the attorney work product. 7 Q. What subject matters were covered at 8 the orientation? 9 A. I would say I remember, it's been, you 10 know, almost 16 years ago, but I remember our 11 cigarette advertising and promotion code, the 12 process and procedures for getting advertising 13 approved through the, advertising and promotion 14 approved through the legal department, our legal 15 requirements with regard to advertising, you 16 know, general policies and guidelines of the 17 company with regard to advertising and marketing. 18 Q. Was there any discussion of smoking by 19 nonadults? 20 MS. PARKER: Same objection. 21 A. No. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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63 1 A. Could you ask it again? 2 Q. Could you describe for the jury the 3 process that goes on when an individual decides 4 to stamp a document secret at your company? 5 A. No. I mean, I don't know what each 6 individual, what goes through their mind. I 7 would suspect, you know, there are documents we 8 want to protect from competitors and therefore 9 you would, I would think, want to stamp them 10 secret so you would be careful with them, so that 11 they weren't loose and they got in the hands of 12 our competition. 13 Q., Have you ever labeled a document RJR 14 secret? 15 A. I don't think so. I don't ever recall 16 labeling one secret. It's possible but I don't 17 recall that. 18 Q. If a document is labeled RJR secret, 19 are you allowed to look at it in your current 20 position? 21 A. Well, you know, I don't know as a AL BETZ & ASSOCIATES, INC. (410) 752-1733
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93 1 Minnesota trial. Do you recall that? 2 A. Yes. 3 Q. Ma'am, there's a reference in there to 4 the, quote, Meet The Turk, closed quote, ad 5 campaign. Can you explain to the jury what that 6 ad campaign was, if you know? 7 A. Excuse me. I just don't remember if 8 while I was on the stand they showed me this or 9 not, but I remember seeing it. 10 Q. All right. 11 A. I'm just not sure. 12 Q. Okay. Do you have my question in 13 mind? 14 A. You -- 15 Q. Explain to the jury what the Meet The 16 Turk ad campaign was. 17 A. I think that, you know, I went back and 18 looked at it and I think there were just four 19 ads, and I looked at the four ads and from what I 20 could tell it looked like a Turkish man in 21 different settings, like a coffee shop and -- AL BETZ & ASSOCIATES, INC. (410) 752-1733
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44 1 they had these meetings? 2 A. Usually about three or four, plus 3 myself and our company lawyer. 4 Q. Have we covered the preparation for the 5 Minnesota trial? 6 MS. PARKER: I want to state my same 7 objection. To the extent that that question asks 8 for information that's covered by the attorney 9 client privilege, it's objectionable. But 10 otherwise you can answer the question. 11 A. Yes. 12 Q. Okay. Now, you were deposed in the 13 Minnesota litigation; is that correct? 14 A. No. I was not. 15 Q. Okay. Your deposition was in the Engle 16 case? 17 A. Yes. I had a deposition in the Engle 18 case . 19 Q. Now, before that deposition, what did 20 you do to prepare yourself for that deposition? Ln ~-J 21 A. For Engle? m N ~ w N w AL BETZ & ASSOCIATES, INC. (410) 752-1733
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53 1 it's an organization that each of the tobacco 2 companies belong to. 3 Q. Do you know what they, do you 4 understand that The Tobacco Institute serves as a 5 spokesman for the tobacco industry? 6 MS. PARKER: I object to the form of 7 that question. I think it is misleading and 8 mischaracterizes her testimony. 9 A. No, I don't really know if they do or 10 not. I don't know what agreements they have 11 reached. 12 Q. You're aware, though, aren't you, 13 ma'am, that The Tobacco Institute's position was 14 that cigarette smoking is an adult custom that 15 should not be considered until a person is over 16 the age of 21? Isn't that correct? 17 MS. PARKER: I object. 18 A. I'm aware that one person working for 19 The Tobacco Institute did one media interview 20 where she said that. That's what I'm aware of. 21 Q. And that media interview, you're aware AL BETZ & ASSOCIATES, INC. (410) 752-1733
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89 1 now. 2 MR. HOSKINS: Yes. Let me get my 3 outline up to date here. 4 Q. Have you ever heard of.the term 5 replacement smoker? 6 A. In litigation, I have. 7 Q. Okay. Could you turn to page 8526 of 8 the doc me t u n . 9 A. Yes. I'm there. 10 Q. And you see here that the report cites 11 government statistics; is that correct? 12 MS. PARKER: I object again to this 13 line of questioning where you're just reading 14 things from the documents, asking her if what you 15 read is correct . 16 Q. Do you see that, ma'am? 17 A. Yes. It says appendix B and then it 18 has source HEW data. 19 Q. Right. And you see the data there 20 about current male smokers by starting age, 21 ma'am, it's kind of like the chart in the middle AL BETZ & ASSOCIATES, INC. (410) 752-1733
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90 1 of the page? 2 A. Yes, I see that. 3 MS. PARKER: Same objection. 4 Q. And it shows a starting age as early as 5 12, correct? Age 12? 6 A. That's what this chart shows. 7 Q. Right. Okay. 8 A. Again, I have no idea what that 9 definition is or what it means. 10 Q. Okay. And it also lists a number of 11 people who started between age 12 and 18, is that 12 correct? 13 A. Yes. It says that. Again, I have no 14 idea what the definition here is. It doesn't 15 say. It could be the first time anyone tried a 16 cigarette, is starting to smoke. I don't know 17 what, you know, obviously this is old data and 18 -- 19 Q. Sure. And -- 20 A. I don't know. 21 Q. I apologize for interrupting you, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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71 1 A. Well, let's see, back in '82, I'm 40 2 now, so what was I, about 24, 25, whatever. 3 Q. Okay. 4 A. Is that about right? 5 MR. BEACH: We're lawyers. 6 A. I can calculate it here if you want, 7 but I was in my early 20s. 8 Q. And you hadn't smoked before you came 9 to R. J. Reynolds? 10 A. No. My only smoking experience prior 11 to R. J. Reynolds, and I don't really consider it 12 a cigarette, is my older brother rolled up my 13 grandfather's chewing tobacco in some paper. 14 Q. Did you review any -- strike that. 15 MS. PARKER: Are you at a place where 16 you want to -- 17 MR. HOSKINS: Do you want to do one 18 more? 19 MS. PARKER: Okay. 20 (Whereupon, Beasley Deposition 21 Exhibit No. 10401, Strategic Research Report, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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61 1 2 3 public that it should not smoke because smoking was an adult custom and that you could not make a mature judgment on that until you reached the age 4 of 21? 5 A. No. The states all have laws on what 6 the age of maturity is for smoking. Our society 7 determines that, and each state has a legal age 8 for smoking at which they consider you mature 9 enough to smoke. 10 Q. And that legal age is 18, correct? 11 A. Well, are you talking about 19 -- now 12 -- 13 Q. I'm talking about now. 14 A. Now? The legal age in almost all 15 states is 18. 16 Q. Does that mean that currently Reynolds 17 is marketing to 18 year olds? 18 A. No. Again, we changed the policy to 21 19 because of the criticism we were under, and we 20 believed it would create an additional buffer so 21 that we would develop our marketing programs for AL BETZ & ASSOCIATES, INC. (410) 752-1733
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102 1 MS. PARKER: I object to the form of 2 that question. 3 A. I was aware that they, obviously I was 4 aware they did focus groups, I mean, all the 5 b d d f ran s o ocus groups, so I was aware of that. 6 Q. Is it your understanding that exhibit 7 10406 is the report relating to one such set of • 8 focus groups? 9 A. That's what it says. 10 Q. And do you agree th&t some time after 11 1985 Camel brand developed a new advertising 12 campaign directed solely towards young adult 13 smokers? 14 A. No. 15 Q. If you turn to the first page, 57, 16 Bates number -- 17 A. I'm sorry, you said developed? 18 Q. Right. 19 A. Yeah, we -- they didn't run, according 20 to this document they were working on developing 21 a supplemental campaign for younger adult AL BETZ & ASSOCIATES, INC. (410) 752-1733
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84 1 would do is we would look at, let's say, Winston, 2 you know, launched in 1954, and reached its peak 3 share in whatever year, and has now at this share 4 so, you know, we would look at the share 5 performance of the brand from 19, when it was 6 launched to the present. 7 Q. Let's focus on Winston, if you will 8 turn to page 8466. Do you see that the author 9 notes concerning successful younger adult brand 10 strategies of the past that Winston built 11 considerable strength among younger adult smokers 12 well ahead of its upsurge in market share? 13 MS. PARKER: I want to object. Again, 14 you're just reading from the document. That 15 speaks for itself. 16 Q. Do you see that, ma'am? 17 A. I don't see what sentence you're on. 18 Could you point it out for me? 19 Q. "Successful younger adult brand 20 strategies of the past"? 21 A. Uh-huh. First paragraph. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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97 1 as part of the Minnesota litigation, do you 2 recall that, ma'am? 3 A. Yes. As part of the litigation. 4 Uh-huh. 5 Q. And, ma'am, this document 2s another 6 marketing research report, correct? 7 A. Yes. 8 Q. Could you tell the jury who the report 9 was sent to? 10 A. It was sent to Rick Caufield. 11 Q. What position did Mr. Caufield hold at 12 the time? 13 A. He was senior brand manager for the 14 Camel brand. 15 Q. Is that a position that you ultimately 16 held while at R. J. Reynolds? 17 A. Yes. 18 Q. When did you take that position? 19 Remind the jury. 20 A. I became senior brand manager of Camel 21 in June of 1987. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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73 1 was in the marketing research department and they 2 sort of researched, you know, general kind of 3 issues rather than specific brand advertising or 4 product or packaging. So since it wasn't a 5 brand-specific issue, they called them the 6 strategic research group and so a report that 7 came out of their group was called a strategic 8 research report. 9 Q. And this report is dated February 29, 10 1984, correct? 11 A. Yes. 12 Q. Could you tell the jury who Mr. Long is 13 or was that's referred to? 14 A. I think in -- do you mean in 1984? 15 Q. Correct. 16 A. In 1984 I think he was president of R. 17 J. Reynolds Tobacco Company. 18 Q. Okay. And what was his first name, do 19 you recall? 20 A. Jerry. 21 Q. And the other, the gentleman listed as AL BETZ & ASSOCIATES, INC. (410) 752-1733
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94 1 Q. And what brand was that for, do you 2 recall, ma'am? 3 A. Camel. 4 Q. Okay. And do you see the reference in 5 there to an attachment to that document at the 6 bottom? Bottom left-hand corner? 7 A. Oh, down here. 8 Q. Right. 9 A. Yes. 10 Q. Do you recall being asked questions 11 during the trial as to whether or not R. J. 12 Reynolds could locate that attachment? 13 A. I don't recall that exact question. So 14 I don't know. 15 Q. Have you conducted any search to find 16 the attachment to this exhibit, ma'am? 17 A. No, I have not. 18 Q. And, ma'am, do you see that reference 19 on the last sentence of the first paragraph to 20 insure increased and longer term growth for Camel 21 filter, the brand must increase its share AL BETZ & ASSOCIATES, INC. (410) 752-1733
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67 1 A. Well, I don't know what you call 2 orientation, I mean, you know, I think of 3 wh are new bein educated i t ti or en a on as g en you 4 about things. I obviously have discussions with 5 lawyers, you know, frequently now. 6 Q. Have you ever visited the law offices 7 of Shook Hardy & Bacon in Kansas City? 8 A. No. 9 Q. Have you ever gone to Jones, Day's 10 offices? 11 A. Have I ever been to Jones, Day? I 12 think -- once, I think once. 13 Q. Did you ever attend any orientation 14 type meetings at outside law firms? 15 A. No. 16 Q. When you went to this orientation, this 17 legal orientation, did you take notes? 18 A. Don't recall taking notes, no. 19 Q. To your knowledge, do you have any 20 notes from this orientation? 21 A. No. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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83 1 A. I don't have, I mean this is back in 2 1983. I don't know about any document, in 1983, 3 that speaks specifically to this. 4 Q. Now, have you personally ever prepared 5 a review of brand history? 6 A. Yes. 7 Q. What review of brand history have you 8 been involved in? 9 A. Just very top line, but when we've had 10 new chairmen at the company I would, whatever 11 brand I had I would just sort of review when it 12 was launched and maybe when were the key styles 13 launched or what were the key campaigns that ran 14 on it. You know, it's not really review of the 15 entire brand history but what are the key events 16 that have happened to the brand over time. You 17 know, what does its share look like, that sort of 18 thing. 19 Q. Did you review any brands -- when you 20 say over time, how far back did you go? 21 A. Well, you know, when, again, what we AL BETZ & ASSOCIATES, INC. (410) 752-1733
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81 1 after age 24? 2 MS. PARKER: I object. Again, that 3 question has been asked and answered. 4 A. This one statement right here, I mean, 5 again I don't know where she got the data, all I 6 know of is government study data. We do not do 7 research on those under age 18 so I would assume 8 that, you know -- 9 Q. The next bullet point says the brand 10 loyalty of 18 year old smokers far outweighs any 11 tendency to switch with age. 12 Is that correct? 13 MS. PARKER: Are you asking her if 14 that's a correct statement of what you read? 15 MR. HOSKINS: Right. 16 A. This document says that. 17 Q. And then if you read on, it says thus, 18 the annual influx of 18 year old smokers provides 19 an effortless momentum to successful first 20 brands. Marlboro grows by about .8 share points 21 per year due to 18 year old smokers alone. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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77 1 Younger Adult Smokers? 2 A. Yes. 3 Q. And this first sentence says, younger 4 adult smokers have been the critical factor in 5 the growth and decline of every major brand and 6 company over the last 50 years. 7 Do you see that? 8 A. I see where it says that, yes. 9 Q. Ma'am, do you know of any evidence that 10 contradicts that statement? 11 A. Yes. 12 Q. What is that, ma'am? 13 A. Well, like, for example, we have our 14 Doral brand which has very, very small percent of 15 younger adult smokers. It's the second largest 16 brand in the industry. It's our largest brand. 17 It's -- our company would be very less successful 18 without it. So that's a clear contradiction of 19 it. I would say Basic is a clear contradiction, 20 GPC is a clear contradiction, and many others, 21 there are many brands that are a clear AL BETZ & ASSOCIATES, INC. (410) 752-1733
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112 1 taking. 2 Q. What about general creative guidelines, 3 what's that mean in marketing? 4 A. Well, you know, again these terms can 5 mean different things to different people. I'm 6 giving you -- I can't tell you in marketing 7 everybody would define it that way. I'm telling 8 you how I would use it. 9 Q. Okay. 10 A. And generally advertising guidelines 11 might be the general things that you would like 12 the advertising to accomplish. 13 Q. What's a copy strategy? 14 A. Generally you think of a copy strategy 15 as more specific, that's even more specific 16 direction, like what you would specifically like 17 the advertising to speak to. 18 Q. Does it mean what you would like, is it 19 setting up an image that you would want buyers of 20 the product to copy? Is that what it means? 21 A. Buyers of the product to copy? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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85 1 Q. Then it talks about five key brands in 2 the last half century. I'm going to focus on the 3 Winston, which is the one you stay you're 4 involved in? 5 A. Uh-huh. 6 Q. Shows that each, including Winston, 7 built considerable strength among younger adult 8 smokers, well ahead of its upsurge in market 9 share. 10 Now, did you study that issue when you 11 did a brand review for Winston, ma'am? 12 MS. PARKER: I object to the form of 13 that question. It's not clear what you're 14 asking. 15 A. No, I did not. 16 Q. Okay. And if you turn to 8467, and we 17 have established that this was a report that was 18 presented to the president of the company; is 19 that correct? 20 A. Well, you know, I think that's what he 21 was then. I don't know if it was presented to AL BETZ & ASSOCIATES, INC. (410) 752-1733
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108 1 replaced Mr. Caufield as senior brand manager at 2 some point? 3 A. I became senior brand manager of Camel 4 after Rick. 5 Q. Ma'am, I'm going to show you what I'm 6 going to ask the reporter to mark as exhibit 7 10407. 8 (Whereupon, Beasley Deposition 9 Exhibit No. 10407, memo from Caufield to Iauco, 10 dated March 12, 1986, marked.) 11 Q. Ma'am, do you recall reviewing this 12 document as part of the Minnesota trial? 13 A. Course of litigation. 14 Q. Had you reviewed it prior to the 15 Minnesota trial? 16 A. In the course of litigation, I think I 17 saw this before in litigation. 18 Q. Okay. I guess what I'm trying to focus 19 on is while you were working on the Camel 20 campaigns did you have any opportunity to review 21 this document? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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101 1 A. I think it was a marketing development 2 department. 3 Q. Am I correct that each report gets a 4 unique number? 5 A. I think so. I am not really involved 6 with assigning numbers. So I'm not really sure 7 of that. 8 Q. Now, my understanding is your testimony 9 is you did not review this document at any time 10 when you were involved with the Camel brand? 11 A. I did not see this document until the 12 course of litigation. 13 Q. Were you aware of this younger, of any 14 younger adult smoker focus groups that had been 15 conducted prior to you becoming involved in the 16 Camel brand? 17 A. I was aware that they conducted focus 18 groups among younger adult smokers. 19 Q. With respect to those, with respect to 20 your awareness, describe for me what you 21 understood. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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110 1 consideration on March 12, 1986, if you know? 2 MS. PARKER: Object to the form -- I'm 3 sorry. I object to the form of the question 4 because no proper foundation has been laid. If 5 you're asking her to just read the document, tell 6 you what's from the document, that's one thing, 7 otherwise there's no foundation for her having 8 any knowledge at all about this. You can go 9 ahead and try to answer the question, though, if 10 you can. 11 A. No, I wasn't on Camel. I wasn't 12 involved with Camel at this time period, and I 13 can only tell you what the document says. 14 Q. Okay. Could you tell the jury what it 15 means to have a target audience definition in 16 marketing? 17 A. Usually in marketing that means that 18 it's a group of consumers that you are most 19 interested in trying to switch to your brand that 20 you probably develop the marketing for in 21 general. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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87 1 Q. Okay. And on 8467 this has a 2 recommendation set forth, correct? 3 A. 8467, you're talking about? 4 Q. Yes, last 4 pages, top of the page. 5 A. I see that. 6 Q. First recommendation? 7 A. Uh-huh. 8 Q. Younger adult smokers are critical to 9 RJR's long term performance and profitability. 10 Therefore, RJR should make a substantial long 11 term commitment of manpower and money dedicated 12 to younger adult smoker programs. 13 Do you see that statement. Ma'am? 14 MS. PARKER: I object again. I object 15 to this process of just reading parts of the. 16 document and asking her if you read it correctly. 17 Q. Do you see that, ma'am? 18 A. I see that where the document says 19 that. 20 Q. Now, in your current position have you 21 ever, since you've been at R. J. Reynolds, seen a AL BETZ & ASSOCIATES, INC. (410) 752-1733
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122 1 selected peer group, correct? 2 A. Yes. 3 Q. Where did you get that information? 4 A. I don't know. 5 Q. The next one is want to be seen as 6 different from other groups, correct? 7 A. Yes. 8 Q. Where did you get that information? 9 A. Don't know. Could have done focus 10 groups. Just don't remember. 11 Q. Next is the desire for success and 12 excitement today, not tomorrow, correct? 13 A. Yes. 14 Q. Where did you get that information? 15 A. Could have been from focus groups. 16 Q. Next is escaping from life through 17 fantasy or finding romance in the, quote, good 18 old days, closed quote, correct? 19 A. That's what the document says. Uh-huh. 20 Q. Where did you get that information? 21 A. Again, you know, probably through AL BETZ & ASSOCIATES, INC. (410) 752-1733
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91 1 ma'am. What does this data state with respect to 2 current male smokers, what percentage start after 3 the age of 18? 4 MS. PARKER: Are you just asking her to 5 review the document and tell you what the 6 document says? 7 MR. HOSKINS: That's right. 8 A. This document, again I don't know the 9 definition of starting here, it could be ever 10 tried a cigarette, but this document says that 31 11 percent start after age 18. 12 Q. Right. And that means that 68.7 13 percent started before age 18? 14 A. I thought you were asking me that 15 column. 16 Q. I was. And if you don't start after, 17 that means you start before, correct? 18 A. Yes. And again this could be have you 19 ever tried a cigarette. I don't know what the 20 definition here -- I have seen more recent 21 government data, and what it suggests is that the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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1 2 3 4 113 Q. A. Q. Right. No. Okay. Then tell me what you -- A. Again, copy strategy would be in 5 general what you would like the advertising to 6 communicate. 7 Q. In other words, the copy, like the 8 written copy -- 9 A. It could be the written copy. Most 10 usually it's that, but it could speak to the 11 actual imagery, too, but what would you like that 12 to communicate. If you ask people what did this 13 ad say, what do you think it means, that's sort 14 of what a copy strategy would be. 15 Q. What's a focus of sale? 16 A. A focus of sale generally is usually a 17 shorter version, you know, it's like one or two 18 statements of just trying to make it more 19 succinct about what you would like the 20 advertising to communicate. 21 Q. Ma'am, were you involved in the Camel AL BETZ & ASSOCIATES, INC. (410) 752-1733
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86 1 him. His name is on this document. 2 Q. Okay. But under the to, T-0 colon, 3 right? 4 A. Yes. 5 Q. What does that mean if you write 6 something to the president, does it not get 7 presented to the president? 8 A. Well -- 9 MS. PARKER: I want to object to the 10 form of that question. You haven't laid a 11 foundation as to whether she knows whether in 12 fact anyone who is shown as an addressee of this 13 report in fact received it or not. If you can 14 lay that foundation, she can certainly answer 15 your questions. 16 Q. What's your experience been, ma'am? If 17 you send a report to the president, does the 18 president get to see it or does it get kept from 19 him? 20 A. If I sent something to the president, I 21 think, you know, usually he would get it. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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118 1 (Whereupon, Beasley Deposition 2 Exhibit No. 104 09, memo from Breininger to 3 McKenna, dated October 19, 1984, marked.) 4 Q. Ma'am, this is a document you wrote, 5 correct? 6 A. Yes. 7 Q. You wrote it October 19, 1984, 8 correct? 9 A. Yes. 10 Q. You wrote it before you were married, 11 correct? 12 A. Yes. 13 Q. It has your maiden name on it? 14 A. Yes. That's right. 15 Q. Who are these people that received 16 copies of the document? 17 A. Alan Sterling, he would have been the 18 brand manager of More. 19 Is that what you're asking me? 20 Q. Yes. 21 A. Susan Nassar who was in marketing AL BETZ & ASSOCIATES, INC. (410) 752-1733
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92 1 average age at which people become daily smokers 2 is between 18 and 19. 3 Q. But this data that was presented to the 4 president in 1984 is set forth in appendix B, 5 correct? 6 A. There's an appendix B here. 7 Q. Right. 8 MR. HOSKINS: This would be a good 9 place to stop. 10 THE VIDEOGRAPHER: Off record at 11 12:15. 12 Luncheon Recess -- 12:15 p.m.) 13 Afternoon Session (1:12 p.m.) 14 THE VIDEOGRAPHER: Back on the record 15 2 at 1:1 . 16 MR. HOSKINS: Mark this as 10404. 17 (Whereupon, Beasley Deposition 18 Exhibit No. 10404, memo from Hind to Tucker, 19 dated January 23, 1975, marked.) 20 Q. This is a document that was shown to 21 you during your cross-examination in the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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88 1 recommendation to the contrary, that they 2 shouldn't make a substantial long term commitment 3 of manpower and money dedicated to younger adult 4 smoker programs? 5 A. I hadn't seen this recommendation. 6 There are lots and lots of recommendations but I 7 haven't seen any recommendation that responds 8 directly to this. But I hadn't seen this either. 9 Q. Okay. Who makes Pall Mall? 10 A. American, I think. 11 Q. Okay. Now Brown & Williamson, I guess? 12 A. I'm sorry. That's right. 13 Q. That's okay. 14 A. That's right. 15 Q. Marlboro is made by what company? 16 A. Philip Morris. 17 Q. Kool? 18 A. Brown & Williamson. 19 Q. Newport? 20 A. Lorillard. 21 MS. PARKER: Let's break for lunch AL BETZ & ASSOCIATES, INC. (410) 752-1733
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117 1 Q. Okay. Did you smoke More at some 2 point? 3 A. Yes. 4 Q. Remind the jury again when you were 5 involved with the More brand? 6 A. The More brand would have been from 7 February 1984 until October 1984. 8 Q. Okay. Who was Mr. McKenna? 9 A. Jerry McKenna, he was in marketing. 10 Q. What position did Mr. McKenna hold in 11 October 1984? 12 A. He was a marketing director. 13 Q. For a particular product? 14 A. Well, a marketing director is over 15 several brands, you have one person who is at 16 that time, it's not this way now but at that time 17 it was you had a senior brand manager, a brand 18 manager for each brand, and then a marketing 19 director kind of oversaw them and had several 20 brands. 21 Q. Okay. Let's mark this as 10409. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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116 1 memo, no. This was a memo internal to the 2 research people. 3 Q. And that's not one that you would have 4 gotten? 5 A. No, because it was internal to the 6 research people. You know, they were writing 7 notes to each other. 8 Q. Okay. 9 A. But, you know, they could have shown it 10 to me. I don't recall seeing it. 11 Q. Does R. J. Reynolds still sell More 12 brand cigarettes? 13 A. Yes. 14 Q. Could you describe for the jury what 15 the More brand is? 16 A. Sure. It's a, its distinguishing 17 characteristics are for one thing it's 120 18 millimeters long which is pretty much the longest 19 cigarette available. It has competitors but most 20 cigarettes are shorter than that. And the key 21 style in More has brown cigarette paper on it. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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119 1 research. And I think -- I'm not sure I remember 2 Duggan. I think probably marketing research. 3 Q. Did you prepare this document or did 4 somebody else prepare it, you just added your 5 name to it? 6 A. I'm sure I prepared it. 7 Q. Okay. And this is a document entitled 8 "younger adult smoker presentation - More brand 9 perspective", correct? 10 A. Yes, that's correct. 11 Q. And that document lists some 12 conclusions, right? 13 A. Yes. 14 Q. And the first conclusion is because of 15 high brand loyalty in the cigarette industry, 16 Fubyas? 17 A. Yes. 18 Q. First usual brand younger adult smokers 19 have driven the success of the key brands of this 20 century, correct? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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96 1 mark as exhibit 10406. 2 MS. PARKER: Is there a 10405? 3 MR. HOSKINS: Yes. 4 MS. PARKER: Has that been marked 5 previously? 6 MR. HOSKINS: No. 7 (Whereupon, Beasley Deposition 8 Exhibit No. 10406, Marketing Research Report, 9 dated February 1, 1985, marked.) 10 Q. Ma'am, when did you first start working 11 on the Camel brand? 12 A. It was in 1984, I believe. I can tell 13 you exactly if you want me to get out the 14 resume'. 15 Q. Well, you're welcome to do that, 16 ma'am. I'd like you to refer, if you could, 17 though, to exhibit 10406 that's been placed in 18 front of you and I'd like to know whether or not 19 you recall receiving a copy of that document? 20 A. No. I did not. 21 Q. And this document was also shown to you AL BETZ & ASSOCIATES, INC. (410) 752-1733
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124 1 about categorizing first usual brand young adult 2 smokers -- 3 A. Uh-huh. 4 Q. -- into social groups. 5 A. Yes. 6 Q. Correct? 7 A. Yes. 8 Q. And there are subgroups, two of them, 9 correct? 10 A. Yes. 11 Q. One of them is conforming and one is 12 nonconforming, correct? 13 MS. PARKER: Same objection. 14 A. That's what it says, yes. 15 Q. And for conforming the document states, 16 quote, goodie goodies, preps, CQs, discos, 17 correct? 18 A. Yes. 19 Q. What's CQs? 20 A. I don't know. 21 Q. I'm sorry, GQs, Gentlemen's Quarterly? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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95 1 penetration among the 14 to 24 age group which 2 have a new set of more liberal values and which 3 represent tomorrow's cigarette business? Do you 4 see that, ma'am? 5 MS. PARKER: I object to that form of 6 questioning where you are just reading something 7 from the document, which speaks for itself. 8 A. That's what the document says. 9 Q. And, ma'am, you've seen this document 10 before, we've established that, correct? 11 A. Yes. 12 Q. All right. And after having been 13 provided this document, have you gone back and 14 determined whether or not there are other 15 documents in R. J. Reynolds' files that discuss 16 similar issues about marketing to 14 to 24 year 17 olds? 18 A. In the course of litigation I have been 19 exposed to documents in the files. I haven't 20 conducted a search myself. 21 Q. I'm handing you what the reporter will AL BETZ & ASSOCIATES, INC. (410) 752-1733
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130 1 (Whereupon, Beasley Deposition 2 Exhibit No. 10410, Agency Memo from Breininger to 3 Schweig, dated August 7, 1987, marked.) 4 Q. Ma'am, I'd like you to look at exhibit 5 10410. 6 A. Uh-huh. 7 Q. That's a document that you authored, 8 correct? 9 A. Yes. 10 Q. Okay. It's dated August 7, 1987? 11 A. Uh-huh. 12 Q. And it is to this Mr. Barry Schweig? 13 A. Yes. 14 Q. And it refers to new campaign 15 development? 16 A. Yes. 17 Q. Okay. Now, you agree with me that 18 number 1 talks about something called the French 19 Camel campaign? 20 A. Right. 21 Q. Okay. You previously testified that AL BETZ & ASSOCIATES, INC. (410) 752-1733
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133 1 an individualist. 2 Q. Okay. What doe s it mean to say Camel 3 ownable? 4 A. That it is unique to Camel, no other 5 brand could do it. 6 Q. That's because it had a Camel? 7 A. Well, yes. 8 Q. Okay. 9 A. That's right. Very good. 10 Q. Okay. Although do you still have a 11 picture of a Camel riding a Marlboro horse in 12 your office, or in the hallway? 13 A. I don't -- no. In my office? No. 14 Q. I thought it was in the marketing 15 department, Camels riding Marlboro horses across 16 streams? 17 A. Yes. Somebody did a mocked up picture 18 like that. I don't know if it's still hanging 19 around or not. I don't know. 20 Q. I guess that's not Camel ownable, 21 correct? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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125 1 A. Probably. I don't know. I don't 2 recall. But that's probably what it is. 3 Q. Where did you get that information, do 4 you remember? 5 A. Now, this looks like something from 6 Diane Burrows. I'm not sure of that but it looks 7 like that. 8 Q. Okay. The nonconforming are rockers, 9 party parties?. 10 A. Uh-huh. 11 Q. Punkers, burn-outs? 12 A. Right. 13 Q. Do you remember where you got that 14 information? 15 A. Again, this looks like probably from 16 Diane Burrows but I don't recall exactly. 17 Q. The next bullet point talks about the 18 fact that all groups of first usual brand young 19 adult smokers admire the nonconforming groups, 20 that would be the rockers, party parties, punkers 21 and burn-outs, for their guts and freedom, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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126 1 smoking incidence is much higher among the 2 nonconforming groups. Do you see that, ma'am? 3 MS. PARKER: Same objection. 4 A. Yes. Of course, you added to what was 5 ritten th r w e e. 6 Q. But that's what it refers to when it 7 says the n onconforming group, that's referring 8 back to th e previous page, correct? 9 A. It appears to be, yes. 10 Q. Do you know where you got that 11 infor matio n for this report? 12 A. Again, if you're referring back to that 13 speci fic s tatement, this right here looks like it 14 came f rom Diane Burrows' work. 15 Q. Okay. What is a pull strategy in k i ? 16 mar e t ng 17 A. I would say in general how we think of 18 it is a pu ll strategy is where, if you create 19 deman d for the brand, like you do advertising 20 about the product and the image of the brand, and 21 an ad ult s moker walks in the door thinking about AL BETZ & ASSOCIATES, INC. (410) 752-1733
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136 1 what that campaign, what was the imagery of that 2 campaign? 3 A. I'm trying to recall. You know, I 4 can't remember what the pictures look like. It's 5 just been years and years since I saw it. 6 Q. Was it a cartoon character? 7 A. It was not an illustrated character, 8 no. 9 Q. What do you mean by illustrated 10 character? 11 A. Joe Camel. 12 Q. Okay. Same thing as a cartoon? 13 A. Well, I don't really think of them as 14 the same thing. They're a little different. If 15 you think of a cartoon character as something 16 that actually ran in a cartoon, Joe Camel was 17 never in a cartoon, it is an illustrated 18 character. 19 Q. As opposed to a picture of the Marlboro 20 man? Correct? 21 A. Right. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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104 1 correct? 2 A. Yes. The 75th birthday campaign was 3 really the beginning of the Joe Camel campaign. 4 Q. Okay. My copies aren't good but is the 5 caricature basically the same in French Camels as 6 in Joe Camel? 7 A. No. 8 Q. What are the differences? 9 A. Oh, there are a lot of differences. 10 He's drawn differently and in the poster, he is 11 just a head, that's all it was was a head, and 12 obviously Joe Camel, we gave complete animated 13 characteristics, and he was redrawn, it's not the 14 same face. 15 Q. In the Joe Camel campaign the Camel 16 became like a person? 17 A. Well, we gave it human 18 characteristics. Obviously, it was still a 19 Camel. 20 Q. Okay. If you would refer to page Ln 21 5738. Did you come to learn in your position N m N w 00 N AL BETZ & ASSOCIATES, INC. (410) 752-1733
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134 A. Well, you know, I guess it's Camel 2 3 4 ownable because it's a Camel on it, but I don't think, we didn't, you know, that was just an internal fun thing. 5 Q. Do you see it talks about next steps 6 down below? 7 A. Yes. 8 Q. Second bullet point? 9 A. Yes. 10 Q. Situation should appear more realistic 11 and understandable to the target? 12 A. Yes. Uh-huh. 13 Q. Do not limit to, quote, younger adult 14 situations, closed quote? 15 A. Yes. 16 Q. What did you mean by younger adult 17 situations? 18 A. It was when we were developing the 19 campaign, we were doing work with 18 to 24 adult 20 smokers and 25 to 34 adult smokers and Camel 21 smokers 18-plus, and the agency at this time was AL BETZ & ASSOCIATES, INC. (410) 752-1733
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106 1 competitive smokers and Camel smokers, adult 2 Camel smokers, and we found out what they thought 3 about Camel. Particularly competitive smokers 4 felt like it was an old brand with harsh taste. 5 Q. Okay. Can you tell me who Mr. Iauco 6 is? 7 A. Dave Iauco. 8 Q. Is he still with the company? 9 A. Yes. 10 Q. What is his current position? 11 A. He's senior vice president in 12 marketing. 13 Q. Is that at your level or above your 14 level or below your level? 15 A. He works for me. 16 Q. That didn't always used to be the way 17 it was, right? 18 A. No. 19 Q. You used to work for him? 20 A. Correct. 21 Q. Now he works for you? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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98 1 Q. And this document is from who? 2 A. Alicia Nance Mitchell. 3 Q. Do you know what position she held on 4 February 1, 1985? 5 A. No. She was in marketing research, I 6 believe, but I don't know the exact position. 7 Q. Now, this report is entitled the 8 Marketing Research Report. Is this prepared by 9 someone different than the strategic research 10 reports we talked about before lunch? 11 A. They're both in marketing research. 12 There was the marketing research department and a 13 subsegment of the marketing research department 14 was the strategic research group, they were 15 called, because they didn't research specific 16 brand issues. So I think if it was about a brand 17 issue, it's called the Marketing Research Report 18 and when it was not a specific brand like 19 advertising, product promotion test, then, and 20 came out of that strategic research group, it was 21 called a Strategic Research Report. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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105 1 that in the 1985 timeframe management had 2 requested that younger adult campaign be taken to 3 focus in order to obtain consumer reaction to 4 these new ads? 5 (The record was read as requested.) 6 MS. PARKER: I object to the form of 7 the question. I think it assumes facts that are 8 not in evidence here. 9 A. The only thing I know about it is 10 having seen this document. 11 Q. Okay. Did you ever come to learn, 12 independent of this document, that this was a 13 management request? 14 A. No. 15 Q. Okay. Did you come to learn, once you 16 took over the brand, that historically male and 17 female respondents had held negative user and 18 product perceptions of Camel? 19 MS. PARKER: Same objection. 20 A. When I came to the Camel brand, we did 21 focus groups on perceptions of Camel among adult AL BETZ & ASSOCIATES, INC. (410) 752-1733
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100 1 ma'am? 2 A. Yes. 3 Q. What is a focus group? Please tell the 4 jury. 5 A. A focus group is where you get, let's 6 say, about 8 to 10 adult smokers together and you 7 have a set of questions you would like to ask 8 them. Often you're showing them advertising or 9 you might be showing them packaging ideas, but 10 you want to get their reaction to some ideas you 11 have, and usually we're at the focus groups but 12 were sitting behind a one-way mirror so that we 13 can listen to what the answers to the questions 14 are, and then there's a trained person in the 15 room who asks them the questions who is trained 16 in asking questions. 17 Q. Okay. Do you see the reference there 18 to the letters MDD and then a number underneath 19 the title on the first page? 20 A. Let's see. Oh, here. Yes. 21 Q. What's MDD stand for? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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141 1 Q. It was dated May 18, 1989, correct? 2 A. Yes. 3 Q. This is called, entitled the "younger 4 adult smoker monthly summary report", correct? 5 MS. PARKER: Could I object just a 6 minute. Let me have a minute to look at the 7 document, please, before you go. 8 MR. HOS KINS: Sure. Do you have a 9 question about it that we can answer? To make 10 your job easier, I'll let you know if I'm going 11 to use a privileged document beforehand. Do you 12 have any objection at this point? 13 MS. PARKER: You can continue with your 14 questions . 15 MR. HOSKINS: Okay. 16 Q. Now that you have it in front of you, 17 do you recall receiving this report? 18 A. I don't recall this exact report, but 19 obviously I get tracker information and have over 20 time. 21 Q. This is one of, we talked earlier this AL BETZ & ASSOCIATES, INC. (410) 752-1733
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128 1 21 to 29. 2 Q. Okay. And then on page 2 you set forth 3 an effective marketing strategy against first 4 usual brand young adult smokers, correct? 5 MS. PARKER: I just want to state my 6 continuing objection again. 7 A. That's what this says, yes. 8 Q. And this document was prepared before 9 you worked on Camel, correct? 10 A. Yes. 11 Q. And it was prepared before you worked 12 on the Joe Camel campaign, correct? 13 A. Yes. 14 Q. What's McCann-Erickson, if you know? 15 A. An advertising agency. 16 Q. And in R. J. Reynolds what's a, quote, 17 agency memo, closed quote used for, if you know? 18 A. Well, there are all different kinds of 19 agency memos, as you know, an agency memo is if 20 an agency writes something. 21 Q. I was wondering if you called it an AL BETZ & ASSOCIATES, INC. (410) 752-1733
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145 1 cigarette without a filter, and then it has a lot 2 of styles that have filters but it has this one 3 style without a filter, and we don't really ever 4 market or hardly ever market the nonfilter style, 5 so Camel ex.Regular is all the filter styles. 6 Q. Why don't you market the one without 7 the filter? 8 A. Because it's declining. We don't 9 really see it as a market opportunity. 10 Q. So this is talking about everything but 11 the good old-fashioned Camels with no filters? 12 A. The old nonfilter. 13 Q. This report covers a time period when 14 the Joe Camel campaign was under way, correct? 15 A. 1989, yes. 16 Q. Okay. This report shows the success of 17 the Joe Camel campaign, correct? 18 MS. PARKER: Object to the form of the 19 question. 20 A. Can I read that point? 21 Q. Sure. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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107 1 A. Yes. 2 Q. And he had involvement in Camel, 3 correct? 4 A. Yes. He had, at times has been 5 involved with Camel marketing. 6 Q. What involvement did Mr. Iauco have? 7 A. Well, you know, I can't tell you 8 exactly but I think at one point he was senior 9 brand manager of Camel. And he was my boss for 10 some of the time I was on Camel. 11 Q. And -- okay. And we talked about Mr. 12 Caufield. In 1986 what position did Mr. Caufield 13 have? 14 A. 1986, I think he was senior brand 15 manager of Camel. 16 Q. Okay. Do you know what Mr. Iauco's 17 position was in March of 1986? 18 A. I'm thinking he was probably a 19 marketing director, but, you know, I couldn't 20 tell you exactly. L, F~ 21 Q. My understanding is you actually m AL BETZ & ASSOCIATES, INC. (410) 752-1733
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137 1 Q. That's a photo? 2 A. Yeah, that's right exactly. 3 Q. Okay. This is something that's got to 4 be drawn by an artist? 5 A. Right. Exactly. 6 Q. Remind me again on May 18, 1989 were 7 you still involved with the Camel campaign? 8 A. No. 9 Q. What had you moved on to do at that 10 point? 11 A. In 1989 I was Director of Special 12 Markets. 13 Q. Okay. Did you -- do you recall 14 receiving from time to time younger adult smoker 15 monthly summary reports? 16 A. I don't really. If you show me, I can 17 tell you. I don't really remember what you're 18 talking about. 19 Q. Do you know who Krishna Prasad, 20 P-R-A-S-A-D, from the marketing research 21 Ln I- department is? m AL BETZ & ASSOCIATES, INC. (410) 752-1733
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103 1 smokers. This did not run but development -- 2 Q. And what supplemental campaign were 3 they talking about in this document, do you 4 recall, ma'am? 5 A. They developed, I don't remember the 6 exact number, four, five, six, six different 7 ideas for campaigns for supplemental campaigns. 8 Well, actually there may be more than six. A 9 bunch of them. 10 Q. One of those campaigns was called 11 French Camels, correct? 12 A. Yes. 13 Q. And is that the figure that ultimately 14 became Joe Camel? 15 A. No. The French Camel did not become 16 Joe Camel. The French Camel was the starting 17 point for developing the 75th birthday campaign 18 of Joe Camel, it is not Joe Camel, though, it was 19 the starting point for developing it. 20 Q. And then in the chronology Joe Camel 21 came out of the 75th birthday campaign; is that AL BETZ & ASSOCIATES, INC. (410) 752-1733
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140 1 competitive brands, so it's our share of market. 2 Q. Can you explain to the jury why that 3 information is useful or important to your 4 company? 5 A. It's important because we want to know 6 how we stand competitively, how many smokers 7 prefer our brands, how many smokers prefer 8 competitive brands. It tells us how we're 9 d i o ng. 10 Q. Okay. Ma'am, I'm going to hand you 11 what has been previously marked as 10411. 12 (Whereupon, Beasley Deposition 13 Exhibit No. 10411, memo from Prasad to multiple 14 recipients, dated May 18, 1989, marked.) 15 Q. You would agree with me, ma'am, that 16 you are shown as receiving a copy of this 17 document? 18 A. Yes. 19 Q. Correct? That's your maiden name 20 i t? aga n, correc 21 A. Yes, it is. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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143 1 A. It's not really how many years. I do 2 have some old documents, but in general I send 3 them to the records center when I'm not using 4 them anymore. 5 Q. Are you able to tell the jury -- 6 strike that. To your knowledge, does the 7 marketing research department as of today still 8 prepare younger adult smoker mdnthly summary 9 reports? 10 A. They prepare reports on tracker, but 11 it's not necessarily monthly. It's more ad hoc 12 requests now. I mean, they might do a summary 13 but primarily it's requests by the brands. 14 Q. And but to your knowledge, do they 15 break down the tracker to focus on younger adult 16 smokers? 17 A. Well, they break down the tracker of 18 all the age groups we have, so we can see how 19 we're doing among each age group. So we look at 20 our performance by each age group. 21 Q. And what use, if any, was made of this AL BETZ & ASSOCIATES, INC. (410) 752-1733
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142 1 morning about kind of like the way your documents 2 are maintained and the pink slips and stuff like 3 that, if you went to your files today could you 4 find a copy of this report? 5 A. I don't know because I don't have all 6 those old files in my office. They're in the 7 records center. 8 Q. Okay. 9 A. And I don't know how they do the 10 records center actually. If they set them up so 11 it's just my files or is the whole marketing 12 department, or -- you know, I don't know exactly 13 what they do. 14 Q. About how many years files do you have 15 in your personal possession at work? 16 MS. PARKER: I want to object to the 17 form of the question. It's not clear what you 18 mean by personal possession. 19 Q. In your office file cabinet or the file 20 cabinet outside your office that you or your 21 secretary or assistant deal with? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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151 1 Arx, dated April 29, 1988, marked.) 2 Q. It's a document dated April 29, 1988, 3 correct? 4 A. Yes. 5 Q. You received a copy of this, correct? 6 A. Yes. 7 Q. That's your maiden name on the copy, 8 correct? 9 A. Yes. Uh-huh. 10 Q. Who was the recipient? 11 MS. PARKER: Are you asking her to read 12 who got a copy? 13 Q. Yes. Tell me who it is. 14 A. It looks like this went to Dolph van 15 Arx. 16 Q. Who was that gentleman? 17 A. He was like president of the company. 18 Q. In 1988? 19 A. Probably. But I -- I don't remember 20 his exact tenure. He was president for a short 21 time. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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109 1 A. Oh, no. No. 2 Q. This document is entitled "Camel new 3 advertising campaign development," correct? 4 A. That's what it says. 5 Q. And it's dated March 12, 1986, correct? 6 A. That's right. 7 Q. And it's been stamped with an RJR 8 secret stamp, correct? 9 A. It has a stamp on it. 10 Q. It's number 206, correct? 11 A. That's what it says. 12 Q. Are you able to tell the jury what new 13 advertising campaign development was being 14 discussed or, at this timeframe and is referenced 15 to in this letter? 16 MS. PARKER: I object to the form of 17 the question. The document speaks for itself. 18 A. You know, are you asking me what this 19 document says? 20 Q. I'm asking you what is the new Ln ~ 21 advertising campaign development that was under m H ~ w a -J AL BETZ & ASSOCIATES, INC. (410) 752-1733
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111 1 Q. Okay. And what's an advertising 2 objective? 3 A. Well, an advertising objective can mean 4 a lot of things, but, you know, to me generally.I 5 would say an advertising objective is what you 6 would like the advertising to communicate. 7 Q. Okay. What is a strategic approach? 8 MS. PARKER: I'm going to object to 9 this line of questioning. If you're asking her 10 what her understanding is of those terms, that's 11 fine. If you're asking her how those terms are 12 used in this document, I do object because 13 there's no foundation laid for her to answer that 14 question. 15 A. Were you asking me just what I 16 thought? 17 Q. Yes. What's a strategic approach in 18 marketing parlance? 19 A. Well, I would say a strategic approach 20 is probably like an overall strategy for the 21 brand, some direction you're thinking about AL BETZ & ASSOCIATES, INC. (410) 752-1733
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144 1 report by you when you received it, ma'am? 2 A. Well, again, you know, I can't speak to 3 this specific one, but we use tracker in general 4 to monitor how we're doing versus the 5 competition, how many adult smokers say they 6 smoke our brands versus competitive brands. 7 Q. Okay. I'd like you to turn to the 8 second page. 9 A. Yes. 10 Q. Do you see the first bullet point, 11 share of smoker performance summary? 12 A. Oops. I was on the third page. 13 Q. It talks about overall share, RJR share 14 among total 18 to 24? 15 A. Yes. 16 Q. Now go down to the second bullet 17 point. 18 A. Yes. 19 Q. It says Camels. Now, what's 20 ex.Regular? L' N co 21 A. Camel has a nonfilter style, a ~ AL BETZ & ASSOCIATES, INC. (410) 752-1733
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147 1 your success at Camel is due in part to what 2 happened, I'm sorry, your success at R. J. 3 Reynolds is due in part to the success that Camel 4 had as a result of the Joe Camel campaign? 5 A. I think that's some of it, obviously. 6 I think it's a lot more than that but that's one 7 thing I did. 8 Q. I was wrong. Do you recall being 9 referred to as the turnaround prodigy at R. J. 10 Reynolds? 11 A. I don't remember that either. Are you 12 going to tell me who said that? 13 Q. Not now. Maybe some other day. And 14 you understand from this report that Camel's 15 performance with younger adult smokers was 16 gaining share? 17 A. Yes. 18 Q. Correct? 19 A. Yes. 20 Q. And the rest of the company's 21 performance with younger adult smokers was doing AL BETZ & ASSOCIATES, INC. (410) 752-1733
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150 1 marketing change recently, correct? 2 A. Yes. 3 Q. What's the name of that new campaign? 4 A. No bull. 5 Q. When did that go into effect? 6 A. We launched it nationally last year, in 7 about July of last year. 8 Q. What's the heroic Camel advertising 9 campaign? 10 A. It's part of the Joe Camel campaign. 11 It was just one phase of the Joe Camel campaign. 12 Q. Could you describe what phase it was? 13 A. Yes. It was the phase that came, if 14 I'm recalling correctly, right after the 75th 15 birthday and it was Joe Camel featured as like, I 16 think he was like a submarine guy or a pilot,'or 17 different characters. 18 Q. I'm going to hand you what has been 19 marked as 10412. 20 (Whereupon, Beasley Deposition 21 Exhibit No. 10412, memo from Weber to D. W. von AL BETZ & ASSOCIATES, INC. (410) 752-1733
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149 1 A. I don't know the exact number. 2 Q. '60, early '70s? 3 A. Probably back in the '60s maybe. 4 Q. And has declined every year since then, 5 correct? 6 A. No. Every year since 1960? 7 Q. Well, since it was the number one 8 brand, it's slowly eroded its share, correct? 9 A. I think that Winston's share peaked 10 around, I think around 1972 was when it had its 11 biggest share. 12 Q. Okay. What replaced it as the best 13 selling cigarette in America? 14 A. Marlboro. 15 Q. What responsibility do you have for 16 Winston's marketing today? 17 A. I'm over all of marketing for Reynolds 18 today. 19 Q. Including the Winston brand, correct? 20 A. Yes, including the Winston brand. 21 Q. And the Winston brand has undergone a AL BETZ & ASSOCIATES, INC. (410) 752-1733
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114 1 75th birthday advertising communications test? 2 A. Probably, but it depends upon what 3 timing it was done on. 4 Q. Okay. December 4, 1987, were you 5 involved with the Camel brand? 6 A. December 4th, 1987, yes. 7 Q. Who was Mr. Fackelman? 8 A. Ernie Fackelman, he was in marketing 9 research. 10 Q. Okay. How about Mr. Penick? 11 A. That's probably -- I'm not sure. I 12 don't have the document in front of me so I can't 13 see the initials, but it's probably Bill Penick. 14 Q. W. R. Penick? 15 A. I think that would be right, Bill, and 16 he would be in marketing research. 17 Q. Okay. Am I correct that the Joe Camel 18 evolved from the 75th birthday campaign? Is that 19 a fair statement? 20 A. I guess how I would say it is that the 21 Camel 75th birthday campaign was the beginning of AL BETZ & ASSOCIATES, INC. (410) 752-1733
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155 1 page that you are listed there by your maiden 2 name under brand business units? 3 A. Yes. 4 Q. Do you recall ever getting a copy of 5 this document? 6 A. Looks familiar to me. 7 Q. Okay. I don't have one that's marked 8 with a Minnesota exhibit, but I believe that this 9 was used in the Minnesota trial. Does that 10 refresh your recollection as to when you might 11 have seen it before? 12 A. I don't remember seeing it in 13 Minnesota. 14 Q. Okay. What is Magna? 15 A. Magna? It's a savings brand, reduced 16 price brand. 17 Q. Was that actually marketed? 18 A. Yes. 19 Q. Is it in existence today? 20 A. Yes. 21 Q. And what are -- I'm just looking at the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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153 1 Q. Overall the key areas for future 2 development indicated by the research are to 3 focus on ways to improve the younger adult 4 orientation. Additionally, further headlines 5 should be explored that reinforce product 6 perceptions while communicating a younger adult 7 image. 8 Do you see that? 9 A. Yes. 10 MS. PARKER: I object to you just 11 reading the document. 12 A. I see that it says that. 13 Q. Did you prepare any written response to 14 this document after you received it? 15 A. I would have already been off the 16 brand . 17 Q. Okay. 18 A. So -- no. 19 Q. But I think it is fair to say that 20 especially since you were off the brand you would 21 not have responded to that research report, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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148 1 what at the same time frame? 2 A. I think the total company share 3 declined. I'd have to refresh my memory here on 4 each brand if you're asking me every brand. 5 Q. I was just going to say here RJR share 6 among total 18 to 24 smokers declined 1.3 share 7 points in the 12 months ending February 1989. 8 That's the first bullet point of the share. 9 A. Right. 10 Q. And one of the brands that was also 11 losing share amongst 18 to 24 year old male 12 smokers was Winston, correct? 13 A. Yes. It says Winston continued its 14 long term share decline among younger adult 15 smokers. 16 Q. Now, -- I'm sorry for interrupting. 17 Winston used to be the most popular brand in 18 America, correct? 19 A. Yes. I would say at one time it was 20 the number one brand. 21 Q. For about 8 years? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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132 1 A. Yes. 2 Q. You have had a chance to review it 3 during our short break, correct? 4 A. Yes, I did. 5 Q. Does this French Camel -- what does 6 this French Camel campaign reference refer to? 7 A. It was when we were developing the 75th 8 birthday campaign and McCann-Erickson was one of 9 the agencies working on it. 10 Q. Okay. And when you make reference to a 11 concept achieving all the objectives, do you see 12 that? 13 A. Yes. 14 Q. Okay. You list the three objectives of 15 the campaign; is that correct? 16 A. Of the objectives set, yes. It says 17 this concept achieved all of the objectives set. 18 Q. What is an individualistic copy 19 strategy? 20 A. It was our copy strategy that we wanted 21 to be the person who smokes Camel to be seen as AL BETZ & ASSOCIATES, INC. (410) 752-1733
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127 1 maybe switching to that brand, that would be a 2 pull strategy. The opposite of that is they 3 don't walk into the store thinking about 4 switching to that brand but there's some deal 5 they see when they get to the store, and then 6 that would be like a push strategy because it's 7 after they got to the store that you got their 8 attention. 9 Q. Okay. Now, in this document, I'm not 10 sure I mentioned this but at the first bullet 11 point you defined first usual brand young adult 12 smokers as being between ages 18 and 20, correct? 13 A. That's what this says, although, you 14 know, again as I told you the age group of which 15 it referred to, I know I have referred to it as 16 18 to 24 many times. 17 Q. Okay. 18 A. 21 to 24. So there was never a 19 consistent, we did not use a consistent age group 20 for that designation. It could be 18 to 24, it 21 could be 18 to 28, it could be 18 to 29, or the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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129 1 agency memo if you were writing something to an 2 agency? 3 A. Not usually. Usually I would think of 4 an agency memo as them writing something to us. 5 Q. Okay. Who was, the last name is 6 S-C-H-W-E-I-G, at McCann-Erickson? 7 A. Barry Schweig. 8 Q. Barry? It's a man? 9 A. Uh-huh. 10 Q. Who was he? 11 A. He worked on, at McCann -Erickson, in 12 the account group on Camel. 13 Q. What did they do for Ca mel 14 specifically? 15 A. They worked on Camel advertising. 16 Q. They did the French Camel campaign? 17 A. There is no French Camel campaign. 18 There's the Joe Camel campaign. There's the 75th 19 birthday campaign. There is no French Camel 20 campaign. 21 MR. HOSKINS: 10410. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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135 1 focusing more on 18 to 24 and I wanted them to 2 broaden it to the 25 to 34 and consider 3 situations that would have high appeal among the 4 whole group. And Camel smokers 18-plus 5 included. 6 Q. Okay. Now, it talks, the next bullet 7 point, about defining the features of the Camel 8 more completely, facial expression, clothes, body 9 language? 10 A. Yes. 11 Q. Is that what we were referring to 12 earlier when you said that it has human 13 characteristics? 14 A. Yes. Joe Camel. Uh-huh. 15 Q. Now, number 2, a different set of 16 rules, is that an entirely separate campaign? 17 A. Yes. It was a completely different 18 campaign. 19 Q. Was that campaign ever enacted or -- 20 A. No. 21 Q. Could you describe for the jury briefly AL BETZ & ASSOCIATES, INC. (410) 752-1733
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115 1 the Joe Camel campaign. I mean, it was the first 2 phase of it. Obviously, it evolved into an 3 ongoing campaign there, but I think that would be 4 like the starting point. 5 Q. Let's mark this as 10408. 6 (Whereupon, Beasley Deposition 7 Exhibit No. 10408, memo from Creighton and Penick 8 to Fackelman, dated December 4, 1987, marked.) 9 Q. Ma'am, you have before you exhibit 10 10408. This is another document that was used 11 during your trial testimony in the Minnesota 12 case. Do you recall it? 13 A. Yes. 14 Q. All right. Other than in preparation 15 for that litigation, had you ever seen this 16 document before? 17 A. I don't really remember seeing it 18 before, no. 19 Q. You did not review this at any time you 20 were involved with the Camel campaign? 21 A. I don't remember seeing this specific AL BETZ & ASSOCIATES, INC. (410) 752-1733
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121 1 A. No, I am not. It is, what this says is 2 because of high brand loyalty in the cigarette 3 industry, first usual brand younger adult smokers 4 have driven the success of the key brands. It 5 doesn't say driven the success of all brands or 6 driven the success of the company. It has driven 7 the success of some key brands. 8 Q. What were the key brands that you were 9 referring to in this exhibit? 10 A. I don't remember. 11 Q. Marlboro would be one, correct? 12 A. Probably. 13 Q. Okay. And then on the fourth bullet 14 point you state key needs which differentiate 15 first usual brand younger adult smokers from 16 other smokers are? 17 A. Uh-huh. Yes. 18 Q. And then you have listed them there, 19 correct? 20 A. Yes. 21 Q. One of those is a want to belong to a AL BETZ & ASSOCIATES, INC. (410) 752-1733
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123 1 research we had done. I just don't remember. 2 Q. Okay. Next is the desire to live on 3 the edge, take risks, stand out in a crowd, 4 aggressive, rugged, adventurous, correct? 5 A. Yes. 6 MS. PARKER: Object again. You're just 7 asking her to read something that is stated right 8 here on the document. Speaks for itself. 9 Q. Where did you get that information, 10 ma'am? 11 A. Again, we probably did research. I 12 don't remember exactly. 13 Q. The next is the desire to stay young, 14 not fall into a rut, correct? 15 MS. PARKER: Same objection. 16 A. That's what it says, yes. 17 Q. And do you remember where you got that 18 information? 19 A. Again, we probably did consumer 20 research. I don't recall. 21 Q. Okay. The next bullet point talks AL BETZ & ASSOCIATES, INC. (410) 752-1733
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157 1 form of the question, because there's been no 2 foundation laid that enabled her to answer it. 3 Q. Go ahead. 4 A. Okay. It was called virile female, VF, 5 because we had segmented the cigarette market and 6 one of the segments of the cigarette market was 7 the virile segment, and it was called the virile 8 segment because the key brands in that segment 9 were Winston, Camel, Marlboro, and then there 10 were some others like Lucky Strike and Pall Mall 11 and they were driven by men choosing those 12 brands. Virile, men. 13 And so what we wanted to do was put a 14 brand that wasn't positioned for men in that 15 segment but was positioned for men and women. So 16 we said a virile female brand, one that is for 17 men and women as opposed to being imagery 18 primarily for men. 19 Q. Okay. Now, Uptown was what type of a 20 brand? 21 A. That was a menthol brand. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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162 1 Q. Uptown, the place, the taste? 2 A. Yes. Uptown, the place, the taste. 3 Q. Do you remember how many milligrams of 4 nicotine were contained in Uptown? 5 A. No. Again, we developed Uptown to 6 compete against Newport and we developed it to be 7 a Newport-like product so we matched it up 8 against the Newport styles. 9 Q. Do you remember we talked about 10 unfiltered Camels? 11 A Y . es. 12 Q. Okay. Do you understand that 13 unfiltered Camels are your company's top 14 milligrams of nicotine brand? Did you know that? 15 A. Well, it has the highest tar and 16 nicotine tends to go with tar, so I would say 17 that it would make sense. 18 Q. It doesn't have a filter, right? 19 A. Right. It's our highest tar brand. 20 Q. So when they do the measurements off 21 the smoking machine, it makes sense it would have AL BETZ & ASSOCIATES, INC. (410) 752-1733
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156 1 second page here. I'm sorry, third page, last 2 four Bates numbers 5727? 3 A. Yes. 4 Q. It talks about under the first bullet 5 point new brands UT/VF. Do you know what that 6 is? 7 A. I -- VF was, I think, Dakota. 8 Q. Okay. Those are code names? 9 A Y . es. 10 Q. Do you remember what UT was? 11 A. Could have been Uptown. Looks like it 12 may have been. But, you know, I'm -- I think 13 that's right. 14 Q. Why would you call Dakota VF? Do you 15 know why they used those two? 16 A. Yes. It stood for virile female. 17 Q. Okay. That's what I thought. And why 18 did they choose virile female for Dakota? 19 MS. PARKER: Object to -- 20 A. Why that -- 21 MS. PARKER: Pardon me. Object to the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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138 1 A. He was in marketing research, I guess. 2 I don't really remember him that well. 3 Q. Was there such a thing, to your 4 knowledge, as a younger adult smoker tracker in 5 existence in 1989? 6 A. We have our tracker system which tracks 7 adult smokers of all ages 18-plus. So probably, 8 I can't, you haven't shown me the document yet, 9 but that if they broke up 18 to 24 they could 10 have called that the younger adult share from 11 tracker. But we track all adult smokers of all 12 ages. 13 Q. That's what I wanted to get, before I 14 show you the document, just your recollection 15 right now of this tracker system. Is that 16 tracking competitive brands as well as your 17 brands? 18 A. Yes. 19 Q. Who runs the tracker system? 20 MS. PARKER: Object to the form of the 21 question. It is unclear whether you're asking AL BETZ & ASSOCIATES, INC. (410) 752-1733
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167 1 probably that and half. I don't remember the 2 exact numbers. But they would be adult Black 3 smokers, African-American smokers would be 4 probably half of Newport's business or somewhere 5 around there. 6 Q. You would agree that Newport is the 7 most popular brand among African-American 8 smokers, correct? 9 A. I think that it depends upon the point 10 in time you're talking about. I would say that 11 the most popular brands among adult Black 12 smokers, the most popular brands chosen would 13 have been Kool and Newport at that time. Newport 14 being the one growing. 15 Q. And R. J. Reynolds was not gaining 16 market share among that segment of the smoking 17 population at this timeframe, correct? 18 A. Our share in general on Salem was 19 probably, this is 1990, probably on the decline, 20 on the decline. 21 Q. Now, in 1989, January of 1989 what AL BETZ & ASSOCIATES, INC. (410) 752-1733
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161 1 Q. Okay. Do you remember the article they 2 wrote about the Uptown -- 3 A. No. 4 Q. -- brand? 5 A. I don't remember it. No. 6 Q. In Philadelphia R. J. Reynolds made all 7 the wrong moves, do you recall that article? 8 A. I just don't recall the specifics of 9 it, no. 10 Q. Do you recall being quoted in that 11 article? 12 A. Again, if you show me I can take a look 13 at it, but I don't recall the specifics of it. 14 Q. Do you remember -- were you involved 15 in the Uptown marketing plan? 16 A. Again, I was vice president of 17 strategic marketing and it was in my group. I 18 wasn't the brand manager but it was in my group. 19 Q. What was the slogan for Uptown? Do you 20 remember? 21 A. No. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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175 1 yes. 2 Q. To your knowledge, are there any 3 documents that suggest that this background 4 statement is inaccurate? 5 MS. PARKER: Object to the form of the 6 question because you haven't laid a proper 7 foundation with this witness. 8 A. So you asked? 9 Q. I just wondered if you knew of any 10 other internal documents that suggested something 11 other than what is set forth here as to the 12 background. 13 A. You know, we would have, there would be 14 many documents on why we, the fresh on the scene 15 campaign, this is just one set of focus groups. 16 There would be many documents on the fresh on the 17 scene campaign, how it was eventually unfolded, 18 what lead markets we put it into, et cetera. So 19 I haven't reviewed all those documents but there 20 are lots of documents on it. 21 Q. This document talks about a Black YAS AL BETZ & ASSOCIATES, INC. (410) 752-1733
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146 1 A. It shows the success of the Camel 2 brand's marketing strategy. 3 Q. Right. And you were given credit for 4 that strategy ultimately, correct? 5 A. Well, I was -- it was my idea to 6 develop the Camel 75th birthday campaign. I 7 wasn't on Camel at this time so obviously a lot 8 of people deserve credit for Camel's 9 performance. I'm not like claiming I'm the only 10 one who deserves credit for Camel's performance. 11 Q. Haven't you been referred to as the 12 turnaround kid at R. J. Reynolds? 13 A. I don't think anybody's said that to 14 me. I don't know. Maybe they have. The 15 turnaround kid? 16 Q. Yeah. 17 A. But certainly, I mean, doing the 18 Camel's 75th birthday campaign was my idea, I was 19 on the brand at that time, I wasn't on the brand 20 when this was written, this particular document. Ln 21 Q. Okay. Would it be fair to say that ~ m ~ AL BETZ & ASSOCIATES, INC. (410) 752-1733
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160 1 A. You know, I don't remember the exact 2 numbers, but it was developed to compete against 3 Newport so we would have matched it up versus 4 Newport. 5 Q. And it was menthol? 6 A. It was menthol. 7 Q. And it was to launch in February of 8 1990, correct? 9 A. I mean, I see you're reading from the 10 document. I don't remember February 1990. 11 That's a pretty specific date. If you show me, 12 though, I'll be happy to look at it. 13 Q. Okay. What's Ad Week? Have you ever 14 heard of that publication? 15 A. Oh, sure. 16 Q. What is it? Tell the jury. 17 A. It's a magazine for people in 18 advertising and marketing. 19 Q. Are you a subscriber? 20 A. Our company is. We subscribe, you cr~ ~ 00 21 know, I see it. m d".. 4~h w OD AL BETZ & ASSOCIATES, INC. (410) 752-1733
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169 1 Q. Do you recall performing focus groups 2 that measured where smokers, excuse me, strike 3 that, where African-American smokers were given a 4 Salem, a Newport, and a Kool and asked to smoke 5 them and compare them? 6 A. Yes. We did that. 7 Q. Okay. And it was part of this research 8 that led to the development of Uptown, correct? 9 A. I don't know. Again, you have a 10 document there, if you will give it to me I'll 11 take a look and be happy to answer questions for 12 you. 13 Q. Okay. I'm just wondering what you 14 know, leaving aside the document, that research 15 is what determined or led Reynolds to decide that 16 it needed to have a product that better matched 17 Newport than its Salem did, correct? 18 A. It wasn't just one set of focus 19 groups. Obviously, we had analyzed the products, 20 we talked to adult smokers, African-American 21 adult smokers, Anglo adult smokers, what do you AL BETZ & ASSOCIATES, INC. (410) 752-1733
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154 1 correct? 2 A. Oh, no. I had left the brand. I'm 3 sure there's lots of responses from the brand 4 manager, or there's lots of direction documents 5 from the brand manager after me. 6 Ok ' ' Q. ay. Ma am, I m going to hand you 7 what's been marked as 10413. 8 (Whereupon, Beasley Deposition 9 Exhibit No. 10413, document entitled Key Business 10 Issues, marked.) 11 Q. Ma'am, if you would turn to the fourth 12 back, it talks about brand business units? 13 A. I'd just like to look at it one second, 14 if I could. 15 Q. Okay. 16 MS. PARKER: What's the page number 17 you're referencing? 18 MR. HOSKINS: 5728 is one of them. 19 MS. PARKER: T hank you. 20 A. Yes. 21 Q. Okay. Ma'am, do you see on the fourth AL BETZ & ASSOCIATES, INC. (410) 752-1733
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180 1 After Recess (3:04 p.m.) 2 THE VIDEOGRAPHER: We're back on record 3 at 3:04. 4 BY MR. HOSKINS: 5 Q. To your knowledge, ma'am, has R. J. 6 Reynolds ever supported legislative enactment of 7 measures to prevent the sale of cigarettes to 8 minors? 9 A. I think the company has supported it. 10 I don't really know many of the specifics but my 11 understanding is the company supports -- what did 12 you say? Legislation? 13 Q. Right. 14 A. That? 15 Q. Enacted to prevent the sale of 16 cigarettes to minors. 17 A. To prevent, is that -- legal age of 18, 18 you mean? 19 Q. Right. 20 A. Yes. I believe the company supports 21 that. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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120 1 MS. PARKER: I object to the form of 2 the question. Again, if you're just reading from 3 the document, it speaks for itself. 4 Q. Well, ma'am, in 1984 where did you get 5 that information that said because of high brand 6 loyalty, first usual brand younger adult smokers 7 have driven the success of the key brands of this 8 century? 9 A. I believe that I got that from a 10 presentation that Diane Burrows gave. 11 Q. And Diane Burrows, as you recall, is 12 the same person who wrote the report that we have 13 discussed earlier as exhibit 10401, correct? 14 A. That's correct. 15 Q. And you're basically setting forth the 16 same conclusions that she set forth in that 17 report, correct? 18 MS. PARKER: Object to the form of that 19 question. That's assuming facts that are not in 20 evidence and contrary to what her testimony has 21 been? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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99 1 Q. And your understanding, I just want to 2 know what you understand, how is it that if a 3 direction is given to prepare a Marketing 4 Research Report, who makes a decision to go out 5 and ask for the research? 6 MS. PARKER: Today? 7 Q. Let's start with today. 8 A. Well, today -- well, there are many 9 people that could, but in general if it's on a 10 brand, let's say it's marketing research specific 11 to a brand, then usually the marketing people 12 responsible for that brand would give the 13 direction that they wanted it, or the marketing 14 research person might suggest it and the brand 15 people, the marketing brand people agree. That 16 kind of a process. 17 Q. Now, this report that's exhibit 10406 18 is entitled Camel younger adult smoker focus 19 groups, correct? 20 A. Yes. That's what it says. 21 Q. Do you know what a focus group is, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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163 1 the highest tar and nicotine? 2 A. Sure, of course. It's a nonfilter 3 brand. 4 Q. Did you know or are you familiar with 5 the fact that Uptown was second only to your 6 unfiltered Camels with respect to the amount of 7 nicotine it had? 8 A. Again, the tar and nicotine levels on 9 Uptown were matched up to be like Newport. We 10 developed the product because we were trying to 11 have Newport smokers switch to one of our brand 12 and we matched up the product to be the same as 13 Newport. 14 Q. You're quoted in this article as saying 15 we developed the product based on research that 16 shows that a significant percentage of Black 17 smokers are currently choosing a brand that 18 offers a lighter menthol flavor than our other 19 major menthol brand Salem, do you recall that 20 quote? 21 MS. PARKER: I'm going to object to the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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152 1 Q. Okay. Who is Mr. Weber? 2 A. Doug Weber, he would have been in 3 marketing research. 4 Q. Do you recall getting a copy of this 5 document? 6 A. If you just give me a minute, I'll take 7 a look at it. 8 Okay. Yes. 9 Q. Do you recall receiving this document 10 back in 1988? 11 A. Yes. 12 Q. And remind the jury again what your 13 involvement with Camel was, if any, in 1988? 14 A. April of 1988 is when I switched 15 brands, when I left Camel as senior brand 16 manager, so April 29th I was probably 17 transitioning off of Camel. 18 Q. Okay. And you see here in the bottom 19 there future development, last page, last bullet 20 point? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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166 1 Q. And you understood, ma'am, that Newport 2 was the fastest growing mentholated brand 3 especially among young blacks, correct? 4 A. Yes. Newport is just plain the fastest 5 growing menthol brand. It's one of very few 6 brands growing. And the three big menthol 7 brands, Kool, Salem and Newport, compete with 8 each other, but Salem had this product which had 9 much more menthol, more menthol taste, so we were 10 trying to develop a brand that had a product like 11 Newport so we could get Newport smokers to switch 12 to one of our brand because we didn't really have 13 a product that was that well liked among adult 14 menthol smokers. 15 Q. And you would agree with me that 16 Newport menthol smokers are predominantly 17 African-American, correct? 18 A. I don't know about predominantly. It's 19 probably, I don't know, 40 to 60 percent. 20 Q. Okay. 21 A. So I would say, you know, closer to AL BETZ & ASSOCIATES, INC. (410) 752-1733
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158 1 Q. Okay. Who was that brand developed 2 for? Do you remember? 3 A. It was developed to compete against 4 Newport because Newport was a very strong brand 5 and so we were trying to develop it to get 6 Newport smokers to switch. 7 Q. Now, at the time of this document you 8 were dealing with special market opportunities, 9 correct? 10 A. Did this have a date on it? Did I see 11 that someplace? 12 Q. I don't believe it does. 13 A. I don't either. 14 Q. But I see that you see strategic 15 marketing? 16 A. Uh-huh. 17 Q. Your name on page 4? 18 A. Yes. 19 Q. Then if you go back a page, it says 20 special market opportunities, Black, Hispanic, 21 military? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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131 1 there was no French Camel campaign. 2 A. It wasn't. It just phrased it wrong 3 here. It was the 75th birthday campaign. Before 4 we developed the whole campaign, before it was 5 finished, because the starting point was the 6 French Camel poster, we had referred to it that 7 way, but what it became is the Joe Camel 75th 8 birthday campaign. And this was when we were in 9 the development of it before it was finished. 10 Q. Okay. 11 THE VIDEOGRAPHER: This concludes tape 12 number 1 of the Lynn Beasley deposition. The 13 time is 1:49. We're off record. 14 (Recess -- 1:49 p.m.) 15 After Recess (1:55 p.m.) 16 THE VIDEOGRAPHER: This is tape number 17 2, the Lynn Beasley deposition. The time is 18 1:55. 19 BY MR. HOSKINS: 20 Q. Ma'am, you have before you exhibit 21 10410, correct? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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177 1 that. 2 Q. Okay. 3 A. And we were specifically looking at 4 Newport smokers and could we convince Newport 5 smokers to switch to Salem. Of course, if you 6 read through this you will see in here that it 7 talks about the fresh on the scene as a copy line 8 working, but the problem is that Newport smokers 9 didn't really like Salem's product and so that 10 was part of the strategy as well, making sure 11 that we developed product that Newport smokers 12 liked. 13 Q. Is it fair to say that that's what led 14 to the development of Uptown? 15 A. Well, the whole initiative led to the 16 development of Uptown. We were trying to see if 17 we could make Salem a relevant brand for Newport 18 smokers to switch to. We were worried we 19 wouldn't be able to because the Salem product was 20 so disliked, so we decided let's do a new brand 21 that has a product just like Newport's because we AL BETZ & ASSOCIATES, INC. (410) 752-1733
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176 1 capital I initiative. Do you see that, ma'am? 2 A. Yes. 3 Q. What was that Black YAS capital I 4 initiative that's referred to there? 5 MS. PARKER: Object to the form of the 6 question because you haven't laid a proper 7 foundation with this witness. 8 A. Where is this? 9 Q. Background, second line, see how it 10 says as a result a capital B Black YAS -- 11 A. Younger adult smoker initiative, yes. 12 Q. Right. 13 A. What we were doing was we were looking 14 at younger adult smokers, in general Anglo, 15 Hispanic, Black, and in this document as it lays 16 out, this is a piece of research that was done 17 among younger adult Black smokers and we were 18 looking at how to make the Salem advertising more 19 relevant among younger adult Black smokers and we 20 obviously had advertising already but we were 21 seeing if we could do better advertising than AL BETZ & ASSOCIATES, INC. (410) 752-1733
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178 1 were worried about changing Salem's product 2 because Salem has a lot of adult smokers who like 3 it, and we were worried about changing Salem's 4 product to a Newport-like product. So we said 5 let's try a new brand that's just like Newport's 6 product. 7 Q. Okay. Now, it talks about launching 8 into lead market in 1989. What does it mean in 9 marketing terminology to launch into lead 10 market? 11 A. Again, a lead market is like a test 12 market, it's like the first market you try 13 something in to see if it will work or not. 14 Q. And is it your understanding that the 15 Salem fresh campaign was launched into lead 16 market in 1989? 17 A. Fresh on the scene campaign. 18 Q. Okay. 19 A. And that advertising was launched in a 20 couple of test markets, and I don't remember the 21 exact date. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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173 1 Q. It is entitled "Inner City Black 2 Creative Exploratory", correct? 3 A. Yes. 4 Q. It contains a management summary on the 5 second page, correct? 6 A. Yes. 7 Q. Did you receive a copy of this report, 8 to your own personal knowledge? 9 A. Yes. 10 Q. Do you recall reviewing this report 11 when you received it? 12 A. Well, if you give me a minute to take a 13 look at it, I'll let you know. 14 Q. Okay. 15 A. Okay. 16 Q. Are you familiar with the document now? 17 A. Yes. 18 Q. Do you recall seeing this document in 19 1989? 20 A. I recall research on the fresh on the 21 scene campaign. I can't say I remember this AL BETZ & ASSOCIATES, INC. (410) 752-1733
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174 1 exact document. 2 Q. Did you review this document in 3 preparation of any of your depositions? 4 A. No. 5 Q. If you look to the first page after the 6 title page, Bates 9956, do you see the background 7 discussion there? 8 A. Yes. 9 Q. Paragraph reads reversing RJR's 10 declining trend among young adult Black smokers 11 is key to the company's long term growth 12 potential. As a result, a Black YAS initiative 13 will be launched into lead market in 1989 with 14 the objective of reversing RJR's declining share 15 among Black YAS. 16 Do you see that, ma'am? 17 MS. PARKER: I want to object to this 18 line of questioning where you're just reading 19 from the document. 20 Q. Do you see that, ma'am? 21 A. I see where the document says that, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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181 1 Q. What is your company's position with 2 respect to the FDA regulations? 3 MS. PARKER: Object to the form of the 4 question. I think that's unclear and overly 5 broad and vague. 6 Q. Are you aware that FDA is trying to 7 regulate the cigarette industry, aren't you, 8 ma'am? 9 A. Yes. 10 Q. Are you aware that your company has 11 filed a lawsuit to prevent the FDA from 12 regulating your industry, correct? 13 A. Yes. 14 Q. What are some of the measures that you 15 have personal knowledge of that are included in 16 these FDA regulations? 17 A. I'm doing it from memory. I may not 18 get them exactly right. But I think it's the 19 elimination of billboards, the elimination of all 20 premiums, the elimination of people and 21 illustrated characters in advertising, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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185 1 to enact mandatory proof of age checking 2 requirements at retailers? 3 A. I mean, like what do you mean, like 4 every single person that walks in, you have to 5 check their age before you sell them cigarettes? 6 Q. Right. I'm talking not a voluntary 7 program but legislative enactment. 8 A. You know, I don't really know. I don't 9 really understand the difference. I would assume 10 that if there's a law that says that you have to 11 be 18 to buy cigarettes, then it would be a 12 retailer's responsibility to insure someone was 13 18. So I don't really know what other law there 14 15 16 would be, I don't really understand. Q. Could you tell the jury who Laura Bender is? 17 A. Yes. She was a marketing person in our 18 marketing department at one time. 19 Q. Is she still with the company? 20 A. No. 21 Q. Is she still alive? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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159 1 A. Yes. 2 Q. When you were involved in strategic 3 marketing, were you also involved in these 4 special market opportunities or was someone else 5 doing that? 6 A. No. I was. I mean, I wasn't the 7 person in charge because I had been promoted but 8 I oversaw it. 9 Q. Now, Uptown didn't stay on the market 10 very long, did it? 11 A. Actually we shipped some of it but I 12 don't think you could ever say it was really on 13 the market. 14 Q. 24 hours. 15 A. I mean, some product had shipped but I 16 don't know as you could ever say it was really 17 actually on the market. 18 Q. Uptown had high tar and high nicotine, 19 correct? 20 MS. PARKER: Object to the form of the 21 question. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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183 1 Q. Did you ever have an employee who 2 recommended that Reynolds support similar 3 legislation? 4 A. I don't know what you mean by similar 5 legislation. To the whole FDA proposal? 6 Q. Right. 7 A. I don't think -- not to my knowledge 8 have we had an employee propose all of the FDA 9 restrictions. 10 Q. Did you ever have an employee who 11 proposed any restrictions -- let's say it this 12 way, proposed publicly encouraging legislatures 13 to enact 14 A. 15 again we 16 smoking, 17 who have 18 Q. restrictions? I don't know what, like what, I mean already talked about the legal age of so obviously I'm sure there are people proposed that. How about proposing a, that all 19 retailers be required to obtain proof of age 20 before selling cigarettes? 21 MS. PARKER: Object to the form of the AL BETZ & ASSOCIATES, INC. (410) 752-1733
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164 1 question without letting her look at the 2 article. 3 A. Could I see it, please? 4 Q. Right there is the quote. I can't let 5 you lift that. 6 A. Okay. I promise I won't lift that up, 7 if I can just read it. 8 Q. There's a snide editorial comment. 9 A. Yes, you didn't do that, did you? 10 Does it continue, or no? 11 Q. (Handing). 12 A. Thank you. 13 Q. Here's the front page, too. 14 A. Okay. I won't turn this, I promise. 15 Q. Don't turn the second page. 16 A. I won't. 17 Okay. 18 Q. Do you have my question in mind? 19 A. No, I'm sorry, I don't. 20 Q. You are quoted in this article as 21 saying that we developed the product based on AL BETZ & ASSOCIATES, INC. (410) 752-1733
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190 1 without seeing it. 2 Q. Okay. 10415. 3 (Whereupon, Beasley Deposition 4 Exhibit No. 10415, memo from Bender to Beasley, 5 dated February 6, 1990, marked.) 6 MS. PARKER: I want to note for the 7 record that the document that's just been marked 8 as exhibit 10415 has a notation on each page 9 saying that it's subject to a confidentiality 10 order in a certain lawsuit in Texas, and so we 11 would like to invoke the provisions of that order 12 with respect to this portion of the deposition 13 where you're going to ask her about that 14 document. 15 MR. HOSKINS: Provisions of what 16 order? 17 MS. PARKER: The order that's 18 referenced on each page of this document on the 19 side. 20 MR. BEACH: As well as the provisions 21 of the confidentiality order that pertained in AL BETZ & ASSOCIATES, INC. (410) 752-1733
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139 1 about today or at the time. 2 Q. Let's talk about today, then we'll go 3 back through time. 4 A. Today how it's done is we have people 5 in marketing research who oversee it and then 6 there are outside suppliers who actually conduct 7 the research for us. 8 Q. Okay. Was this the same way it was 9 being conducted in 1989? 10 A. I don't really know if it was exactly 11 the same way then. I think it was approximately 12 the same. But they could have made some 13 changes. 14 Q. And is this report used regularly by 15 management today? 16 A. I don't know what report you're 17 referring to. 18 Q. A tracker report? 19 A. A tracker information is. Because it 20 tracks our share. What percent of smokers claim ~ N 21 that our brands are their usual brands versus our m AL BETZ & ASSOCIATES, INC. (410) 752-1733
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172 1 Q. It means profound, correct? 2 A. I don't know. 3 Q. Or it means heavy, it means heavy, 4 correct? 5 A. I don't know. 6 Q. All right. Let's look at exhibit 7 10427. 8 (Whereupon, Beasley Deposition 9 Exhibit No. 10427, Marketing Research Report, 10 dated January 16, 1989, marked.) 11 Q. Ma'am, this document is dated January 12 16, 1989, correct? 13 A. Yes. 14 Q. You received a copy of the document, 15 correct? 16 A. Yes. 17 Q. The document is a Marketing Research 18 Report, correct? 19 A. Yes. 20 Q. Its number is 88-12121, correct? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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191 1 the Maryland Attorney General case. 2 MR. HOSKINS: Okay. Well, there is no 3 protective order in the Richardson case and this 4 document is now a public document in the 5 Minnesota depository, so you can invoke it but 6 our position is this is not a privileged document 7 nor a privileged deposition. So -- 8 MS. PARKER: I stated our position. 9 Q. Have you had a chance to look at the 10 document, ma'am? 11 A. No. It will just take me a minute. if 12 you would just give me a minute. 13 Q. Okay. 14 Are you ready, ma'am? 15 A. Yes. 16 Q. You received this document, correct? 17 A. Yes. 18 Q. It was after you were married? 19 A. Yes. 20 Q. So this is a Beasley document, right? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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188 1 I'll be happy to respond. 2 Q. In response to that criticism did 3 somebody prepare a stock set of questions and 4 answers? 5 A. Our public relations department does 6 that routinely, and I don't know if that's what 7 you are referring to or not. But they prepare 8 potential questions and answers to media 9 inquiries. 10 Q. Okay. Who was the source of these 11 articles, do you know? 12 MS. PARKER: Object to the form of the 13 question. No proper foundation laid for it. 14 A. The source of these articles? Like I 15 suppose reporters wrote the articles. 16 Q. Do you remember there was an anonymous 17 source for each of those articles? 18 A. An anonymous source? The reporter who 19 e th ? t t wro e e s ory, you m an 20 Q. No. The reporter quoted an anonymous 21 source from R. J. Reynolds. Are you familiar AL BETZ & ASSOCIATES, INC. (410) 752-1733
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192 1 Q. What did you do in response to this 2 document? 3 A. I don't remember a response to this 4 specific document. Since there was the anonymous 5 source and articles were written, we obviously 6 prepared questions and answers to media inquiries 7 around the Dakota issue, and we test marketed the 8 brand. 9 Q. Laura was a friend of yours, correct? 10 A. She was an employee of mine. 11 Q. Was she more than an employee? 12 A. No. She was an employee of mine. 13 Q. She was on a first name basis with you? 14 A. Of course. She worked for me. 15 Q. Turn to the second page, please. Now, 16 when this document refers to the, quote, capital 17 B Brand, closed quote, what are they referring 18 to? 19 A. Can you show me where you are? I don't 20 see it. 21 Q. It says encouraging minors to smoke? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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195 1 Q. Okay. And then your employee goes on 2 to list two of those -- 3 A. Uh-huh. 4 Q. -- examples, correct? 5 A. Yes. 6 Q. Requiring proof of age at retail? 7 A. Uh-huh. 8 Q. Correct? 9 A. That's what this says. 10 Q. Right. And noncompliance could result 11 in a loss of license to sell cigarettes, 12 correct? That's her recommendation. 13 A. That's what she says. 14 Q. Right. And she also recommended 15 supporting legislatures to enact measures to 16 limit vending machine locations, correct? 17 A. That's what she says. 18 MS. PARKER: Same objection. 19 Q. You received this recommendation, 20 correct? 21 A. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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201 1 delta task force be established. Do you see that 2 reference? 3 A. Yes. 4 Q. What was the original delta task 5 force? 6 A. It was a group of people from different 7 departments put together to try and come up with 8 new brand ideas. 9 Q. It was just new brand ideas that was 10 discussed at the delta task force? 11 A. New brand, new marketing ideas. 12 Q. Was anything discussed about underaged 13 smoking as part of the delta task force? 14 A. Not that I recall, no. 15 Q. Who was on the delta task force? 16 A. I don't remember all of the specific 17 people. I was, and there were a number of other 18 people. 19 Q. Were any lawyers on the task force? 20 A. I'm sure there were lawyers who 21 supported -- literally a member of the task AL BETZ & ASSOCIATES, INC. (410) 752-1733
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196 1 Q. Your employer recommended that one way 2 to deal with the criticisms that your company was 3 marketing to minors was to prove that you didn't 4 want minors by publicly encouraging legislators 5 to enact measures to prevent the sale of 6 cigarettes to minors, correct? 7 A. That's what she says here. 8 Q. What did you do in response to that 9 recommendation? 10 A. Again, as she points out here, 11 government relations, which is part of our 12 external relations department, is the group 13 that's responsible for formulating that kind of 14 strategy. And so they have, as a result, I 15 believe, my understanding is, supported 16 legislation to restrict the sale of cigarettes to 17 adults 18 and older. They have also supported 18 legislation with regard to vending machines, that 19 they be in supervised locations. So I believe 20 our company, I don't know the exact timing, went 21 on to support those two positions. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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171 1 A. No. I remember fresh on the scene. 2 Q. Okay. And do you know what fresh meant 3 in inner city African-American slang? 4 A. Fresh referred to modern, contemporary 5 and a fresh product. Menthol products are known 6 for their freshness, they taste fresh. So it was 7 both of those things. 8 Q. Do you understand that fresh in the, 9 amongst younger adult inner city Black smokers 10 means hip? 11 A. I said modern contemporary. 12 Q. How about with it, sexy? 13 A. Modern, contemporary, that would -- 14 Q. Bad? 15 A. Well, I mean, you know, it depends how 16 you use bad, I guess. If bad means good. 17 Q. That's right. And what does the word, 18 word, mean to younger adult inner city Black 19 smokers? 20 A. The word, word? I don't know. I don't 21 recall that. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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170 1 think of Salem products, Newport products. We 2 did blind product tests where they didn't know 3 the name to see how they evaluated the products, 4 I mean. So certainly we have done a lot of 5 testing because we wanted Newport smokers, adult 6 Newport smokers to switch to our brands. 7 Q. Do you also recall doing research on 8 younger adult inner city Black smokers' slang? 9 A. Slang? I don't know what you're 10 talking about. Again, if you can show me the 11 document, I'll take a look at it. 12 Q. Do you remember any Salem ads that were 13 developed as part of this campaign? 14 A. I don't know what you're talking about 15 slang. Again, if you let me see the document, 16 I'll be happy to answer questions on it. 17 Q. Do you remember the Salem ads that read 18 fresh on the scene? 19 A. Yes. I remember fresh on the scene. 20 Q. How about the word smooth? Do you 21 remember that one? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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194 1 Q. Right. 2 A. And she's saying this is something 3 people might try and say and, if they do, here's 4 what I suggest we say back. That's what she's 5 doing. 6 Q. And she also recommended in point 7 number 2 that in the event that 8 media/governmental pressure continues, it is 9 likely that nothing we think can deflect 10 criticism. If the volume of criticism reaches 11 unmanageable levels, I believe it may become 12 necessary to prove we do not want minors to 13 smoke. This can be accomplished by, and then it 14 is underlined, publicly encouraging legislators 15 to enact measures to prevent the sale of 16 cigarettes to minors. 17 Do you see that part of the document, 18 ma' am? 19 A. Yes. 20 MS. PARKER: Same objection. 21 A. Yes, I see where it says that. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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208 1 A. Want me to take this rubber band off 2 and -- 3 Q. You're welcome to. I don't have many 4 questions, but you can look through it all if you 5 want. 6 I guess my first question would be do 7 you recall reviewing this as part of the 8 Minnesota trial? 9 A. I think I do. Well, I reviewed it in 10 litigation, you know, it was probably the 11 Minnesota trial. 12 13 14 15 16 17 18 19 20 ow? Q. A. Q. A. Q. A. Q. A. What does Y and R stand for? Young & Rubicam. Who are Young & Rubicam? An advertising agency. Where are they located? In New York. What was this document used for, if you It says Camel YR Orientation, but other 21 than what it says, I didn't have a part in it. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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168 1 position did you hold? 2 A. January of 1989 I was Director of 3 Special Markets. 4 Q. Okay. And do you remember the 5 development of the Salem, Salem campaigns for the 6 inner city Black market? 7 A. I remember that we were developing 8 advertising for younger adult African-American 9 smokers. 10 Q. For the Salem brand particularly, 11 correct? 12 A. Well, not just for the Salem brand but 13 certainly the Salem brand was one brand we looked 14 at. 15 Q. What other brands were you developing? 16 A. I don't know at that time. Again, as I 17 told you before, most of our brands have 18 advertising which features African-American 19 smokers as well as Anglo smokers and some have 20 advertising that features Hispanic smokers as 21 well. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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205 1 Q. Remind the jury what your position was 2 on April 3, 1989. 3 A. April of 1989 I was Director of Special 4 Markets. 5 Q. And this is a document that's dated 6 April 3, 1989, correct? 7 A. Yes. 8 Q. From Mr. Winebrenner to Mr. Hall, 9 correct? From Mr. Winebrenner to Mr. Hall. 10 A. Yes. 11 Q. Okay. Re: The impact of aging.: 12 Demographics and its effect on volume and SOM, 13 correct? 14 A. SOM. 15 Q. M. Tell the jury what SOM is? 16 A. Share of market. 17 Q. I just want to direct your attention to 18 the last sentence in the second paragraph, which 19 reads Precision should take a back seat to the 20 more pressing need of gaining full concurrence to 21 the undeniable finding that young adult smokers AL BETZ & ASSOCIATES, INC. (410) 752-1733
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165 1 research that shows that a significant percentage 2 of Black smokers are currently choosing a'brand 3 that offers a lighter menthol flavor than our 4 other major menthol brand Salem. 5 A. That's right. 6 Q. Do you recall that quote? 7 A. Yes. 8 Q. You don't have this article framed in 9 your office, by any chance, do you, ma'am? 10 A. No, I don't. 11 Q. Okay. 12 A. Again, we were, we developed the 13 product to compete with Newport and Newport has 14 less menthol and more tobacco taste. And that's 15 what I was referring to there, that we developed 16 Uptown with less menthol, unlike Salem which had 17 more menthol, less menthol and more tobacco taste 18 so that it would match up versus Newport. Our 19 goal was to make a product just like Newport so 20 that we could get Newport smokers to switch to 21 Uptown. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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214 1 to be transferred to Mezzina Brown. 2 And so they were discussing the need 3 not to have to transfer these materials which 4 were just duplicates of things that Reynolds had 5 anyway, or ideas that were never pursued, and we 6 had no more use for. 7 And this note here, this thing about 8 the scrutiny thing was because Y and R was really 9 unhappy that these people were leaving to form 10 their own agency. And so Mark wanted to be sure 11 that he didn't take anything they considered 12 their property that they didn't need anyway. 13 Q. So you remember that the American 14 Medical Association, I'm sorry, the Journal of 15 the American Medical Association published 16 research on the Joe Camel campaign, correct? 17 A. I didn't get that swift transition. So 18 you're done with this and you're asking me about 19 something else. 20 Q. I'm not quite done with it, but yes -- 21 A. I'm sorry. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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218 1 have personal knowledge of it. But I have talked 2 to the people who were involved. 3 Q. Okay. Ma'am, are you familiar with an 4 organization called Total Marketing? 5 A. Total Marketing? I don't know. 6 Probably. But, you know -- 7 Q. Come on, they're right up the street. 8 A. From here? 9 Q. Right. 10 A. You know, just a lot of marketing 11 agencies have marketing names, and -- 12 Q. 300 West 7th Street, Winston-Salem? 13 A. Total Marketing? I don't know. Which 14 agency is it? 15 Q. Okay. Remind the jury on May 4, 1990 16 what were you working on? You weren't working on 17 Camel, correct? 18 A. No. 19 Q. Ma'am, I'm going to hand you what has 20 been marked as exhibit 10418. 21 A. Uh-huh. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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197 1 Q. So your understanding and belief is 2 that in fact your company has publicly encouraged 3 legislators to enact those types of measures, 4 that's your understanding? 5 A. Not -- you know, specifically what she 6 meant by this proof of age, I have no idea, she 7 doesn't say. Again, what we have supported is 8 laws that require you be an adult to buy 9 cigarettes. We have encouraged retailers to card 10 for cigarettes, and that vending machines be in 11 supervised locations. 12 Q. Did you pass this recommendation on to 13 anyone? 14 A. We had many discussions on it. I can't 15 tell you this specific memo. But the people 16 listed on the cc list are in our external 17 relations department, they are part of our 18 external relations department who were 19 responsible for working on those strategies. And 20 so they would have been a part of this 21 discussion. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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215 1 Q. I just want to direct your attention to 2 the fact that do you recall that the Journal of 3 the American Medical Association published 4 research about the Joe Camel campaign? 5 A. Yes. I'm aware of that. 6 Q. Okay. And what do you recall that 7 research showed? 8 A. If you could be more specific, if you 9 have something in mind. 10 Q. Okay. The research, this was the 11 research that showed that Joe Camel had a strong 12 appeal to young children, correct? 13 A. I don't know what you're talking about 14 when you say strong appeal. 15 Q. All right. 16 A. There were several different articles 17 published in JAMA and if you will refer to a 18 specific one, then I can answer your questions. 19 Q. Why don't you tell the jury what you 20 remember reading in JAMA about the Joe Camel 21 campaign. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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179 1 Q. And I guess for Uptown, Philadelphia 2 was supposed to be the lead market? 3 A. It was a test market to see if we could 4 attract Newport smokers to switch to a product 5 that was like Newport. 6 Q. Okay. Then you see if you turn to page 7 9969 -- 8 A. Yes. 9 Q. -- there's that list of younger adult 10 inner city Black smokers slanguage, correct? 11 A. Yes, correct. That's what it says. 12 MS. PARKER: Are you through with this 13 document? I wanted to ask would you like to take 14 a break now? Are you okay? 15 THE WITNESS: Sure. A five-minute 16 break would be great. 17 MS. PARKER: Is this a convenient place 18 for you to stop? 19 MR. HOSKINS: Sure. 20 THE VIDEOGRAPHER: Off record at 2:53. 21 (Recess -- 2:53 p.m.) AL BETZ & ASSOCIATES, INC. (410) 752-1733
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211 1 Q. Why don't you tell the jury what that 2 article is about. 3 MS. PARKER: I object to the form of 4 that question. That's entirely improper to ask 5 her to summarize a newspaper article that 6 obviously speaks for itself. 7 Q. Ma'am, go ahead. 8 A. It's about a memo that an account guy 9 at Y and R wrote. 10 Q. Okay. Did you ever see that memo? 11 A. I saw it in the course of litigation. 12 Q. Okay. Ma'am, I'm going to hand you 13 exhibit 10425. 14 A. Yes. 15 (Whereupon, Beasley Deposition 16 Exhibit No. 10425, document dated October 31, 17 1991, on Young & Rubicam stationery, marked.) 18 Q. And ask you if that's a copy of the 19 memo that you saw in the course of litigation? 20 A. It is. I recognize it. 21 Q. Other than litigation, did,you receive AL BETZ & ASSOCIATES, INC. (410) 752-1733
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206 1 are RJR's most critical problem. 2 Do you recall reading that when you 3 received this document in April of 1989? 4 A. I don't recall the specifics of it, no. 5 Q. Okay. 6 A. You know, again I think the document 7 makes it clear that the same sort of analysis 8 should be done on occasional users and switchers, 9 you know, younger adult smokers are important to 10 the company, so are occasional users, so are 11 switchers, and I think that's right. 12 Q. Based on your experience at RJR do you 13 dispute that younger adult smokers are RJR's most 14 critical problem area? 15 MS. PARKER: Object to the form of the 16 question. I think it's vague and unclear. 17 A. What I would say is young adult smokers 18 are important to the company, as are occasional 19 users, as are switchers, very critical. Again, 20 our largest brand is not a younger adult brand, 21 it's Doral, a switching brand.. And nearly 30 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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186 1 A. I -- you know, I don't know. I haven't 2 talked to her in years. 3 Q. When did she leave the company? 4 A. Oh, gosh. I don't know. It's been 5 years. 6 Q. What were the circumstances of her 7 departure? 8 A. She left in one of the downsizing we 9 had when we were, had to downsize the company. 10 Q. Do you remember when that was? 11 A. I can't remember exactly when it was. 12 Q. Laura Bender worked for you, correct? 13 A. At one time she did. 14 Q. She worked for you on the Dakota 15 campaign, correct? 16 A. Yes. 17 Q. Dakota was the YF cigarette you 18 referred to earlier? 19 A. Do you mean VF? 20 Q. VF, virile female? 21 A. VF. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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184 1 question. 2 A. Again, I think what our company has 3 supported, and we have a program in place that 4 supports the We Card, we help retailers educate 5 retailers and their clerks on how to card people 6 for cigarettes and to card people for 7 cigarettes. So we very much support that 8 retailers card people to be sure they are of 9 legal age to buy cigarettes. 10 Q. It would be fair to state that the 11 industry supports voluntary measures, correct? 12 A. Again, we, you know, speaking for the 13 company, I can't really talk about the industry, 14 but for the company I believe that we support 15 retail, laws which mandate that the legal age, 16 you know, that you can only buy cigarettes at 18, 17 and then to facilitate that we provide these 18 materials, these We Card materials to hundreds of 19 thousands of retailers to help educate clerks and 20 retailers on how to card for cigarettes. 21 Q. Does your company encourage legislators AL BETZ & ASSOCIATES, INC. (410) 752-1733
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209 1 Q. Were you personally involved in the 2 Camel Young & Rubicam orientation? 3 A. N 4 Q. Were you involved with Camel when Young 5 & Rubicam was doing the advertising for the 6 brand? 7 A. No. 8 Q. That happened after you left the 9 brand? 10 A. Yes. 11 Q. Tell me again which company was doing 12 the advertising? 13 A. Advertising? McCann-Erickson, remember 14 we talked about McCann-Erickson. And there were 15 other agencies as well. They weren't the only 16 one. 17 Q. Bear with me one second. So you never 18 saw this document before other than litigation? 19 A. In litigation. In litigation. 20 Q. But it's not a document you reviewed in 21 the normal course of your business? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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207 1 percent of the market smokes reduced price 2 brands. So I don't think most critical is an 3 appropriate description. 4 Are younger adult smokers important to 5 the company? Yes, of course they are. So are 6 switchers, so are occasional users, so are full 7 price brands, so are reduced price brands. It's 8 the total market of adult smokers and they are 9 all important to our company's future and share 10 of market. 11 Q. Well, you understand that smokers die 12 from time to time, correct? 13 A. All people die, and some people who die 14 are smokers. 15 Q. Okay. And all smokers die some day, 16 correct? 17 A. All people die some day, so yes. 18 Q. Okay. This is exhibit 10417. 19 Beasle De osition (Wh re o p y e up n, 20 Exhibit No. 10417, document entitled Camel Y & R 21 Orientation, marked.) AL BETZ & ASSOCIATES, INC. (410) 752-1733
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182 1 restricting I think direct mail to black and 2 white advertising, restrictions on point of sale, 3 restrictions on sponsorships. I'm sure that's 4 not all of them. But -- 5 Q. Let's talk about the point of sale 6 restrictions. Do you know any specific 7 restrictions at the point of sale? 8 MS. PARKER: Object to the form of the 9 question. It's unclear to me what you're 10 asking. 11 A. I think with -- again, I'd have to go 12 back and refresh my memory but my general 13 recollection is that it would have proposed that 14 there be no cigarette displays on counters, that 15 they would have to be behind the counter, and 16 that each company would be limited to how much 17 point of sale it could have in a store. 18 Q. What about vending machine 19 restrictions? 20 A. I think it banned all vending 21 machines. That's my general recollection. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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220 1 of this document. I don't even remember seeing 2 it in litigation before. I just don't remember 3 seein it g . 4 Q. Let me see your CV there so I can quit 5 asking you these same questions. 6 A. Sure. There you go. 7 Q. Okay. Let's do 10420. 8 (Whereupon, Beasley Deposition 9 Exhibit No. 10420, memo from Nordine to Burrows 10 and others, dated July 16, 1984, marked.) 11 Q. I'm going to ask you, this has been 12 used in some of your previous depositions, but I 13 want to know, leaving aside those depositions, 14 had you ever seen it before? 15 A. All right. 16 MS. PARKER: Has this been marked? 17 MR. HOSKINS: Yes. 18 MS. PARKER: What number again? 19 MR. HOSKINS: 420. 20 A. 10420. 21 MS. PARKER: Thank you. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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189 1 with that, ma'am? 2 A. An anonymous source from R. J. 3 Reynolds? I mean they had, someone gave them R. 4 J. Reynolds' documents. I don't remember 5 specific quotes. Again, if you would like to 6 show me I'll be happy to take a look at it. 7 Q. Do you recall seeing a document from 8 Ms. Bender addressing that issue, the Atlanta 9 Constitution and Ad Week articles? 10 A. Again, if you will show it to me I'll 11 let you know if I remember it or not. 12 Q. But without seeing it you don't 13 remember a document? 14 A. Well, I don't know what it says so I 15 can't tell you if I remember it or not. 16 Q. Do you remember what Ms. Bender 17 recommended with respect to how to deal with 18 criticisms that your company was targeting youth 19 smokers? 20 A. Again, if you want to show me I can let 21 you know if I remember it. I can't tell you AL BETZ & ASSOCIATES, INC. (410) 752-1733
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213 1 MS. PARKER: I object to the form of 2 that question. There is absolutely no foundation 3 laid for you to ask that, it's also unclear and 4 vague. 5 Q. Do you remember, ma'am? 6 A. Would you just ask the question again? 7 I'm sorry. 8 Q. Sure. What do you understand, what 9 understanding, if any, do you have of what led 10 the author of this document to take the action 11 that is discussed in this document? 12 A. My understanding is this, it's not 13 firsthand, it's not, you know, I wasn't there, I 14 wasn't a part of this, but what happened is this 15 Mark Morrissey, and there were a couple other 16 people at Young & Rubicam, were starting up their 17 own agency called Mezzina Brown, and Reynolds was 18 getting ready to move the business from Y and R 19 to Mezzina Brown, and Mark Morrissey was one of 20 the people leaving Y and R to form this new 21 agency Mezzina Brown. And materials were going AL BETZ & ASSOCIATES, INC. (410) 752-1733
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204 1 A. Yes. 2 (Wh l ereupon, Beas ey Deposition 3 Exhibit No. 10416, memo from Winebrenner to Hall, 4 dated April 3, 1989, marked.) 5 Q. I think this was another document that 6 was used as part of your Minnesota trial 7 testimony. Do you recall seeing that document in 8 Minnesota? 9 A. Can I just look at it for a minute? 10 Q. Sure. 11 A. I'm sure I looked at a lot of stuff out 12 there. 13 You know, I don't remember this in 14 Minnesota but it's possible, you know, I'm not 15 saying it's not. 16 Q. All right. Well, you received a -- 17 well, you're shown as having'received a copy of 18 this document, correct? 19 A. Yes. 20 Q. That's your maiden name? 21 A. Yes. I'm on the cc list. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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187 1 Q. Is Dakota marketed in the United States 2 today? 3 A. No. 4 Q. Was it ever marketed? 5 A. Yes. We had a test market on Dakota, 6 we test marketed it, but it wasn't successful in 7 achieving our objective of switching Marlboro 8 smokers. Our objective on Dakota was to have a 9 brand that was positioned for men and women 10 instead of all the other virile brands which were 11 positioned primarily for men, and so we put it in 12 a test market to try it out and it did not 13 achieve the objective. 14 Q. And do you remember that there were 15 articles criticizing Dakota written in the 16 Atlanta Constitution? 17 A. I do. 18 Q. And in Ad Week? 19 A. I just don't remember all the 20 specifics. If there's, again if there's 21 something you want to show me and ask me about, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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193 1 A. Yes. 2 Q. The capital B Brand*. 3 A. Oh, the Brand, meaning she worked, she 4 has the Brand and so she's speaking on behalf of 5 the Brand. 6 Q. Which would be Dakota in this case? 7 A. Yes. 8 Q. Okay. So -- all right. Her report to 9 you at this point says the Brand believes 10 anti-smoking factions may serve Dakota up as, 11 quote, proof, closed quote, that tobacco 12 companies and R. J. Reynolds Tobacco in 13 particular are trying to get minors to smoke. 14 MS. PARKER: Object to the -- 15 Q. All right. Do you see that, ma'am? 16 MS. PARKER: I object to that question 17 because you're just reading from the document. 18 That speaks for itself. 19 A. Again, what she's doing in this 20 document is she's laying out things that she 21 thinks people will try and say. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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221 1 A. Can I take just a second to look at 2 it? 3 Q. Sure. 4 A. Wow! It's kind of hard to read, isn't 5 it? 6 MS. PARKER: Do you have a better 7 copy? 8 MR. HOSKINS: Do you? I do not. 9 A. No. 10 Q. To your knowledge, were you ever 11 provided with a copy of this document at any time 12 prior to the development of the Camel campaign? 13 A. No. 14 Q. Could you tell the ladies and gentlemen 15 of the jury if you know who Mr. Nordine was in 16 1984? 17 A. Dick Nordine. He worked in the 18 strategic research group. 19 Q. How about the people that this was sent 20 to, Mr. Burrows? Ln co 21 A. m Diane Burrows. ~ AL BETZ & ASSOCIATES, INC. (410) 752-1733
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226 1 when, if at all, R. J. Reynolds stopped using the 2 NFO data? 3 A. Well, again, I started with the company 4 in 1982, and all I remember is tracker. I do not 5 remember NFO. 6 Q. Okay. And is it fair to state the 7 tracker data is not designed to measure teenaged 8 consumption of tobacco products? 9 A. It only measures adult smokers. 10 Q. Okay. Just generally, as part of your, 11 in any of your marketing positions have you ever 12 studied old NFO data? 13 A. Never did. Never. 14 Q. Okay. 15 A. I mean, I don't recall ever studying 16 it. I certainly know for a fact I never looked 17 at any 14 to 17 year old NFO data. I didn't know 18 it existed. 19 Q. What's the William Esty Company? 20 A. Advertising agency. 21 Q. You were two years old when this AL BETZ & ASSOCIATES, INC. (410) 752-1733
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230 1 Q. I think that's a document you're 2 familiar with. 3 A. Yes. 4 Q. Been used a lot, right? 5 A. Yes, and I know Howard Parks. I'm 6 thinking Miller could have been an assistant to 7 Howard, but I just don't remember. 8 Q. Can you please explain to the jury this 9 reference on the second full paragraph talking 10 about project LF as a wider circumference 11 nonmenthol cigarette targeted at younger adult 12 male smoker, primarily 13 to 24 year old male 13 Marlboro smokers? 14 A. It's a typo. It was a 13, it was meant 15 to be 18. There's lots and lots and lots of LF 16 documents and they all say 18 to 24, and 18 to 17 34. And, you know, it's obviously that someone 18 made a typo in here. That was the target for LF, 19 I know, I was there, I talked with the new brands 20 group and there are lots and lots of documents on 21 LF that document it was an adult target. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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229 1 course I talked to the new brands group, you 2 know, because they were doing, they were trying 3 to develop it as a new brand. 4 Q. Okay. 5 A. So, I mean, we talked to each other 6 because we were both thinking about it. 7 Q. Okay. Who was Miller? 8 A. You're going to have to give me more 9 than just Miller. 10 Q. J.H. Miller. October 15, 1987. 11 A. Can I see the -- 12 Q. In a minute. 13 A. Well, it might trigger a memory. 14 Q. Okay. How about Emily Etzel? 15 A. Marketing research. 16 Q. Ann Biswell? 17 A. Marketing research. 18 Q. This is exhibit 10424. 19 (Whereupon, Beasley Deposition 20 Exhibit No. 10424, memo from Miller to Etzel and 21 Biswell, dated October 15, 1987, marked.) AL BETZ & ASSOCIATES, INC. (410) 752-1733
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231 1 Q. Okay. You say it's a typo. Was this 2 typo ever corrected? 3 A. I don't know if anybody noticed it. I 4 don't know if it was corrected. 5 Q. Okay. 6 A. You know, the document didn't go to 7 me. So I don't know if anybody noticed it and 8 corrected it and there was a revised one in the 9 files or not, but it's clear it's a typo because 10 there's all kinds of documents on this LF project 11 written, you know, weeks before this document, 12 weeks after this document, and that's clearly 13 over and over and over spelled out that the 14 target is 18 to 24 and 18 to 34. 15 Q. Do all of those documents say that the 16 target is 18 to 24 year old male Marlboro 17 smokers? 18 A. Yes. What they say is 18 to 24 and 18 19 to 34, with primary, it's, now I can't remember 20 the exact words but it's like 18 to 24 primary 21 emphasis, 18 to 34 overall. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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198 1 Q. And did you personally agree with the 2 recommendation of Ms. Bender with respect to 3 publicly encouraging legislators to enact 4 measures to prevent the sale of cigarettes to 5 minors? 6 A. I don't -- again, I don't know the 7 exact specifics, but our company supports laws 8 that restrict the sale of cigarettes to adults 18 9 and older, we also support retailers with regard 10 to carding and carding for cigarettes, and we 11 have put materials in hundreds of thousands of 12 stores to insure that. So, you know, what she 13 exactly meant specifically here, I don't 14 remember, but those are the things we have acted 15 on and I support the company's position on that. 16 Q. Can you identify for the ladies and 17 gentlemen of the jury one instance where your 18 company publicly encouraged a legislator to enact 19 measures to prevent the sale of cigarettes to 20 minors? Can you point to one time that your 21 company did that? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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210 1 A. No, but I did see it in litigation. 2 Q. Okay. Young & Rubicam was in the news 3 recently, right? 4 A. I'm not -- I don't know what you're 5 referring to, I guess. 6 Q. April 30, 1998 article in the Wall 7 Street Journal? 8 A. April 30, 1998? 9 Q. Right. 10 A. I don't think I read it. 11 Q. Top ad agency defends tossing Joe Camel 12 files. 13 A. Can I take a look at it? I'm not sure 14 if I read it or not. 15 Q. Sure. I thought all executives had to 16 read the Wall Street Journal. 17 A. I do read the Wall Street Journal some, 18 but, you know, there's a lot of stuff written 19 about it and I can't read it all. 20 Oh, yes. Yes. I know what this is 21 about. I just had to refresh my memory. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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233 1 a copy of this document. I don't understand why 2 not, given your position in 1987. 3 MS. PARKER: Object to the form of the 4 question. I think it is argumentative. There's 5 no basis, no foundation for it. 6 Q. Go ahead, ma'am. 7 A. This was written to Howard Parks, so 8 we're talking about -- well, he's cc'd on it and 9 he was brand manager for the new brand 10 development work on LF, so they were specifically 11 referencing some brands for the new brand part of 12 it rather than the Camel part of it. That's why 13 they didn't copy me on it. 14 Q. So you only first saw this document in 15 litigation? 16 A. I would say that I saw a lot of LF 17 documents back then. I may have seen this one 18 back then. I don't remember it. So I probably, 19 you know, I may not have. I saw many LF 20 documents, though. 21 Q. Okay. Do you have any current AL BETZ & ASSOCIATES, INC. (410) 752-1733
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199 1 MS. PARKER: I object. That's 2 argumentative. 3 A. Again, publicly there are many, many 4 statements on our We Card program. Publicly we 5 have worked to help retailers to card people for 6 cigarettes to insure that they are adults. That 7 is an industrywide program now but we had our own 8 company program before that. That program has 9 been very public, it's been sent out to hundreds 10 of thousands of retailers. And we have put a lot 11 of support behind it. 12 Q. What public legislation was enacted 13 that led to the creation of the We Card program? 14 A. This was a voluntary program on our 15 part. This was not something that was 16 legislated. We did it because we believed it was 17 the right thing to do and we put in place a 18 voluntary program to hundreds of thousands of 19 retailers, we gave their clerks training, we 20 provided point of sale for the store buttons for 21 their clerks on how to card for cigarettes, who AL BETZ & ASSOCIATES, INC. (410) 752-1733
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200 1 to card for cigarettes, and how to do the process 2 at our own expense and voluntarily. 3 Q. So the We Card program was not a 4 legislative enactment, correct? 5 A. No. Again, that's a voluntary company 6 program we did. Of course, it's an industrywide 7 program now but it started as a company, an R. J. 8 Reynolds-specific program. 9 Q. So can you identify one time when your 10 company publicly encouraged a legislator to enact 11 measures to prevent the sale of cigarettes to 12 minors? Enacted a law. 13 A. You know, really I don't work in the 14 government relations department, I don't know 15 what legislators they have met with, what they 16 have discussed. So I couldn't possibly answer 17 that. 18 Q. Okay. Now, if you would turn a couple 19 more pages back towards the end, page 4 on top of 20 5, makes reference to I recommend that a task 21 force similar to the original delta, original AL BETZ & ASSOCIATES, INC. (410) 752-1733
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212 1 a copy of this document when it was prepared in 2 October of 1991? 3 A. No. 4 Q. Who is Edmund C. Leary? 5 A. Ned Leary. 6 Q. Okay. Who is Ned Leary? 7 A. At this time he was, I believe, senior 8 brand manager for Camel. 9 Q. Okay. A position you had held at some 10 point? 11 A. Yes. 12 Q. Was he your immediate replacement? 13 A. No. 14 Q. Okay. And at this timeframe Joe Camel 15 was ongoing, correct? 16 A. The Camel brand was running the Joe 17 Camel campaign, that's correct. 18 Q. And do you also recall -- strike 19 that. What do you understand led to the decision 20 of Young & Rubicam to take the action that's 21 outlined in this document? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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202 1 force? 2 Q. Right. 3 A. I don't think so, no. 4 Q. And is it your testimony that Laura 5 Bender's leaving the company had nothing to do 6 with this document? 7 MS. PARKER: Object to the form of that 8 question. It's argumentative, and inconsistent 9 with her testimony, and there is no basis at all 10 in the record for the question to be asked. 11 Q. Was it your testimony that her leaving 12 the company had nothing to do with this 13 document? 14 A. It had nothing to do with this 15 document. Laura Bender, we were having a 16 downsizing, and Laura Bender opted to leave the 17 company in the downsizing. She was out in a 18 field office at the time and rather than move 19 back to Winston-Salem, opted to leave the 20 company. 21 Q. What field office was she located in? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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235 1 family. 2 A. Okay. 3 Q. Children? How many children? 4 A. Two step-children. 5 Q. How old are your step-children? 6 A. My step-son is 30 and my step-daughter 7 is 26. 8 Q. Okay. You should call them 9 step-sisters, right, and step-brother? 10 A. They're step-children. 11 Q. When you were married how old were 12 they? 13 A. My step daughter when we got married 14 was 16, I believe. 16. 15 Q. How about your step-son? 16 A. He would have been what, he's four 17 years older, so 20. 18 Q. Your step-son play basketball? 19 Somebody put the hoop in the back yard, right? 20 A. You know, he probably does. I mean, 21 you know, recreational basketball, you mean? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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203 1 A. I don't recall. 2 Q. Where is she now? Do you know? 3 A. No. 4 Q. Who is Mr. Winebrenner? 5 A. John Winebrenner, he was in marketing. 6 Q. What position did he hold in April of 7 1989? 8 A. April 1989, probably vice president or 9 senior vice president of marketing. 10 Q. Who was Mr. Hall? 11 A. Larry Hall? 12 Q. Uh-huh. What position did he hold in 13 1989? 14 A. 1989? I'm thinking he was probably 15 vice president of strategic planning but he may 16 have left the company in 1989. I don't remember 17 the exact year he left. I mean, I think it was 18 1989, but was it at the end of `89, I don't 19 remember exactly. 20 Q. Okay. I'm going to hand you exhibit 21 10416. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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232 1 Q. My question was a little more 2 specific. 3 A. Oh! 4 Q. When it makes reference to 18 to 24 5 does it always make reference to that in the same 6 portion of a sentence that talks about male 7 Marlboro smokers? 8 A. Well, it would always talk about, I'm 9 pretty sure, as I recall, every one I've seen 10 talks about male sm okers. Now, I don't know if 11 everyone mentions, references Marlboro or not, I 12 just can't recall. 13 Q. Do you understand that in October 15, 14 1987, there were 13 year old male Marlboro 15 smokers? 16 A. You know, I don't know. 17 Q. Okay. 18 A. But obviously children experiment with 19 smoking. But, you know, we don't do any research 20 on -- 21 Q. Okay. Now, you say you didn't receive AL BETZ & ASSOCIATES, INC. (410) 752-1733
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236 1 Q. Yes. 2 A. Oh, sure. I'm sure he does. 3 Q. When did he start to play, do you know? 4 A. No, I really don't have any idea. 5 Q. Now, you have a brother? 6 A. I have four brothers. 7 Q. Older or younger? 8 A. Both. 9 Q. They played basketball? 10 A. No, not really. None of them played 11 basketball. Wisconsin is wrestling. They were 12 all wrestlers. 13 Q. Okay. 14 A. I'm not trying to be difficult but they 15 were -- 16 Q. Your boyfriend in high school played 17 basketball, right? 18 A. No, he was a wrestler. 19 Q. You never knew anyone who played 20 basketball growing up, right? 21 A. Well, I don't know. I mean, do you AL BETZ & ASSOCIATES, INC. (410) 752-1733
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216 1 A. Sure. What specific articles have been 2 published on the Joe Camel campaign? 3 Q. And what they found or what they -- 4 A. There was one article published which 5 talked about high recognition among Joe Camel 6 among young children, or high ability to link the 7 Joe Camel character with cigarettes, and there 8 was much followup research done on that by Henke 9 and others that found that regardless of whether 10 young children recognize Joe Camel or not, their 11 attitudes towards smoking and cigarettes are very 12 negative. 96, 97 percent, whether they recognize 13 Joe Camel or not, have negative attitudes towards 14 smoking, and in fact recognizing Joe Camel does 15 not make children have more positive attitudes 16 towards smoking. 17 Q. Any other research from JAMA that you 18 recall? 19 A. Yes. There was also a DeFranza article 20 where he talked about the appeal of Joe Camel and 21 claimed this outrageous thing about, you know, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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224 1 A. Kay Duffy? No. 2 Q. Okay. How about a Mr. J.R. Moore? 3 A. Jerry Moore. 4 Q. What did Mr. Moore do in 19 80, if you 5 remember? 6 A. I wasn't with the company. 7 Q. But can you think back as to what 8 positions he's held? 9 A. He's been in marketing research. 10 Q. Okay. 11 A. The whole time I've been with the 12 company. He probably was in 1982, although 13 really I don't know since I wasn't with the 14 company. 15 Q. How about Perry, S.R. Perry ? 16 A. S -- the initials are S? What were 17 th S? ey, 18 Q. Then R, middle initial R. 19 A. S.R. Perry. No. 20 Q. Okay. I'm just going to show you a 21 document that's going to be marked 10422. The AL BETZ & ASSOCIATES, INC. (410) 752-1733
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219 1 (Whereupon, Beasley Deposition 2 Exhibit No. 104 18, document titled Camel Brand, 3 Promotion Opportunities, dated May 4, 1990, 4 marked.) 5 Q. Have you ever seen that document 6 before, ma'am? 7 A. Can I take a minute to look at it? 8 Q. Sure. 9 A. Yeah, I really -- Total Marketing, I 10 don't know. 11 I don't really remember seeing this. 12 Q. Okay. Who was in charge of the Camel 13 brand on May 4, 1990? 14 A. 1990? Probably Cliff Pennel or Ned 15 Lear y. 16 Q. And you weren't in the chain of command 17 for Camel at that timeframe, correct? 18 A. No. 19 Q. To the best of your knowledge, you 20 don't recall receiving a copy of that document? 21 A. No. I definitely didn't receive a copy AL BETZ & ASSOCIATES, INC. (410) 752-1733
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227 1 document was prepared. 2 A. You already calculated it, huh? 3 Q. Let me show you exhibit 10423. 4 (Whereupon, Beasley Deposition 5 Exhibit No. 10423, letter from MacGovern to Sugg, 6 dated December 9, 1959, marked.) 7 Q. Okay? 8 A. Okay. 9 Q. I just had to say that because your 10 counsel was going to say it if I didn't. 11 A. Okay. 12 Q. She was two years old when... 13 This was used in some previous 14 depositions, but again I want to know if you have 15 seen this document outside of the litigation 16 process? 17 A. Oh, no. Definitely not. 18 Q. I think you probably recall from your 19 previous deposition this document is about 20 cigarette smoking studies among high school and 21 college students. Do you know or can you tell AL BETZ & ASSOCIATES, INC. (410) 752-1733
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217 1 Camel having a 32 share among underaged smokers, 2 which of course the government studies refute, 3 and he showed the people, it's been totally 4 discredited because he showed people like 7 Camel 5 ads before he asked them what brand they would 6 choose. I mean, it was just not legitimate 7 research and it also was completely inconsistent 8 with government studies that had been done on the 9 question. 10 Q. Okay. And you recall that both of 11 those articles came out before October 31st, 12 1991, correct? 13 A. I don't remember the exact date. I 14 think it was in 1991, though. 15 Q. Okay. And your testimony is that, as I 16 understand it, is that this document, 10425, had 17 nothing to do with the JAMA articles? 18 A. No. It did not. 19 Q. Okay. 20 A. Again, I don't have, just in talking to 21 other people, I was not personally there, I don't AL BETZ & ASSOCIATES, INC. (410) 752-1733
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222 1 Q. Ms. Burrows. Who was that? 2 A. She works in this, for Dick. 3 Q. We've talked about her before, right? 4 A. Yes. She worked for D ick. 5 Q. Who was the most senior person on that 6 list, the To list, if you know i n 1984? 7 A. I couldn't tell you. I don't know who 8 S. Y. Evans is. Could have been -- oh, on the To 9 list. I don't know. Could have been Dick, but 10 he's on the From, so I don't know. 11 Q. I'm going to show you document 10421 12 and I just want to know whether you had ever seen 13 this document before the litigation began? 14 (Whereupon, Beasley Deposition 15 Exhibit No. 10421, memo from Sherrill to Smith, 16 dated September 26, 1972, marked.) 17 A. Before I was involved in any 18 litigation? 19 Q. Right. 20 A. No. 21 Q. Do you think you reviewed this as part AL BETZ & ASSOCIATES, INC. (410) 752-1733
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239 1 THE VIDEOGRAPHER: Tape number 3 of the 2 Lynn Beasley deposition. The time is 4:14. 3 BY MR. HOSKINS: 4 Q. I'm going to hand you what's been 5 marked as 10426 in the deposition. 6 (Whereupon, Beasley Deposition 7 Exhibit No. 10426, memo from LaBrecque to 8 Sanders, dated December 16, 1987, marked.) 9 Q. This document is dated December 16, 10 1987, correct? 11 A. Yes. 12 Q. It deals with the Camel 75th birthday 13 basketball visual, correct? 14 A. Yes. 15 Q. It was written by Mr. Mark LaBrecque, 16 correct? 17 A. Yes. 18 Q. Is that how you pronounce his name? 19 A. Yes. 20 Q. And it was written to Sanders? 21 A. Rick Sanders. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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223 1 of the Minnesota case? 2 A. I don't know about Minnesota, but I 3 believe I've seen this before in litigation. 4 Q. Okay. It makes reference to something 5 called NFO share. 6 A. Yes. 7 Q. Do you know what that means NFO? 8 A. I think that's National Family Opinion. 9 Q. Okay. Is that a survey? 10 A. I think it was a survey, yes. 11 Q. Did you know a person whose last name 12 was spelled F-R-Y-D-M-A-N? 13 A. F-R-Y. 14 Q. Frydman or Frydman. 15 A. Can you tell me the initials? 16 Q. The first name was spelled U-Z-I-E-L, 17 Uziel? 18 A. Doesn't ring a bell. 19 Q. Okay. 20 A. Uziel? Oh, no, it doesn't ring a bell. 21 Q. How about Kay Duffy? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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228 1 the jury the last time that R. J. Reynolds was 2 involved in a cigarette smoking study among high 3 schoolers? 4 A. Again, since I've been at the company, 5 which is July of 1982, I have never been involved 6 in any marketing research except for adult 7 smokers. I haven't been aware of any, so -- 8 Q. Project LF was Camel Wides, correct? 9 A. It was actually two different 10 projects. It was a new brand project and it was 11 a Camel line extension project. The word LF was 12 used for both of those. 13 Q. Okay. Now, in October 15, 1987 -- 14 A. I was on Camel. 15 Q. Okay. 16 A. I'm helping you out. 17 Q. Did you have a role in project LF? 18 A. Yes. 19 Q. What was your role for project LF? 20 A. Because I was on the Camel brand 21 considering it as a Camel line extension. Ln And of ~ 00 m ~ ~ AL BETZ & ASSOCIATES, INC. (410) 752-1733
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246 1 Q. You also revamped Doral, correct? 2 A. I worked on Doral as well. 3 Q. Is Nancy Brennan Lund still with Philip 4 Morris? 5 A. I don't know. 6 Q. Creighton, was who? 7 A. Fran Creighton. 8 Q. Man or woman? 9 A. Woman. 10 Q. You used to work for her? 11 A. No. She worked for me. 12 Q. Wasn't there a time when you worked for 13 her, then she worked for you? 14 A. No. 15 Q. Okay. Do you recall the Current Affair 16 newscast in 1995? 17 A. Yes, I do. 18 Q. Dealt with NASCAR racing at North 19 Wilkesboro, Charlotte and Rockingham, correct? 20 A. Yes. 21 Q. And tell the jury what happened. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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242 1 A. No, we didn't run the visual. 2 Q. Why not? 3 A. Because our legal department's view was 4 that it was, could be perceived as a youth 5 activity and therefore we didn't run it. 6 Q. Mr. LaBrecque wanted to run it 7 notwithstanding that advice, correct? 8 A. He did not agree with the advice. 9 Q. Mr. Sanders wanted to run it 10 notwithstanding that advice, correct? 11 A. I don't remember Rick's position. This 12 was Mark's position. He believed that 13 basketball, which it is, it's a pickup game and 14 it's just as likely to have been a middle-aged 15 younger adult player and basketball appeals to 16 all ages and that was Mark's opinion and so Mark 17 was expressing his opinion to Rick. 18 Q. Did you have an opinion on this issue? 19 A. Yes. 20 Q. What was your opinion? 21 A. I agreed with that. I thought that AL BETZ & ASSOCIATES, INC. (410) 752-1733
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238 1 Q. And you had a varsity basketball team? 2 A. Yes, we did. 3 Q. That would have been juniors and 4 seniors, correct? 5 A. Probably. 6 Q. And so you would agree with me that 7 people can start to play basketball when they are 8 children? 9 A. Some people do. 10 Q. Some people like David Robinson don't 11 start until they're at the naval academy, right? 12 A. I don't know David Robinson. 13 Q. Just testing your basketball 14 knowledge. 15 A. Sorry. I don't have any. 16 Q. Let's change the tape. 17 THE VIDEOGRAPHER: This concludes tape 18 number 2, the Lynn Beasley deposition. The time 19 is 4:05. 20 (Recess -- 4:05 p.m.) 21 After Recess (4:14 p.m.) AL BETZ & ASSOCIATES, INC. (410) 752-1733
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253 1 A. Today? He's President of Sports 2 Marketing Enterprises. And Senior Vice President 3 of Marketing. He has two titles. 4 Q. Okay. So that's a position in the 5 company, Sports Enterprises Marketing? 6 A. Yes. 7 Q. Okay. That's probably -- what is 8 that? Camel racing? 9 A. Our Winston sponsorship. It's our 10 special events group. 11 Q. Okay. Are you a member of any Board of 12 Directors? 13 A. Yes. 14 Q. Which companies? 15 A. Tal-Tex. 16 Q. Tell the ladies and gentlemen of the 17 jury what Tal-Tex markets? 18 A. It's a textile manufacturer in 19 Martinsville, Virginia. 20 Q. Most famously known for Logo athletic 21 wear, fair to say? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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252 1 Q. Okay. Did he leave or was he asked to 2 leave? 3 A. Well, you know, I wasn't a part of 4 that. You know, so what I'd be saying is what 5 I've heard. Do you want me to say that? 6 Q. What did you hear? 7 A. I think he was asked to leave. As part of his departure the marketing 9 department was restructured at Reynolds, as I 10 understand it, correct? 11 A. Well, I don't know what you mean by 12 restructured. Obviously, since he left, then 13 the people who had reported to him, most of us 14 then reported directly to Andy, the president and 15 CEO. And some people who had reported to him 16 reported to people who, other people. 17 Q. Who was Mr. Pennel? 18 A. Cliff Pennel. 19 Q. What is his position? 20 A. Do you mean today? 21 Q. Yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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225 1 first question, again this was used as an exhibit 2 in a previous deposition, I just want to know if 3 you had seen it outside of litigation or whether 4 you only saw it as part of the litigation. 5 A. All right. 6 (Whereupon, Beasley Deposition 7 Exhibit No. 10422, memo from Duffy to Frydman, 8 dated July 9, 1980, marked.) 9 A. Yes, I only saw this as part of the 10 litigation. I can tell you that. 11 Q. Now, this document talks about 12 obtaining NFO data. Okay? We talked about that 13 and you told the jury what NFO was before, right? 14 A. I said I think it's National Family 15 Opinion, although I've never dealt with NFO 16 data. When I've been at the company it's been 17 tracker data. I've seen these old documents in 18 the course of litigation and I think in the 19 course of reading these old documents, it said 20 that. That's my recollection. 21 Q. Do you recall or can you tell the jury AL BETZ & ASSOCIATES, INC. (410) 752-1733
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245 1 Q. Do you remember being interviewed by 2 Fara Warner? 3 A. Yes. 4 Q. Do you remember the article called 5 Winston's Elect? 6 A. I don't remember the specifics of it. 7 If you show me, I'll speak to -- 8 Q. I'm sorry. That refers to you, 9 correct? 10 A. I don't recall. If you, I haven't read 11 that probably since it came out, so if you show 12 me, I'll be happy to respond. 13 Q. Do you recall stating an intention to 14 do with Winston what we achieved with Camel? 15 A. Yes, I do recall that. 16 Q. That was one of your jobs when you took 17 over the Winston brand? 18 A. Yes. We repositioned Camel to make it 19 a growing brand instead of a declining brand, and 20 that was our same goal on Winston, to make it a 21 growing brand, not a declining brand. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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254 1 A. Logo athletic wear is one of their 2 brands. 3 Q. Are you a member of any other boards? 4 A. Not business. I mean, community 5 boards. I'm not sure what you're asking me. 6 Q. Just business. 7 A. Just business. 8 Q. Is there an employment agreement relating to your current position at Reynolds? 10 A. Yes. I would say so. 11 Q. Can you tell me the terms of the 12 agreement? 13 A. If I'm fired, I get two years pay over 14 three years. 15 Q. Okay. Is there anything else that goes 16 into effect if you're fired? 17 A. Well, there's, I think there's like 18 standard severance but I think that would be 19 superseded by the employment agreement. 20 Q. Is there a noncompete clause in this 21 agreement, if you know? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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248 1 them to give their Marlboro cigarettes to us and 2 then we give them usually two packs of Winston in 3 return. 4 Q. So it's a promotion that gives away 5 free cigarettes, correct? 6 A. It's a sampling for cigarettes, that's 7 right, and we usually try and, I mean, you, I 8 guess you could call it free, but what we usually 9 try and do is make them give up their competitive 10 product so they're giving us something of value. 11 We take that competitive product out of their, 12 hands and put Winston in their hands. 13 Q. But you don't sell the competitive 14 product? 15 A. No. 16 Q. In fact, someone could give you a half 17 empty pack of Marlboros and you would give them a 18 full pack of Camels, or maybe two packs, correct? 19 A. Oh, yes. Because we want them to try 20 our brand and switch to our brand. That's 21 exactly right. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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244 1 A. You know, I was part of creating that 2 brand line extension. 3 Q. Okay. And what was the intent of 4 creating Winston Select? 5 A. The intent of Winston Select was 6 Marlboro's products, we were trying to get 7 Marlboro smokers to switch to Winston, and 8 Marlboro smokers felt like the Winston products 9 were too strong and harsh. But the current 10 Winston adult smokers liked the Winston product, 11 so we were going to bring out a line extension of 12 Winston called Winston Select that had products 13 more like the Marlboro product so we could get 14 Marlboro smokers to switch to Winston. 15 Q. Okay. Do you also get a copy of Brand 16 Week? 17 A. Yes. 18 Q. That used to be Ad Week, Marketing 19 Week? 20 A. I don't remember all the titles but 21 Brand Week, yes. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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261 1 a joint selection. So, you know, but your 2 comment is on the record. 3 MS. PARKER: Thank you very much. 4 MR. HOSKINS: Al is going to put those 5 with the original and send copies of those to 6 everybody. There is a standing order; Al makes a 7 lot of money on these transcripts. But if you 8 guys want additional copies other than what's 9 going to go to Mark and to your local counsel, 10 just tell Mark or call Al and he will be happy to 11 print it out. 12 MS. PARKER: All right. Thank you very 13 h muc . 14 (Examination concluded -- 4:34 p.m.) 15 16 17 18 19 20 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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266 PAGE/LINE CHANGE REASON SIGNATURE: DATE: Lynn Joanne Beasley AL BETZ & ASSOCIATES, INC. (410) 752-1733
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240 1 Q. What was Rick Sanders' job? 2 A. He was my boss at the time. 3 Q. You've got a copy of this, correct? 4 A. Yes. Mark worked for me and then I 5 worked for Rick. 6 Q. Okay. And am I correct that that 7 handwriting is David Iauco's handwriting in the 8 upper right hand? 9 A. Yes. 10 Q. Who would JTW be, if you know? 11 A. John Winebrenner. 12 Q. And who was John Winebrenner? 13 A. I'm thinking, now I can't tell you for 14 sure, but I think this was the order, Mark worked 15 for me, I worked for Rick, Rick worked for Dave, 16 and Dave worked for John. 17 Q. Do you recall the issue that's 18 discussed in this document? 19 A. Yes. tn 1-J 20 Q. Okay: Could you tell the jury what the co 21 issue was? m FJ Ob ~ ~ co AL BETZ & ASSOCIATES, INC. (410) 752-1733
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264 1 C E R T I F I C A T E 2 STATE OF 3 COUNTY/CITY OF ; 4 Before me, this day, personally 5 appeared , who, being duly 6 sworn, states that the foregoing transcript of 7 his/her Deposition, taken in the matter, on the 8 date, and at the time and place set out on the 9 title page hereof, constitutes a true and 10 accurate transcript of said deposition. 11 12 13 Notary Public 14 15 SUBSCRIBED and SWORN to before me this 16 day of , 1998 17 in the jurisdiction aforesaid. 18 19 20 Ln ~ 00 21 My Commission Expires Notary Public ~ AL BETZ & ASSOCIATES, INC. (410) 752-1733
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255 1 A. Yes. 2 Q. What does that say? 3 A. Well, I can't go to a competing company 4 during that time period while I'm being paid. 5 Q. The three-year time period? 6 A. Yes. 7 Q. Is there a confidentiality agreement? 8 A. I'm sure there is. I don't remember 9 the specific wording. But I believe there is. 10 Q. Is there a cooperation agreement? 11 A. Cooperation agreement? What do you 12 mean there? 13 Q. Says you have to cooperate with the 14 company and its counsel in any litigation? 15 A. I don't remember those specific 16 words. It could be in there. 17 Q. Okay. What's a prime prospect group? 18 A. It's, you know, again that's one of 19 those terms that's used differently, but usually 20 that's the group of consumers that, for us, the 21 adult smokers you're trying to get to switch to AL BETZ & ASSOCIATES, INC. (410) 752-1733
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234 1 recollection about a basketball visual that was 2 to be used with a Camel 75th birthday campaign? 3 A. Yes. 4 Q. Could you tell the jury about that 5 visual? 6 A. Yes. It was Joe, I think, as I recall, 7 it was Joe Camel playing basketball. 8 Q. He was twirling a basketball on his 9 fingers, correct? 10 A. You know more about it. It sounds like 11 you've just seen it. I don't remember the exact 12 visual. It probably was. 13 Q. Did you ever play basketball? 14 A. Well, not what you'd really call 15 playing basketball. I mean, you know, like out 16 in the yard there's a basketball hoop. But you 17 mean like competition-wise, ever played? 18 Q. I thought everybody in North Carolina 19 played basketball? 20 A. I didn't grow up in North Carolina. 21 Q. Okay. Tell the jury about your AL BETZ & ASSOCIATES, INC. (410) 752-1733
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259 1 needs to be handled in accordance with that 2 confidentiality order in the Maryland Attorney 3 General case. 4 In addition, I'm under the impression 5 that perhaps you as the Court Reporter and you, 6 the Videographer, have not executed the 7 confidentiality affidavit attached to the 8 confidentiality order and we would certainly 9 request that you do so as is required. 10 MR. HOSKINS: I think he signed one, 11 but if you want him to sign another one, he was 12 picked by R. J. Reynolds -- 13 MR. BEACH: Obviously, there's no need 14 for him to sign it twice. If either of these 15 gentlemen haven't executed it, that they do so. 16 MR. HOSKINS: I understand what you're 17 saying, but just so, you know, you can say you're 18 designating it confidential in the AG case, we 19 question strongly why you would do that but if 20 you want to do it, that's fine. Every document 21 we have used your client, in consideration for AL BETZ & ASSOCIATES, INC. (410) 752-1733
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249 1 Q. Explain to the ladies and gentlemen in 2 Maryland who goes to automobile races down in 3 North Carolina? 4 A. The NASCAR attendance is about 95 5 percent adults. 6 Q. Okay. So the other 5 percent are kids, 7 correct? 8 A. Would be nonadults, that's correct. 9 It's 95 percent adult attendance. 10 Q. NASCAR is pretty popular with children 11 in the states that have NASCAR, correct? 12 A. It's very popular with adults. Again, 13 the attendance is 95 percent adults. 14 Q. Who is Jeff Gordon? 15 A. He's one of the race drivers. 16 Q. Is he one of the most popular race 17 drivers? 18 A. He's one of the most successful. 19 Q. What's his number? 20 A. 24, I think. 21 Q. Okay. You have seen T-shirts with his AL BETZ & ASSOCIATES, INC. (410) 752-1733
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265 1 DEPOSITION ERRATA SHEET 2 RE: Al Betz & Associates, Inc. 3 FILE NO.: AB20514B 4 CASE CAPTION: Richardson vs. Philip Morris 5 DEPONENT: Lynn Joanne Beasley 6 DEPOSITION DATE: May 21, 1998 7 I have read the entire transcript of my 8 Deposition taken in the captioned matter or the 9 same has been read to me. I request that the 10 changes noted on the following errata sheet be 11 entered upon the record for the reasons 12 indicated. I have signed my name to the Errata 13 Sheet and the appropriate Certificate and 14 authorize you to attach both to the original 15 transcript. 16 PAGE/LINE CHANGE REASON 17 18 19 20 SIGNATURE: DATE: 21 Lynn Joanne Beasley AL BETZ & ASSOCIATES, INC. (410) 752-1733
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260 1 settlement in Minnesota, agreed to make available 2 to the public, but you should also be aware that 3 there is no protective order in the Richardson 4 case, and there is no provision for sealing this 5 deposition. And if you wish to do so, then you 6 need to go to Judge Angeletti for a motion for 7 protective order. I'm sure I'm telling you 8 something that Mark already knows. 9 But if you want Mr. Betz and the 10 videographer to sign it, that's fine. I thought 11 that your local counsel had, you know, resolved 12 that a long time ago. 13 MR. BEACH: You're the person who 14 retained these people for the purpose of this 15 deposition, so it seems to me that's your 16 responsibility. 17 MR. HOSKINS: You know, you should be 18 careful not to say something you don't have any 19 information about, Mr. Betz is here on behalf of 20 all the parties, has been retained as a court 21 reporter on behalf of all of the parties, it was AL BETZ & ASSOCIATES, INC. (410) 752-1733
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251 1 A. That's right. And so we brought out 2 much of what was like the original design and 3 reintroduced the brand as a line extension of 4 Camel. 5 Q. Okay. Camel was originally marketed as 6 having a Turkish blend, correct? 7 A. Yes. Turkish and domestic, not just 8 Turkish, Turkish and domestic blend. 9 Q. Who was Mr. Sorensen? 10 A. Avay Sorensen, he was the Executive 11 Vice President of Marketing. 12 Q. When was he the Executive Vice 13 President of Marketing? 14 A. Would have been, I guess, about a year 15 and a half ago. 16 Q. You replaced Mr. Sorensen in that 17 position, correct? 18 A. Well, actually what happened is Mr. 19 Sorensen left and the position was vacant. And 20 so for about, I don't know, probably 8 months the 21 position was vacant and then I took the position. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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243 1 basketball was something that people of all ages 2 played, younger adults played in pickup games and 3 et cetera. 4 Q. Mr. Iauco agreed with that position as 5 well? 6 A. Yes. It says here he did. 7 Q. How about JTW? 8 A. I don't recall. 9 Q. Okay. But to your knowledge, this 10 visual was never used? 11 A. Yes. I believe that was the outcome. 12 We never ran the visual. 13 What? Why are you looking at me like 14 th t? a 15 Q. Let's talk about your press clippings. 16 You worked on Winston Select, correct? 17 A. Yes. 18 Q. And that's when you started smoking 19 Winston Select, correct? 20 A. Well, the brand didn't exist before. 21 Q. Okay. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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237 1 want me to think if I've ever known anyone who 2 played basketball? 3 Q. Yes. 4 A. I'm sure I have. 5 Q. Okay. When did they start playing 6 basketball? 7 A. You know, I don't really know. The 8 people I've known, when did they start playing 9 basketball? 10 Q. Right. 11 A. I don't know. I guess in high school I 12 knew people that played basketball, as an adult I 13 know people who play basketball. 14 Q. In high school you probably had a 15 junior varsity basketball team, right? 16 A. I believe we did. 17 Q. Okay. And that would have been 18 freshman and sophomores from your high school 19 class, right? 20 A. I'm guessing so. I mean, you know, I 21 don't recall specifically, but it was probably. AL BETZ & ASSOCIATES, INC. (410) 752-1733
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267 1 I N D E X 2 Deposition of Lynn Joanne Beasley 3 May 21, 1998 4 5 6 EXAMINATION BY: Page 7 Mr. Hoskins 8 8 9 10 EXHIBIT: Description Page 11 No. 10400, 20/20 Telecast Growing Up In 12 Smoke, October 20, 1983 ....................... 54 13 No. 10414, memo re: advertising 14 practices, dated May 28, 1992 ............... 58 15 No. 10401, Strategic Research Report, dated 16 February 29, 1984 ............................. 71 17 No. 10404, memo from Hind to Tucker, dated 18 January 23, 1975 .............................. 92 19 No. 10406, Marketing Research Report, dated 20 February 1, 1985 .............................. 96 21 No. 10407, memo from Caufield to Iauco, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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241 1 A. The issue was this Camel 75th birthday 2 basketball visual. 3 Q. Okay. And if you direct your attention 4 to the background statement, can you see the 5 second full sentence? 6 A. Yes. 7 Q. Brand's legal counsel has advised 8 against using the basketball visual on the 9 grounds that the game of basketball is a, quote, 10 youth activity, closed quote. 11 Do you see that? 12 A. Yes, sir, I do. 13 Q. Was Mr. Rucker the legal counsel for 14 the brand? 15 A. Yes. 16 Q. And is it fair to state that each brand 17 had their own legal counsel? 18 A. No. Tom was for all the brands. 19 Q. Okay. Am I correct that 20 notwithstanding this advice, the visual was used 21 for the Camel 75th birthday campaign? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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247 1 A. The Current Affair program did this 2 kind of like sting operation on us where they 3 sent underaged people in repeatedly to try and 4 get cigarettes from the samplers we had at the 5 races at that time, NASCAR races, and they were 6 able to have some underaged people, many were 7 turned down but some were able to obtain 8 cigarettes from our samplers, which was a huge 9 problem, and we completely revised our procedures 10 to insure it didn't happen again. 11 Q. You have used the term samplers. Could 12 you describe to the ladies and gentlemen of the 13 jury what that means? 14 A. Yes. When we're at a race, we use it 15 as an opportunity to intercept competitive 16 smokers. So if you're an adult smoker, we 17 approach you and we ask you, you know, what you 18 smoke. For instance, you might be a Marlboro 19 smoker, and then we give a little pitch about our 20 brand Winston and why we would like you to try 21 the Winston brand. And we usually try and get AL BETZ & ASSOCIATES, INC. (410) 752-1733
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0 SECTION I THE IMPORTANCE OF YUUNGER ADULT SMOKERS ~
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263 1 C A P T I 0 N 2 The Deposition of LYNN JOANNE BEASLEY, 3 taken in the matter, on the date, and at the time 4 and place set out on the title page hereof. 5 It was requested that the deposition be 6 taken by the reporter and that same be reduced to 7 typewritten form. 8 It was agreed by and between counsel and 9 the parties that the Deponent will read and sign 10 the transcript of said deposition. 11 12 13 14 15 16 17 18 19 20 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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257 1 not causing kids to like smoking any more by 2 being aware of the campaign or liking the 3 campaign, it did not cause them to have more 4 positive attitudes towards smoking, didn't cause 5 them to start smoking, you know. And then the 6 FTC came out with that decision after they 7 investigated the campaign for four years in 1994 8 that said, you know, there was no evidence that 9 the campaign caused kids to start smoking or 10 smoke more. 11 So in the course of that I think 12 outside lawyers presented some evidence and our 13 internal lawyers, that would be like the only 14 thing in that area that you're talking about. 15 Q. I want to leave aside litigation and 16 what may have been done to support your company's 17 position in litigation. 18 A. Okay. 19 Q. Leaving that aside, to your knowledge 20 has Reynolds ever done any work or any research 21 itself to determine whether or not its AL BETZ & ASSOCIATES, INC. (410) 752-1733
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258 1 advertising influenced and motivated children 2 under the age of 18 to use your products? 3 A. We don't do any research, our company, 4 on those under 18. 5 Q. So it would be fair to say that the 6 answer to my question is no, no research was done 7 on that issue, correct? 8 A. We don't do any research on that 9 issue. We don't do any research on those under 10 the age of 18. We only do research on adults who 11 smoke . 12 Q. Thank you. Those are my questions. 13 MS. PARKER: All right. Thank you. 14 MR. HOSKINS: Any questions from you? 15 MS. PARKER: We reserve the right to 16 read and sign. 17 THE VIDEOGRAPHER: This concludes the 18 the deposition of Ms. Lynn Beasley at 4:32 p.m. 19 MR. BEACH: We have invoked the 20 provisions of the confidentiality agreement that 21 pertain to this case, therefore the transcript AL BETZ & ASSOCIATES, INC. (410) 752-1733
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269 1 on Young & Rubicam stationery ................ 211 2 No. 10418, document titled Camel Brand, 3 Promotion Opportunities, dated May 4, 1990... 219 4 No. 10420, memo from Nordine to Burrows and 5 others, dated July 16, 1984 .................. 220 6 No. 10421, memo from Sherrill to Smith, 7 dated September 26, 1972 ..................... 222 8 No. 10422, memo from Duffy to Frydman, 9 dated July 9, 1980 ........................... 225 10 No. 10423, letter from MacGovern to Sugg, 11 dated December 9, 1959 ....................... 227 12 No. 10424, memo from Miller to Etzel and 13 Biswell, dated October 15, 1987 .............. 229 14 No. 10426, memo from LaBrecque to Sanders, 15 dated December 16, 1987 ...................... 239 16 17 18 19 20 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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268 1 dated March 12, 1986 ......................... 108 2 No. 10408, memo from Creighton and Penick 3 to Fackelman, dated December 4, 1987 ......... 115 4 No. 10409, memo from Breininger to McKenna... 118 5 No. 10410, Agency Memo from Breininger to 6 Schweig, dated August 7, 1987 ................ 130 7 No. 10411, memo from Prasad to multiple 8 recipients, dated May 18, 1989 ............... 140 9 No. 10412, memo from Weber to D. W. von 10 Arx, dated April 29, 1988 .................... 150 11 No. 10413, document entitled Key Business 12 Issues ....................................... 154 13 No. 10427, Marketing Research Report, dated 14 January 16, 1989 ............................. 172 15 No. 10415, memo from Bender to Beasley, 16 dated February 6, 1990 ...,. ................. 190 17 No. 10416, memo from Winebrenner to Hall, 18 dated April 3, 1989 .......................... 204 19 No. 10417, document entitled Camel Y & R 20 Orientation .................................. 207 21 No. 10425, document dated October 31, 1991, AL BETZ & ASSOCIATES, INC. (410) 752-1733
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250 1 number on it, correct? 2 A. Yes. 3 Q. And kids wear those T-shirts, correct? 4 A. Probably some kids do. I mean, I 5 haven't seen kids with it on, but -- 6 Q. They sell them in probably every 7 department store in North Carolina, yes, Gordon 8 T-shirts for kids; isn't that correct? 9 A. I doubt they sell them in every 10 department store, but there are probably some 11 stores that have them. 12 Q. Okay. Tell the ladies and gentlemen of 13 the jury what Red Kamel is? 14 A. That's a line extension of Camel 15 cigarettes, and it was a brand that was brought 16 out originally back in 1913 when Camel was test 17 marketed, Red Kamel was also test marketed, and 18 the company decided to go with Camel with a C 19 instead of Camel with a K, Red Kamel. 20 Q. Red Kamel has a K, spells Camel with a 21 K? AL BETZ & ASSOCIATES, INC. (410) 752-1733
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0 1 SECTION 11 SUCCESSFUL "FIRST BRAND" STRATEGIES OF THE PAST 0 0
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256 1 your brand. 2 Q. Am I correct that Reynolds does not 3 study the effect its advertising has on people 4 who are under the age of 18? 5 A. We don't do marketing research on 6 people under the age of 18. 7 Q. So does Reynolds have any way of 8 knowing what would appeal, motivate or influence 9 a 17 year old? 10 A. With regard to advertising? 11 Q. Right. 12 A. I mean, no, not that I know of. 13 Q. And, to your knowledge, has Reynolds 14 ever done any work to determine whether or not 15 its ads were influencing and motivating children 16 under the age of 18? 17 A. I mean, the only thing that I can speak 18 to would be the FTC investigation where the FTC 19 was investigating the Joe Camel campaign during 20 the first investigation and our outside lawyers 21 presented evidence about the Joe Camel campaign AL BETZ & ASSOCIATES, INC. (410) 752-1733
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.: / 51801 4601 50192 8q97
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262 1 STATE OF MARYLAND 2 SS: 3 I, Alfred A. Betz, a Notary Public of the 4 State of Maryland, do hereby certify that the 5 within named, LYNN JOANNE BEASLEY, personally 6 appeared before me at the time and place herein 7 set out, and after having been duly sworn by me, 8 was interrogated by counsel. 9 I further certify that the examination was 10 recorded stenographically by me and this 11 transcript is a true record of the proceedings. 12 I further certify that I am not of counsel 13 to any of the parties, nor an employee of counsel, 14 nor related to any of the parties, nor in any way 15 interested in the outcome of this action. 16 As witness my hand and notarial seal this 17 25th day of May, 1998. 18 19 My commission expires: 20 November 1, 1999 ONotary Pul'blic 21 AL BETZ & ASSOCIATES, INC. (410) 752-1733
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---- -• . . .r.. . ._. _ _ ~ _ . .~.. - .... ~ . _.. . . _ . ' (B&w) PROTECTED BY MIMYE,SOTA TOBACCO LTITGATION PROTECTIVE ORDER '~- Stassel: - If the purpose of it isn't to $all cigarettes,-.why do they •... ~- `. sponsor *it, -out of the goodness of their heart? Browder: . I would imagine that's part of the reason . why they sponsor it, because they've been approached by various people for " ` sponsorship and ... Stassel: 0 Be good guys... ~ Browder: ~ Sure. ' Stassel: Fed Trade Commissioner, Michael Purchak. Purchak: They're promoting those sporting events and other events because they create an aura ot legitimacy, of wholesomeness. They're gaining innocence by association. Stassel: They're also doing a lot of associating with music. There's the KOOL JAZZ Festival. Barbara Mandreil's got money from Marlboro. Juice Newton and Alabama's current tour is sponsored by Salem. But sometimes musicians won't take the money. James Taylor, Peter, Paul and Mary said they wouldn't perform here at the Boston Common last summer unless Camel bowed out as sponsor. Camel did. Hall and Oates have turned down tobacco money because of their concern about young people in the audience. So have the Oak Ridge Boys. Cigarette companies have come to you and said we'll pay you if we can run our ads around your concert and you said no. Oak Ridge Boys: we said no. Because we didn't want to influence young people in such a way that would make them think that the Oak Ridge Boys say smoking cigarettes is okay, because we don't believe that it is. 6 •A 003C0266
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• SECTION V KEY TREND DETAIL • 0 l C
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SECTION IV IMPIICATIUNS AND KECOMMENDATIONS FOR RJR
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• By omission, no brand whose product messages remind the consumer of product negatives or portray the brand as a'Veak cigarette" has succeeded as a younger adult first brand. For example, any. brand which has specifically emphasited "low tar" (which implies remaining tar) has been limited to switching gains among maturing smokers.
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'(Bdc W) PROTECTED BY MINNESOTA TOBACCO LITIGAT'IOti PROTECTIVE ORDER Browder: It .ay be or it may -not.be:: ~ We don't knoir. Stassel: " . _ .. .~~+ . How ean you say it.might•not be harmful; yet most of the people who die of lung cancer smoke? I mean, how can there not be a connection? - ~".. ... :~.~- . ~ . - ... .. Browder: We certainly are aware of the fact that people die on a daily basis. Some of them are smokers and some of them are not smokers. . - (Commercial) Call for.Philip Morris. Stassel: Even though they say they're not convinced that cigarettes kill, tobacco companies say they voluntarily cancelled their radio and TV ads before Congress banned them. Why? Because the broadcast media had grown to a position of unique appeal for young people. It is kids, of course, who are the most vulnerable, but tobacco companies claim they've never wanted kids to smoke. Browder: We feel very strongly that ci arette smoking is an adult custom that one should not even consider until they've reached the age of maturity. Stassel: What's maturity? 8rowder: Anyone over the age of 21. Stassel: But studies show that 80% of all smokers started before they were 21. 3 2 003C0263
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f ' • External factors of key interest are social acceptability, which could revolutionize the future market, and pricing, whi4h has been critical in 1983. Both will re;uire careful understanding;and execution to reach younger adult smokers. ~ • The ke_y_ demographic growth sectors among younger 2dult smokers are Blacks, Hispanics, and females. In terms of wants, the desire to "move up in the world" is likely to become even more intense, but expressed in more entrepreneurial ways. Based on history, these opportunities could be realized by brands with a balanced younger adult base as well as, perhaps, narrowly targeted ones. • The key out-of-touch competitor is Marlboro, which now relies more on younger adult identity/belonging generated by its own users, rather than on the "masculinity" of its advertising. Marlboro is too broad (half the younger adult smoker market) to be addressed as a single competitor and should be attacked by a variety of younger-adult- centered rather than competitor-centered strategies. RJR should emphasize innovative points of difference from existing brands in attacking *h P_xounger adult smoker market, using head-on/imitative eiforts primarily as defensive measlires. Phili- Morris may have recognized !'.arlboro's vulnerability'and be using ir: as a "feeder brand" for Virgtnia Slims and Merit. This increasis'these brands' importance as competitive targets. Among,RJR established brands, VANTAGE has the best switching performance versus Marlvjoro and may be able to maintain/enhance that performance. • Product_vants of younger adult smokers, especially mild/smooth/less with positive copy. harsh deliver , should be full understood, reflected in action standards for RJR's younger adult targeted pro ucts, and communicated 11
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0 YOUNGER ADULT SMOKERS: STRATEGIES AND OPPORTUNITIES TABLE OF CONTENTS MANAGEMENT SUMMARY i PACE 0 0 1 SECTION I: THE IMPORTANCE OF YOUNGER ADULT SMOKERS 2 SECTION II: SUCCESSFUL "FIRST BRAND" STRATEGIES OF THE PAST 8 SECTION III: KEY LEARNING -- SUMMARY/CONCLUSIONS 27 SECTION IV: IMPLICATJONS FOR RJR 33 SECTION V: KEY TREND DETAIL Pricing Social Acceptability Black/Hispanic Younger Adult Smokers Fevale Younger Adult Smokers "Moving Up in the World" 38 51 APPENDICES a a
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I. THE IMPORTANCE OF YOUNGER ADULT SMOKERS J Within five years, younger adults (18-24) will drop from 18% to 15% of"'the total adult population (18+). They will continue to decline in numbers until at least 1995, as the crest of the Baby Bubble pushes farther past age 25. This shift in the population will cause smokers aged 18-24 to fall from 16% to 14% of all smokers by 1988. Even 13% would not be surprising, since smoking incidence has been declining more rapidly among younger adults than any other age group in recent years (see Appendix A). Why, then, are younger adult smokers important to RJR? 1. VOLUME Younger adult smokers are the only source of replacement smokers. Repeated government studies (Appendix B) have shown that: • Less than one-third of smokers (31%) start after age 18. • 0 • Only.5X of smokers start after age 24. Thus, today's younger adult smoking behavior will largely determine the trend of-1;hdustry volume over the next several decades. If younger adults turn away from smoking, the Industry must decline, just as a population which does not give birth will eventually dwindle. In such an environ- ment, a,positive RJR sales trend would require disproportionate share gains and/or steep price increases (which could depress volume). 2. MARKET SHARE -- THE "FIRST BRAND" ADVANTAGE A. ANNUAL GAINS FROM THE "NEW" MARKET The 18-year-old smokers in the 1983 market were worth about 1.6 share of total smokers. B ca turin half of these 18- ear-old amokers, Marlboro gained .8 points of total smokers without needing to attract a single brand switchcr. This gain was the equivalent of a successful two-style new brand introduction, with no cannibalization and no development/introductory costs. -Z-
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Newport Newport was completely redone between 1970-73 -- campaign, product, package,: When the "new" Newport went to market in 1973, it went only against the ~ northeastern U.S., which had been a focal point of Black population growth throughout the sixties as Blacks left the south. Newport was the first menthol to emphasize imagery but, on the bottom line, Newport went after Kool with dollars. Newport's total ad spending in the mid-1970's was only about 3026' of Kool's, but it was concentrated in some 20% of the U.S. Half of Newport's budgtt was in out-of-home. By 1978, Newport's regional spending against Blacks equalled Kool's national Black market spending. Newport had picked Kool's prime market, with a size it could afford. and essentially bought it. The results among younger adult smokers, especially younger adult Blacks, were immediate. NEWPORT I i9.c Mo tw.ay wmCt aRr* so t.n .es - ».o 19" -24=
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. . ~ . _ `T~ . r. • -,.. .. . . ~ . .. • ._. . . . j: . .. .- • B&W1 PROTECTED BY AII_*iN'ESOTA TOBACCO LPTIGATION PROTECIWE ORDER Stassel:, 4 0 When we went to a team America soccer game,• what iMpressed us ~.. •...s was how thorough cigarette. sponsorship_ can; ba. ~;:You can't go. anywhere without seeing Minston: -. The• ticket takers wear ' . r~~ Winston hats. And once you're•inside, you're greeted by young women who give Winston's away. . . . _ . . -.z Person getting samoles: z -- . _ . . . , . . . . . . , L.• .,. Cigarettes, cigarettes. Sampler: r.~ , C Would you like regular or ... M ~ ~ . ~ s Give me regular. __ ~ Stassel: Z Even the lady selling programs wears Winstons. z Reynolds Tobacco says the audience here is predominantly adult, ~ but there are lots of kids at soccer games. The North American ~ Soccer League says soccer's the fastest growing sport among > teenagers. Some of the kids here wesr•their free Winston hats, ~ helps keep the sun out of your eyes as you watch the ^ cheerleaders. And even at halftime, you get Winstons. You win money if you ,-; kick the ball through the Winston siqn. y ~ Soccer is very popular with kids. You cannot go to that game ~ without seeing Winston everywhere. Why? Z ~ ~ .. Browder: ~ Why not? _ Stassel: You just said you don't want to expose kids to smoking... Browder: That's not the same. That is not encouraging anyone to smoke, ~ .John. 0 ~ 5 GO ~ '.a Person gettino samples: 003C0265
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~~ _ ....~.. _. . . _ ..._ _ ~.._ __ - - (B&w) PROTECTED BYMI,NNESOTATOBACCO LITIGATTON PROTECITVE ORDER ' 0 •The fTC ordered _8arclaylto 'stop vsinc :the•_Z aQ. 'L: tar r,;claim aos out •earclaY won•t stop: •;:They!re'_atSII-tdvertisinQ 'tar• free.'• Now all of this is being touqht over* in court. Your tax ao2lars•pay for it.' .. ;` - •i called Barclay to ask, ;YDid,you desiqit ; tthis cisarette just ..,.:~,.~.~ `.: .~ , x to cheat the machine?' Barclay said .no,'ttfiey put the holes in ~ ~ they say to swirl the s"moke and improve the taste. . I guess the point for you to reeeober•is that indeed these cigarettes are .- ~ very low in 'tar,' but oaybe 8arclay is not that low no matter ., .~ „ what the ads say."; . Z: .4. -C ~ D 2 Z ... V 2 TV M A . . .. . . •,, C L VA r 003C0270
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~ Opening Remarks: Narrator: 20/20 TELECAST GROWING UP IN SMOKE October 20, 1983 On the ABC news magazine, 20/20, tonight, kids under 21, America's youngsters, are they the new target for cigarette manufacturers? • John Banzaff: Spokesmen. for the industry say no, but cigarette advertising is everywhere--sporting events, rock and jazz concerts, billboards, magazines and giveaways. Consumer reporter, John Stassel, challenges the industry, their money and their methods, in Growing Up in Smoke." understand the dangers. , Narrator: You want to get them as young as 10 and 12 and 14, get them interested in your product, get them hooked•before they Hugh Downs: Up front tonight, turning your child into a smoker. is there a campaign to addict a new generation of smokers? For almost 30 years, the research and the warnings on the many harmful effects of cigarette smoking have multiplied. 8ut, where in ..19Sa the number of cigarettes sold was 387 billion, this year's .estimate is 617 billion. Now one fact that may help clarify this odd progression of ~ events is that more money is spent for promoting cigarettes than for any other product and some of this promotion seems aimed at children. A viewer sent us a complaint on the impact of that promotion and consumer correspondent, John Stassel, has been investigating. John. ler!!S(Ey Exhibit # I 0 Date: 4E: ,1 I Alfred A. Betz, RMR '16 '' (Bdc W) PROTECTED BY MIMYESOTA TOBACCO LITIGATIOIY PROTECTIVE ORDER ~,~ . . . . f .' . ~.- . • ,.. . ~ r v A 003C0261
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i adult smokers left to defend But, Pall Mall becamo out of step with its times when the cancer scares of the mid-1950's created the filter boom. Pall Mall might have dffended itself with a filter line extension, but it didn't try until 1965, when.it had few youpger After Pall Mall peaked, its younger adult franchise began to skew male. Younger adult female smokers -- the rising trend Pall Mall had captured -- moved on. But the brand loyalty and aging benefits of the younger adult smokers who remained with Pall Mall bolstered its market share for another years. 10 PALL MALL SHA,ZE A MONG 18-YEAR-OLD SM0 1arRS 1940's 1950-54 1955-59 1960-64 1965-74 Males 9% 16% 30% 22 4 I Females 1 18 40 30 13 2 OT L T A 10 > 26 > 30 < 19 < 3 Source: 1983 SDS 1 ATC's leading position among younger adult smokers, first with Lucky Strike and then Pall Kall, pushed it to 01 in the industry in 1940, when it passed RJR. However, since Pall Mall was ATC's last successful younger adult entry, the brand's downturn signalled the future performance of ATC as a company. AMERICAN TOBACCO r:+t •tv *%..:.c -V-WVVt s..e _-T-. t1s0 i&/CIS VSL~ W-4 4wC fC. fM 1 -10-
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MDD ABSTRACT FORM r PROJ ECT ~ NUhSB R None TITLE: Younger Adult Smokers: Strategies and Opportunities AUTHOR: Diane S. Burrows DATE STARTED: DATE COMPLETED: --- 2/29/84 TYPE OF RESEARCH: SECTION MANAGE.R: Strategic R. C. Nordine ABSTRACT: Younger adult smokers are shown to be critical to long term brand/company growth in the past, present, and future. Younger adult performance of the six major brands of the last half century was analyzed to identify four common strategies/circumstances leading to their younger adult strength. They capitalized on: I.- Changes in external factors. 2. Gtr)wth sectors among younger adult smokers. 3.. Out-of-touch competitors. 4. Product" mildness, communicated positively. Key recommendations include: 1. Establishment of a separate younger adult smoker program/unit, with customized procedures/measures, improved information resources, and a less competitor-centered focus. 2. Attention to Blacks, Hispanics, females, social acceptability, pricing, and potential enhancement of product acceptability. KEY WORDS Younger Adult Smokers Pali Mall 4TINSTON Marlboro koo7. SALEM Newport Blacks Hispanics Women Social Acceptability Pricing 3129LB4 Da t e
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! 3. SWITCHING OPPORTUNITY / Younger adults are more likely to switch brands than any other smoker ~ group, i.e., they are a concentrated switching target. Their very high propensity to also switch styles within their brand suggests the latent potential for even higher rates of brand switching. PROBABILITY OF SWITCHING IN 6 M0. BRAND FAMiLY STYLE IN BRAND X INDEX X INDEX 18-24 16.6% 126 21.5% 178 25-34 13.4 102 12.8 106 35-49 12.1 92 10.4 86 50+ 13.2 100 11.1 92 TOTAL 13.2 100 12.1 100 Source: NFO, 1981-1983 (first half). ) Younger adult brand switchers (who then remain loyal) can also contribute the major portion of their aging benefits, including increased usage, to their second brand. Thus, switching by smokers 18-24 can yield a significant part, but not all, of the share advantages associated with a "first brand". Older switchers confer less, or none, of these benefits.
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i Philip Morris may itself recognize Marlboro's vulnerability.~ (Certainly thp brand's switching losses among 18-24 year olds have been visible in the ~ 1980's, averaging the equivalent uf .3 share points of total smokers every year.) While Marlboro could not be .•.epositioned after 20 years of the same campaign, some clues suggest PM may be using other strategies to protect Marlboro's contribution to their younger adult share strength: . Virginia Slims and Merit have been gaining disproportionate switching from Marlboro among smokers 18-24, allowing Philip Morris to keep 32% of Marlboro's net switching losses from 1980 to 1983 within the corporate fold -- nearly twice PM's fair share. (See Appendix H). This suggests that Marlboro might serve PM as a "feeder brand", capturing 18-year-old smokers who can then be channeled to other PM brands. • Virginia Slims' performance as an 18-year-old "first brand" has improved markedly in recent years. This may relate to its softer, more casual executions, which are more consistent with the younger adult Marlboro female's desire to not be "too bold". v1RCIN!A Sl1nS wm w...M .,...... i ..ore.wm~w • The Merit repositioning seems to draw it closer to Marlboro, perhaps shortening the supply lines. (
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, C. MOMENTUM FROM AGING An analysis of Tracker shares from 1979-83 (see 4ppendix E) shoV that, apart froM short term fluctuations: ~ . Incoming 18-year-old smokers and the movement of its existing franchise into older age brackets can explain all of Marlboro's smoker share gains in the past four years. Amon smokers 25+, all of Marlboro's gains are attributable to this aging :.ovement -- switching appears to havp had no net long term effect. If MArlboro merely holds its share among younger adult sn." .1 in the next five years, it is likely to gain at least 3 pointb f smoker sha:e due to the a;ing movement of its present smokezs (assuming its switching is no worse than in 1980-83). If Marlboro continues to gain share among younger adult smokers at its present rate, its overall smoker share could easily increase by a total of 5 points, from :9X in 1983 to 24% by 1988. . Newport's growth can also be entirely explained by its younger adult strength and aging. Over the next five years, Newport is likely to gain .8 points of total smokers without any additional growth among younger adults. If its younger adult gains also continue, it could exceed a 4% total smoker share by 1988, a gain of about 1.5 points over 1983. I These examples demonstrate the momentum younger adult smokers givo a brand. Although a competitor could slow this momentum by attracting switchers, the "first brand" would hold the high ground of brand loyalty in such a battle. D. LONG-TERM DIVIDENDS -- RATE PER DAY Government and RJR studies spanning several decades have shown that smokers increase their consumption as they age. The chprt below shows that smokers 25+ consumed 22% more than smokers 18-24 on average during 1980-82. RATE PER DAY (1980-82 AVG.) % Increase Index AGE Ci ts. Vs. 18-24 vs. Total 18-24 26.2 85 25-34 30.6 + 17% 99 35-49 34.1 + 30% 110 50+ 31.2 + 19% 101 1 Total 25+ 32.0 + 22% 103 TOTAL 31.0 + 18% 100 Source: Incidence/Rate Report, Year 1982. -4-
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a "Extra length" Pall Mall King entered the market in 19~7. Initially, it had a prestige positioning, but was soon refocussed to emphasize mildness and "easy" smoking. From the beginning, Pall Mall's development was about twice as high among younger adult females as males. This captured the rising trend of the younger adult smoker market and also made good strategic sense for ATC -- Lucky Strike skewed male and Pall aall skewed female. Thus, Pall Mall was in tune with the demographics of the times and its company's mix. Mildness is a Pleasure with Pall Mall . 0 1 1. 0 . 0 •rrw- •--~~•- r ~....-.. . --_-~.. ~ ~ ...__ .~~ Qorig..arL1 ._ ~.-.~..._-~.._ 0 0 4 m I -i3-~- 1956 I During the 1940's, Pall Mall's share grew to 10% among all 18-year-old smokers, to 18% among younger adult female smokers, and was still rising. But since Pall Mall attracted fewer older smokers, its market share was only 3% after a decade"(1947). By the 1950's, though, the aging payoff was inevitable: Pa11_,Mall's SOM soared to 15%, with a younger adult smoker share twice that high. PALL MALL I71t fCrR ROt11r0 AK"O[ rwRi WOC:sr wlflal a/1.* w 1W .w s -9-
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I s t1RP.L60R0 .nc ,uw *k«r.o A.c*"c 5+wet 1{A1lu, SIUI~F - ~ Itl-fLU-OLD S1uAt i V1taSSOt: / i I'1 oiS7ot: ISALCM Lt. 100. *e.9ort. V. Sllsa, C1uQ1. »+o ! - e ~ . ~...T-~~~.~....~. ~ l..o I»o 1960 ll Waaf wmn4 .rttt ow cwn sos I»o Despite Marlboro's masculine positioning, it appears to have been a dual sex brand among younger adult smokers from the beginning. Marlboro skewed male to the same extent the total younger adult smoker market did, but was almost equally developed among younger adult males/females until after 1973. SHARE AMONG 18-YEAR-OLD S!lOKERS Develo ment Index Marlboro Total a e em Te 1955-64 8.5% 101 98 1965-74 31.8 104 94 1575-79 40.6 107 94 1979-83 50.3 116 84 Source: 1983 SDS 0 This balance was advantageous to the brand since the 1960's drop in female importance was only temporary. If Marlboro's masculine sitionin had made it a heavil male brand, it would have sitione the brand on a long term ec ining tren . -1'7-
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Key Points About'Pall Mall: J . Pall Mall's "extra length" was a product breakthrough in its day r- one that promised extra mildness. It caught on right away with younge~r adult smokers. . Pall Mall grew quickly among younger adult smokers because it was in tune with the 1940's, when the major trend in smoking was the rising importance of younger adult female smokers in the market. • Pall Mall's younger adult strength was a long lead-indicator of its rapid market share growth in the early 1950's. • Pall Mall's downturn among younger adult smokers was alao a lead- indicator of the brand's eventual decline, although its market share held for another decade due to the loyalty and aging of the younger adult smokers it attracted in earlier years. s Pall Mall became overdeveloped among males only during its decline. • Since Pall Mall was ATC's last major younger adult brand, its downturn was a lea3ing indicator of ATC's decline.
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YOUNGER ADULT SMOKERS: 9 1 STRATEGIES AIZD OPPORTUNITIES . ( PURPOSE MANACEMENT SUMMARY This is intended to assist RJR in optimizing its strategic position with respect to younger adult smokers (18-24) by clarifying their importance versus smokers 25+, identifying strategies which have been most effective against younger adult smokers in the past, and applying this learning to RJR and its current enviror.ment. This summary provides a broad overview of the most critical points and key . ideas in the report. However, it was necessary to omit many important points in order to be brief, and readers are encouraged to read the entire document. THE IMPORTANCE OF YOUNGER ADULT SMOKERS ~ Younger adult smokers have been the critical factor in the growth aud decline of eve ma or brand and compan over the last 5 ears. The wil centinue to just as important to bran s companies in t e future for two simp e reasons: • The renewal of the market stems almost entirely from 18-year-old smokers. No more than 5% of smokers start after age 24. • The brand loyalty of 18-year-old smokers far outweighs any tendency to switch with age. Thus, the annual influx of 18-year-old smokers provides an effortless momentum to successful "first brands".* Marlboro grows by about .8 share points per year due to 18-year-old snokers alone. On the other hand, brands/companies which fail to attract their fair share of younger adult smokers face an uphill battle. They must achieve net switching gains every year to merely hold share. By not attracting its fair share of 18-year-old smokers, RJR yielded a .5 point ingoing share advantage to PM in 1983. Marlboro and Newport, the only true younger adult growth brards in the market, have no need for switching gains. All of their volume growth can be traced to younger adult smokers and the movement of the 18-year-vlds which they have previously attracted into older age brackets, where they pay a consumption dividend of up to 30%. A strategy which appealed to older smokers would not ~ pay this dividend. * i.e., those which appeal to 18-year-old smokers rather than switchers ages 19-24. -i-
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IHPLICATIONS/RECOP4MENDATIONS FOR RJR 1. Younger adult smokers are critical to RJR's long term performance aAd profitability. Therefore, RJR should make a substantial_longt term commitment of manpower and money dedicated to youngert adult smoker programs. An unusually strong commitment from Executive Management will be necessary, since major volume payoffs may lag several years behind the implementation of a successful younger adult smoker strategy. This time lag can also magnify the penalties for wrong .:urns in the development and implementation of younger adult smoker programs. To prevent such problems: • RJR should develop objectives, planning procedures, and marketability criteria for younger adult brands/programs which reflect their unique, long term character. These may differ significantly from the approaches/measures which are appropriate to established brands or to new brands addressing older smokers by, for example, emphasizing consumer-based rather than volume-based action standards. . • RJR should make resources available to develop/improve its c~2abilities to thoroughly identify and track demographics, values, wants, media effectiveness, and brand performance within sectors of the younger adult smoker population. These tools will be critical to the development and implementation off effective programs addressing younger adult smokers. • Because of the sensitivity of the younger adult smoker market, brand deve lopment /management should encompass all aspects'of the marketing mix and maintain a long term, sing e-minded focus to all elements -- product, advertising, name, packaging, media, promotion, and distribution. Tactics which could negatively affect the integrity of the strategy should be avoided. . R,Jfi should seek to better understand and capitalize on the factors/ strate ies which have succeeded for oun er adult brands of the flast. Since RJR's processeptools have been better attuned to suitching eftorts than to "first brand" strategies, time and learning will clearly be required to fully assess the opportunities available through these avenues. It should be noted that the new/established brand programs in the 1984 Plan already address the major issues/trends identified below, within the framework of current knowledge/processes. These Plans should continue as a basis for RJR's 1984 marketing efforts, but should be enhanced by a full-time dedication of resources to ensure a solution to the problem. 0 -iii-
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1 In the 1980's. Newport started rolling out across the South Atlantic, where migration patterns of the 1970's showed Blacks had been re urning. Tracker data during this rollout period tend to confirm that Newpoit gained among. younger adult Whites as it gained distribution, but its fundamental growtq has been due to younger adult Blacks. NEWPORT 2ENTN0L SKARE OF SMOKERS 1st Half 2nd Hal; 1st Half 1980 1981 1982 1982 1983 AGES 18-24 ~ k Bla 18 6% > 22 4% > 25 2% > 97 28 > 36 6% c . . . . . . White 4.4 4.9 5.5 5.0 4.9 TOTAL 6.1 -> 7.0 > 7.5 7.6 --> 8.5 Source: MIDD Tracker 1 All of Newport's growth has also been due to its King, which seems better attuned to younger adult product wants than Kool. In 1982, ycunger adult smokers rated both as acceptable products but found Newport King was significantly smoother, milder and less harsh than Kool King. (See Appendix K.) In qualitative work, Newport King is even described as a"light" (i.e., low "tar") product, despite 4ts 18 mg. level. The SDS showed that Newport, like Marlboro, relies heavily on its users to provide brand imagery among younger adult smokers (See Appendix F). And, Newport has the youngest franchise of any brand in the market -- 53% were 18-24 in 1983. 'Phus, it is no surprise that Newport has become the alternate younger adult identity brand, for those who don't want to just follow the crowd. For Blacks, it's today's alternative to Kool; for Whites, it's an alternative to Marlboro. m C -25- ~D V~
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R Key Points About Marlboro ~ • ~. 1960's • Marlboro succeeded with a "first brand" strategy targeted to the leading edge of the Baby Bubble, who turned 18 in the 1960's. • Younger adult smokers have been a clear leading indicator of Marlboro's market share growth. • Marlboro was only a second entry in the taste/flavor filter market until it developed its image-intensive long term campaign/ positioning. This took eight years of trial and error. • Marlboro's final positioning, set in 1962, was in tune with the mindset of the 1960's and also with the demographic shifts among younger adult smokers, since females dipped in.importance during that decade. / • Despite Marlboro's masculine positioning, it was almost equally developed among younger adult males and females until after 1975. Overdevelopment among males would have disadvantaged the brand. 1970- • Marlboro's younger adult smoker share softened in the late 1970's, but it had built enough aging momentum that its SOM trend slowed only slightly. • Certain evidence suggests that Marlboro's positioning has become less in tune with younger adult smokers than it was in the 1960's. - Females, not males, have been the growing sector among younger adult smokers. Marlboro has been losing strength among females. - Younger adult Marlboro males' interest in masculine imagery is no stronger than the average younger adult male smoker. • Marlboro is a "bandwagon brand" today. Marlboro users provide the brand's imagesy today more than its advertising does. Marlboro stands for "the average younger adult." Peer popularity is its added benefit. Marlboro smokers believe in its high quality. It is se.n as much smoother than WINSTON, bat less strong. 1 • Younger adult smokers' need f or "belonging" is strong and may be increasing due to social pressures against smoking. Marlboro provides a means of belonging. • Marlboro suffers high switching between ages 18-24, but Philip Morris retains about twice its fair share of those switchers, via Virginia Slims and Merit.
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0 °n~n S rs.p _€:`ET N:.3 8 6By v._:`,.dti_- n STRATEGIC RESEARCH REPORT TO: `tr. G. H. Long Mr. *t. L. Orlowskv Mr. H. J. Lees YOM'GER ADGLT SMOKERS: 0 STRAIECIES AXD OPPORTU`ITIES I FROM: Diane S. Burrows COPY LIST Mr. Ms. Mr. L. S. C. V. A. W. Hall, Jr. MacKinnon McKenna Ln ~_A 00 Mr. Mr. J. J. T. R. Winebrenner Shostak bcc: A. C. M. J. Curry m Tottetdale ~ Mr. E. J. Fackelman R. A. Lloyd 6p. :1s. Mr. Dr. E. J. J. N. R. L. Monahan Moore Gemtna T. W. G. J. K. C. Rucker u, m Neher m ethea Mr. G. Nova k R. J. Harden (2) Mr. G. T. Baroody T. Pearson J. Whaley PUBLISHED BY THE MARKETING DEVELOPMENT DEPARTMENT R.l. REYNOLDS TOBACCO COMPANY, WINSTON-SALEM, N.C. 27102 0 11J/1T Fs.n. 73" - 10/81 6 &FqJF«-7 Exhibit # 1 o yo/ Date: ~ - L ' - qk Alfred A. Betz, RMR E TRIAL EXHIBIT 12,579
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Y (B&W) PROTECTED BY.wQNNFSOTA TOBACCO LTTIGATION PROTECTIVE ORDER _. advertised product: • And •ther_letter. re received raised two :• complaints. . First, are aajazines and newspapers censoring T negative information about cigarettes to protect the big money they make on cigarette ads.• Secopd, are•tobacco companies finding new ways to make cigarettes appeal to children? Of course, the companies had to.find new ways'of advertising when their commercials were kicked off television: . . . . .. , . 1. .;_ (Commercial) Smoke anywhere and you'11'enJoy the cigarette of it is sort of strange, the biggest killer is America's most • John Stassel fine tobacco, Lucky Strike.' Stassel: and TV. It was twelve years ago tha,t cigarettes were banned from radio switch. (Commercial) Us Tareyton smokers would rather fight than .Stassel: I'd forgotten them now. (Commercial) (Commercial) continues. Stassel: what these ads were like. It's amazing to watch Winston tastes good like a cigarette should. Showing Marlboro commercial while Stassel 'The growing evidence that these products were killing people eventually led to their ban from broadcasting. The tobacco companies, however, still claim that health hazards haven't been proven. We asked Philip Morris, R. 3. Reynolds, Brown ~ Williamson and Lorillard to appear on this program. None would. They told us to talk to the Tobacco Institute. The Institute said Anne 8rowder would speak for them. r ! Browder: The case is still open. Stassel: The jury has not come in. s ? 17 Cd It may not be harmful. You're not convinced. O ~ .. C D ' . ~ Ln F+ ~ td - 00 G A 003C0262
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~ C. Out-Of-Touch Competitors (Cont.) ~ . . * - Virginia Slims and Merit should be high priority competitive targets, since they appear to play a key role in defending Philip Morris against Marlboro's traditionally high switching losses. - VANTAGE may have an opportunity to compete more effectively for younger adult Marlboro switchers, based on its history of switching gains from Marlboro. (Shown in Appendix }I). L D. 'roduct Delivery/Communication . Smooth, mild product delivery seems to have been a key factor in the succession of younger adult brands. Therefore: RJR should ensure that product wants among smokers 18-24 are fully understood and reflected clearly in action standards for products targeting younger adult smokers. RJR should give high priority tc eliminating elements of harshness from its younger-adult-targeted products. 0 a RJR should use copy strategies which emphasize product positives to younger adult smokers. Connotations of "weak", "concerned". or "low tar" should be avoided and elements of mild, smooth, rich, smoking pleasure should be emphasized. ~ -37- , ~
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Marlboro is the leading brand among Puerto Ricans and Cubans end recently appears to have intensified its efforts against the Mexican lector. In fact, Philip Morris appears to be increasing special market spending behind all oft. its key brands, with special Hispanic campaigns recently appearing for Marlboro, BbH, and Players. (See Appendix L.) Key Points • Blacks/Hispanics will comprise 20% of all younger adult smokers by 1990. • Younger adult Black smokers appear to be highly responsive to effective advertising spending. They appear somewhat more likely to be attracted to a brand which keys on their interests in "moving up" and style/dress and can achieve reasonable development in the younger adult general market. • Knowledge of the younger adult Hispanic market is extremely limited, although it is fairly clear that Mexicans are the key sector. Success among younger adult Hispanics is likely to require development of an adequate information base and extreme sensitivity to executional elements. Philip Morris has placed much heavier emphasis on ethnic spending in recent years and evolved on-going Hispanic campaigns for Marlboro and Benson & .Hedges. U O %O N %J
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• . Major performance gains among younger adulz smokers do not necessarily have a major effect on short term total market share. This means that com etition may be slow to notice an im rovemend of RJR rformance among younger adult smo ers and, there ore, may-e slow to readt. - -Z - A "first brand" strategy (which necessarily targets younger adult smokers) provides an opportunity for unique long term benefits. However, it is likely that at least two to three years of close trackin would be re uired to determine the de ree of success of a" irst brand" effort. Younger adult smokers provide the most concentrated switching opportunity in the market. While a switching strategy is inherently less cost effective, it may be more feasible in the short term and may also produce more short term share results. Some switching appeal will be necessary tu build enough early share for a "first brand" to hold the shelf. • Younaer adult smokers have been as likely or more likely than older smokers to be early adopters of brands which have ultimately succeeded as "first brands" over the last 50 years. Younger adults have not flocked to brands which were already large in the total market, possibly because the existing older franchise inhibits younger adult identification with the brand. I • Patterns observed for WINSTON suggest that a "bandwagon effect" may accrue to a"first brand" which achieves an 1g-year-old share near the level. When WINSTON's share reached this level, younger adult smoker growth was curtailed on both SALEM and Marlboro, until WINSTON's share again fell below that level. II. SUCCESSFUL YOUNGER ADULT BRAND STRATEGIES OF THE PAST The successful younger adult brands of the past have used strategies with many similar themes. In nearly every case, these brands have capitalized on the following types of opportunities, which will be discussed in more detail. A. v, External Factors ~ B. Growth Sectors Within Younger Adult Smokers to C. m Out-of-Touch Competitors ~ D. Product Delivery/Communication ~ Q! -28- C ~O
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YOUNGER ADULT SMOKERS: STRATECIES AND OPPORTUNITIES INTRODUCT!UN # s / / RJR's -:onsistent policy is that smoking is a matter of free, informed, adult choice which the Company does not seek to influence. However, in order to plan our business, we must consider the effects those choices may have on the future of the Industry. Furthermore, if we are to compete effectively, we must recognize the imperative to know and meet the wants of those who are 18 and have al-eady elected to smoke, as well as those of older smokers. Pur ose This report is intended to provide additional learning on younger adult smokers (aged 18-24) to assist RJR in optimizing its strategic position with respect to this smoker group. While competitive issues, such as Philip Morris' continuing overdevelopment among 18-24 year olds, are a major focus of the analysis, the broader perspective is on the overall business opportunity which may be available to RJR through effective marketing to younger adult adult smokers. There are five sections: Section I, "The ~Importance of Younger Adult Smokers," explores the potential benefits/costs of.,,"first brand"* or switching strategies directed toward younger adult smd~`cers, in comparison to smokers 25+. Key elements include the impact of 18-year-old smokers on the market, the effects of aging on both smoker share and`market share, and the degree of potential switching opportunity. These analyses are based on share trends from MDD Tracker, loyalty rates from the 1983 Segment Description Study (SDS), NFO switching, and consumption patterns from Tracker and government studies. Section II, "Successful 'First Brand' Strategies of the Past," uses never- before-available information from the 1983 SDS to trace the succession of key younger adult brands over the past 50 years. This allows an analysis of the key fsc_ors which.may have been important to their growth and decline, as a potential framevock for RJR's present/future younger adult smoker strategies. Sectiou III summarizes the "Key Learning" which can be concluded from Sections I and II on the importance of younger adult strength and the means which have successfully achieved that strength in the past. Section IV gives "Implications and Recommendations for RJR" which were derived by applying this learning to today's younger adult smoker market. Section V, "Key Trend Detail," amplifies key recommendations from Section IV. Appendices support the main presentation as referenced in the text. *"First Brand" strategies appeal to 18-year-old emokerE rather than switchers ages 19-24.
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0 III. KEY i.EARNINC: SUrMARY & CONCLUSIONS t The previous two sections t1ave discussed the importance of' a strong posit"ion in the younger adult smoker market and the strategies/circumstances which~ have, in the past, allcwed brands;companipc to achieve growth among younger adult smokers. By integrating the key points from these sections, several conclusions can be reached. I. THE IMPORTANCE OF YOUNCER ADULT SMOKERS • StronR Derformance amon ounge r adult smokers i s critical to generating sustained growth momentum for brands/companies. "New" 18-year-old smokers represent about 1.4 share points of incremental volume each year. A younger adult smoker aho has been gained and retained appreciates in value over time because of increased consumption. Older smokers do not. • The biggest cigarette brands of the last half centur:r have derived their strength from high younger adult development -- Pall Mall, WINSTON, Marlboro, and Kool. Newport may become another such brand, but its size is currently limited by distribution and lack of a broad geographical marketing effort. In each case, - Younger adult gains have been a long term leading indicator of the brand's market share gains. Typically, major market share growth has lagged the brand's younger adult smoker growth by at least five years. - leadin indicator of market share softness and decline, although aging may bolster the brand s SOM for a decade or more. - Continuing loss of oun er adult strength has also been_a These brands have been the flagship brands driving their companies' performance and each has been superceded by a brand from another company. Thus, younger adult growth performance has been a:eading indicator of long term corporate performance. At present, Philip Morris and Lorillard are the only companies showing steady younger adult performance gains.
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i ! IV. IMPLICATIONS/RECOMMENDATIONS FOR RJR . ; 1. Younger adult smokers are critical to RJR's long term performance and profitability. Therefore, RJR should make a substantial lon term commitment of manpower and money dedicated to younger adult smoker programs. An unusually strong commitment from Executive Management will be necessary, since major volume payoffs may 2ig several years behind the implementation of a successful younger adult smoker strategy. prevent such problems: This time lag can also magnify the penalties for wrong turns in the development and implementation of younger adult smoker programs. To • RJR should develop objectives, planning procedures, and marketability criteria for younger adult brands/programs which reflect their unique, long term character. These may differ significantly from the approaches/measures which are appropriatn to established brands or to new brands addressing older smokers. Thoroughness should be emphasized. Innovation, experimentation, and multiple approaches should be encouraged. - Rigorous, objective consumer-based action standards should be established to ensure that volume results will ultimately follow and that continuing Management commitment is warranted. • RJR should make resources available to develop/improve its capabilities tu tiioroughly identify and track demographics, values/wants, media effectiveness, and brand performance within sectors of the younger .1dult smoker o ulation. These tools will be critical to the developmenr, and implementation o effective programs among younger adult smokers. • Because of the sensitivity of the younger adult smoker market, brand develo ment/mana ement should encom ass all as cts of the marke=ing mix and maintain a long term, single-minded focus to all elements -- product, advertising, name, packaging, media, promotion, and distribution. Tactics which could negatively affect the integrity of the strategy should be avoided.
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.. - --.~--_ - -- .~.....~...-.~ - - .....~--. . r. ~ B& W1 PROTECTED BY MDYNFSOTA TOBACCO LITIGATION PROTECTIVE ORDER (Interviews with young people) - . r.•'. . • grown up.0 • - "Everybody was smoking. And I thought it made me fea2 terribly ~ •I started smoking when_ I wss I4 years old." - ' 44• a ..~i ..w.. . '. •r: 4:4ti • • Stassel. . . That's where the market is.• There•s no point attracting some o 7 a 60. Anti-smoking advocate John 8anraft C?): ' You want to get kids, you want to get them as young as -10 and 12 and 14, get them interested in your product, get them hooked before they understand the dangers and then hope.that they'll stay with your brand. Stassel: The tobacco industry denies it. Browder: Cigarette manufacturers are not interested in obtaining new business from teenagers in our society. Stassel: 8ut how can you stay in business if you can't hook the kids? Browder: We've been in business very well, thank you, for some time now without attempting to hook kids. We do everything possible to discourage teenage smoking. Stassel: 00 they? Recently tobacco companies have found new ways to display their products where kids can be impressed. Can't advertise on television, sponsor a tennis tournament that's covered on television. In many baseball stadiums, when someone hits a homerun, some brand of cigarette gets on TV. Games like this one have about 40,000 viewers under 21. 4 - ... ,..; : _ •. . •. ~ . : ~ c : ~ 07 60 ~ ~ N Ln ~_A OD m N IrA Ln • %'A 003C0264
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0 • J , ., • WINSTON bznefitted from the health scares of the 1950's, which creAed the filter boom. It used a positive positior. -- "WINSTON Tastes Goud" -- to capitalize on a negative environment. Key Points About WINSTON: • Favorable timing helped WINSTON. It attacked the filter market before earlier filter brands became entrenched. • Younger adult smokers were as likely as older ones to be early WINSTON adopters. • Younger adult strength was a leading indicator of WINSTON's extended market share gains and of its softening. • Peer pressure --- the "bandwagon effect" -- seems to have worked for WINSTON in the early 1960's, when it had a 30% share of younger adult smokers. • WINSTON ma;, have lost popularity among younger adult smokers because changes in the external environment made WINSTON less in tune with both the demographics and the mindset of the 1960's than it had been in the 1950's. Its large number of older smokers may have contributed by linking the brand to the "establishment". • WINSTON did not become overdeveloped among males until after its younger adult smoker share had begun to decline. • WINSTON's line extensions do not appear to have had any long term effect on its younger adult smoker performance, although WYNSTON Lights 100's may have caused a temporary rise until Marlboro responded. -15-
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(BdcW) PROTECTED BY MDYYF,SOTA TOBACCO LITIGATTON PROTECTIVE ORDER .. • _ Browder: .. . -. Z. 7.:; . •Oo,you think cigarette manufacturers had something to do << that?.. ,... _ ... . _ . : ~ ti .. e ~ . . . . . Stassel: 1 Yeah, I think that . . v w. ~-f.r .~,..:.-= . . . . . . . 8rowder:~- - Cigarette manufacturers Stassel: But what do you think, on his own? Browder:' . ~ that the movie~naker Just showed-Marlboro Perhaps the moviemaker was a Marlboro smoker. . ..., . Stassel: We tried to ask the moviemaker, but he wouldn't talk to us. Philip Morris wouldn't comment on the financial arrangement except to say they didn't pay the producers cash. Maybe, of course, it doesn't matter. Kids see the billboards all the time. Tobacco companies spend so much money on advertisin that nearly every other billboard in America promotes c1garettes. Browder: I think the cigarette manufacturers have the right to advertise their product. I think they have the right to sponsor a variety of events as they do. I don't think it's illegal, so why not? Stassel: The problem with cigarettes is that they're all around us and the advertising promotion is all around us and we become used to the idea that they're just familiar artifacts of daily life. And it's terribly hard to keep in mind that they really are a terrible killer. And what happens when a killer is also America's most advertised product? Can that affect the information we get about cigarettes? You bet it can. 9 VA _~.~. r;... 003C0269
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(B& W) PROTECTED BY M[IYNF.SOTA TOBACCO LiTiGATIOK PROTECTiVE ORDER a . • y , , assigned a reporter to do a story on the KOOL JAZZ Festival. It was the first time the Festival was being held here in Minneapolis. A reporter wrote about the music, about who was cooing and at the end of,the article, he questioned whether a cigirette company should be sponsoring the Festival. He said- the diseases cigarettes cause are un-Kool. The reporter was Paul 1iacCabee. The day after the article appeared, he-was fired. . MacCabee: The publisher, Mr. Hopp, called me into his office and he said, "If we have to fly to Louisville, Kentucky, and crawl on our bended knees and beg the cigarette company not to take their ads out of our newspaper, we'll do that." And then he told me, you're fired. Stassel: This is the many who fired him, publisher Mark Hopp. • You said you would go down to Louisville and get down on your knees and apologize? H00 : True. Starssel: Doesn't this mean that the cigarette companies have a lot of power over what is written about them? Hopo: I don't believe so. There's... 10 VA (Commercial) you've come a long way baby to get where you got to tooay Stassel:.~~~ . Y: . ; ~•V?w•/I,•,~' . • . . . . . .. .. . . • . . . . ' ~ .. . . . . : ~... . ::••L+. • . ]f 7C- Mhen cigarettes were taken off• television, there was suddenly millions of advertising dollars looki'ng•for a place to go. • Most of It went to newspapers an0 magazines. = Let~s 2ook it the effect on-one~small publication,''~ The twin ~~ r ,. Cities Reader Minneapolis Last ear the Twin Cities Reader ~ " "-- ~ _ ' • ~ '~ = `_ ~ ? ~ - : - : ., = C 003C026A
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0 A. External Factors 1 s, Pasrt periods of intense publicity on the health issue appeal~ to have played a key role in the succession of the major younger adult "first brands." WINSTON capitalized on the filter boom, which gained momentum from the "health scare" enviranment of the early 1950's. Marlboro capitalized on the changing mix of males/females in the 1960's, which arose from their different reactions to the intense health publicity of that time. Kool capitalized on the similar shift between Blacks/Whites in the 1960's. • Based on the WINSTON experience, product "breakthroughs" which address external factors are more likely to produce short term share results than those based primarily on imagery wants of younger adult smokers. B. Growth Sectors Within YounRer Adult Smokers ~ Successful "first brands" have capitalized on subtle demographic shifts within the younger adult,smoker market. Their "formula for 0 success" appears to have been to target the FUTURE profile of younger adult smokers, i.e., to be better developed among sex/ race/geographic groups which are gaining importance, but onl to the extent that reflects the group's rate of growth. This "formula" will usually imply broad based, nearly balanced appeal rather than overemphasis on male/female, Black/White, or other factors. Pall Mall was strongly developed among younger adult female smokers while their importance was increasing most rapidly. WINSTON was introduced when younger adult female importance was modestly increasing and was slightly better developed among females, but essentially a balanced brand. Marlboro was slightly better developed among males during the 1960's, when female itcportance dipped, but was ePsentially a balanced brand until after 1975. Kool was highly developed among Blacks and grew when their importance among younger adult smokers surged in the 1960's. Newport targeted Blacks in the northeastern U.S., where the Black population was growing most rapidly in the 1970's, and has moved to the south, following the return migration. 0 ~ ~ N -29- ~, 0 0
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50192 as2a 51801 4628
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b C. Out-Of-Touch Com2etito`a (Cont. ) • Marlboro's advertising/positioning seems to have become lessb in touch with the demographic trends within younger adult smoke ~h of the late 1970's and 1980's and, perhaps, their mindset. Younger adult feffale smokers were the key growth sector in the 1910's and 1980's. Today, Marlboro's younger adult male smokers do not have an above average interest in masculine imagery versus all younger adult males. - Philip Morris may have recognized Marlboro as vulnerable. Marlboro's disproportionate switching losses to Virginia Slims and Merit tend to feed Marlboro's losses back to PM. The campaign modifications on these brands may shorten the lines of supply. D. Product Delivery/Communication • Throughout the succession of "first brands", younger adult smokers have moved to "milder" products. Pall Mall promised "mildness" based on its length. 10 WINSTON, as a filter product, would be seen as milder than nonfilters. In the 1960's, Marlboro was "milder", i.e., significantly lower in tar, than WINSTON, as was advertised by the FTC. Today, Marlboro is still rated milder/smoother than WINSTON by younger adult smokera and is preferred. Kool and SALEM could Le seen as milder because of their menthol. - Newport is perceived as milder/smoother than Kool. • Successful "first brands" have used positive prodttct nessages. Pall Mall emphasized milder smoking "pleasure". WINSTON "Tastes Good" despite its filter. Marlboro is "where the flavor is", although historically and presently smoother than WINSTON. Newport speaks to smoking "pleasure". 0 N
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b II. SUCCESSFUL "FIRST BRAND" STRATEGIES Of THE PAST X , In the 1983 Segment Description Study (SDS), smokers of all ages were asked what b:•aii,: they smoked when they were 18 years old. By using these responses to represent the younger adult market of the past, the rise and fall of key younger adult brands over the last fifty years can be analyzed. By linking these brand trends in time to demographic/social/marketing changes, insights into the factors which a`fected those brands and might affect a younger adult brand today can be gained. This section traces ever brand which has risen to a 10% or higher share among 18-year-old smokers since the 1930's. There have been only six, but they include the major brands of the last hal: century -- Pall Mall, WINSTON, Marlboro, Kool, SALEM, and Newport. BACKGROUND Although their rise cannot be traced, Lucky Strike, CAMEL, and Chesterfield were the giants of the cigarette market during the 1930's. Smokers who turned 18 in the 1930's seemed to favor Lucky Strike, but no brand skewed younger adult to the degree seen for the brands that would follow. 1930's AVG. SOM 18-YR-OLD SMOKERS Share BDI Lucky Strike 22% 32% 146 CAMEL 27 30 lll Chesterfield 27 20 74 All Other 24 18 75 PALL MALL: THE BRAND OF THE 1940'S AND 1950'S. The key trend for Pall Mall was younger adult female smokers, who were rapidly becoming more likely to smoke at age 18. The SDS showed that females rose in importance from 30% of all 18-year-old smokers in the 1930's to 44% in the 1950's. This gain was large enough to create a 6% increase in the number of younger adult smokers between the 30's and SO's, even'"` t~-'~Foug~ there was a 15% decrease in the size of the younger adult population during that time. 0 . ~ . N ~ -8- C v m
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• The 1983 SDS showed that younger adult smokers are most likely to base their brand perceptions on the people they see using the brand -i- more than its advertising, package, or name. Thus, it :e possible that;WINSTON's own ., profile might have hastened its downturn among younger adult smokers. Whereas Pall Mall started with few older smokers, WINSTON started strong among all ages. Thus, by 1965, half of WTNSTON smokers were over 35 and might have contributed to an older, "establishment" image for the brnnd. As WINSTON lost its hold on the 18-year-old smoker market of the mid-1960's, its younger adult smokers dispersed to SALEM and Kool as well as to Marlboro. As with Pall Mall, WINSTON's younger adult female smokers moved more quickly, leaving WINSTON overdeveloped among younger adult males for the first time. WINSTON SHARE AMONG 18-YEAR-OLD SMOKERS 1956-60 1961-65 1966-70 1971-75 1976-80 Males 12% 31% 27% 16% 11% Females ~ 14 i 35 ~ 32 9 1 TOTAL 13 > 32 29 < 13 < 5 Source: 1983 SDS 0 D When the.TV ban took effect in 1970, the TV ant:smoking campaign also ended and younger adult female smokers again became the rising trend. But by this time, Marlboro had Lecome the "bandwagon brand". There was an uptick in WINSTON's share among younger adult female smokers when its Lights 100's were introduced in 1977, well ahead of their Marlboro counterpart. But, overall, WINSTON's line extensions seem to have had no lasting effect on its younger adult smoker trend. -14-
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t B. Growth Sectors Among Younger Adult Smokers (Cont.)~ •"Moving up in the world" has been identified'as a key endurirr. want among youngerr adult smokers. This imagery need is like~y to grow, since younger adults who follow the Baby Bubble are likely to experience limited opportunities for traditional success. - Lim:red opportunity to "move up" within the establishment may lead younger adults to more entrepreneurial means of success, such as fame via the performing arts. This type of concept meshes with younger adults' key activities/ interests, apparently represents an enduring want, and therefore may provide an innovative opportunity to be clearly different from competition. - A "status symbol" brand may attract some younger adult smokers, as an affordable compensation for other luxury items, if it can be executed to key on younger adult definitions of "class" and achieve clear difference versus competition. C. Out-Of-Touch Competitors • Based on history, RJR should emphasize competitive efforts which are clearly different from the target brands. Head-on or imitative strategies should be p.:rsued as defensive rather than offensive measures. Thus, RJR should target younger adult smokers based on their inherent vants/differences rather than letting competitors define the market. • Marlboro has become somewhat out-of-touch in that it is too male to fully capitalize on the female growth sector and its masculine imagery is less of a "hook" in the 1980's. However, Marlboro's users themselves provide the brand a strong positioning as an identity/belonging brand. Since Marlboro is not likely to be preemptable on belonging and is not strongly profiting from its "masculinity", other less head-on strategies hold more promise at present. Marlboro smokers are half of the younger adult market and, thus, encompass a diversity of wants. This implies that successful attacks on any key sectors of the younger adult market are likely to T.urt Marlboro. Thus, a variety of approaches should be developed to address the spectrum of oun e~r adult smokers rather than limiting creative options by defining t 5e market strictly in terms of Marlboro. 1 m -36- o ~
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THE IMPORTANCE OF YOUNGER ADULT SMOKERt SUKKARY Though decreasing in number, younger adult smokers are a key market for RJR because improved RJR performance among younger adult smokers could contribute more to long term profitability and positive share momentum than could be achieved from gains in any other age group. 1. Younger adult smokers are the only source of replacement smokers. More than a share point of 18-year-old smokerF enter the market every year. These offer a significant growth opportunity and also shrink the share value of smokers already in the market. 0 2. A "first brand" strategy has significar,t share advantages. • Optimum ability to capitalize on the influx of 18-year-old smokers. This gave PM a .5 point ir.-going advantage over RJR in 1983. •"First brands" compete from the high ground. They do not need switching gains to grow and can afford some switching losses. Brands which rely on older smokers must achieve net switching gains to break even on share. • Strength among younger adult smokers will ultimately yield growth in older age brackets. Aging has been contributing all of Marlboro's and Neu-port's smoker share gains among smokers 25+. • Aging of loyal younger adult smokers creates disproportiona:ely large gains in-market share, due to their increasing consumption. This does not accrue from gains among older smokers. • Younger adult strength, past c: present, will tend to extend the lifecycle of a brand. 0 ooa rtunit • Switchers aged 18-24 can provide more share advantage from ag:ng/ increasing consumption than switchers 25+. 3. Younger adult smokers offer the nost concentrated switching o • Smokers 18-24 are more likely to switch. -7-
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APPENDIX A ! NUMERICAL IHPORTANCE OF YOUNGER ADULT SMOKERS 1 Ages 18-24: 1975 1980 1981 1982 1983 % of Total Pop. 18+ 18.8% 18.5% 18.3% 17.9% 17.5% Incidence of Smoking Smoker Z of 18-24 Pop. 36.0% 32.7% 31.7% 29.4% 29.0% (P) Index vs. Total 18+ 106 99 98 95 94 (P) % of Smokers 18+ 20.0% 18.3X 17.9% 16.9% 16.4% (P) (P) = Preliminary Tracker Data Sources: Incidence and Rate Report, Year 1982, PIDD Tracker, and Census Bureau population estimates. Ages 18-24 in 1988: High Side (1) Low Side (2) z of Total Pop. 18+ 14.9% 14.9% Incilence of Smoking: Index vs. Total 18+ 94 87 X of Smokers 18+ 14.0% 13.0% (1) High Side assumes younger adult incidence follovs the same trend as the total population (18+). (2) Low Side assumes younger adult incidence falls more rapidly than among total smokers, to the average degree seen from 1975 to 1983. I
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b In every sense, companies with strong younger adult brands hold the high ground, standing above the increasingly difficult and costly battle for switchers. Today, only Philip Morris and Lorillard are gyowing smong younger adult smokers; RJR is losing about a point per year among;this group. ., • / 1 SUCCESSFUL YOUNGER ADULT BRAND STRATEGIES OF THE PAST A review of the five key brands in the last half century -- Pall Mall, WINSTON, Marlboro, t:ool, and Newport -- shows that each built considerable strength among younger adult smokers well ahead of its upsurge in market share. Their strategies succeeded almost invisibly, hidden from competitors in the critical but low-volume younger adult smoker market. The positionings of these brands have all been very different, but there have been important ctmt)Arities in the strategies they followed. While chance may have played a role in these past successes, the analysis indicates that the key elements can be understood and purposefully leveraged if sufficient time, priority, and resources are invested. • All of these brands took advantage of changes in the external environment that worked against or were ignored by their predecessor. The external changes included smoking and health during the 1950's, the generation gap in the 1960's, and racial pride in the late 1960's-70's. These factors affected the mix of the younger adult smoker market as well as its mindset. • All of the brands capitalized on demographic shtfts within the younger adult smoker market. Females wnre gaining importance when Pall Mall and WINSTON took off. Marlboro made its inroads during the 1960's, the only decade when younger adult male smokers surged in importance. The emergence of younger adult Black smokers has been pivotal to Kool and Newport. These brands succeeded by keying on the growth sectors without boxing themselves in, e.g., Marlboro was as well developed among females as males until recent years. • In every case, the major younger adult brands have been succeeded by a brand which was positioned to be different from its predecessor and better "in-touch" with the younger adult smokers of the time. Me-too strategies have never worked. . All of these successful brands have stressed positive product messages (as opposed to problem/solution) and have provided milder/smoother product deliverl than their predecessor. -ii-
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'' (B&W) PROTECTED BY `'RNNESOTATOBACCO LTTIGATION PROTECTIVE ORDER .-. Transcript of Good Morning America, 3/16/83 television program • John Stossel. ABC Consumer Reporter . . . . . . . . • t . •If you die because of the -ciqarettes you ,si+oke, there's a good chance it's the •tar' that will kill you:~ There are a number of ingredients in 'tar' that can cause cancer. Enough people know that now that the cigarette companies are promoting ultra • .-••- low 'tar' cigarettes like these brands (pictured in front of him). All these contain about 1/20 as much 'tar' as a Lucky -v ` Strike or a CameZ; about 1/15 as much as a Winston or Marlboro. _ A - "Now some people say lov 'tar' cigarettes have no taste. Some s people say they're too hard to draw. But Barclay claims to G have solved that and come'up with a relatively tasty, - smooth-drawing cigarette that.still gives you very little 'tar.' : . .. . ~ "The cigarette'sa big hit.'Even though it was introduced only = two years ago, it's a big seller. But before we congratulate ' Barclay, let me tell you that, yes, maybe they're successful ~ because they have a good cigarette or maybe they were just ' sneaky. Let me explain. ~ . . ~ "Barclay qualifies as an ultra-low 'tar' cigarette because it " ' passed a government smoking test with.flying colors. The : tester is this machine at the Federal Trade Commission. Its ' little artificial lungs can smoke hundreds of cigarettes - without getting sick and simultaneously measure what's coming ~ out with the smoke. The machine duly reported that when it smoked the Barclay, it inhaled only 1 mg. of 'tar.' Very good. But maybe it did that well only because Barclay designed a special filter to beat the machine. In Advertising Age, a : top tobacco executive is quoted as saying: • 'Hell, every company in the cigarette business knew how ; to make a product that would fool the FTC machine. None of us had the nerve to take the chance that Brown ~ Williamson has taken.' , "So far the filter has been a very successful marketing tool. Now it's very hard to see, but if you look at the Barclay filter, on the end you see four little holes on the sides. These holes bring in some air with the smoke•so you get less smoke and more fresh air. Or at least the machine gets that. People may not. The FTC says when people smoke, your mouth, consciously or not, pinches off some of those holes so you get much more 'tar' than the machine gets - up to seven times more. ~t1 003C026F
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APPENDIX B YOUNCER ADULTS' IMPORTANCE AS REPLACEMENT SMOKERS • • t • u, t 0 ® s \ • More than two-thirds of male srrokers start by age 18. Only 5% start after age 24. Current Male Smokers By Starting Age Cumulative X Start By Age Start After Age 12 9.9% 90.1% 13 13.4 86.6 14 20.8 79.2 15 30.3 69.7 16 42.9 57.1 17 46.4 Median a 16.7 years 18 1_.SL69.7 l 31.3 19-20 84.0 16.0 21-24 94.6 5.4 25+ 100.0% Sources: Average of HEW data reported in Adult Use of Tobacco, 1970 and 1975. • Although women of the early 1900's started to smoke at later ages there has been little difference in recent decades. Year of Birth Median Starting Age of Female Smokers 1900-1920 20.0 years 1920's 18.5 1930's 17.7 1940'a 17.1 Source: HEW, Changes in Cigarette Smoking Habits, 1955-66. I M/•T Mj *OA F fr1RT" RK ~ ~ than men, m ~
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a • The name, package, and post-introductory advertiding (once clear awareness of the point of difference was established) could `. emphasize supportable claims that the brand also provides a full measure of benefits of "old style filters" such as taste, satisfaction, draw, and imagery. 2. Second Entry Brand The opportunity may be greater for a second entry social acceptability brand to establish mainstream appeal among younger adult smokers, since the first entry must push the product difference. Thus, the first entry might rutomatically be viewed as "concerned" even if it went mainstream post-introduction, i.e., quickly repositioned itself. Other advantages of the second entry strategy could be: • The strategy is equally viable whether RJR or another company hits market first with a social acceptability brand (assuming that product development timetables will be similar between companies). • RJR could cover th2 bases by offering both a "concerned" and a younger-adult-oriented entry. If the first product is a satisfactory smoke, at could be used under both positionings. 3. Line Extensions If social acceptability entries catch on, RJR should be prepared to defend its established brands with appropriate line extensions. Although a mainstream second entry brand could, itself, be a line extension, this would dilute leverage of "the new way to smoke" versus "old style filter cigarettes" and allow competitive brands tu more easily respond. The least likely candidates for this type of line extension would be brands committed to "Virility" such as CAMEL and, hopefully, Marlboro. Key Points • Products -..:3ressing social acceptability could revolutionize the market in the same way filters did in the "health scare" environment of the 1950's. The long range outlook for such pro&ucts will depend on their acceptance by younger adult smokers. • To be adopted by younger adult smokers, a social acceptability brand should: 1. Offer adequate smoking satisfaction as from soc:al pressurc:.. / well as effective relief 2. Be positioned positively rather than as "socially c.oacerned", perhaps using easentially the WINSTON strategy of the 1950's. 0 • A second entry social acceptability brand is more likely to be able to ~ position itself in the younger adult mainstream. N m ~ ~ -41- c
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D 1 ' / SALEM • In its early years, SALEM's appeal to younger adult smokers was overshadowed by WINSTON. Key Points About SALEM/Kool/Newport • SALEM gained among younger adult smokers of the 1970's, especially Blacks, by spending more effectively against Kool, but never has become a true "first brand". Koo1 • Kool's growth, much like Marlboro's, hinged on demographic shifts caused by the antismoking 1960's. • Kool was in tune with the rising importance of younger adult Blacks in the 1960's. The mindset of "Black identity" made it time for Blacks to adopt their own brands, rather than follow the general market. competitors. • Kool gained "Black identity" by advertising to Blacks before its • When younger adult Whites returned to the market of the 1970's, Kool was suddenly too Black to fit the younger adult market and became vulnerable. Kool also splintered its heritage, posirioning itself by style. Ne ort • Newport, when it was repositioned, essentially bought Kool's prime North Atlantic market by intense spending in out-of-home and against Blacks. • It appears that Newport has gained younger adult White amokers by gaining distribution but its fundamental growth is among Blacks. • Younger adult smokers rate Newport as milder/smoother than Kool. • Newport users are the main source of Newport perceptions. It is seen as the alternative younger adult brand -- for Blacks an alternative to Kool, for Whites an alternative to Marlboro. It's for those who don't want to follow the crowd. -26-
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APPENDIX F SOURCE OF BRAND PERCEPTIONS I • Younger adult smokers are more likely than older smokers to base braq perceptions on other people they see using the brand. BASIS FOR USUAL BRAND PERCEPTIONS X of X of Index of Total Smokers 18-24 Vs. Smokers 18-24 Total (2627) (443) Product 87.5% 88.2% 101 Advertising 45.3 43.9 97 Package 28.7 28.7 100 Name 0 > 35 41 1 117 . . Other Users 38.9 > 49.4 127 • Younger adult smokers are especially likely to basis their imagery of Marlboro and Newport on other users. BASIS FOR USUAL BRAND PERCEPTIONS KEY BRAND AVG. U.B. '4ARL. VS. IMPORTANCE IMPORTANCE AVG. INDEX MARLBORO (Base = 252) P d t 8% > 83 22 88 95 ro uc . . Advertising 48.8 43.9 111 P k 20 9 > 7 28 73 ac age . . Name 43.2 41.1 105 U 0 h 4 58 4 49 118 t er- sers . < . NEWPORT (Base = 79) P d 3% > 69 88 2% 79 ro uct . . Ad i i 0 > 35 43 9 80 ng vert s . . P k 0 > 20 7 28 70 ac age . . N 7 > 23 41 1 5 9 ame . . Other Users 60.5 < ,49.4 122 > • Significantly higher at 80% confidence level. Source: 1983 SDS
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i i A price/value brand would need a conspicuous second "hook" to reduce possible conflict between youhger adults' value wants and imagery wants'. The most saleable "hooks" arb likely to be based on product quality, since these probide easy-to-explain public reasons for switching. Suitable imagery should also be used. Since younger adult smokers with above-average interest in value are concentrated in the Coolness segment, it is possible that younger adult smokers might be responsive to an appropriately positioned value-oriented menthol entry. Tactically, extended periods of closely targeted pack promotion (B1G1F, sampling) in selected sites (e.g., convenience stores, military exchanges, special events) could lead to brand loyalty from repeated trial. This should be considered an investment program. B. Growth Sectors Among Younger Adult Smokers (Detail in Section V.) • Younger adult Hispanic and Black smokers should be keX RJR targets, since they are gaining importance in the younger adult smoTcer market. Resources/manpower should be made available to increase understanding of the dynamics, wants, and executional sensitivities within these markets. Heavy-up advertising in selected media are likely to be beneficial against younger adult Black smokers, based on Newport/Kool history. - Competitive advantage could accrue from these special market programs, since Philip Morris has intensified its Black/Hispanic marketing efforts. • Females are continuing to gain importance among younger adult smokers and, based on their diversity, should afford a number of potential opportunities. Since the continuing trends to working women and "new masculinity" imply greater commonalities between the sexes, a dual sex brand which appeals to, but is not limited to women may be "in tune with the times." "Style/Dress" remains a pronounced interest tnwng younger adult female smokers, but should be executed to provide a clear point of difference and not be "too bold." ' u, 0 m -35- ~
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• 0 2. Younger adult males in the SDS were more likely than any other smok:rc to have taken advantage of B1Clf' offers. Such pack promotions provide ~the savings benefit without conflicting imagery but typically yield tria;l or occasional usage rather than a change in brand loyalty. Carton offers, on the other hand, tend to reach older smokers. But, if RJR could closely target pack price promotions to younger adult smok:ts over an extended period of time, brand lo alt mi ht be ca tured. This would be an investment program. Its cost e fectiveness would depend on how tightly promotions could be targeted to younger adult smokers via, for example, military exchanges/canteens, selected convenience outlets, etc. Any other price tactics on established brands could tend to undercut their perceived quality/value. 3. An SDS profile of younger adult smokers who have more interest than their peers in a value brand, but lower confidence in generics, showed high Coolness Segment development. Although, as seen above, price behavior may differ from expressed wants, there may be somewhat higher potential for a menthol entry to appeal to younger adult smokers on the basis of value/price. Key Points • Any orice/value strategy will need a preemptive second "hook" to make it easy for younger adult smokers to switch for a reason other than price. Product-based "hooks" are easiest for consume-rs to publicly express. • Since younger adult Coolness smokers have somewhat above average interest in value, a menthol entry may warrant consideration. • Tactically, closely targeted, long running B1C1F's may yield some younger adult switching (as opposed to trial). t. a -39- V t.
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0 MARLBORO: THE "BABY BUBBLE" BRAND The leading edge of the Baby Bubble exploded on society 1s the Younger adults of the 1960's. Over 30 was "out" and the younger set was driving fashidns, politics, and the marketplace, sometimes violently. And Marlboro would1become their brand. Marlboro had been quickly repositioned in 1954-55 to catch the filter boom. But, as a second entry in the "taste/flavor" filter market, with no point of difference but its box, it trailed WINSTON among both younger adult and older smokers. 1955-60 Market Share :8-Year-Old Smoker Share WINSTON 9% 11% Marlboro 4 3' 0 Judging by its copy. Marlboro's masculine positioning was originally directed at the nonfilter market, which had become overdeveloped among males as it declined. It took eight years of experimentation for Marlboro's permanent "cowboy" cam,rsign to fall in place in 1962. Even then, the WINSTON "bandwagon" held Marlboro at bay. But Marlboro, through happenstance or design, fit better and better as the pressures of the 1960's evolved. • Marlboro was a milder product than WINSTON, but its emphasis on flavor kept it positioned as a "real cigarette". • Marlboro was positioned male during the only decade since 1930 when males were the growth sector among younger adult smokers. • Marlboro's intensity fit the mindset of younger adults in the 1960's. • Marlboro's positioning was in tune with younger adult smoktrs' enduring want to express their maturity and independence through smoking. (The Marlboro cowboy is always shown as a mature, even older man.) • Marlboro acquired younger adult smokers than WINSTON* and, by the late 1960's, this meant the Baby Bubble, the largest cohort of people, and smokers, in history. * One way to see this is by comparir.g the percentage of Marlboro versus WINSTON smokers who smoked at age 18. For example, among White male _ WINSTON smokers who turned 18 in 1955-70, 70% smoked at age 18; for i Marlboro, that percentage was 87%. (Source: 1983 SDS) -16-
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w r Furthermore, entering 18-year-old smokers accuAr.; for all of Marlboro's strength among total 18-24. Loyalty ;ates from the 1583 SDS (.e., the percentage of smokers who smoked hlarlboro at age,18 and still do) show that Marlboro loses about 28% of its 18-year-old~ by age 20 and another 147. by age 24 -- a total loss of 42% over the six years between ages 18 and 24. Translating this to share points, Marlboro would be expected to lose .3 points of its .8 points of 18-year-olds before they reach age 24. This is, in fact, about the annual total NFO sw:;.ching loss found for Marlboro in recent years. (See Appendix C.) But, since Marlb,.:o gained .8 by becoming their "first brand" at age 18, it can afford the .3 switching loss and still come out 5 points ahead. B. THE COMPETITIVE SQUEEZE This steady influx of 18-year-old smokers causes the pre-existing smoker market to shrink in share value: smokers who were worth 100.0% of the market at the beginning of 1983 were worth only-98.4X by year end. Thus, a brand which had a 10.0% smoker share going into 1983 and did not attract :ny 18-year-old smokers would drop to 9.8% even if it kept every member of its franchise. This means that au brand/com any which is underdeveloped among 18-year-olds must achieve net swi:c ing gains just to break even. As a company, Philip Morris held more than 60% of these 18-year-old smokers in 1983 versus RJR's 15-20%, yielding PM a .5 goint in-going SOM advantage in 1983 due only to "new" smokers. The power of this advantage can be seen by the facc that R.iR's total competitive switching gains have been twice as large as PM's during 1980-83 yet, during the same period, RJR has lost smoker share while PM has made significant gains (See Appendix D). Furthermore,"PM's younger adult smoker advantage has been increasing dramatically: AVERAGE aHARE OF SMOKERS 18-24 ANNUAL 1979 1980 )981 1982 1983 CHANGE RJR 26.1 25.0 24.3 23.5 21.3 - 1.2 PM 44.8 48.8 51.5 54.0 58.4 + 3.4 Source: MDD Track.er 0 C. MOME`STUM FROM AGING Once a brand becomes well-developed among younger adult smokers, a ing and brand loyalty will eventually transmit that strength to older a e raa'f'cets.
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- •.- :.4 • -- ~(B&W1 PROTECTED BYWNNFSOTA TOBACCO LITIGATIOH PROTECTIVE ORDER -.'`- Stsssel: ~~~ . . • ' - . - :• ..~ w... . . . - r ...•- Hopp says -the tobacco companies never pressured him and that the ~ain • reason--he 'tfred MacCabee is because '-•he didn - t'*want -f:ts ~`~!~~'~ :local paper covering national issues. You don't cover national-issues.. Hoep: s~ - .. . - _~" f - .- No. ~ Stassel: Yet after he fired MacCabee, he ran'articles on Seymour Hirsch and Henry Kissinger, Love Canal and the Mideast. ~ : H~oop: ~ I don't believe those articles ran-after April of '82. ` Stassel: .~._.._ : June of '82, July of t82. , . : HOPP: ~ Well, at least we don't have as many of them anymore. Stassel: r But isn't that issue? HOpp: a smokescreen? Isn't cigarette money the No. Stassel: Yet, week after week, his paper is filled with full-page cigarette ads. This is big bucks for you. HODO: Yes. Stassel: .._.`._ How much money? 11 real 003C026B
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/ Kool apparently capitalized on this aspect of the 1960's by simply advertising to Blacks before its competitors did. Kool ads were in EbQny consistently from at least 1962, when our records start. This was easy.for Kool, sincg its early-60's penguin campaign fit either race, and it was effective. Kool ~eeame "cool" and, by the early 1970's, had a 56% share among younger adult Blacks -- it was the Black Marlboro. 1950's KOOL SHARE A.'lONG 18-YEAR-OLD 1960-64 1965-69 1970-74 Black 10% 122 17% Khite 1 2 4 TOTAL 2 3 6 Source: 1983 SDS 1 56X 11 SMOKERS 1975-79 1979-83 442 34% 11 5 14 15 Like Marlboro, Kool capitalized on the shifts in the 1960's market. And, by the 1970's, it was falling out of step with the trends of the times -- younger adult Whites were returning to smoking, leaving Kool with a 500 BDI in a sector whose importance vas no longer booming. Kool was in a bind in the Black market, too, with-SALEM suddenly spending about as much as Kool against Blacks. (See Appendix J). Kool also splintered its positioning in the 1970's, advertising each-'line extension with its own thrust -- Kool 100 was "Lady Be Cool", Kool Milds was dual sex, upscale, etc. Kool was vulnerable and Newport capitalized on that vulnerability. KOOL rnt 't•R..ut....t.aoc w.c WASCr..RaeLa .." .. wo M 0 N - CD -23- ~ W
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0 After 1975, Marlboro not only started to skew male, it started to lose its grip on the 18-year-old smoker market: I . Marlboro's 18-year-old smoker share dipped in 1976-77 when both SALEM and WINSTON brought out Lights 100's styles and Marlboro failed to respond until 1978. This may partly account for Marlboro's increasing male skew in the late 1970's and, perhaps, for Marlboro Lights 100's switching gains versus WINSTON and SALEM in the 1980's. • Newport began to nibble at Marlboro's "first brand" territory. Newport was a brand Marlboro was ill-equipped to compete against, because of its long-standing menthol weakness. This could be a reason for the strong emphasis on Marlboro Menthol in late 1982. • CAMEL and Virginia Slims each took a bite. These inroads on Marlboro's younger adult smoker stronghold in the late 1970's barely showed in the brand's market share because aging momentum from the 1950's and 1960's covered its tracks. But these may have been signals that Marlboro's masculine imagery was becoming less in-sync with younger adult smokers over time. • Males were not the growth sector of the younger adult smoker miirket in the 1970's. Females were, rebounding from 38% importance in the 1960's to 49% of all 18-year-old smokers by the end of the 1970's. % IMPORTANCE AMONG 18-YEAR-OLD SMOKERS 1950's 1960's 1970's 1980-83 Males 55 > 62 < 53 31 Females 44 < 38 > 47 49 Source: 1983 SDS • In the 1983 SDS, younger adult males clearly still cared about being seen as masculine -- they don't want feminine imagery! Marlboro's 18-24 smokers also want masculinity, because the majority of the brand's smokers are male. But, Marlboro's younger adult male smokerE do not stress masculinity any more than other younger adult males. In fact, younger adult males who smoke other brands are somewhat more likely to want the rugged, tradi:ional masculinity. Thus, the evidence of share trend, demographics, and wants tends to suggest that Marlboro's positioning may have become less in tune with the younger adult smoker market during the late 1970's and 1980's.
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APPENDIX C HARLRORO SWITCHINC LOSSES -- ACTUAL VS. PREDICTED • NFO: Avg. 1980 - First Half 1983 0 Importance Of Age Avg. Annual Gross Switching I•oss *~ Age To TotA'. Smokers * Pts in Age Wtd Pts Of Total X 0f Total 18-24 17.2% -1.46 25-34 25.8 - .64 35-49 27.6 - .40 50+ 29.4 - .36 I TOTAL 100.0% - .64 - .64 39% 27 17 17 100% * Source: MDD Incidence/Rate Report, Year 1982; MDD Tracker, lst Half, 1983. .* NFO gross svitching losses within age converted to total and points of total by ieportance weights above. • Predicted By SDS Loyalty Rates .w.qms.v.rr -Harlboro 18-Year-Olds After -- 0 1 Yrs Yrs X Remnining Loyal 1002 76% 2 3 4 5 6 Yrs Yrs Yrs Yra Yrs Avera e 72% 68% 65% 61% 58% 71% Since 71% remain loyal, 39% must switch over the six years, i.e., an average of 6.5% per year among the average 712 of the original group remain. 71% x 6.5% - 4.6% average annual switching loss. Harlboro Tracker'Share Among 18-24 Avg. Importance of 18-24 Value in Points of Total Smokers Average Annual Svitr:hieg Loss Average 1980-83 (lst Half) 35.3% 7_.2wX x 17.2% 6.1% x -4.6% ~ Points who
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, WINSTON: THE HIT OF THE 1950'S AND 1960'S. External influences in the 1950's contributed to the WINSTON opportunity. 1. The rising tide of health concern which peaked with the "cancer sAre" of 1954. Although "modern" filter cigarettes had been in the U.S. market since 1936, their market importance was almost nil until the early 1950's, when Viceroy sales quadrupled in less than two years. Reynolds, determined not to repeat its experience introducing CAVALIER against an already-too-well-entrenched Pall Mall, rushed WINSTON to market in March, 1954, near the crest of the health scare. 0 WINSTON IT1[ TL1e M UM RKMIdc s~K ~ i . 4 F, M . wOu: sUut - - i0-rw-oia s.Pz i / I % / % 1 I ~ ~ I '% % 1940 1t30 190 I;1C. 1960 2. The spread of television. WINSTON was introduced on TV -- a "fad" that spread from 9% of all households in 1950 to 87% by 1960. Advertising dollars were a key advantage for WINSTON over its filter competitors, and the bulk of those dollars were used to leverage TV. Younger adult and older smokers alike responded promptly to WINSTON's positive proposition -- "WINSTON Tastes Good" -- ita point of difference from other filter brands and the product deficiency non-filter smokers might suspect. WINSTON let Kent snd Viceroy sell the benefits of filters and, perhaps, make themselves look like "sissy brands" to younger adult smokers seeking maturity. By 1958, WINSTON was the Number One filter brand and still showing !:teady market share gains. In the early 1960's, its share rmong 18-year-old smokers reached some 30%, twice as high as its market share. WINSTON's effect on SALEM and Marlboro during the early 1960's (as shown later) suggests that this 30% share was large enough to put peer pressure on WINSTON's side and make it a "bandwagon brand" among younger adult smokers. , 900CM MMLso" ow No an -12-
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APPENDIX I BLACK/WHITE YOUNGER ADULT DEVELOPMENT OF KEY BRANDS, 1940-83 SHARE AMONG 18-YEAR-OLDS 19 0- 9 1950-54 1955-59 1960-64 1965-69 1970-74 1975-79 1978-83 PALL lIALL Black -- 16 38 13 -- -- White 10 28 30 20 5 2 l 10 T 26 30 19 5 2 ota WINSTON Black -- -- 6 30 40 9 5 -- White -- -- 11 24 35 14 13 • 5 Total -- -- 11 25 35 14 12 5 MARLBORO Black -- -- -- 6 8 3 -- -- White -- -- 3 12 21 48 - 44 56 Total -- -- 3 12 20 44 41 50 SALEM Black -- -- 9 8 8 15 27 15 White -- -- 3 3 4 8 10 8 Total -- -- 3 4 4 9 11 9 KOOL Black 5 -- 19 12 17 56 44 34 White 1 2 1 2 4 11 ll 5 Total 1 1 3 3 6 14, 15 8 NEWPORT Black -- -- -- - 1 5 15 33-• - Ithite -- -- 1 2 3 -- 6 9 Total -- -- 1 1 3 1 7 11 Sources. 1983 Segaent Description Study ~ M SESB Z61 0S 6E9fii I08TS
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APPENDIX N f p WINSTON 0 i USUAL BRAND SMOKERS Share In Demo. Deve1opment Index OPPORTUNITY INDEX VULNER.IBILITY INDEX Total Smokers 18+ 11.4% -- 98 1r= TOTAL SMOKERS 18-24 5.6 100 156 110 Black 1.5 27 145* 189* White/Other 6.2 111 153 109 Male 7.4 132 157 105 Female 3.9 70 151 115 Beyond H.S. 4.8 86 174 142 H.S. or Less 6.0 107 141 96 Under SISM 4.5 80 171 128 Over $15H 7.0 126 137 103 , * Small base size. 0
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APPENDIX K NEWPORT VS. KOOL PRODUCT Competitive product test results showed Newport parity on overall 7+ ratings amcag full flavor 1982. However, Newport was significantly more strong/harsh than Koo]. King an menthol mild/smo J d Kpol smokers oth and King to be at ages 18-24\in less KOOL NEWPORT (Base Size) -"TTWTf" Overall y70+ Rating 51.6 56.4 Attributes More satisfying 4.16 4.33 Stronger 4.11 <----- 3.79* More harsh 3 66* < 07* 3 . . Smoother 3 91* > 4 40* . . Milder 88 3 > 4 17 . . More tobacco caste 3.96 3.71* More tobacco than menthol 3.96* 3.95* More menthol Y~' 4.16* <--- 3.86* Cooler 3.84* 3.83* Less good aftertaste 4 03 < 67 3 . . Artificial tasting 3.94 3.77 Bitter tasting 3.58 <--. 2.95 Easier draw '.. 4.80 4.87 Burns f asterl~"" 4.04* < 3. 81 * Interpretation Note: The arrow indicates a significant difference between the two products with the arrow pointing towards the product which is more in agreement with the attribute on the left. An asterisk indicates a significant difference versus the ideal. Source: MDD 82-21223, 82-21230
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APPENDIX E EFFECTS OF AGING ON SHARE OF SMOKERS Method The charts in this Appendix summarize an analysis of the relative importance of aging* and "other factors" (switching/quitting/starting) to changes in smoker share for Marlboro and Newport (menthol). She analysis assumed that a brand's share was flat within the Tracker age brackets and simply aged its smokers year by year, within or across these age brackets. For example, in 1981, Marlboro had a 34.3% Tracker share among 18-24 and a 21.9% share among 25-34. Fcr 1982, we would estimate that, if nothing but aging occurred, Marlboro would have a 34.3% share among those who aged f rom 24 to 25 and still a 21.9% share amonR 26-34, who did not leave their 1981 bracket. Since 25-year-olds were about 11% of all 25-34 smokers in 1982, a weighted average indicates aging would push Marlboro's share among 25-34 from 21.9X° in 1981 to 23.3% in 1982, a gain of 1.4 points. 11% X 34.3 e 3.8 points from 25 year olds 89X X 21.9 - 19.5 points from 26-34 100% 23.3% share among 25-34 if only aging occurred Since Marlboro's Tracker share among 25-34 in 1982 was in fact only 23.0%, we presume the differences of about .3 was due to switching/starting/quitting among 25-34's that year. In addition to the historical analysis, possible future effects of aging were conservatively projected for the brands by assuming that younger adults would drop in importance from 16.5% of all smokers in 1982 to 13.6% by 1988. Upside and downside future trends were calculated for each brand, with and without "other effects";~Aased on the brand's history from 1980-83 (1st half). Marlboro D-1 Newport Menthol D-2 * Gains within the younger adult group were considered aging contributions.
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APPENDIX N ! X00L USCAL BRAND SMOKETtS I Share In Deao. Development Index OPPORfUNITY INDEX VULNERABILITY INDEX Total Smokers 18+ 6.6% -- 89 88 TOTAL SMOKERS 18-24 6.7 100 83 94 Black 21.8 325 63 99 White/Other 4.7 70 95 8) Male 6.7 100 63 124 Female 6.7 100 99 63 Beyond B.S. 4.0 60 95 88 H.S. or Less 7.8 116 77 97 Under S1SK 8.3 12/A 83 110 Over S)5~'4- 4,4 66 82 77 / Black 18-24 Male 24.1 360 58 110 Female 19.9 297 69 84 Beyond H.S. 17.3 259 59 126 E.S. or LEss 25.1 375 65 88 Under $15M 28.8 429 50 124 Over $1S!! 12.1 181 100 22 Ln White 18-24 ~ ao m tiale 4.7 70 66 133 ~ Female 4.8 72 115 38 ~ ~ ~ * Small base size. 1
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0 APPENDIX L PHILIP NORRIS SPECIAL fdARKET PROCRAHS 1 ~ a ...,,,~~ a ~ ® ...~•ti+.. ,,.. ..~~, 6i Ln ~-4 ETHNIC SPENDING (SM) CO m ~ ~ 1980 1981 1982 1983 ~ ~ Marlboro 28 31 1028 1127 w B&H 618 321 2653 2888 V. Siims 523 588 2340 1945 I I Source:. Media Department ` ~ . 10
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APPENDIX N ID VANTAGE USUAL BRAND SMOKERS Share In Demo. Development Index OPPORTUNITY INDEX VULNERABILITY INDEX Total Smokers 18+ 3.9% -- 110 101 TOTAL SMOKERS 18-24 2.4 100 147 129 Black .5* 21* * * White/Other 2.7 113 148 128 Male 2.7 113 150 189 Female 2.2 92 143 47 Beyond H.S. 3.3 138 1G7 95 H.S. or Less 2.1 88 132 141 Under $15M .9* 36* 136* 24* Over $15M 4.1* 171~ 111* 160* 1 * Sma11 base size. 1
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1 YOUNGER ADULT FEMALE SMOKERS I Opportunity Analysis Younger adult female smokers have been a driving force behind industry growth during the last half century as they have become more likely to smoke at age 18 and, over time, spread in importance within older age brackets. X IMPORTANCE AMONG 18-YEAR-OLD SMOKERS 1960's 1970's 1980-83 Males 62 53 51 Females 38 47 49 Source: 1983 SDS Younger adult females are continuing to gain importance among younger adult smokers, due to their stronger incidence trend versus younger adult males. Based on government reports in recent years expressing alarm at increased smoking among teenage girls, younger adult females are likely to continue to slowly gain importance, although external factors such as social acceptability and price may affect the outlook. INCIDENCE AMONG YOUNGER ADULTS 18-24 TOTAL MALES FEMALES X % INDEX % INDEX 1980 32.7 33.7 103 31.7 97 1981 31.7 31.6 100 31.8 100 1982 29.4 28.8 98 30.1 102 1983 29.0 28.8 99 29.3 101 Source: MDD Tracker Key differences in wants between younger adult female smokers and other smokers were identified in the 1983 SDS. KEY WANTS/CONCERNS OF FEMALES 18-24 VS. TOTAL SMOKERS VS. TOTAL 18-24 I Belonging/Fitting In Moving Up in World Powerlessness Style/Dress Savings/Value Health/"Tar" New Nale/Female Roles Social Acceptability Smoking Problems No Difference +++ -45-
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0 SALEM/Kool/Newport 0 P SALEM '• e SALEM's product breakthrough was "light menthol". Kool nonfilter had been in market since 1931, but it vcs advertised more like a cold remedy than a cigarette and, apparently, tasted like it. When SALEM lowered the menthol and added a filter, it cut an 8% niche in the market. At first, younger adult smokers adopted SALEM as readily as older ones but, in the earlv 1960's, its 18-year-old smoker share went flat. It appears that this had more to do with WINSTON than either SALEM or Kool -- the WINSTON "band-agon effect" was drawing 18-year-old smokers like a magnet. When wINSTON let go in the lace 1960's, SALEM could again attract its fair share of younger adult smokers. Although SALEM became stronger amrng younger adult smokers of the 1970's, it has never become a true "first brand". A fair share of younger adult.smokers, though, is enough to keep market share steady for a long time. ." R,. SRLEn m.mM.a "a .r.rie..... o+...M w P Koo: The key trend for Kool was the emerging importance of younger adult Black smokers in the market. In the health-c:oncerned 1960's, younger adult Blacks didn't back off from smoking to the extent that Whites did. Because of this, their importance surged from 6X of 18-year-old gmokers in the 1950's to 10% in the 1960's,. Younger adult Blacks of the 1930's to 1950's hod basically gone with whatever brand was big among younger adult White smokers (See Appendix I). In the 1960's, they began to coalesce behind Kool, which only had a 2% share among younger adult Sdhites. It was time for Blacks to build their own brand in the 1960's, the heyday of Martin Luther King and "Black pride". -22-
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APPENDIX N . ® NE'-IPORT I . . .. s USUAL BRAND SMOKERS Share Ia De eao _ Development Index OPPORTUNITY INDEX WLNERABILITY INDEX __ Total Smokers 18+ 2.82 - 93 116 TOTAL SMOKERS 18-24 8.9 100 74 89 Bin:k 36.4 409 57 109 4Thite/Other 5.3 60 88 78 Hale 7.6 85 80 103 Female 10.2 115 69 78 Beyond H.S. 8.4 94 50 80 H.S. or Less 9.2 103 89 96 Under S15.'! 10.5 118 86 85 Over S1SM 7.8 88 59 101 Black 18-24 Male 35.8 402 59 131 Female 36.9 415 55 88 Beyond li. S. 48.6 546 45 80 H.S. or Less 30.6 344 67 134 Under $15M 33.9 381 80 98 Ove r S 15H 44.2 497 18 122 White 18-24 Hale 4.3 48 102 88 Female 6.4 72 77 71 * Small base size. 0
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APPENDIX N USUAL BRAND SMOKERS Share In Development OPPORTUNITY VULNERABILITY Demo. Index INDEX INDEX MARLBORO ~ Total Smokers 18: 18.9% -- 77 97 TOTAL SMOKERS 18-24 41.2 100 42 112 Black 6.1 15 163 95 White/Other 45.8 111 43 113 Male 49.0 119 44 121 Female 33.5 81 39 100 Beyond H.S. 33.9 82 42 127 H.S. or Less 44.2 107 40 103 Under S1SM 41.6 101 44 130 Over $15M 41.2 100 40 96 r Males 18-24 Black 11.3 27 219 189 White/Other 53.5 130 45 126 Beyond H.S. 48.3 117 43 149 H.S. or Less 50.3 122 Under S15M Over $15M Females 18-24 Black White/Other Beyond H.S. H.S. or Less Under $15M Over $15M 0 41 106 53.1 129 41 133 45.5 110 49 105 1.8 4 113* 95* 38.0 92 39 96 32.5 79 41 99 33.7 82 38 98 30.7 75 48 125 36.6 89 28 85 , * Small base size.
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_ ... ....--~ ~ . _. ~. .. - ..._.r,,. _ ~.. ~. I • • .• ,~ • .. " ~ . -. ..~~.... .. _~ _ . " .. ~ «. .. .7J~..r . (B&W) PROTECTED BY.tiIINNFSOTA TOBACCO LTrIGATION PROTECTIVE ORDER Stassel: of course, the cigarette company doesn!a need thsousician's permission if it wants to promotevits brands outside the ' concert. Here they're passing out .tree Caoels: Tobacco companies have been doing a Ibt.of this lately.' Their. code says, we shall not give cigarettes away in any public •~-place within two blocks of any center of youth activity. e~Yet t here they're passing the~a out In front of a'Oavid Bowie '"s =' concert. Lots of kids here: Cigarettes were also.passed out at concerts given by the Talking Heads' and the Animals. You pass out free cigarettes at these concerts? I don't see you passing out free cigarettes at Frank Sinatra concerts. Browder: There are many, many adults at those concerts. Stassel: Promoters of the concerts say 40-60% of the audience is under 21. The tobacco code also says, don't give cigarettes to z Cz w anyone under 21. We asked a 16 year old to try to get some. ^ • Samoler: Regular or Light? • 16 year old: Regular. I just went up and asked for cigarettes, and they didn't ask me for any ID or anything so I just got it and walked away. Stassel: Reynolds Tobacco says they fire people who violate the sampling code. We tried to ask the samplers about all this, but they said they've been told not to talk to the media. This videotape made last winter by the Chicago Lung Association shows young people being given Bright cigarettes. Sixteen year old Joe was given a pack. So was Paulette, she's 18. And Chris, he's 19. Seven of nine young people who asked for cigarettes got them. 7 A 0 ~.;' ~. ..r ..'C c 003C0267
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APPENDIX D 1 RJR/PM SWITCHING VS. SMOKER SHARE PERFoRMANCE POINTS OF TOTAL SMOKERS NET SWITCHING SHARE RJR PM RJR PM 1980 + .26 + .45 33.3 29.2 1981 + .27 - .25 32.1 31.0 1982 + .42 + .24 32.8 32.3 1983 (Ist Half) +1.00E + .36E 33.0 34.2 Avg. Change + .41 < + .18 Per 6 Mo. - .l > 1.0 Sources: NFO and MDD Tracker
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.' , a CAMEL USUAL BRMID SMOKERS APPENDIX N Share In Demo. Development Index 0PP0RTUNIiY INDEX VULNERABIL:TY INDEX Total Smokers 18+ 4.5% -- 101 99 TOTAJ. SMOKERS 18-24 3.8 100 123 138 Black .8 21 * * White/Other 4.2 lil 123 138 Male 6.2 163 121 162 Female 1.4 37 134 0 Beyond H.S. 4.8 126 65 145 H.S. or Less 3.4 89 161 126 Under $15H 5.1* 133* 109* 109* Over $13m 2.0* 75* 140* 189* * Small base size. 1
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PRICING I . 1 0pportunitv Analysis : I Pricing is a key issue because of the pressures of the FET incrAe and the ensuing surge in sales of generic/private label brands. The impact of price on younger adult smokers is a complex question, which is likely to require additional learning, over time, to completely resolve. Studies by the National Bureau of Economic Research (NBER) were used by the government as a rationale for the FET increase. These studies indicated that price had a much stronger effect on smoking by younger adults, particularly males, than on any other age group, because people•were less likel to start smoking in an environment of higher cigarette prices. us, over an extended period of time, younger adult smokers would tend to become less price sensitive, since those who react most strongly would not become smokers. Nowever, the NBER studies clearly imply that price influences younger adults, so that price/value may offer an opportunity for some share leverage among current younger adult smokers. Strategic Alternatives 1. In the 1983 SDS, younger adult males were more likely than any other smokers to say they would buy generics for any price differential, large or small. Yet they were least likely of all smokers to report a generic usual brand. The explanation is probably conflicting wants: Younger adult males want to be seen as successful, someone who buys the best regardless of price. They want to make a good impression on others, smoke a brand acceptable to their friends. They have little interest in being seen as "smart shoppers". Field reports from the military market confirm this conflict. Generic sales were booming but none of the men were seen smoking them -- because they were putting the generics in Marlboro packs. Younger adult females have a more average attitude towar+ eost-conscious imagery but are also unlikely to adopt generics, perhaps because of conflict with their own "upward striving" wants, such as style/dress. Thus, to maximize ^pportunity among younger adult smokers, a price/value brand will need a second "hook" to its ro osition to allow oun er adult smokers to switch on the basis o other, more acce ta e wants as well as price. 1 e imagery vi ei ra e, pro a y necessary, to ran success, the most likely second "hook" is product quality/taste since this is a more easily expressed public reason for adoption. Examples would be "computer technology produces better smoke at lower cost" or "pay for the best product, not the big brand name." -38-
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• - Females are increasingly opting to remain singleJduring their younger adult years and to live alone. •. s X WHO HAVE NEVER MARRIED Ages 20-24 1960 1970 1975 1981 Males 53.1 54.7 59.9 > 69.5 Females 4 28 > . 35.8 -> 40.3 -> 51.9 YOUNGER ADULT FEMALES LIVING ALONE 1960 1970 1975 1981 Number (M) 110 282- 501 752 Source: Statistical Abstracts, 1982-83, pages 41 & 44 0 - 8oth.,7ounger adult males and females are more likly to say they "associate with the new ideas of men/women" than their older ..: counterparts. These increasing lifestyle commonalities suggest that females wiil continue to be more''attracted to dual sex brands which adequately address their wants than to highly tar.geted female-only brands. .~.. Kev Points ~ Younger adult female smokers have greatly increased in importance over the last 20 years and are likely to continue to slowly gain in importance, unless external factors intervene. • Virginia Slims, or similar female-only brands, are likely to hold a niche in the future younger adult female market, but essentially dual sex brands which are attentive to female vants!concerns are likely to provide the larger opportunity. • Style/dress remains a pronounced interest among younger adult females, but should be executed to provide a clear point of difference and not be "too bold". 10
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. 0 BLACK/HISPANIC YOUNGER ADULT SMOKER 2Eportunity Analysis ., > Younger adult Black and Hispanic amokers are dramatically increasing in importance and will, conservatively, comprise 20% of the 18-24 market by 1990. PROJECTED 1965 1976 1980 1990 BLACK X Pop. 18-24 11.2 12.4 13.0 14.8 X Smokers 18-24 12 9 4 13 13 6 > 14 5 . . . . Index 115 108 105 98 HISPANIC X Pop. 18-24 NA 5.7 7.5 9.9 X Smokers 18-24 NA NA 3 9 > 5 1 . . Index NA NA 52 52 BLACK & HISPANIC % Pop. 18-24 NA 18.1 20.5 24.7 x Smokers 18-24 NA NA 17 5 > 1 6 . . Sources: Census Bureau; Pispanic Omnibus Study; "Projections of Hispanic Population for the U.S., 1990 & 2000" (Center for Continuing Study the California Economy); "Health, U.S., 1981". BLACKS competition from Stylish brands. no appeal to Blacks Virile brands, even Marlboro, have virtually . SHARE AtlONC BLACK SMOKERS 18-24 1980 1981 1982 1983 Avg. Pt. Chg. Kool 34.6 30.8 27.9 21.8 - 4.3 ~ Newport M 18.6 22.4 27.2 36.4 + 5.9 c0 SALEM 17.2 19.2 17.3 13.6 - 1.2 ~ Coolness 71.3 72.8 73.0 72.1 + .3 m Menthol 88.7 89.9 91.5 88.9 + .1 n Source : MIDD Tracker of Since the Kool phenomenon began in the 1960's, younger adult Blacks have moved increasingly to menthol products, which have accounted for 90% of the younger adult Black market in recent years. In 1983, 72% of Blacks 18-24 smoked one of the 3 major Coolness brands, :,ithough the segment has been getting some N 0 ~ ti0 -42- m N © tA
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0 B. Growth Sectors 4'ithin Younger Adult Smokers (Cont. ) / • The dominant trend in the younger adult'smoker market bver the last 50 years has been the rising importance of fe~ales. Because of this, the maior "first brands" have been overdeveloped among males only during their periods of decline. Marlboro has become overdeveloped among younger adult males only after 1975, ahen its share was softening among younger adult female smokers. • One key to Marlboro's success in capturing the Baby Bubble appears to be that it attracted more 18-year-old smokers than wINSTON, within the youngk:r adult smoker market. That is, it was clearly a "first brand", with relatively lower switching appeal. C. Out-Of-Touch Competitors In every case, the ma o"ounger adult brands have been succeeded ositioned t-- be significantly different from the b predecessor. The softening/decline of the major younger adult brands seems linked to an inability to "stay in tune with the times" as well as a new competitor "started in tune with the times" at its introduction/repositioning. While the real criteria for being "in tune" are probably the mesh between imagery and/or product and :.he wants of younger adult smokers of the times, demographics are a u:. tool for identifying the likelihood of that mesh. • Pall Mall became out of touch with younger adult smokers' product wants when it failed to effectively react to the filter boom of the 1950's. GINSTON fit those wants. • WINSTON was the victim of subtle shif ts which may have been transparent or seemed transitory at the time. WINSTON's light-hearted campaign fit well with the mindset of the 1950's, but did not fit as well with the risiag tide of intense younger adult rebels as Marlboro did in the 1960's. WINSTON's campaign had a slightly female slant and so did its franchise. In the 1960's, younger adult females were losing importance and males were gaining -- a better fit for Marlboro. - WINSTON's popularity among older smokers may have made it difficult to maintain an exclusively younger adult identity during the 1960's, when that want was most extreme. 0 • Kool found itself "too Black" in the 1970's as younger adult W'hitPs were rapidly regaining market importance. -30-
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APPENDIX N YOUNGER ADULT TARGEI DEFINITIr)N AIDS The charts in this Appendix summarize demographic differences within the younger adult smoker population which may be relevant to brand target definition. For selected brands, the tables provide: • brand share/development by sex, education, race, and sex within race f rom MDD Tracker (Year 1983). Share and development by income level and for education within race/sex have been approximated by applying the relative development found in the 1983 SDS to the overall develop- ment shown on Tracker. • Opportunity/Vulnerability Indices by demos, from the 1983 SDS. The Vulnerability Indices reflect the proportion of the brand's franchise (in that demo) which are not core smokers of the brand and would therefore be relatively open to competitive appeals. - The Opportunity Indices reflect the extent to which the brand might further capitalize on positive smoker attitudes (within the demo) by drawing more of its fringe into its franchise. Both indices are relative to the Opportunity/Vulnerability of the average brand in the total market.
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a 10 a 2. RJR should seek to better understand and capitalize on the market conditions/approaches which have successfully created younger adult strength for brands/companies in the past: A. External Factors B. Growth Sectors Among Younger Adult Smokers D. Product Delivery/Communication C. Out-Of-Touch Competitors Since RJR's processes/tools have been better attuned to switching efforts than to "flrst brand" strategies, time and learning will clearly be required to fully assess the opportunities available through these avenues. It should be noted that the new/established brand programs in the 1984 Plan already address the major issues/trends identified below, within the framework of current knowledge/processes. These Plans should continue as a basis for RJR's 1984 marketing efforts, but should be enhanced by a full-time dedication of resources to ensure a solution to the problem. A. External Factors (Detail in Section V) e SOCIAL ACCEPTABILITY A breakthrough product which effectively addresses social acceptability concerns could revolutionize the market as WINSTON did in the health-concerned 1950's. The ultimate size of this opportunity will depend on younger adult smoker acceptance. Thus, RJR should consider: The need to develop a social acceptability product whose smoking benefits meet younger adult smokers' wants as well as other smokers' wants. Planning a second entry social acceptability brand which could emphasize mainstream younger adult imagery and Broduct positives, thus avoiding the connotations of "social concern" which would likely be associated with the first entry. Thus, RJR could enter its own "Marlboro" to follow the "WINSTON of the 1980's." M • PRICING Pricing is a key issue in the industry. Some evidence suggests that younger adult smokers are interested in price, but unlikely to adopt a brand whose onl "hook" is price. To maximize the possible pricing opportunity among younger adult smokers, several alternatives should be considered: -34-
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APPENDIX N 0 0 MERIT ~ ;3SUAL BRAND SMOKERS Share In Demo. Development Index OPPORTUNITY INDEX VULNERABILITY INDEX Total Smokers 18+ 4.92 -- 94 101 TOTAL SMOKERS 18-24 4.8 100 129 93 Black .5 10 * * uhite/Other 5.4 113 .128 92 Male 5.0 104 141 91 Female 4.6 96 113 95 Beyond H.S. 7.6 158 140 88 H.S. or Less 3.6 75 128 91 Under $15M 4.1* 84* 142* 108* Over SISM 4.9* 102* 127* 91* • Ln N to m ~ ~ * Sma11 base size. m ~ ~ ~ 0 ~ • .o N O w ~ O
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- w.. -.T-+7ma -. a_ .4WnqWV?_. . (BdcW) PROTECTED BY MIIYNESOTA TOBACCO LITIGATION PROTECTIVE ORDER j~. ~ . That is competitive and proprietar iritormation - -. ._ . ." Hoop: ' _ . . : r _ . • .. s.C/~- •A 1A _V~11 .YP"g ' Y't'~ 7~S . . ..,. . ... 8ut if you lost it, it would hurt.. • .•.~`, .. .": Hoppi =.. .Yes, itwould jeopardize^our local responsibility to 'local community. ' MacCabee: ~ . . . . .. ~ . . . .. . a r7.R'. 7Sy0 r'.~ . _~ ' . '_ . . .J. ..i: v cover ttie r think when 'Journalists rqad about my tiring because of an' article critical of ci9arettes it's oing to have a chilling effect on what they write.' I~hink o~her writers will ask themselves,' viait a minute, should I really cover. this story, am Igoinq to get fired Just like that guy MacCabee in Minneapolis, because I tread on an advertisers' toes. Stassel: Now in some publications, the question never comes up because they don't accept cigarette ads. Here are some examples (show . Good Housekeeping, Seventeen, Reader's'Digest). These publications say they don't want dangerous products advertised to their readers. The American Council on Science and Health surveyed magazines and concluded that those that do not accept cigarette advertising give much more thorough coverage to the smoking and health issue than those that do take the ads. The Council cites these ma9azines as the worst. The magazines say their coverage of the issue has been adequate. And they deny trying to protect the advertisers. But I know it happens sometimes. Family Circle magazine, for example. The publisher denies that cigarette articles are censored. Yet a few years ago the magazine asked me to write an article and said, don't write about cigarettes. It might offend advertisers. Family Circle carries about $16 million in cigarette ads. Sometimes magazines even turn down money to avoid offending Q~ tobacco companies. ~D Daymen Reingold is a hypnotist who runs anti-smoking clinics in several cities. He wanted more people to know about his clinics, so he asked his ex-wife, who's in the promotion business, to place some advertising for him. They ran into obstacles. 12 VA E 003C026C
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SOUSs 5747 t
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51801 4665 5ag5q 5'3'fe $0458 s7s6
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51801 4661 I .
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I Despite key differences in vants from younger adult males, younger adult females tend to smoke dual sex brands rather than specifically targeted female brands, e.g., 34% smoke Marlboro versus :.1x for Virginia Sltms. . Virginia Slims was introduced in 1968 but appears to have gained appeal as a younger adult female "first brand" only in recent years. .NO ron S in ® - ~...., .. -~~.~ « .~" ~ w. .. w .~.mn...W~• This may relate to its gradual campaign evolution from heavy makeup and avant garde fashions to more friendly, casual imagery. This transition may have been speeded by the introduction of SALEM Slim Lights, which outperformed all other competitors in attracting svitchers f•om Virginia Slims. t` VIRGINU SLIMS SWITCHING AMONG FEMALE SMOKERS 18-24 NET GAINS NET LOSSES PTS. % PTS. X SALEM - - -.14 45 Barclay - - -.05 16 CAlEL - - -.02 6 VANTAGE - - -.02 6 B&H - - -.02 6 Generics - - -.02 6 Marlboco-;, +.26 39 - - Merit +.12 18 - - Newport +,05 8 - - Kent +.05 8 - - Parliament +.05 8 - - All Other +.13 20 -.04 15 +.66 100% -.31 100% Source: NFO, 1980-83 (1st Half) Avg. Per 6 Mo. Although base sizes are smail, there is some indication that Virginia Slims younger adult core females are true Stylish segment smokers who desire to make ° a bold statement with their brand, whereas Virginia Slims fringe ssokers consider the brand to be nearly too bold for their tastes. Its key imagery is, naturally enough, "today's woman". -46-
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PREPICH CAMELS Give us a rinp. Cau I e00 2?34000 and we'll send you this pOster, 28" x 36':
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~ Newport is the growth brand among younger adult Blacks, Vet it is not perceived as particularly relevant to their key wants/concerns: "poving up in the world," style/dress, and powerlessness. Effective spending appears to 1~ave been key to its success, although product mildness versus Kool may have played a role. Kool appears to have risen partly from an emerging desire for Black identity, but it is not clear that this want is as pronounced among younger adult Blacks today. • The SDS showed that younger adult Blacks were less likely than older Blacks to believe "it is important to remember my roots." • Although Newport spends about 16% go to OOH which is of is prominently advertised in Black publications and its brand dollars against Blacks, 59% of its dollars primarily general market. • In qualitative work, younger adult Blacks feel limited rapport with today's Black "leaders", e.g., Jesse Jackson. Thus, Coolness strength among younger adult Blacks may continue to decline in the future in favor of Stylish brands which key on Black wants but also have appeal in the general market. Hispanics The Hispanic market is very difficult to address because: • Mexicans, Cubans, and Puerto Ricans form three distinct segments which differ in wants, lifestyles, even language. • Many Hispanics insist that advertising be in the Spanish language and that visual executions be perfectly attuned to Lneir lifestyles, self image, and traditions. Hispanics are extremely literal. • Illegal entry makes even population data difficult to obtain and tools for understanding/tracking the Hispanic market have been quite primitive compared to general market capabilities. Mexicans are the largest and fastest growing sector of the Hispanic population and also the sector in which RJR's performance is strongest. Percent of U.S. Hispanic_Population ~ 1980 2000 M 61% 64% exican Puerto Rican 14 12 Cuban Other 7 18 S 19 0 Source: Center for Continuing Study of the California Economy. -4 3-
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APPENDIX H 10 DISTRIRi1TI0N OF MARLBORO SWITCHINC LOSSES A brand's or company's effectiveness at drawing younger adult smokers fron Marlboro can be measured by: J 1. The size (points) of Marlboro's switching loss,-to that brand/gompany. 2. The percentage importance of that brand/company to Marlboro's,.losses. 3. The brand/company percentage of Marlboro losses versus its "fair share", based on its development among smokers 18-24. BY COMPANY During 1980-83 (1st half), Marlboro averaged a .36 point net switching loss every six months among younger adult smokers. Other Philip Morris brands were the beneficiaries of nearly half of Marlboro's net losses, allowing PM to keep twice its fair share of these younger adult smokers. MARLBORO SWITCHING AMONG SMOKERS 18-24 Avg. per 6 Mo. 1980-83 (1st half) I Marlboro Net Points X Importance Fair Share Of Switching vs: of 18-24 To Marlboro Losses Marlboro Losses ATC - .05 11X 2% B&W + .10 --- 18 Liggett - .01 2 1 Lorillard - .17 38 15 Philip Morris - .22 49 <------- 27 RJR_. , .00 --- 37 TOTAL - .36 100% 100% Sources: NFO, MDD Tracker BY BRAND Virginia Slims and Merit were almost entirely responsible for retaining such a large proportion of younger adult Marlboro switchers within PM's corporate fold. Among RJR brands, VANTAGE was most effective at gaining 18-24 switchers from Marlboro. MARLBORO SWITCHING AMONG SMOKERS 18-24 Avg. per 6 Mo. 1980-83 (1st half) Marlboro Switching vs: Net Points of 18-24 % Importance To Marlboro Losses Fair Share Of Marlboro Losses Virginia Slims - .14 1 <---~-- 9% Merit - .07 8 Other PM - .01 1 10 CAMEL - .04 5 5 WINSTON - .05 11. 4 VANTAGE - .09 (, 12 1 < 1 Other RJR + .18 --- 17 All Other Brands - .14 46 46 TOTAL - .36 100% 100%
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, WINSTON suddenly lost favor with you,iger adult smoker3 in the mid-1960's. This was not due to any sudden changes in WINSTON or Marlboro ads or products. The ban on television advertising didn't hit unti! 1970. Hdvever, two major shifts in the 1960's environment may have left WINSTON less-in touch with '• younger adult smokers. 1 1. The heavy antismoking activity in 1964-69 may have caused problems for NINSTON: . WINSTON's positioning and its development were both slightly female, in tune with the younger adult smokers of the 1950's. However, the antismoking publicity in the 1960's had a disproportionate effect on younger adult females, so it changed the demographic mix. Within only a few years, females fell from 44% to 38% of younger adult smokers and, for a decade the risin trend was male. Thus, WINSTON became out-of-tune demographica ly with the younger adult smoker market, because external influences had changed the market of the 1960's. a The first FTC report, published in 1967, named WINSTON the highest "tar" non-menthol filter in the market -- h:s'.-.er than some non- filter brands and 8 mg. higher than Marlboro.. WINSTON's product- centered proposition may have been vulnerable on this front among younger adult smokers looking for mildnecs. . The intense antismoking campaign on TV may have offset WINSTON's effectivene:s in this'key medium. 2. WINSTOh's light i.earted approach may hsive also become l,.ss attuned to the changirg younger adult mindset of the 1960's. In the era of Vietnam, campus riots, and the Chicago Seven, it seems likely that Marlboro's intense, unsmiling cowboy was a better fit. ~.:z .... w1.Ioa a&M qWd..w.dwM 1 1965 -13- I W so t 0 1\1 Come to where the flavor Is. Come to Marlboro Country
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51801 4662
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I Virginia Slims weakness may be that it fits not only a parttcular type of female but a particular stage of life. The prototypical younger adult fevle Virginia Slims smoker is like its overall franchise -- she'is from a famill with income over $25M (BDI - 160), has some college education (BDI - 130), is employed as a secretary/clerk (BDI - 160), and is single or newly married. The drop in Virginia Slims development among married/formerly married women suggests that Virginia Slims somehow does not fit the married woman's lifestyle and thus, has limited opportunity as a lifetime brand. VIRGINIA SLIMS DEVELOPMENT TOTAL FEMALES 18-24 FEMALES Never Married 213 126 Married < 2 Years 182 96 Married 2+ Years 77 77 Formerly Married 77 48 Total BDI 100 100 Share 6.0% 10.7% Sources: 1983 SDS, 1983 Tracker • Most younger adult females smoke a dual sex brand -- not too masculine (e.g. CAlEL), but not strictly female (Virginia Slims). While specially targeted female'brands`vill undoubtedly play a role in the future market, lifestyle trends suggest that commonalities between younger adult males/females are increasing over time, so that dual sex wants are likely to remain prevalent. Younger adult females are increasingly moving into the workplace, at a more rapid pace than older women. LABOR FORCE PARTICIPATION (X) AGES 20-24 ....~.~._.. 1960 1970 1575 1981 ~_... Females 20-24 46.1 -> 57.7 > 64.1 ----> 69.6 Index vs. Total Females 122 127 133 134 Younger adult females have become as likely as males to attend college. X COLLEGE ENROLLEES 18-24 1960 1970 1975 1981 Nales 63% $72 53% 50% Females 37 --a 43 ---> 47 .--..a 50
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l ~ . , ' f / ../ , May 28, 1992 L J Beasley ,~. Best ~•2irlin ~ ~N. Blackmer ~ Cundari R. E. G-M E. M. McAtee Y. W. Ford. Jr. 0. C. Pennell S. G. Hanea M. R. Savooa R. S. Hendrix R. M. Sanders D. A. Krishock S. R. Strawsburg RE: Irrtising Practices As' o.rc w4"'Ore, our long-standing policy and that of the entire industry has been that.re :;:>::: n,;t<<> advertise and;promote our brands only to adult smokers beaause we firmly believe that aooldng is an adult acfV," nd that children should not smoke. We define adul those being 18 years of age or older and continue to support industry efforts to enact and di~~jce laws prohibiting the sale of cigarettes to persons under 18 years of age as well as a wide,varie~y of other programs intended to discourage underage smoldng. i .n...... :3?.~~..~..?f ; a We have beertve candid in our public statements to the effect that we advertise certain of our brands to smu~"cg~8 years of age and older. This is entirely consistent with our view (and the law of most sE s~~that 18•year-olds are adults for purposes of the purchase of cigarettes. ...,: The Cigarette Advertising and Promotion Code, as it has evolved over time, contains a number of provisions which are age-specific. For example, models must be and appear to be 2S or older; we do not advertise in publications directed primarily to those under 21; and our direct mail and sampling activities are restricted to smokers 21 or older. 'Iltese provisions in our voluntary code have been the source of some confusion outside the Company beaause they have been misinterpreted to prohibit Any marketing activities directed to persons under 21. None of our competitors in their public statements admit that they advertise or promote their products to anyone under 21. The fact that our public statements on this issue differ from our competitors' and, on the surface might appear inconsistent with elements of the Cigarette Advcrtising and Promotion Code, has not gone unnoticed by our adversaries. In fact, a similar issuc was raised recentlv bv an apparently well•intent ioned shareholder at our annual meeting. 'VJe wori: for sr,t)-,,i+s' 66R.fLcy Exhibit # ~ Date: 9'' 2 Alfred A. Betz, RMR 021900B3
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51801 4672 50+58 o53 5's5! 5i53 i .~ u
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"WELCOMk TO THE OAS7S" I N O i ~ a ~ ~ M .o
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Once Pall Mall and WINSTON had turned down among younger adult smokers, there was no return. How, then, has Marlboro managed to hold, evean recoup, among 18-year-old smokers in the 1980's? , ~. 1. In the 1983 SDS, younger adult smokers were much more likely than other smokers to base their brand perceptions on the people they see using the brand. But, among all brands, younger adults were most likely to base their Marlboro perceptions on brand users. (See Appendix F). Since, in 1983, 70% of Marlboro users were under 35 and fully 36% were under 25 (BDI - 218), Marlboro's very size among younger adult smokers may give it an effective potcitionin& that has little to do with the posi:ioning of its advertising. Marlboro's younger adult smokers can be their own campaign, automatically in tune with the times. 2. The SDS showed that Marlboro's ke ima er was not masculinit , it was zounger adult identity belonging -- the brand for average younger adults, popular and acceptable among younger adult friends, not "too different". This makes sense as the imagery Marlboro's users would convey, apart from the brand's advertising, pack, or name. 3. Marlboro is clearly seen as a quality product, even by younger adult smokers who prefer other brands. Marlboro smokers want to "buy the best" and they think that Marlboro is the best. This may reflect specific product performance, since in-market test results over the last decade indicate that Marlboro King's smoother, less harsh delivery has been consistently preferred over the stronger WINSTON King. This was.still the case among younger adult smokers in 1983 testing. (See Appendix C.) 4. Marlboro has the "bandwagon effect" still going for it. In fact, the trend over the decades has been for younger adult smokers to increasingly cluster behind one big "first brand", a trend that parallels the increasing pressures against smoking during these times. This could mean that as social oressures tend to isolate younger adult smokers from -their nonsmokin i dentify with their smokin .. 0 eers 1 to smoke the "belongin brand • SHARE AMONG YOUNGER ROUl.TSO w.R .Aa.. we,.a =3 , / .w.. .w.i 0 eers they have an increased need to i onT i'.y t.0 t.w I • 1t-Yc.•-t.a Ssoaca. 1911 kcmsr OIsc.1a1oN irwv -19-
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r 'I'D WALK A MILE ?OR A CAMEL" 1 r, • ~ v \ -~ V
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, • APPENDIX N 0 ! SALEM ~ USUAL BRAND SMOKERS Share In Demo. Development Index OPPORTUNITY INDEX VULNERABILITY INDEX Total Smokers 18+ 9.4% -- 77 103 TOTAL SMOKERS 18-24 8.1 100 84 126 Black 13.6 168 123 83 4hite/0ther 7,4 91 67 140 Male 5.8 72 110 125 Female 10.4 128 64 126 Beyond H.S. 8.2 101 101 157 H.S. or Less 7.9 98 76 115 Under t1'SH 7.4 92 89 125 Over $°1,SK- 8.4 104 84 120 Black 18-24 "alP 10.6 131 139 63 Fema 1e 16.0 198 109 95 Beyond H.S. 13.4 165 125 95 H.S. or Less 11.4 141 95 133 Under $15M 7.3 90 76 82 Over $15M 21.4 264 162 81 White lt -24 Male 5.3 65 98 142 Ln I-A Co Female 9 6 119 42 138 m . ~ Beyond H.S. H.S. or Less 6.2 8.3 77 102 91 52 175 123 ~ m ~ Under S1SM 7.5 92 47 139 Co Over $15M 7.1 87 86 132 ~ a Small base size.
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0 VIRGINIA SLIMS USUAL BRAND SMOKERS APPENDIX N Share In Demo. Development Index OPPORI'UNITY INDEX VULNERABILITY INDEX Total Smokers 18+ 3.0% -- 116 82 TOTAL SNDKERS 18-24 5.4 !00 11' 94 Black 3.5 65 153 108 White/Other 5.7 106 115 £3 Male .1 2 * * Female 10.7 198 117 94 Beyond H.S. 7.3 135 103 93 H.S. or Less 4.6 85 128 94 Under $15M 4.8 88 111 77 Over S15M 5.8 108 119 109 Female 18-24 Black 6.0 111 153 108 White/Other 11.4 211 115 88 Beyond H.S. 13.7 254 103 93 H.S. or Less 8.8 163 128 94 Under $15M 9.3 173 111 77 Over $15M 12.3 227 119 109 * Small base size.
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"SMOKE RINGS" ~ve us a K;nc~. Cail 1800 273•°J(i0 I LanC sen-' :.tiis ccve.,. x 3F': ~~....~ .~~~:.a..s • . ~...:..-.r ., .._. _.._...._...... ._.....,. .
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' SOCIAL ACCEPTABILITY J !. Opportunity Analysis ~ Social pressures against smoking are high and increasing. This negative influence is somewhat slmilar to the health situation in the early 1950's. Therefore, it is possible that products which effectively address the perceived social negatives of smoking and also provide adequate smoker benefits could revolutionize the future market just as filters revolutionized the market during the 1950's. It is possible that RJR will have an opportunity to repeat the WINSTON success in the 1980's environment. The lcng range impact of such roducts on the industry will ultimately de end on their acceptance among younger adult smokers, just as the filter revolution did. At present, younger adult smokers and nonsmokers are becoming polarized on social acceptability -- younger adult smokers show less concern with the issue than older smokers, while younger adult nonsmokers are somewhat more concerned. "In general, you are more acceptarle to people if you don't smoke." Z AGREE SMOKERS NONSMOKERS ! 18-24 2 5+ 49.5% > 73.2 55.3 71.1 Total 54.4 71.5 Source: 1983 Smoking Attitudes Study Given younger adult smokers' keen interest in peer acceptance/approval, it is likely that younger adult smokers would be_interssted in a brand which effec tively addresses social acceptability and also rovides the other smokin 6 0 benefits the~ waat. However, if that brand is positioned as "socially concerned'", younger adult smokers may try it as a novelty but are unlikely to adopt it as a regular brand -- younger adults who wish to be seen as "concerned" are more likely to choose to be nonsmokers. Strategic Alternatives 1. First Entry Brand If RJR achieves first entry with a social acceptability brand, younger adult smokers are more likely to adopt it if the brand proposition is as positive and mainstream as possible. This was essentially WINSTON's approach to the health concerns in the 1950's. WINSTON let Kent and others sell "safer" filters, while WINSTON let people know it had a filter but em hasized the eositive of taste For example: p u+ a • o , • The added product benefit might be "enhances sociability" rather than N courtesy (which implies potentiai .a sspproval from others). -40-
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EFFECTS OF AGING ON SHARE OF SMOKERS NEWPORT MENTHOL HISTORICAL PROJECTED 1980-83 • If Nwport were to hold Its 1985 shar• of younger edults and 19e0 1981 1982 lst Helf 1903 Annust Avg, Cha, continue to be afl.ctsd only by aging, Its total s.oksr share 5 years from now eould be 3.41. a ga(n of .6 polnts over 1983, 18-24 SMOICER SMARE 6.1 7,0 7,6 8.5 Change vs. Yr. Ago +,9 +,9 +,6 +.9 +.8 ist italf PROJECTED 1983 1984 1989 19d8 25-34 SMOKER SNARE 1.8 2.5 2.7 3.3 Chang• vs. Yr. Ago +,1 +,7 4.2 +,6 +,4 Aging Effect Aging Effect *,4 *,S 4.5 •.S *.s 10-24 8.5 8.5 8.5 8.5 0th.r Eff.ets -.3 +.2 -.3 4.1 -.1 25-34 3.3 3.9 4.4 5.7 3S-r9 1,0 1.2 1,4 2. t 35-49 SMOKER SHJWs .7 .s .8 1,0 S0+ .2 .2 .2 .3 Mengs s. Yr, Ago -.1 *,1 NC +,2 +,1 Aging Effect +,1 *,1 +,2 +,2 •.2 Total 2.6 2.7 2,8 3.4 Other Effects -,2 NC -.2 NC -.1 Other Eff.cts (Cuw.) NC NC trC OVERALL 2.6 2.7 2.8 3.4 3W SMOKER SHARE .4 .4 .4 .2 Chan9s vs. Yr. Ago NC NC NC -.2 NC 119109 Effect NC "C NC t1C NC • It N.aport were to oontlnu• to gain eex+ng younger edutts et the Other Eff•ets NC NC HC -.2 NC rat. s.en sinc. 1980, Its totel s.oker sher• could reech 4.1% by 1988. ~ TOTAL 18* SMOKER SNIIRE 1,9 2.2 2.3 2.6 CAsn • vs Yr A o 2 + 3 * 1 + *.3 +.2 1st Half PROJOECTEO g g . . A in Effe t , 3 * . 3 + , 2 • 4 2 2 4 1983 1964 1985 1988 g g c , . . . . Other Eff.ets -,i NC -,1 4.1 NC Aging Effect 18-24 8.5 9.3 10.1 12.5 b 'f S S£9t T08TS 9 4.5 6.2 M 3 3 25-34 5 N t6t0S . . 2 d 4 2 ' :' 1 1 . . .2 ' 35-49 1.0 • 4ver th• Itrst four Yssrs, Nerport hs3 gsin.a sn avregs of ,2 share 50+ .2 .2 .2 .3 x points O.r Yser of total saoRers. M fote! 2.6 2,8 3.1 4.1 ,~„ • Newport's lon9-term growth Is entirely sttributebl• to Its lsrgs, NC steedy yalns a.ong younger aAults, Gelns In older smoker groups Other Effects (Cuw.) NC NC .ppsr to be solely the result of aging. OYERALL 2.6 2.8 3.1 •,1
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0 s CLAIMED READERSHIP AMONG 18-24 Y EAR 0L0 SMOKERS TOT AL MALE FEMALE WHITE 818qC RE ACH EFF ICIENCY • REACH EFFICIENCY • REACH WIC1ENCY • REACH EFFICIENCY • REACH EFFICIENCY • MAGAZINES ( YS f) TOT, /8• (t) YS.IVALE 18• If) YSL FEM, 18• (f) YS. WHITE 18a (S/ YS BLACK 184, Nwsstane Mrekly _ T3 104 64 100 81 to7 71 ~~ - M.nts G.n•ra/ 44 135 f 66 1 7 23 146 43 142 ~ ~8 111 1 N.ws x..klls 40 83 41 78 38 90 39 82 4.1 87 Seiectlve F•wsla 39 132 11 76 65 143 1 37 144 42 98 RaeA.r Sports 36 121 54 120 24 133 36 124 113 Mow.n's Gen.ral 38 78 8 39 I 65 89 37 80 43 87 Hunt/FIsA/Outdoors 34 111 47 107 20 136 35 114 52 102 Auto.otlv. 33 160 54 166 [ 13 168 34 IA9 24 113 Shelter 32 72 16 50 47 82 28 67 49 91 Gen.raI 29 89 27 79 31 l00 25 84 46 103 FasAlon 24 149 6 109 41 150 21 151 36 144 M.chanlcel 21 92 33 92 9 114 20 86 19 109 Bfeck 19 123 15 103 24 139 3 143 88 t08 Llt.rarY 16 /11 19 107 13 122 15 120 20 85 Hov To 15 62 8 47 22 69 16 61 17 ,r 78 Participant Sports 15 92 16 72 13 144 14 85 17 112 Businss/F/nance 15 73 17 67 12 86 12 61 23 97 Epicureen 9 64 4 40 13 75 6 59 12 90 r .w • Index of r./AersAlp awong 18-24 group vs. Indicated smoker totel. ~~ Top 4 esgs=tne cstegories based on ReecA X EfflctencY, Source: 1903 S•gw•nt Oescr 1 pt lon Study tj t9t, j 08 L S
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.• '*Ae ~"N y'_• ~3~ ~. . . ... . , r .: ; r 1 , . ., . _....-. . • .-....r..........~ . (BdcW) PROTECTED BY MINNESOTA TOBACCO LTITGATIOlY PROTECTINE ORDER -- - e _ . - . . . . -- - -. • .. . ~ - • . . . . ~ ..~ . _ . _ i Re ngo s ex-wi e. . . . ,. _ft„. 0,,....,-A,. . . ... ... .. <<.".. .. My . 'tirs.:t ' voagari••ri+iLJ~'f....•e" , th®t . i _.ha^,d"z. -ar • . • /4th at •. oed in~ on I~~wanted to work with -ias Psychology Today. . .. . . . • .•t; Stassel: But whert she"tried to place the ad, Psychology Today told her: . • .. - . . .' ~. . . . . . , . . . . ~ . ..r~i~~i_r:. ~ Reinoold's ex_wite: . . ~...z::' No, this' is not acceptable:So I thouqht*well then it's the ad concept,' and I had at least 1s different ad concepts drawn up. . . • • .. .. ' .i . Stassel: ... . . . r~. . Finally, the person in charge of advertising told her... ;, :. ... ~ ..,.. . . . . . Reingold's ex_wite: ~ Actually I don't think ariy of these are going to be acceptable. We have a lot of money that comes in from tobacco companies, and frankly, we don't want to offend our tobacco advertisers. And I thought, how can you say that to me. I mean, you're Psychology Today, don't you really care about the health of your readers. She looked at me and she said, well you know Grace, you're going to run into this problem wherever you go. ' Stassel: She went to Cosmopolitan. When Daymon Reingold called to place the ad, Cosmopolitan's advertising director told him, no way. Reingold taped the conversation. (tape) Cosmooolitan ad director: "I can't accept it. We get 200 pages of cigarette advertising." Reingold: "You're telling me there's going to be a problem or an obstacle here." Ad director: ' "Well, am I going to j eopardize $3 or 10 million worth of business? What would you do if you were the advertising director of a magazine that had preponderence of that type of business and somebody wanted to run one ad telling everybody, don't smoke." 13 VA 003C026D
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2 • Nevport's share among 18-24 smokers grew 1.3 share points to 12.1% versus a year ago. The gain was due to a 2.2 share point inerease aoong 18-24 females. • On a 12 month comparison, Kool's 18-24 share of smokers remained relatively flat ev 2.2X. The brand was flat across all subgroups. This stability repreeqr,ts a slight improvement relative to the brand's long term share o:c ~.: r.•~. _..........- 010900A0
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' I' D KALK AM1 LE FOR A CAMEL' ~ a s
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2. hSARl:ET SHAT.E -- THE "F1RST BRAND" aDV.ANTACE D. LONG-TERM DIYIDENDS -- RATE PEIt DAY (Cor.t. ) / . ~ Thus, the 18-year-olds who vere worth 1.6 points of smoker share in 1983 were worth only 1.4 points of market share, sinc~ their consump- tion was below average (index of 85). However, by ages 35-49 they will be worth 1.8 points of SON -- a 30% dividend on their original market share value. This consum tion increase is the difference between having smokers 35- an havin smokers who will Ue to 35-49. F. EXTENDED BRAND LIFE CYCLE The combination of brand loyalty, aging, and increasing usage tends to provide "life insurance" for brands which skew, or have skewed, younger adult. For exa.ple, Marlboro relies heavily on 18-year-olds for its share growth. But if, from 1984 on, no 18-year-olds ever smoked Msrlboro again, aging_could let Marlboro alsost hold its market share through 1990. The left side of the t able belo suows the contribution each age group makes to Marlboro's current.smoker share and what that• contribution would be in 1990 if Marlboro got no more 18year-olds and merely moved its franchise smokers to older age brackets. On the •~right side of the table, the smoker share contributions are translated to markat share, by factoring in rate per day differences. The bottom line shows that, even after seven )eara without 18 year-olds, aging could allow Marlboro's market share to hold within one point of its 1983 level. SMOKER SNARE CONTRIBUTION MARKET SHARS CONTRIBUTION 1983 TRACKER 1 PROJECTION 198 BST. 1990 PROJECTION 18-24 6.8 <--- 0.0 6.6 < 0.0 25-34 6.5 6.4 6.6 7.2 Ln r 35-49 3.6 7.9 4.6 9.6 OD S0+ 1.8 2.2 2.1 2.5 m ~ TOTAL 18.9 t 16.9 620.2 19.3 ~ uti j aJen.-hec., 1983 MSA. _ ao Thus, arr_ if_a briM far lls_frum favot among younger aduit s~m ,.ukRrs. the oun er adulte it attracted in earlter,y&ars and thc:r_increasing consumotion cen carr t a hrand e wrket sh or Yc:.rst _jtVi(j- cent, y exton .s n~i ts over`aTr"~1~'. eyeTe. -s- 0 0 N d ~ ~ , . . . ..,... ... .. ..... .. .r. . . . . .... . .~. . . ...
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•cdtq a•wufnAL R . ~ R .. e ~~~ : e iVf~rk~thig Research _ . ort p ' i' Pebruarr 1, 198S T0: Mr. a. T. Cautield FROMs Alicia Nance Mitchell C~'.L YOtJiiGER ADULT SMOlCEit FOCUS GROt]PS 05 - r-: ssoaa ~ :.. ~ Cooies To: Mr. L. W. 8a11 Mr. A. R. Cox/Mr. D. H. Murphy Mr. J. T. Winebrenner D.'F. Saker (McCann-Erickson) ':C TRIAL EXHIBIT 12,811 ANM ! C., rU£USH£D £N THE MAatiETiNG D£1'£LUPvlEN2' DEPARTMENT R.J. REYNOLDS TOBACCO COMPANY, WINSTON-SALEM, N.C.27102 A09c Y ExWbit # ro q06 Date: ' Alfred A. Betz, RIviR
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Mr. C. A. Tucl.er : 3 anuary 23 1975 I';` R ET Nu.~~4-1 By Our attached iecommendation to expand r.ationally the successfully tested "Meet the Turk" ad campaign and new Marlboro-type blend is another step to meet our marketing objective: To increase our young adult franchise. Tc ensure increased and longer-term growth for CAMEL FIL7ER, the brand a.ust increase its share penetration antong the 14-24 age group k hich have a new set of more liberal values and which represent tomorrow's cigamtte business. Presently, alrost two-thirds Df the CAMEL FILTER busi- nessj-is among smokers over 35 years of age, more than twice.that for Marlboro. While "Meet the Turk" is destqned to srift the orand's age profile to the younger acro~qooup, this won't come over night. Patience, per- siat"ce, and consistency will be. needed. There may even be temporarily a softness ir. CAMEL FI:.TER's growth ratt"%s some cf the older, more conservative CAMEL FILTER smolrers are t%.rned off by the campaign and younger, more libwltall smokers begin to come into the orand's franchise. Ter,~ arket results suqoest, t'":otgh, thnt this risk is smalT: ' ':he 'current media spen3ing le/al will be maintained since test m.irket shipments :ndicat-a nc significant short-term vol~ gains from increased spending. .)ther competitive brar.ds such as VANTAGE, Newpo.: t, and Vi rginia Slims with shaY'p2v direct:d advertising have demonstrated significant groaela rates attainable with CAMEL FILTER's media spending kevel. We would prefer, as wE- did for 'JANTAGE, to demon- strate an incraased growth rac.e with this campaign/blend and then give :onsideration to asking for extra monies. JFH: jh Attachment 0CFASuY Exhibit # f v ~ Date: S Zf - S Alfred A. Betz, RMR F TRIAL EXHIBIT 12,865
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"MOVINC UP IN THE WORLD" 0 / , "Moving 'up in the world" is a key want among all groups of younger adult smokers and the one which most distinguishes them from older smokers in the SDS. This is not surprising, given that they are in the process of developing their education and/or career and establishing their independence (which requires dollars). Dollars may well be the key measure of success to younger adult smokers, since the desire to move up decreases as their incomes increase. Blue collar workers (who are the highest earning younger adults) are less upward striving than average. Sducation makes no difference. Younger adult smokers are more likely than older to emphasize the "image" of success. They like to know important people and feel "there's nothing wrong with showing you've made it," regardless of race or sex. Over the next 10 years, younger adults' desire to "move up" may become more frustrating, since the peak of the Baby Bubble will ride just ahead of them, clogging the traditional avenues of advancement and success. This suggests that they may move to alternate paths as other "powerless" minorities have done in the past. . a Some m'ay compensate by seeking to acquire affordable status symbols, possibly a prestige/class cigarette brand. However, it is not entirely clear that the younger adult definition of "class" will entirely mesh .with the.status symbols prized by the older establishment, since they seem to prefer designer jeans to couturier originals and flair/ individuality above elegance. B&H, the only established "prestige" brand has attracted some interest among younger adult Blacks/Hispanics but is underdeveloped among younger adult smokers as a whole. • One option successfully used by entrepreneurial minorities in the past is to seek fame by exercising special ta'.ents in the public eye -- women achieved visible success through the stage or screen (or by marriage), Blacks;,moved up through sports and music, Jews became famous on the comedy circuits, "poor boys" from Liverpool or Mississippi made it with rock and roll. The desire to fame, the fantasy of "being discovered", and "star worship" appear to have been common among younger adults for generations in varying forms. Today's younger adults appear to be no exception: I In qualitative work, when younger adult smokers are asked to name their heroes, they tend to name performers rather than the sports figures (e.g., Jo Dimaggio) or political leaders (John Kennedy, Martin Luther King) who may have had more attention in the past. The "Newsstand Veeklies" (People, National Enquirer, etc.) which key on performers, are the most-read periodicals asiong younger adult smokere (See Appendix !i). -49-
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51801 4659 8
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© ® 0 0 0 0 mmc ® Give us e rinp. Csii 1M27 and we'll send you this poster, 28" x 36' ® 0 0 0 ® 0 • t .. N .. • •. ^ \ 0 ® .` . • 0 0 tEiw.~.-
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0 - The TV series "Fame" appealed to younger adults and is returning via syndication. j Music is probably the most popular mode of performance among younger adult smokers: • A special cable network, MTV, offers nothing but video renditions of popular younger adult music. • Younger adult smokers in the SDS were twice as likely to actively participate in musical activities (i.e., actually play or sing) as smokers 25+ were. ! • Younger adults tend to associate Marlboro with the occupation of musician. This was mentioned by 21% of smokers 18-24 rating Marlboro versus 14% of all smokers, the most pronounced difference found between older/younger adult responses. This is unusual, since Marlboro's only formal association with music has been some recent special events sponsorship. This suggests that these younger adult male Marlboro users may be characterizing themselves as they are or wish to be. Although "fame" is a concept rather than an opportunity at present, it would represent an.innovative point of difference from any past/present brand and appears to be relevant to younger adult wants/interests. Key Points •"Moving up in the world" is a key, enduring want among younger adult smokers and is likely to become of even higher importance as avenues for traditional success are increasingly blocked by the Baby Bubble. • Younger adults tend to emphasize the image of success rather than "self impr ovement". • A"status symbol" brand mdy attract some younger adult smokers, as an affordable compensation for other luxury items, if it can be executed to key on younger adult definitions of "class" and achieve clear difference versus competition. • Limited opportunity to "move up" within the establishment may lead younger adults to more entrepreneurial means of success, such as fame via the performing arts, especially music. This meshes with younger adults' key activities/interests and apparently represents an enduring want applicable to both sexes and races. Therefore it may provide an innovative new brand/repositioning opportunity, clearly different froa competition. 10 t!` -So- w
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ETHNIC SPENDiNG (f IN 1,000'S) SA(,p+ Koo 1 I/..por t x Tot f x f Tot ,; ~ % f Tot f l SEOMEKT INDUSTRY t Brnd f f ind f € s ernd f` 490 f'` '' Id f" f Brnd f S.qn~ f tnd S S _ S 1970 32.3 0.1 2.4 0.9 779.8 3.8 Stl.s 22.6 514,6 16,1 38.8 15.1 1,326,7 3,416.9 1971 725.0 5.5 55.7 22.7 576.0 2.7 44,3 18.0 0 0 0 0 1,501.0 3,19e,3 1972 938.1 4,9 74.2 25.9 325.5 1,7 25.6 9.0 0 0 0 0 1,263.6 3,623.9 1973 1,109.0 3.5 55.0 24,3 90A.0 5.5 45.0 19.9 0 0 0 0 2,017.0 4,564.0 1974 1,S3S.0 7.3 49,5 23.1 1,464.0 ?.2 47.3 22.0 100.0 1.6 3.2 1.5 3,139.0 6,744,0 1975 1,776,0 8.3 40.3 19.0 2,427,1 10,5 55.0 26.0 207.4 3.0 4.7 2,2 4,410.5 9,349,9 1976 1,530.0 5.9 39.1 ifl.2 2,200.0 8.9 56.3 29.1 180,0 2.8 4.6 2.4 3,910.0 7,515.0 1977 1,405.0 5.6 46.1 16.9 1,335.0 4.1 43.8 /6.1 310.0 2.9 10.2 3.7 3,050.0 8,310.0 1970 1,670.0 5.7 31,1 20.4 1,210.0 4,1 37.0 14,e 390.0 4.1 11.9 4,0 3,270,0 8,180.0 1979 NA IUl NA NA NA NA NA NA NA NA NA NA -... NA NA /9a0 21509.4 3,7 39,0 25.3 2,629,5 9,1 39.6 25,7 1,422.0 11.6 21.4 13.9 6,640.9 10.225.3 1981 2,199.9 4,2 46,7 21.0 1,300.9 6,3 27.6 12.9 1,210,7 5.3 25,7 12,0 4,711.5 10,111.8 1992 4,491,3 6.0 39,7 17.6 4,176.1 6.0 36.9 16.8 2,657,3 14.9 23.5 10.4 11,324.1 25,498.8 1953 4,AM,1 9.2 39.9 13.7 4,145.9 9.4 34,4 11.8 3,095,6 15.9 25.7 t).E 1.2,.j145.6 35,004.0 (Oct. YTD) a 9ES8 Z610S 0V9V T08tS P ., tOTE: N^vport spendtn4 was .ss.ntls/ly confln.d to North Atlantle/North Contra/ Area un'II epproxHne7.tY 1981, x v
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Mr. D. N. 'auco March 12, '_986 Page 3 5. COPY STRATEGIES A. Masculine AuthEr.ticity - Cont'd. • Focus of SalE - CAMEL is the only cigarette with a long heritage of de- liverinq the full/authentic smoking satisfaction demanded by men who pioiect the masculine ideal of strenqth, authenticity and self-confidence. • Psycholoaical Motivation Reinforcement of masculin:ty through expression of the masculine ideal. • Rationale - Reinforcenent of masculinity is an important want among a large percentage of males and this is particularly true among less educated and younger adult males (i.e., CAMEL's prime prospect). .., - Feniales noo represent nearly 40% of Marlboro ~ smokers. Siven this dual profile, N.arlboro's - ab*lity to credibly make the stronqly masculine ~:Y 411 ., s"tement that i t once d id has been weakened. '• .-Af ' - With its 13nq history of beinq smoked a lmost exclusivelr by men, CAMEL is unquestionably perceived ss the most mascul.Lne brand on the market. Tiere`ore, CAMEL can most effectively capitalize on the opportunity to provide the masculine :einforcement desired by target smokers. - CAMEL's pr)duct heritage cf deliverinq full/ authentic ;moking satisfaction is consistent with the d!sired user perception. Further, this advertisinj approach will position CAMEL's product heritage ii its most positive light by associating its produc: delivery with that necessary to satisfy men who project the mascu:inE: ideal. B. Cool Attitude • Copy Strategy' The objective of the advertising is to leverage the non- conformist, self-confident mindset historically attributed to CAMEL users scs that the brand becomes a relevant, appealing choice for today's younger adult smokers.
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"SMOKIN'=AT PERCEY'S PALACE" IMGEON GENERAL'S WARNING: QUITTING SMOKfl1G NOW GREATLY REDUCES SERIUUS NEALTN RISK:
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%v OZLV T08IS
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Mr. D. N. lauco March 12, 1986 Page 5 6. NEXT STEPS/TIMING - Cont'd. Initial creative -:oncepts will be available for review no later than the week of ipri1 7, with the first round of focus qroups scheduled for the week of April 14. An overall projec•: timetable is attached and assumes three routi-js of qualita•.ive research as well as a quantitative study similar to that conducted for the "Sociability" campaign. The recommended timetFble would result in a new advertising campaign appearing in-mark(t-during 2nd quarter of next year. Please advise wher Executive Manaqecr.ent has approved the recommended stratcgic direction. ;'i''"" 0`+ • . R. T. Caufield A:'C/ga Attachment : ,,cc: Ms. F. V. Creighton Mr. Mr. Mr. Mr. Mr. E. C:"Leary S. H.- Marlow G. C. Pennell 8. .it. Schwei ; J. II..Wilkin;
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Mr. D. N. lauco March 12, 1986 Page 2 3. STRATEGIC APPROACH - Cont'd. Specifically, target smokers' desire to project an image which reinforces their masculinity will be addressed through leveraq- inq CAMEL's heritage of deliverinq the full/authentic smoking satisfaction which historica.lly has made it the overwhelming choice of men who amulate the mascu:ine ideal of strenqth, auth^nticity and self-confidence. A second strategic direction will leverage the non-conformist, se:.'-conf;.dent min3set historically attributed to the CAMEL user to address *_arget smokers' desire to project an image that elevates them in tie eyes of their peers. C . GENERAL CREATIVE GlIDELINES To ensurftthat prob.ems encountered with the recent "Sociability" campaiqn'.do not bec<~me an issue in the new exploratory, advertisinq'Mill be developed to meet the following general guide:ines. . ... • Advez~ainq w:I rely on clearly aspirational appeals (the me i want •.o be versus the me I am) to provide the motivation :or target smokers to select CAMEL. t Campeiqns wh:ch rely on literal depiction of smokers to cotnu~wnicate c esired user imagery will ensure that ~nodeZs~~ and sitse tions selected art highly relevant and appea.ijniq to not only target smokers but broader demoqraphic qrotps as well. Additionally, the exploratory wi17 cover approaches which employ universal cues and symbols that effectively communi- cate tha st_atecies with motivational value that transcends democ:aphics. , . COPY STRATEGIES A. Masculine Auther.:icit • Copy Strateov The objective of the advertising is to leverage CAMEL's product and male user heritage so that the brand becomes a relevant, appealing choice for today's younger adult male smokers. To accomplish this objective, the adver- tisinq will coivince smokers that only the legendary CAMEL 'ci.garette delivers the full/authentic smoking satisfaction wlich for over '0 vears has made it the overwhelming c*ioice of men. CAMEL smokers pro'lect the masculine ideal of strength, authenticity and self-confidenc?. 1%
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Nr~~-j~.•-"~4-. - 7- ~.:~ ..i... ~ : r • (B&W) PROTECTED BY MINNESOTA TOBACCO IdTIGAITON PRO'I'ECTIVE ORDER •• . Stassel: ''!t: . I hoped •the pub,lishers.. of. Cosmopolitan or Psycholoqy Today. ..~_ ., . ' would appear 'on;,televiston to talk'about their policies,' but they 'would not: On' the'phone, both said they'have no`general policy on anti-smoking'ads. ::PsycholQgy Today's publisher said the reasons they re3ect •ads are confidential 'AnC ~ _ . . .. ' • Cosmopolitart~~s-publisher''said he can-"re ect"an ad for'any _" = '? ~~ ~ .reason,and that •s. true, but is it fair ~ . • . ~. . ~.. . . . .. . . , . ..• :~,yt~:~.. Reinold: _ - . . : - :~ .. . . -•,ti,~s;.~ ~ ..:{yR •: . Me• ought to be able to get our,.essage out across to the public : also. .. - - Reinoold (?): • . . , ., .. . . ... . . • . • . . • . . I think money is what's to blame really, big super dollars, , 51.24 billion a year in advertising tobacco money every year.' ; ' That's $4 for every man; woman and child in America today. That's an awesome, staggering kind of thing. And I think that's where the power really is. ~ Hugh Downs: John, do you think tobacco companies coerce magazines and newspapers not to run the articles or the anti-smokinq ads? Stassel: I don't think so, Hugh. I have no evidence that iny tobacco company tells a magazine, don't run that. They don't have to. As Daymon Reingold puts it, it's the money. 8ecause the tobacco companies buy so many ads, the publication sometimes sensor themselves for fear of losing that money. And incidentally, Cosmopolitan magazine now says it may run that anti-smoking ad after all. They said they didn't run it before because the magazine, they say, never received it. Of course, Cosmopolitan said all this only after we called and told them we were going to talk about this on television. 0 ~ O 14 N ~ ~ ~ W F+ . . . A 003C026E
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Fk~:E~Fi LIY(E_;,'EDD: [LJREEONGENERAL-'S WARNING: QUlTT1NG SMOKING NOW GREATLY REDUCES SERIOUS HEAtTH RISK:
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!.jr t~LS..H ON HE SCENE/• ..v ~t\.~,:'i ~"' . ... t. ........ •.. .%. ~i(][LL I~IGt~ I..LV~1~1tvV C11tVVirL) ~ SUR6EON GENERAI"S WARNING: QUITTING SMOKlNG NOW GREATLY REDUCES SERIOUS HEALTN RI bZLV t08t5
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nrrinui.t i, rtIs/r t/~L l•~wn An.~MIt/ ti. wtaM as if/l.ltrl r1t ..o. .,1 U-It L, MS jLt 1t's M-1 Itti 1~ 1m /M.~./tf . 1 . . . • . . ...Lt• wM/Me t/K r 1 • 1 . • 1 ' 1 s*ae/s . w aw c.+l. litlq plrtlt #1t t/./.Ht L.aax tlst .u1. v.el.. .rt.re ntrr/ stwnl . . tt y^ slt~ll /lw w. f"Sal/ tulr ./t t/Yr4Yt i.r[au wUII tttl swlls Utt ~o ttls tluri L/ 69 Ywtll wr1M. tiH fMt tltlt sr1. IIMIIt. 111(IlA/. twUt/ ttti/ wn. uu .rnN u// tlwl• ~ tnlti N• /IN owr t1YYq ttrtlNl wM/ wMI 111s IIIr1M uN rw1N Nlt t/mfa 111111 elit/l 11.Ia 4Mt rYIow. itt !'tKe r/ w N/tr Cw //t1 w MI (1RIerItp) jwt wHw. kl ala& r/ .I Irw r Htl w aHw t1.N tQIr/tlu) Inlttr t//K ItAma[/I NM~tr/ tl. Mlttr/ t)r I .MI tt n I~r1Y ~ t/A(.t tY" I tMl. •1 IIt1A pRll! /f1 ~ MK LS ~ I~r1Y 1Yi/t CM1/111t( 11/WYrfWf tYoaY wtr. /rl .I l it. I/r(l1 tliN II/IR { 1 1 • • • • /t /1 11 to 11 ~ )t .IIN /~. .1~c tA. 1Ty1m1 tit3 •IM@ tlq •1f1Y Ni/1 1.1/t th~o tL{t sIf71s uu tf.aN t,wtn. ,1 is.n, t/Yld1 ttts w. ttss 1t•. t•ri {htsl• u{i 10. mt Iqll i•ql i/t1 rwa 11Nt/wo Un/ •1n11 llt..t NY a/ .yfl. tr w•s#1 I/t.s1 1tY R/ Mltf, 11 / t~1 tl•31 titl as ntlts. rt m a;: •/•.•/ 11r a.lYttf talmls tAn tnlpf, n••YM wol..ts 8met !Ernnn a.r. 101 wa..nr. nwtM aft",' Immm fwgm hwr1Y M M f#"/ tiwttltiM* fr1 ' M am I1M stlt 1S•81 iMIfltNl Y if GAl/ N•h tiNt/1N1 Y~~ N Mlt/f/ uu .rl. 1111111111101 /rthal "11tN1 CAlf111/K- a Y w41 NW b1 Mftmttt Y.N. fett 0640
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~~ ~...~~.  - ~... SURGEON GENERAL'S 1NARNiNG: O.UlTTING SMOKING NOW GREATLY REDUCES SERIOUS HEALTH Rl
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Advertising 1. "Smokin' At Heroes" 2. "Smokin' At Percy's Palace" 3. "Smokin' At Bentley's" 4. "Fresh On The Scene" (Man and Woman) 5. "Fresh On The Scene" (One Man Tipping Bnt) 6. "Fresh On The Scene" (Tvo Men Close Up) 7. "Fresh On The Scene" (Three Men Clovning Around) 8. "Fresh Like Lamont" 9. "Fresh Like Eddie" 10. "Fresh Like Tyrone" 11. "Word. Smooth" 12. "Reeeefreshest" 13. "SALEM Into It" 14. "Breezin" 15. "StepR i'ng Up" no In Club Advertising/Posters "Ci tjr.. Br•Ozin" Poster 2. "Ci tyx8.x:eezin" Mnemonic 3. "FreS..h..::-.F::;tontin" Poster 4. "Fre~h Frontin" Mnemonic
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RFSH <I.I.KEfTYRQt;?E' G: QUITTING S;:.UKING NOW GREATIY REDUCES SERIOUS HEALTH RISI
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--.~....-........._...r.,,~..._ ~ . *,.~_. .. __..~..., : R.J. Reynolde Tobacco USA Wmston•Salem. N.C. 27102 (9191 17 7• 50pp April to. 11tjt1 SulJl<C?o "UtROIC CAMIRL• A,RVtRTIMO~C~AMI~ON l At the r.Qusst of John Vinebronnor, attseli.d you vill [iad a discuosion Oioca oe the •5aR0iC CANZI.• sdvartisiag for your upCO*i/l~ oaotin; vith th• •osed of vlraataes. tto istont io t• peovlde you vith the intor.ation needed to de.o.strato its superiority to all other RJR esapaiges tested. tho targot data for outdoor and print ro.ain• July, 1os1. fotk-04 J. lD. Vabor J :ZIz -Z- JbtJldh Attach.ant eet Mr. C. V. titsteeald Kr. Mr. Me. Me. J. L. t. R. T. V. J. No Yinabr.ea.r •all, Jr. ysakal.an tapders 11a.• 1. •. -CeriMbtat~,` Mo. t;.. JJ tr~lniR=oe A $Aibit Z(- 9~ { ~~.+ Date: lZM~ °' getz, Alfred A. 01090068
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~~J1'7Vf~1tV tii._i1GKVC.J" EATIY REDUCES SERIOUS NEALTI
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CONPIi)ENTIAL ._..`. Kay 18, 1989 Mr. J. V. fellis Ms. L. L. Bender Mr. E. M. Slackrer Ms. L. J. 8reininger Ms. P. S. Cohen Ms. E. C. Etsel Mr. E. J. FackelMan ~,lt ~. F. Fields . . E. Gslyan r. J. L. Oest.a Ms. K. V. Mr. J. R. Mr. D. a. Mr. N. T. Ms. R. C. Mr. 0. C. Mr. R. M. Ms. N. A. Mr. L. d. Mr. S. L. Mr. K. L. Mr. J. D. Mr. V. P. Mr. J. T. McCaiErey Moore Murphy P.rks Pasteresyk Pennell Sanders Si.nons Swith Snyder Verner Veber Vhitlatch Vinebrenner 60cER ADULT SMOKER MOKtNLY St1MMARY RBroRr fj~ . V. Nall, Jr. T. C. Harris Mr 'J. R. Nriinr C. S. Hunter s~J. Y. Marshall rasad The attached is the Younger Adult Sroker Monthly Sus,e.ry Report irom tho MRD's Younger Adult SRoker TRACKER tor the period ending February, 1989. .,.------. - - - _...~ Kris na Prasad MA1tKtTIMG RES6ARq1 DiPARTNSN? ocridc Attaahment e.c i NRIC Q ~ERtce ~ # Ex}iibit Date: r AWod A. Betz,1LMR 514347379
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Mr. D. N. :auco March ;2, 1986 Page 4 , 5. COPY STRATEGIES B. Cool Attitude • Copy StratecN - Cont'd.- To accomplist this obiective, t.he advertising will create,~,~. the perceptic p ,~that',~,CAMEL smokers - non-conformii•~ ~ self-confidert ^rcb"ol-attitude which is admired by their peers. • Focus o` Sale l. ~ ., s CAMEL is a sRooth, satisfying cigarette for non-conforming y~ yovnger adult smokers who project a cool ' attitUde which is admired by their peers. • Psvcholocical Motivation Aspix:ticn to an image which wiil make tarqet smokers coq>Wqccepted by their peers. . r...3~ • RatR tstia 1e : ::rai r- • ;I •i~K+t - Aspiration to be perceived as cool/a member of the "+-c:oup is one of the strongest influences affect- ing the be-tavior of younger adult smokers. - Personaliti attributes respected by target smokers anc} ir.here zt in their definstion of cool include a deQree of rebellion or non-conformity, along with the self-confilence to remain in control of the somewhat risky, exc:ting lifestyle associated with these characteri-,tics. ~~ - CAMEL's no::-conformist, self-confident user heritaqe, ,~ in cor.junc•:ion with its perception as a unique, . difrerent Lnd one-of-a-kind brand, makes CAMEL the i0 only brand which can credibly execute this strategy. eo~ ~ - This approich will capitalize on the ubiquitous nature of ltarlboro by reposition:nq it as the epitome of conformity, versus CAMEL the smoke of the coo:/in-group. 6. NEXT STEPS/TIMING I The Agency has ir.itiated preliminary idea generation at this point and will proteed immediately with full blown creative development upon a-eproval of the strateqic direction outlined in this memo.
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"BREEZIN" SURGEON GENERAL'S WARNING: QUiTTING SMOKING NOW GREATLY REDUCES SERIOUS NEAITH W
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p i M BvSDOM I$$M • DsCuaft Ioan*r volnm. • AfInL RdR Frsaelrlr. " rki Oiadwo Incradas Per"osVBoel~l Co~~ fi. AMC bYu,Oal SRIKY{Yg V/n0 HfwW w,'^a ~W;.r ~.. N Id • ~ C) co ~ /~ + • ~ N ~ v N N ro C, 4kvy Exln'bit # (U Date: ~= 2 (- f e Alfred A. Betz, RMR 510495725
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Younger Adult Inner City Black Smokers Slanguage Word/Phrase Strags Kool was "first big kick" Squares Straight Hang At A suit ;:;Vhen you vant to cool out He's cool/straight/strapped t ' s going on/it's on/that's happening ::yYou're a free,_agent F><Ne's on, sexy::>;;::- ...z I t a i n' t g o i ng;; a You're::.>out of her`e :: .. >;t h e o n~ . _ 8> , • ~9 t'give ht > play Physical Movement "Respondent" snapping fingers Meaning Women (uncomplimentary) Kool used to be big popular brand Cigarettes Good, cool To hang out at some place A respected man, a person vho has status Profound, heavy Image - Hip, with it, sexy, bad Product - cool, mint, light Aave a good time .A person you respect Something that's in Single or no date A very masculine person Nothing happening To leave Not someone's girlfriend To flirt Relaxing Heanin OK
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CA2EL Y&R ORIENTATION >0 T'i b E~ t#(0 `ff 7 Date: S- L (- W Alfted A. Betz, RMR TRIAL EXHIBIT 129989 0 Ln
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°ri<ESri Oiy. 'i'iir jCENr." (MAN MAN) SURGEON GENERAL'S WARNING: O.UIiTING SMOKING NOW GREATtY REDUCES SERiOUS NEALTH RISI
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for,nL Ctl ne, mrrv c~nrw,p lq (ONE Ml);N::;;I',IPPING ItAT) I SURGEON GENERAL'S WARNING: QUITTING SMOKING NOW GREATIY REDUCES SERIOUS NEaITN RI ZZLfii T08I5 0
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REEEEEEFRESHEST SURGEON GENERAE'S WARNING: SMOKING CAUSES LUNG CANCER, HEART DISEASE, AND EMPNYSI
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, k ... ... .~,` "FRESH ON `THE SCENE" CLOSE UP) (TWO St;RGEON GENERAL'S WARNENG: QUITTING SMOKING NOW GREATLY REDUCES SERIOtJS HEAtTH R#SK
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(B&W) PROTECTED BY vIIYNF',SOTA TOBACCO LITIGATION PROTECITYE ORDER ` Stassel: = So.when the Chicago Lung Association sent people out,-,kids. Qot~~ , a 1. . . C. ~ SA r _ . :.them.;•'. -' Browder: I cannot address that. I can tell you what the sampling code ~ z ,~ :~is for cigarette manufacturers and the sampling compariies are C sworn to adhere by that code. Stassel: ,~; VA But they don't obey it. Browder: `.They are supposed to obey it. Stassel: Maybe they're breaking their code in movie theaters, too. This is a commercial for KOOL cigarettes. This summer Brown & Williamson began running ads for KOOL and BARCLAY at some 3,000 movie theaters. They wouldn't give us copies, so we filmed them off the movie screen. The KOOL ad was shown at this - theater in Newton, Massachusettes, right before a performance of Snow White. Brown & Williamson says that was a mistake. It should only run before R and PC films. Of course, PC means the cigarette ad could run with kids' pictures like Star Mars and Superman. A group called Action for Children's Television has petitioned the government to ban the ads, calling it peddling cigarettes to kids. Brown & Williamson denies the charge. Even if movie advertising were banned, there'd still be cigarettes in movies popular with kids. These pictures are from Superman II. Marlboro, made by Philip Morris, is shown at least 13 times. They're able to equate their product tn the minds of people with a super hero. Somebody who is squeaky clean. And that association occurring over and over and over again in the movie is bound to have an impact, particularly on young, impressionable minds. Corporations acknowledge that they like to get their products in movies. It's another form of advertising. I asked the Tobacco Institute why Marlboro's were shown so often if Superman II 8 v .~ ~ ~ cn . ~ .~ z .., z x > ~ ~ v ~ ~ z` z ~ ~ ~ ~ C ~ ~ M CD F0 ~ Z u, F~ 00 m ~ ~ Ln v, Ln 003C0268
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r SUMMARY Z'bU dltte* dll+lCdM for RJR orlC the sas 3.5 yean Is to pli/nstain msMcet lbarc by toearirg oNorb o..dablMW be+iuii lrqesi hd..aat Has eatlOlloui4 and now blsndf that addrlw dM ron0a10g opportcoitlea Yo..pe Adult 8mokea QuaftI - abb-Added Wiral S}rM! `b--I `xYa<;.:: E41Cb 0r"Ovas op'Of~e~li hKieft do strsts* Quaa laded" a a riw;•ab.rt taru So.1. 510495729
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SURGEON GENERAE"S WARNING: QU1TtING SMQKING NOW GREATtYREDUCES SERIUUS IIEAtTEl HISK BZLfii I08I5
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R.J.Revnolds Tobla:^cc; Com:,a~ y _' © Agency Memo n~°n '0: B. W. Schweig WNCY: McCann-Erickson WOM: L. J. areininger *TE: August 7, 1987 ~a~~•JBJECT: Nev Campaign Development Thi s •A ~ confirm our discussion re ardin next steps on new c.~ylj~aign development. Based on focus group learning, should piirsue further two of the concepts presented: 1) kfMch Camel Campaign :~s^:enot : ~ O concept achieved all of the objectives set: CAMEL's we ~. rx.r , Individualist copy strategy ~ CAMEL ownab le y' ~,V Jolts consumers/nonconventional/contemporary Next Steps ...~'. • Develop situations which communicate that the French Camel has an individualist personality. This will provide more s;~> ~ substance to this campaign rather than just being cartoonish or cute. • Situations should appear more realistic and understand- Ln able to the target. Do not limit to "younger adult r CO situations". m t"A • Define the features of the CAMEL more completely (i.e., ~ m facial expression/clothes/body language). CO CO Z- • Explore alternative lines or statements which help define French Camel personality. 2) A Different Set of Rules (n 0 N O Campaign acceptance wasR driven by the copy lint which successfully communicates the individualist strategy. 4 r w v r w 44JCry ~ Exhibit # Date: AIfr dAB t RMR ~ N w M . . z, e e 507131238
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May 28, 1992 Page 2 Under these caircumstanoes, Jim Johnston, Dave lauco, Ernie Fackelman and I have oDttduded that it would be in our long-term best interests to join the ranks of our competitors and limit our advertising and marketing efforts to smokers 21 years of age and older. We don't believe for a minute that this will silence our adversaries in their attempts to misrepresent our motives or the effect of our advertising. We do feel that it wil1 blunt this point of attack and provide us with a three-year 'cushion' that can be used in reaponse to daims that we're after the underage market. Since all of our direct marketing, sampling and most of our promotional activities are already lim"-.d to 21 and above, what this means, as a practical matter, is the folloMing: I. All brand positioning statements that currently re0ect audietwes below the age of 21 should be revised to reflect audienaes wfiioh are 21 or older. All of oU..c}vertising agenciet that are currently working on brands/styles with audiena" below 21, should be promptly advised that the audience has been revise-*or above and that any arork-ia-progress should, to the erient necessa~e revised to reflect this repositioning Markeljng Research conducted with the purpose of developing our marketing eleme uct, packaging, pronatioa, advertising) or enhancing the appeal of these e„I~is~t~ will be conducted only among smokers 21 and above. 3. 4. rf h oDpduaed to understand and track the cigarette category and the performance p g sbult (N'+P"rnokers. our brm dt and those of our ooru etitors can oontinue to be eoedueted amon all 5. Our in(advertising review panel should be advised of this policy immediite~and instructed to factor it into its w3rk. 6. While our` pelicy already prohibits our advertising in publications directed Primar~C~those under 21, I would suggest that we also take this opportunity to rev~ew:~pur rnedia list z. Please ensure !~t sAI our marketing materials/activities conform with this policy as soon as practicable. James (' Schroer :jt cc: J. W. Johnston E. J. Fackelman D. N. lauco 021900B4
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prodt 111 : HLjIV1YiIRl+:Y" ; : STRATEGIC IMPORTAyCE OF YAS AND SUPWARY OF YAS LEMtNING II. GUIDELINES FOR EFFECTIVE MWKENG TO YAS. III . CANEt; !Vxr~4~oN ~~ IV. CAMEL 1990 OVERViP1 bi9t bZE09 9fiiLfii T08TS 0
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nesponcencs In tive or the six locus groups were snovn current SALtrt ^xetreshest" Black executions - "Poolside Hip," "Male Waterfall," "Holiday," and "Leg Fan." Two of the four "Refreshest" executions shown received a favorable reaction from most respondents - "Poolside Hip" among male respondents and "Hale Waterfall" among female respondents. The appeal of these two executions was the use of attractive models - versus some of the new creative which was perceived as using unattractive models. "Poolside Bip" "She's fresh" "Cooling out by pool. Good body. Good poise." "Male Waterfall" "Cooling out. He's fresh. Good body." "At waterfall chilling out." Respondents in general liked the relaxing and romantic atmosphere they perceived in these executions. However, they were not perceived as unique, particularly relevant, (versus favored "Smokin at Heroes/Percy's Palace" executions) and were feit to be more for older smokers. "Mental picture relative to "Smokin' at Heroes." "Everybody's doing this." "Smokin' At Heroes looks more like today. '60's action." "For older men ("Poolside Hip") relative to 'Heroes'." While many,::F;r'espondents liked "The Refreshest" copy, others felt it referred to SALEM'S I~gh•f, menthol taste which they did not like. For those who responded it vas perceived to mean "the ultimate in a o'1`"The Refreshest" copy favorably , .;: ., taste like".A good drink." ,.;: ~ . .. :0 '
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This campaign did not confirm any of the ingoing nypotneses excepL one. .; did use "language that was relevant and somewhat exciting." Overall. most respondent's reacted negatively to this campaign. Their reactions were due solely to the visuals. The models were not perceived as "fresh." They needed to have better looks, clothes and a more stylish haircut. They were too average, too sloppy, too dovnscale and too close to everyday reality. "Dress Lamont up a little bit to be fresh." "He doesn't look too fresh. Looks like man who sits on corner with bottle." "He's not fresh. You're vasting fresh on somebody." "Not appealing. Need guy from 'Smokin' ad." "Has ghetto look about it." Fresh was perceived as a better looking man or woman who is better dressed znd looks like they're in charge. Fresh dress included: A Nike warm-up suit A Leather jacket The Miami Vice look - a striped t-shirt and jacket e~ Many respondents did like the copy but wanted a different visual. '~ Many.,,fel..a the "Fresh Like ..." copy would go vell on the "Smokin "' visuals. D. "VorSmooth" ~~ Like thew-"Fresh Like ..." campaign, this execution, "Word. Smooth" did not onfirm;,;ehy of the ingoing hypotheses except one. It did use "language that ~.eI ev.ant and somevhat exciting." ~, ; . . The c:Word. Smooth" or just "Word" received favorable reactions from most resYi'ondents. It was relevant language and most perceived the copy to .,? r mean :..;.:.:..: ;~ . "The word is SALEM" "That's straight" "Says SALEM is smooth" All respondents recognized the visual as the rap group Run D.M.C. Therefore, respondent's positive reactions to this execution may be attributable to their positive response/recognition of the popular Run D.M.C. rap group. U7 F~ 07 ~ I-r 1p v F-' I--~
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Our ingoing hypotheses were not confirmed vith the "Stepping Up" execution. The majority of respondents perceived the copy "Stepping Up" to mean "Stepping up in life, in status" "Stepping up in the world, to a better brand" However, almost all respondents felt the male model was more of "a street operator, a thug, or gang-like" in his appearance. "Doesn't look like someone who is stepping up in life. Looks like a street operator." There were a number of reasons respondents felt the model was a thug. They included the gold chain jewelry, hat tilted to the side, sunglasses, and no smile. In Club Advertising/Posters Two executions (and corresponding mnemonic) for In club advertising were shown In three of the six focus groups. See Attachment IV. "City Breezin" Most z:,espondents favored the "City Breezin" poster over the "Fresh Frontin" poster di•scussed below. They liked the fact that the poster was shoving people...ha"ying a good time in the city. Others felt it was promoting the city 1. Poster. '~~and r }.~spo~ded favorably to the idea. .` W "T..Figt "'s nice. Having good time." "Heafis promoting the city." Some r ,espandents even perceived the poster because "Breezin" meant coolness. to communicate a product message 2. Mnemonic Almost all respondents liked the "City Breezin" mnemonic. skyline of city buildings fit vell vith the "City Breezin" copy. "Fresh Frontin" 1. Poster The majority of respondents did not like the "Fresh Frontin" poster. This was due to the negative meaning of the word "Frontin." "Frontin" was perceived to mean to mislead/misrepresent oneself/put up a front. Most felt "gangs" would like this poster. 2. Mnemonic ~' ~ ru m As with the poster, most respondents did not like the "Fresh Frontin" ~ mnemonic. Many felt the mnemonic looked like a logo for a gang. ~ ~ ~ w They felt the
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® INT SURGEON GENERAl.'S WARNING: SMOKING CAUSES IUNG CANCER N EART DISEASE, AN ~~ D EMPNYSEMA
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Chicago Clubs Attended wN;:. ;<..>:> Chicky Ricks The Copper Box The Taste (Knovn for female dancers) The Fantasy The Surf AKA Coconuts Riviera Heroes Bob's Place The Illusion ET's The Barricade Tiie;>So.Othern Girl The:;;:R. A e The Efieads Thg;:'„~tiifnmi ngb i rd s Sa.nsabar S ao.d'jY-i'p e r s The::>::Epony Room :' \ V.v...~ y' . TMF Nev Box Set & Dial The Cotton Club Onyx Sveet Georgia Brown Tits
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507119988 51801 4735
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"STEPPIN' UP" URGEON GENERAL'S WARNING: QUlTTlNG SMOKING NOW GREATLY REUUCES SERIOUS NEALTK RIS , 1,,
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kaq BusiNsss /csuf(, .;~;~:;.:.... $'r.• nS4>: • . • a0euNlNt, »4qcTty VoLuCAE,, . ~66. ~68 • Gonsu~~Frtion y 2oje P*t(.we.a. `6Q • f)o . . .. . • i44n jNh.• RsQ..Pip NCN 1sf.,1 tixPIM'n. Is9, of nwremenf ~A RTR Sorn wkqo(y, + Cs°)o •I'nU eaery '6o . . ... . __ ..__. .._. . .....,... .~ . • IucgE4i~#c* Pt,ezo+~n,L / 9041m, co&ctcus _. snak+nq -& WEuMA lAboy ConhAlAAo T Pifsi" tcwM.d "smcb•koe' env;ionn,ini . Mowrnai- twrrcw.#Nt, 6ivtu 8e.aub LoyAcry Oa rhaoboro 'trno"4d Mos+"sYMf Wrhd in '~At 170'S - ytf)e ore_ 6-1+lt W;+h . . . , . e 4 -+o(Al . 510495726
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I I 7iJOty: NW ~iIZa~32i4?` 7.,LIJ 51801 4734 507119987
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Mr. G. W. McKenna Page Two October 19, 1984 • A11 groups of Fubyas admire the non-conforming groups for much their guts and freedom. Smoking incidence is higher among the non-conforming groups. • An effective marketing strategy against Fubyas should: utilize nontra'ditional mediums - field marketing, special events, etc. use pull strategies, not hard sell address a rising trend use more than just a product sell provide internal integrity - not phony to target groups avoid price discounting IMPLICATIONS • MORbr 14 have an o ortunity for qrowth amonq a Fubyas DU sub"f` .ind therefore lon -term rowt-h. The MORE Brand is a n ural fit with many o the key needs of Fubyas. They~ire to live on the edge - take risks, stand out n a crdwd, be adventurous. MORE automatically makes ~his~•,M (d of statement about its user. Fubyas want to do~ ~~mbols which allow them to belong to a group nd hi~ah differentiates them from other groups. Things like~**~'~~`~ 'k hair, spiked clothing, and drinking Budweiser mak~~em stand out as part of a unique group. Why not a bz~~cigarette? MORE has never been seen as a mairti$tream brand, therefore, it should not have to over- come any hurdles in marketing to Fubyas. Not only is the trend of livin on the ed e consistent with the MORE ro osition, it is ver levera a le. According to this analysis, it is a rising tren among the non-conforming Fubyas subgroups, and it is the non- conforming Fubyas subgroups that have the highest incidence of smoking. If MORE became the brand for a Fubyas subgroup, it could reestablish long-term growth. Since 1982, MORE has been flat to declining due in part to the limited number of people interrested in making the kind of statement a colored cigarette makes. A marketing program directed at two separate segments could increase the potential for future business similar to the IIudweiser approach. Budweiser didn't reposition the brand, it re-executed it for the younger adult market. Budweisei maintained separate younger adult versions of BUD's TV, Radio, and print campaigns. 503440794.04
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0 intrusive in the inner cit Black environment seems to oe correct ioi res ondents favore executions - "Smokinat Heroes/Perc 's Pn ace" and some "Fresh on the Scene" executions. Target smo ers respon e favorably to both the action in t ese execut ons as vell as the vivid colors in them. They also incorporated cues/hot buttons which enhanced the ability of these executions to attract attention such as: positive male/female interaction; male "center staged"/primary figure; and the right dress (i.e. Nike warm-up suit). NEXT STEPS: Next steps are to make revisions in the creative based on our learning/consuroer input which will be followed by further qualitative assessment (which vill include exploratory on "fresh" dress as vell as relevant "scenes.") . *'~y~s,~~d
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• sRArm $uSDG= vMS Four RJtt Btaad Bodsep Unks bn" beeo wdtb!lsbed In otder to offadh* aidtsm the curreat laoa sad more etflcieatty mat .awr*Inj mwbtplaoe de0a.d~6 • ' LEM & M. Diackrw • wrxsrowMAOriA"m R M. 8ti.iws • VANTAGB/NOWIMORR B.Ii.B&"&n . sa,,ct:¢e M,aric,ft L J. BrMal"r aas sn m.de up et re [hoau l~iil0 iMW Pevmbotfoos 510495728
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produced by (1JR7 0 lti Hu:N'lpHIui:y • TO MOVE FROM PROSLEM 1DENTIFICATION TO ydAT ME CAN DO AsOUT IT• • TO PROVIDE INSI6HTS INTO ACTIONS MHiCH CAN IMPROVE RJR PERFORMANCE AMONB FUBYAS• ~iSLfi I08TS ZZ9t yZLOS
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provtaced bm 61,II2'CC' • MDO/MARKETlNB jNPUT• lMP'JaEY' ' QUALITATIVE O6UT fEEL' ' DATA REVIEN AND SOMETIMES RE-ANALYSIS • OUTSIDE EXPERTS FROM OTI/ER DISCIPLINES ANR INDUSTRIES• • YA SMOKERS• - 611OtlPS AND DEPTNS - SAN DIEGO, MEMPHIS, NEW YORK I.: x~I~` ~~~;~~~~~.~~~~:Z ~ . `~ ~~~ ~~.. ~..'( ~ ~.:~'~ ~ ~'~ ~ EZ9t 6ZLOS SSLV t08TS
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None of the ingoing hypotheses vere confirmed vith tnis executlon, "Reeeefreshest." F. Respondents' reactions to this execution vas one of confusion. The message vas unclear. Host did not understand vhy the models were jumping. Furthermore, they did not see how they could jump (or smoke cigarettes) undervater. This execution did communicate that SALEM would be cool, refreshing, minty, like a peppermint - reinforcing SALEM's already too minty perceptions. Many respondents, particularly the women, recognized Vanessa Williams as one of the models. This in turn elicited comments that she was "fresh looking and fresh dressing." "SALEM Into It" None of the ingoing hypotheses vere confirmed by the majority of respondents with this execution, "SALEM Into It." Many respondents perceived this execution as boring and the models as older smokers. , 01 ~~ ~ ~:.~ <+` • "Too posed. Studio picture. Album cover." "Vou.l.dn't care what these guys are up to." %i;S ' Some '~emale respondents reacted more favorably. They felt the guys In this execu...c;ii:were "nice looking and clean cut." ;.~~,. "'Fhes,~;guYs are fresh. They got dollars." "T..hte}t^wr e i n t o i t." Otherwma-l'e and female respondents liked the copy, but not the visual. These smokeW* °also suggested variations to the copy such as: V- V .. ..}vif..'.,.,h, 1.t "SAI;EK`Get Into It." "Into It SALEM." ~~ "Into SALEM." ~a~ ;~,.. .~ .~~ :..~.. . G. "Breezin" The groups' reaction suggest our ingoing hypotheses vere incorrect on the "Breezin" execution. Most respondents had a neutral reaction to the "Breezin" execution. It was not particularly relevant or exciting, "just OK." There was little being communicated to respondents by this execution -- mostly that breezin and skateboarding go together. Most respondents did, however, like the bright colors in this execution. Ln ~ CO m ~ ~ ~ ~ N
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produced by RJR'fC 3 in i-EUMPIIRF,Y TYO VERY DIFFERENT EXAMPLES OF SUCCESSFUL SRANO STRATE6IES: 1• JACK DANIEL'S -- THE MARLBORO OF BOURBONS • UNEXPECTED POSITIONING AND EXECUTION • CONSISTENT. LONG TERM MARKETING EFFORT 2. SUDMEfSER -- TURNING A BIG BRAND AROUND 1`11)F:NT! ~. %. T(M 'l(.'t:.'(.) 1:11 if' k I 'io-"t; SZ9i bZLOS LSLV T08TS
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"MEn02C CAMEL' ADVEMISING AISEAJICfl SUMMARY • ADVERTISINC COMMUNICATION 'Heroic CA?ItL" sisniEicantly l.Oroves advertisind epe~runieation by adding a soeial dimension to the CAMEL sroker personalityt • Equals Sob •eek in eoa.unieation of IndependencNindlvldualisa. • Exceeds 1ob 6eek as a aore lun, social and likeabl• personality. - Provides more "younger adult' iaalery than 1ob Beeks hovever, the s.eker ieage remains aor• "older adult" thtn "younger adult'. • ADVER?ISINC APPEAL "Reroie CAM6L" Sinerated a very strons and positive emotional response aaons rale target ssokers at levels tvo to three times higher than Oob leck. - RiShly conteaporary and up-to-date. - Very exciting, eyecatching and appealing. - Uniaue. original, CAMEL ovnable•advertising. • ATTI?VDE IMlAOV'EMLtR "Reroie CAMEL' is highly motivating to target ssekers. • Lproved opinions of CAMtL uont d1X of sale e•eipetitive target saokers vhieh is tvie• as high aa any other previous eapaip tested. - Actually shifted attitudes aore positively aaeng CANRL franchise eeekers (34X) suggesting reinforcement e! CAMlL brand 1•yalty. - Generated virtually no negative shift in attitudes aaottS either group. • READLINE, COMtAAISON Advertisir•r performance did not vary significantly based on dilterent. headlines. Isolated differences betvaen headlines ineludadt -'Smooth Character' eo..uaitated .ore s.ooth tasting, less harsh and more enjoyable cigarette. ~ -"Nov You're Saokin" vas perceived as more contesiporary and aa having a ~ .ote sociable petsonalitr. -"Lisht Up A Lesend' negatively rainiorced older perceptions of the CAMf.1M OD m ~ brand. ~ • !'t!= DMLOtMDR m 6l •Ovesalle the key areas for tuture davalop.ent indieated by the research aro to leeus en vayo to iqrev the •yotaiSat adt+lt• o=ieatatlest. Addit!•ttally, further headlinee should bo •xpl•rod that r•intoree prodaat pere•peions vhsle eem.unieatind a'yowter adult" ims.. « .. . ~ . . .. ..~....-. 0109006A
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produced by It,llt'i'C YOINIGER ADULT SMOKERS , STRATEGIC IMPORTANCE 0~.6IPOIW&1~IR STRENGTH AMONG YAS WHILE RJR LOSES AGING CALCULATION , INDUSTRY NUMBER X NUMBER X 40 14 99MM 31 0 1988 SMOKERS 48.36MM 19.34MM .0 . . NEW YAS 1.11 .77 69.8 +1. 3% .15 13.8 _0.6 x OLDER QUITTERS 1.76 .42 24.1 I .63 36.0 .0 .~ ...~. ... .,.... .. ,. ,~ 14 51MM 4 < 30 SMOKERS 1989 SMOKERS 47.70NN~t 19.69MM 41.3 < . . Y ~I IN Nl=:s-$":.)` I A'I 9191 bZLOS 09LV T08i5
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The advertising exposed in the focus groups can be found in Attachment III. A. "Smokin' at Heroes/Percy's Palace/Bentley's" The first campaign, "Smokin" seemed to fulfill three of the four ingoing hypotheses. Specifically that it: - Is more appealing and relevant to younger adult inner city Black smokers than is the current "Refreshest" cac:paign. - Communicates that SALEN is a brand for younger adult Black smokers. - Is impactful and would be intrusive in the inner city Black environment. The Smokin' campaign had by far the strongest visuals. Virtually all respondents selected this campaign visual as their favorite. Their positive reactions to this campaign visual appeared to be a result of a number of factors. < t. .v ..,v:.~ The visual portrayed a positive side of these respondents lives. It was when they dressed up (either casually or more formally) and vent out to have fun. The dress was fashionable, enhanced their acceptability and self image, but:vas not so expensive that it was unattainable/out of their reach. Somo'f the dress had brand name items they recognized and admired (i.e. Nik..e..~>vdrm-up suit in the Heroes' execution). "They.,.;have on leather and dark sunglasses -- that's in" ~.k.'. "Th.e'~°guy's dress is right for disco" (i.e. Nike varm up suit) "Like.guy and his lady out on the town, fashionable, attractive, for yooin-ger:, adul t smokers. " ;ues-:>: rot~s.; R:x~i:ka The'-mo.d.els were perceived as attractive, young, and definitely Black. :{.a~~ The male/female interaction portrayed was positive. The male was the primary figure, "center stage," in charge, while the attractive female was his date, "on his arm." - The colors used in the executions were bright, upbeat, and there was action in the visuals. Ln , "d M W ~ ,". ..~ M ~ W
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• STRATBGIC PLAN G Build YAS Share ter Lm=-Teem Gevft •Support braoab atready :bwwiog YAS pobmtls! ( tiNA) - Now braade (VPlVR) • Speelal Market Opperluoiqn (8taelchtrpaaldA'liHar7) Revlaltze Core Brand: With Streogtbeaed Perodad Pe+opoeitloar ..h - SALEM • YAS appeal (NIt/GLD) WIIVMN/VANTAGE • nritebio= oppo~a~ ;:>:...... ~` Capitatis. nop:: 6rowing De.Mad for Uwa! Pries . - S11Sai0l/ilbe mM DORAL'j ieplleat ked/fM* • ftP1oeo'~~do.al k~w Peia PropoeiL~o.e Conoeem • BBTA • VANI'Ad.bIO Lawo6 Nwe::#~sodMJw Bztessloos Zbat Address Ioarasm= AenooaNSoeW OpHmita SbanVPO!latlal of Nk6! DffMk • MOIiNNOW Eumieaa Trade Loaatn= ~ )0 ~ 0 0 co ~ V 510495727
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SECRET No. 206 By_._.. TO: Mr. D. N. lauco March 12, 1986 6c hSCEl '~ Exhibit# 1C) `'~~! Date: 1- 2 LI 4 Alfred A. Betz, RMR Re: CAMEL Dew Advertisino Cameaicn Develooment This forwards the Brand Group's recommendations covering key aspects of CAMEL's new advertising campaiqn development prolect including: 1) target audience definit=or., 2) advertisinq objec- tive, 3) strategic approach, 4) genera: creative guidelines, 5) copy strateqies and rationale and 6) next steps/timinq. 2. TARGET AMIENCE based on considera:ion of the marketplace dynamics which are perpetuatfng Marlb)ro's growth (i.e., brand loyalty and peer :t 4s recommended that creative efforts reflect a primary focus on developanq advertising which is highly relevant, appealing and motivational tD 18-24 male smokers. This-recommendation is influencal, and wh;ch strongly suggest that repositioning CA*L aaathe re,?evant brsnd choice for younger adult smokers will be critical-.to genera:ing sustained volume growth. However, recogniziriq the vo.ume potential associated with advertising which is• broad bast:d irn appeal, the creative exploratory will ecr.phasize 'aoproachf-s which employ ur.:versal cues and symbols havi:,g motivationa. va:ue outside of the prime prospect group as well. i . ADVERTISING OBJECT:VE Overall, CA.MEL advcrtising will be directed toward using peer acceptance/influence to provide the motivation for target smokers to select CAMEL. Specifically, advertising will be developed with the objective of convincing target smokers that by selecting CAMEL as their usual brand they will project an image that will entance their acceptance among their peers. 3. STRATEGIC APPROACH The underlying strategic approach guiding advertising develop- ment will be to leveraqe positive•and distinctive aspects of CAMEL's product/user heritage includinq: 1) delivery of full/ authentic smoking satisfaction, 2) masculinity and 3) TRIAL EXHIBIT TRIAL ,769 12 non-conformist, self-confident user percertions. Creative will present these brand assets in a relevant, appealing manner to address rr.aior image wants of target smokers. ~ W a+ ~ N W ~
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produced V, III Fl.UMrlIRl,v, YOlMGER ADULT SMOKERS I ~:NA `I.A I.: Nf t1(.MA lf ;t'`~ 9191 bZLOS BVLV t08z5
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Younger adult inner city Black smokers definitely nave tneir own sanguage. They have specific vords/phrases (i.e. slanguage) they use to describe a certain type of person or situation. For example; Black YAS Slan ua e A very masculine person e's on, sexy A person you respect Ae's cool, straight, strapped A person vho has status A suit What's "in" It's going on, it's on, its happening, its fresh A complete list of Black YAS slanguage used in the focus groups and their meaning is included in the Attachment II. II. In-Market Perceptions - SALEM, Newport and Kool , >sfi:` ~~:•M '~. SALEM's perceptions among Black inner city younger adult smokers is fairly cons?stent with its perceptions in the general market. SALEM has both unfavorable product and user perceptions. SALEM's product is just too light and its user image skews female, older, while and overall boring people. Newport, on the other hard, benefits from both positive product and user perceptions. Its product has just the right amount of strength. And Newport's user imagery is younger adult and mostly Black smokers.' It from being - the most popular brand, the one all their friends smoke. , ~~ : Kool is a s'ecrond choice brand for many perceived as;;`~he strongest. Kool's perceived _ra~,be primarily for Black SALEI?7~ ~• . Too light'~'" : "Like noCing" "Need to cut filter off when smoke" "Like smoking air" Too minty Mostly females, Mom's Older, working women For White people Boring, stays at home and smokes benefits Black YAS of Newport. Its product is user imagery skevs male, older and is Smokers. Summary of Perceptions Newport Kool Just the right strength "They cool you down" All friends smoke "Started coming on the 70's" For YAS Mostly for Blacks Strongest, almost too strong More for men "Older people, cause in been on market so long" Mostly Black . not ~~ "They're gone" (i.e a~~ popular)
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pt-oaucea by[l,IRI' c I 11 .IO IS AN EXAMPLE OF A VIADL t t G. 1 tk ~ AM T/NDARD' eUT AUTHENTIC AND s UNPRETENTIOUS MAY. WHICH NOt ~ R JO Y CO m E ~QO. ERTED YA'S INTO MALKiNG SlLLdOARDS• THEY STARTED NITH A GOOD IDEA AND STUCK TO IT• BUDMEISER, IN CONTRAST, IS A STORY OF HAVING TO RE'THINK THE YA MARKET WHEN THE GOING GOT ROUGH• ~.'(_)'Fl~~l~:"~`~'~:~ ~:: ~''~ IE9T bZLOS E9LV T08TS
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October 19, 1984 wit, M. a TO: Mr. G. W. McKenna RE: Younger hdult Snoker Presentation - MORE Brand Perspective This memo provides you with the Brand's perspective on subject presentation. KrY CONCLUSIONS • Because of high brand loyalty in the cigarette industry, FUBYAS (first usual brand younger adult smokers) have driven the success of the key brands of this century. Fubyas are 18-20 years old. Older smokers who have already selected a first usual brand are switchers. • Success,,ful brands among Fubyas are those that have addrE~s~eV a want which is a rising trend and that diff~~e~~rtiates Fubyas from all other groups. Succe:ul brands tend to be dual, rather than ~ f ema ma 1 e. •4a-Ahre~~~Urths of smokers 18-24 were educated through :.~~ ~~.~~igh~ sc}ibol or less, a trend which is still evolving. „~... ~ • Key Jmumft which differentiate Fubyas from other smokers the desire for success and excitement today not tomorrow escaping from life through fantasy or finding romance in the "Good old Days" the desire to live on the edge (take risks, stand out in a crowd, aggressive, rugged, adventurous) the desire to stay yorng, not fall into a rut ~~ . OWM ' to belong to a selected peer group. *ant to be seen as different from other groups • Fubyas are categorized into social groups which clearly define subgroups that can be marketed to: conforming - goodie goodies, preps, GQ's, discos, nonconforming - rockers, party parties, punkers, burn-outs asce Y ro c Exhibit # ~ Date: ,2L ( ' ~ Alfred A. Betz, RMR are: 503440794.03
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r---1---av.+A xw--.. . ±!rR' . , out 00 IN I !~~ i 1. fscausa of CYiL'a asjatire i.o.a=kat *ssaaptis.a a.m psirps adrlts, a rs.p.iga diract.d toMasda tM.m trt be .rsy app.aliag aa1 st~lati~, as wll as ep.-eatCriag. Irl.le ttiMa ?s.411sr aislt ais all i" @1 to w.m the tarj.t is the sft6t dis.atie., dw Ms did set s.m tUss to tbs a.e.sa*y sir.... 2. CAlii.•s arsat of Mritap dss .fst aN.as to rsw qvdts dw lswsap api.st ttie tasv.t" gsos! . tlrt ws - .arit.r pr~....M. !ie s+...es for trds is pziasrily that this ap aram is too po.as to sesa~ss eatliet ties to '1'd lalk A kLl.', dw wekiap bdlltissd, dw easl or aap ot'ber .lewat rvociat.d .itti the lra.d. 3. Ia ter.m of overall apl.al, rssaPr adult ..obass appear to law a TM soalitp. eLsset . faetoss wn& s AodeL tbair os .ap ami activities the raitoiisst oeiTd prstid}ats or ` r.late to; ttie taataap elasat iselrid.s sesss ttiat.ara estbtr mmlqas aad :wmspactad, os:'Tir.osoas sd ridieulow. 4. °Tbs Tewsser Ad.lt Ca.paim ia, for the .ost psrt, successful is 3attiM the target lanar tbat the ads asa directN toaards tb.ir pasticular ap onp. ~• coats+sat, the s.olvtiowasp Cs~paipa bss a ao.r~rbat .id.r raan of ~~ ~_I~~imi=_ 31is ?ouoper Jda1t S.oker Ca.paign's dapartura from traditional CuRL Ma.rtiMNNis a sfaailicast i.pro.asat due to ita rele.a+scy to tbsse ° t.d s.otars srodp. T6e actual esecatioaa, hossw ar, tall s6ort of Imcitiui the sls.r reactioea obieb ara a.edad io ordar to ebaape ctirrsat pi~s~ceptions of CUi~. furtber creative esploration of ad.~artiassats could p~odnce a sore dy+arde aad effective Younger Adult Caapairn. . ,~ ~[: ca
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I le L(Jnr 11it'IN i L:AI. Marketing Research Report January 16,1989 ' .ex::x.;Cat INNER CITY BLACK CREATIVE EXPIlJRAMRY 11 COPIES TO: ~ ~. Mr. E. J. Fack,elman Mr. J. D. Weber ;., Mr. J. V. Bellis Mr. J. A. Paooaterra ~.~ Ms. Ms. Ms. L. J. Breinin,qer D. C. Miller Janive Lee (FCB/LKP ) ~ Ms. Mr. Diane Krutan (FCB/LKP) Kelvin Wall FMi: MS. C. S. HUt1m PUBLISHED BY THE MARKETING RESEARCH DEPARTMENT R.J. REYNOLDS TOBACCO USA, WINSTON-SALEM, N.C. 27102 aJRr / orm E75x - i1ev. 7/!8 MS. F. V. CREIG'H'IUN Jf! ~~w5Jk3`~ . < ' AcotcEy Exhibit # Q '1 Z Date: S- 2(• 4.~ Alfred A. Betz, RMR 0 c c
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produccd b}~ RJR'f+L' ,!D'S POStTIONI/6 a' 111 •.ID IS TO BE SEEN AS *THElJTt4EXJ1Dj ~l44T~U~1~Y, SUPERPREMIUM BRAND OF AMERICAN STRAIGHT WHISKEY ON THE MARKET•0 (AA $/4/80) {TS IMAGE SHOULD REFLECT if A SOFT'SPOKEN RESTRAINED PERSONALITY THAT ATTRACTS SiMPLY sECAUSE IT NEVER SEEMS TO TRY TOO HARDa• (AA 7/26/8q) JD'S CONCEPT *THEY MADE IT RIGHT IN THE GOOD OLD DAYS& ITS AD CAMPAIGN CONVEYING THIS MESSAGE APPEARED IN 1954 AND CONTINUES TODAY• {...'t:~'~ t0 L :1`1'1 CA 'I OZ9j baLOS 09LV t08TS
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0 'SICAtcg.Ic lwporlance of 1'AS 6 Suaa.ary A YAS Learning ~~ I %% . i 51801 4747 50724 1615 i 0:1. N :I :A.)SA "s, 14A It I I ~ ~ A rLiiiidIvrin[ ul a ~~.L2![`?I ~fc1 i)3i1P4..)J(:t
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0 lwii -Ufki6Si;~I-i 51801 4733 507119986
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NNAt D1D R"t PE0('h1e(' by fZJllrl'C • ill l• THEY INCREASED THEIR OVERALL AD SPENDING. .~ q ..~ ~ .1~E;.^.~.~..._l. f ~j..~...~..li.R.. ..,.4~...j, BUT YOUNGER ADULT AD AMA$EHESS PER SE WAS NOT THEIR PROSLEM YS• MILLER AND THEREFORE. NOT THE SOLUTION TO THEIR PROSLEM• AO ANARENESS 18-24 bE91 bZL05 99LV T@8TS REG. BRAND USAGE-18-24 . y , $ ~ ? • f. ~ t~~ : '~ i `2
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pr(•)d.uccd by IZ1R "T(. ~: IT PAID OFF WITH YOUNGER ADULTS AND IT PAID 0 ..~~ !. THE TOTAL MARKET• i • 1970 1975 1!7• 1977 1979 1979 1980 1981 1992 1993 1!•4 1fAS 1959 • THESE TWO EXAMPLES OF YOUNGER ADULT MARKETING SUCCESS, IIUO AND .IO, SNOM SOME SIMILAR THEMES IN VERY DIFFERENT SITI/ATIONS• BOTH ULTIMATELY LED TO SUCCESS IN TNEIR LONG TERM TOTAL MARKETS• ~. ~ )~<°, • NEXT, WE MILL LOOK AT THEMES FROM THE LONG TERM CIGARETTE MARKET• 6£9i trZL05 T LLV T08TS
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JU ~' .. 1 • SUMfEt=ER LOSt MA fT1QlE11~ 1'''TA'~Rlt~~ 1 !9 . LIHLLflNG WAS ON THE WALL sY 1976. ~ ~. ~~. ~ ,,,,,,_ . . . . .. . .. . . . ....~ . . -- R~ , , .- . ------. • IT WAS IN 1976 THAT AOGUST RnSCN DECIDED TO ti1TE THE BULLET AND GO TO MORK ON YOUNGER ADtlLTS• • EYERY YEAR SINCE TMEN, A-% HAS INCREASED ITS COMMITMENT• IN FIELS MARKETING ALONE, THEY HAY4 .6RSMFR~~b11[r~1~N~~.~b ZE9T YZLOS V9LTi I08TS
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pr()duce(i bE~ R,111,~,(. JD'S TAR6ET • YA ALTHOUGH ITS ORIGINAL fDE 1~S~Sf~T 0.,~11 ~-AGED MEM'S NOSTALGIAlfOR • • • o u x~it~ sf- t~ D A6E 8/4/80 )• r ~ditE MOM S APPLE PIE, JD NON • THEIR SUCCESS iS SHOWN IN THEIR AGE PROFILE WHICH RESEMBLES MARLSORO's AND SUGGESTS THAT THE eRAND'S OVERALL GROWTH MAY dE A FUNCTION OF AGING AND SRAND LOYALTr, SIMILAR TO MARLSORO OR NEMPORT• BRAND USED OMOST Of TEN* (SMRB) BDI fOR: ,dGE BOURBON 18-24 116 158 25-34 111 127 35-44 105 104 45-54 98 81 55-64 94 66 65 PLUS 68 39 , ;. LZ9l bZLO9 65Lfii t08TS
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i)IT'(.)(I.iICCd by I~JIt"1'(' YOUNGER ADULT SMOKERS STRATEGIC IMPORTANCE lil Ht_)lbiPIIRI?Y To STABILIZE RJR's SHARE OF TOTAL SMOKERS, IT MUST RAISE SHARE AMONG 18-20 FROM 13.5t To 40% ... ASAP. STRATEGIES NEED TO COUNTER ... • MARLBORO ANONG ANGLOS/MExICANs NEWPORT aMONG BtACKS/PR (:'ONFID11:~'~~I:~~.1 °~I I ~ ~~~~;~~~~`f N ~~ ~ ~~~ ~.I'll ~ ~.~.I I W~~ OZ9I bZLOS ZSLV I08T5
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. . .. . . :~~ ~~ :~.~:~~..~.~~~~ ~.; ~. YOl1NGER ADUL ~ ~. ~ SMOKERS STRATEGIC IMPORTANCE ~ .~.. ~~. BMRT . . . .. (,:. . ~ 1 ._ .~::~.~:~~.~..:~'~...~~~ .L.~ _.~.~~ .~ IF RJR ACHIEVES YAS OBJECTIVE, IY'S TOTAL SNARE OF SMOKERS WILL BEGIN TO GROw IN 1995, REACHING 35% IN 20 YEARS. IN COMPARISON TO RESULTS UNDER THE CURRENT DECLINE, BENEFITS OF A SUCCESSFUL YAS PROGRAM ARE: • Avorn mAjoR Loss (18 PolNrs) • ESTABLISN GROWTfI OF .58 POINTS/YEAR • CUMUUTIVE 20 YEAR GaIN OF 572 BILLION UNITS RJR SNARE oF TOTAL SNOaERs P 1989 _199 4_ IM 2004 ZW . YAS PROGRAM 31.4 29.3 29.9 32.3 35.1 YL-V ~I~A :1:11 f ) N BENEFIT -- 1.5 5.3 11.2 18.1 iZSt bZtoS ESLV T08tS
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YOUNGER ADULT SMOKER MONTHLY SUMMARY REPORT TBROUGH FEBRUARY, 1989 i I BACKGROUND: This report provides a brief shure of smoker performance summary by key younger adult smoker subgroups (Total 18-24, Male 18-24, Fenale 18-24, Total 18-20, and Total 21-24 smokers) for R,iRT brands and key com~vtitors. The report focuses on the 12 months ending 2/28/89 versus the 12 months ending 2/29/88. The information for this summary report is from MRD's Younger Adult Consumer TRACKER implemented on 11/1/8B. Thia report is Intended to provide summary level data. As the sample sites vithin younger adult smoker subgroups build in 1989, more detailed analyses and precise quarterly, semi-annual, and annual comparisons can be made. SHARE OF SMOKER PL'RfORMANCE SUMMARY: • RJRT's share among total 18 smokers declined 1.3 share points in the 12 months ending February, 1989 to 1S.2X. Philip Morris' share among 18-24 smokers remained flat at 66.5% :n the current 12 months. Lorillard's 18-24 share of smokers vas up 1.3 s)te•ta p*ints to 12.7% due to grovth by Nevport. Brovn & Villiarson's share ama.%4 18-24 smokers (3.3X) vaa flat in the current 12 month period. . CAMEL's (ex. Regular) share among 18-24 smokers in the 12 month period ending February, 1989 var up 1.2 share points versus year ago. CAMEL's improved performance versus year ago among 18-24 smokers is benefiting from the strong young4•r adult smoker emphasis in the brand's advertising and promotion stratog; throughout 1988. • SALEM's share among total 18-24 ss;or.ers continued a slov decline in the current 12 month period (4.4X). Th•• brand shoved signs of softness among 18-20 smokers and 18-24 females. • MAGNA's share of smokers reached 0..$ share points among 18-24 smokers in the current quarter in areas vhere the brand is in distribution (Pacific Mountain and North Atlantic sales arEas and the State of Florida combined). • VINSTON continued its long term share decline among younger adult smokers across virtually all subgroups. VINST)N's share in the 12 month period ending February, 1989 vas 3.6% among wal 18-24 smokers, dovn somevhat from year ago. The brand's biggest loss va. among 18-24 male smokers - down 1.4 share points to 4.4. • VANTAGE's share vas flat at 1.1% in the current 12 month period among 18-24 smokers. The brand was also relatively st:.ble across all subgroups. • On a 12 month comparison, Harlboro's share among total 18-24 smokers was stable at 54.6%. This represents Fk sloving in the brand's long term grovth trend among 18-24 smokers. .,.,......~.. 0109009F
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PI.'O(ILJCC(t i..y 11J[t'I'C 3• THEY DIDN'T REPOSITION THE DRAND, THEY ' ECUTED IT FO/1 THE YOUNGER ADULT MARKET• J . THEY LEFT THE COPY AND CHANGED THE MESS 1• s ~ ~` tl .~Y~S ;~T~ . . . A~ A~ S • 8 0tlC S•CIA ~~ T E 6 U YN6 T D*R D ED E t ~ TIN ON SAT ROA 1 H LIVE MiTH 'TASTE BUD' -- AN IMPROMPTU-LOOKING AD WITH PEOPLE DRESSED AS TASTE BUDS IN A GIANT MOUTH. TOSSING SACK PIZZA INGREDIENTS WHICH WERE WASHED DOWN BY THROWING THE PRODUCT IN THEIR FACES• IT LOOKED LIKE PART OF THE PROGRAM• TODAY oFOR ALL YOti DO" IN THE GENERAL MARKET 13 TREATED AS A STRAIGHT, EVEN INSPIRATIONAL LINE• RUT FOR YA 'ALL You UO' CAN MEAN ANYTHING• A .( .A.'( 9£9T 4ZL05 89L~ T08TS
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i • QFLORsl!!S . P1,00dUced Ia}• 1T `l C' • BEL•N6tN6 fs ENORMONSLY IMPORTANT THly AS• • AND THts NEED DIFFERENTIATES THEM FROM SMOKERS IN OLDEN AGE 6ROUPS• EBLV T08IS _.., -s.-? I n5
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Prodticecl by KEY TRENDS PURCHASE PATTERNS lll 1--I tJ.IVI.P.U. IZEY YAS TEND TO BUY CIGARETTES IN SMALL CONVENIENCE ORIENTED OUTLETS. YAS OUTLET 1986 1987 1988 SUPERMARKETS 19.6 21.2 18.9 CONVENIENCE STORES 27.7 29.8 30.9 SERVICE STATIONS 17.7 16.7 16.9 SUB-TOTAL 45.4 46.5 47.8 SMALL GROCERY 8.7 8.4 9.5 DRUG STORES 4.9 4.9 4.1 VENDING 7.3 5.6 5.8 ~:~I :: ~[Ix~"~~:`~~:.~ t'~:a"~~ 9b91 tiat05 BLLt T08T5
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~.~:..j~. ~~~ ~ Ri.R.TC.' p~ ~.' ~~.~~.~ ~. ~. . 2. THEY HEAVIED UP FIELD MARKETING AND PROM•T1ONS• ~. ~~. • THEIR LABEL (A YA sTR~/~H~M~1~~G~ LL141. T~, ..~,rEN JEANS• PERCEPTIONS 18-24 "a ATTRACTIVE PKG• MILLER N.L. MI LER L1TE < 262 191 • CAMPUS EYENTS. BAR NtGHTS, SOFTBALL TEAMS AND STREET SCENES -- GIVING THEIR COORDINATOR AUTHORITY TO IMPLEMENT AS HE SAW FIT (WITHIN GUIDELINES) TO CAPITALIZE ON A FIELD OPPORTUNITY ALMOST O11ERNlGHT• • THEY WENT WHERE THE YA WERE, IN SMALL AS WELL AS efG NAYS• ~ °~)Nil `"I D I V I A L? S£91 bz4m L9Lt T08TS
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8. W. Schweig Page 2 August 7. 1987 20 A Different Set of Rules (Cont'd) • Need more relavant, dramatic visualization of this idea. CAMEL must be an integrated part of the visual, not simply a pack set to the aide. In other words, the visual could not work without CAIML as a part of it (CAMEL changes the rules). • Additionally, visualisation must have reason for being not just a prop that is different/unique. It siust be a story with closure and meaning tied back to the individualist copy strategy. Without reading the copy line, the visual should communicate what the copy line doas. • Consider alternative versions of tha copy line to explore positive ways of changing the rules (e.g., "CAMEL sets the rules", a new set of rules make your rules). Barry, as we discussed, we need to work on daveloping additional concept . Thes• should focus primarily in the area of going ~ ? e Brand. Additional user campaigns should avoid the use m ~ throt t i d A l d h o a nl e man to portray t ividualist att tu ee s e in discujao., these campaigns are not unconventional, not uniquely ,nd are very difficult to communicate in the mediums ~ ~. Likewise, wa cannot use variations of the sociability vai~abl ampg~ith a mirror group image of younger adult smokers in a mummi r. I ~ I X,,FelsWnerisituation. .. ~~~ Plea:~ me know when we can expect to have our n~iew with , Msna~,enen~t. : ~ ~ ~ ~ LJE:arh cc: R. N. Sanders =0 . . T. H.. Jones Ii. P. LaDrecque l- 507131239
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prx~cluced bv Il,Tit'T(' I SUCCESSFtlk iMRKETING ~ ~. TO 1• SUCCESSFUL YA MARKETING EXAMPLES FROM OTHER CATEGORIES 2. IDEAS FOR POSITIONING SUCCESS • PRINCIPLES FROM HISTORY - 'REING IN TUNE' (DIFFERENTIATION) - USING GROWTH SECTORS • KNON/NG THE TARGET - MARKET TRENDS - MINDSETS 3. EXECUTIONAL IDEAS -- MAKING IT LOOK RIGHT TO YAS EYES ' 'LIFESTYLE GROUPS' YAS's KNOM ~ CUES AND SYMaOLS 4• KEY ClN...:~I~~'.''~~l~~:~~.° "~~IN.`~.'~~.~~"F:~ 1;~..~~> ~~. ~. bZ9t vZLOS 9SLfii t08t5
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.(•I,~. pi'1lCIitC('CI I?Y Ik~~ ~. 0 in HUI~~iPHRI~;Y THEIR APPROACH TO TARGET MARKETING IS T0: \ • SE61~NT THE MASS MARKE T: - DEMOGRAPHICALLY - GEOGRAPHICALLY - AND/OR BY SPECIAL INTERESTS • IDENTIFY SEGMEtITS OF C oNSlNIERS: - WITH SOMETHING IMP ORTANT IN COM~ION - BIG EN011GH TO JUST IFY SPECIAL EFFORT - SM/lLL ENOUGH TO SA TURATE • FOCUS EFFORTS ON BEST OPPORTUNITIES, I.E., TARGET MARKETS THAT: - CAN BE REACHED EFFICIENTLY ~ `l~~~`~:~fth,'~~TIO~l~~~~'Ol~. L)'c - WHERE COMPANY CAN BEST CAPITALIZE ON COMPETITIVE VULNERABILITY L£9i bZLOS 69Lt 10819
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O(IiICed by R KEY TRENDS CATEGORIES 0 III ~ . ~ ~ ~`f jfi..~ .~..~ ..~..~. .~ ~1 ..~..T THE LARGEST GROWTH TREN G SMOKERS 18-20 ARE NON-MENTHOLS AND BOX , PACKAGING. THE APPEAL FOR FF TASTE AND 85M LENGTH IS STABLE. SOS AMONG SMOKERS 18-20 CATEGORY 1982 1983 1984 1985 1986 1987 1988 NON-MENTHOL 63.5 66.9 68.9 70.1 72.2 73.0 76.2 MENTHOL 34.8 32.1 29.6 28.4 26.7 24.5 21.7 BOX 31.3 35.5 40.3 45.7 45.8 48.0 56.4 SOFT PACK 67.0 63.6 58.1 52.8 53.1 49.5 41.4 85MM 66.4 67.4 68.2 67.1 69.5 67.1 71.9 100MM+ 31.9 31.6 30.3 31.4 29.4 30.3 25.9 FF 53.8 55.4 53.7 54.8 55.5 53.4 55.4 LT 44.4 43.6 44.7 43.7 43.4 44.0 42.4 SOURCE : TRAL~~R ' ' b~91 VZLOS .,( ~ 1. 1 `V i CI:A.: 14 i I (:) N., 51801 4776
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1M'()(111CC(I Artr [Z,1 tz~~'t' q, fx _ITFMFrT • • •T ED6E__ 0 1.11. .•nrc tou' RIFFERFUT ~ I l~~ I V l l'l.I1~ d~~Y - THEY LIKE TO sE aEEN AS RISK TAKERS -•• TAKE RISKS S99T bzzp5
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pr(iclucecl ~_ r • AO A6E SAYS JACK DANIEL'S IS I Soetce: H.mveli O.t. (1983 E.tt..teR) "IINDOUSTEOLY ONE OF THE CLEAREST EXAMPLES OF SUCCESSFUL MARKETING IN A DECLINING CATE6ORY•a • JD ROSE FROM 09 AMONG dOUROONS IN 1974 TO 02 dY 1979 AND HAS SINCE RUN NECK AND NECK FOR 11 WITH JIM SEAM, THE LONG TIME MARKET LEAUER• • DtlRlNG THE WS, JD'S SALES GAINS AVERAGED 151 GROMTH PER YEAR, MORE THAN TRIPLING ITS VOLUME Of")MI ~"~t~.l:~~,: f~.~~):~e.~.`(..f~} 1.~1 i(.I .': ~~I~,~~?~ ~ V . . ., f .0' `q 9Z9t VZtO9 BSL~ Z08Z5
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procluced • IIE ARE MUCH MORE OPEN ABOUT EVERYTHING • WE HAVE s0 MUCH FREEDOM .E. izt WE DON'T NEED TO REBEL GROM UP FASTER, HAVE MORE CHOICES LIBERAL ABOUT SEX DON'T GET HARRIED, HAVE BABIES AS YOUNG INTO DRUGS AND DRINK TOO MUCH • RUT WITH FREEDOM. COMES STRESS - RESPONSIBLE FOR CHOICES - MAKE MISTAKES EARLIER • OUR GENERATION is GOING TO HUSTLE FOR THE MATERIAL THINGS -- EXPENSIVE TOYS -- NOT SAVE THE MORLD• • RYUORD OF THE GENERATION - GOALS• WE DON'T RESPECT PEERS MIO GOALS -- BUT ALMOST ANY GOALS WILL DO• • WE WOlt.1(.W-41114 NV0`I! -GENNA'itlt~~~`'•~~F~~L 7 6b9t-bZLOS jBLV Z08TS
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p~ ~ .~ ~~~~.~~..~~...~,~. ~~ ~ .~.~.,.~.~.~.~ ~~ ~. ~- YOINI6ER ADULT_SM KERS * STtATEBlC IMPORTANCE in • 1• EACN VEAR 1•OMM NEW A .~ ~ ~ C 6 A ~~ -- 2.0 SHARE PO t NTS • ~ 2. YAS ARE THE ONLY lOURCE OF REPLACEMENT SMOKERS• 18• - LESS THAN ONE'TNIRD OF SMOKERS START AFTER AGE - ONt.Y SZ OF SMOKERS START AFTER AGE Z4• 3. FIRST UsUAI. dRAN. YOUNGER ADULT SMOKERS (FUBYAS) DRIVE THE GROWTH OF MARLBORO AND NEMPORT• 4. THE VALUE OF EINYAS COMPOUNOS OVER TiME DUE TO EXTREME BRAND LOYALTY AND RATE PER DAY INCREAlES• - OF ALL SMOKERS MNO CHOSE MARLBORO AS AF1R IN THE 0110 1970'l, 41x STILL SMOKE TNE SRAND• - RATE PER DAY INCREASES 302 BETWEEN AQES 18 AND 35. 5. RJR IS SUBSTANTIALLY UNDERDEVELOPED AND DECLINING IN SHARE OF 18-Z0 YEAR OLD SMOKERS• SHARE OF 18-20 SMOKERS 1983 1984 1985 1986 1987 1988 RJR 16.8 16.4 14.5 14.0 13.5 13.8 ~ to 0 1.I&M:A'AlON d IERENCE 48.3 49.0 53.0 53.9 55.2 56.0 SOURCE: TRACKER LT9i bZLOS 6VLV T08t5
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I PrOdIeccI iii Y, RJ :irt'c 0 THROU6HOUt TH 1 S NEXT SECT 1 1S-ZO YEAR OLD SMOKERS ~ FUBYAS Z1-24 YEAR OLD SMOKERS - SMITCNERS DIFFERENCES BETWEEN THESE TWO YAS GROUPS IN TERMS OF BASIC NEEDS! • ITS MEANING AND NATURE TO FUBYAS • THE DIFFERENCE FIRYAS vs. SUITCHERS • RELEVANCE TO MARKETING • FIVE KEY NEEDS - BELONGING - BEING DIFFERENT - UPWARD STRIVING - EXCITEMENT - SEX MINN. O59t bZLOS Z8LV T08TS
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R,JR7'C' by prBEING oduced ,..,..0 I.G.G NO oIFFE r isa Eiun~~n~irzrv . KARKFTING RFLF A - FI9YASt PEER GROUP iDENTITY M1TN IDENTIFIABLE SOCIAL GROUPS PROYIDES2 • SPECTRUM '- MINDSETS • SPECTRUM -- CUES R SYMBOLS • WILL DISCUSS LATER IN DETAIL . k T(.~~~:~.~.:~... 9991 bZZUS L8LV T08TS
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1)rOdueCtI by R.1IZ7'(.' - AssREas in • • • ass.. 61A~~~~;~ 66LV T08TS L99t bZLOS
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. , produced by IZ,IR7 C' 1. t 2. NEEONGIN AN dEING_DIFFERENT i19 -p 1IIi..rv1.ii.i.iu:v • FIBYAS ARE IN A TRANSITION ' BELONGING TO THE EAR(1,Y (SECURE ) REPLACED BY BELONGING TO SELECTED 610K (NOT AS SECURE ) ' BELONGING TO SELECTED PEER GROUP REQUIRES BEING DIFFE EINT_ FROM: • FAMILY • OTHER PEER GROUPS • FOR FIBYAS. THE TWO ARE iNSEPARASLE• 0 1.1 T ES9T yzLOS SBLfii t08tS
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ta~~cAelucc~l by rZJ [t'I'C 1. t 2. NELONGING AND BEIN DIFFERENT UJVIPTJ.REV Sll1iCllERS DELONGIN6: EER GROUP IDENTITI - A FEM CLOSE FRIENDS - A FEW CLOSE FRIENDS - OPPOSITE SEX - THE eROADER SOCIETY BEING DIFFERENL: BEING DIffERENT: - dE1NG DIFFERENT VIA TNE GROUP ' BEING DIFFERENT AS AN INDIVIDUAL DEVELOPING SELF-IDENTITY (TRANSITION) NNO ARE WE - MNO AM I , 1,0 U A (.:(..`0 LITIG*-yTION 98LV t08tS bS9I b~LOS
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- prudaced by RJ12'CC' .Q„EKIH . .rR F.a• i n , ~ ANe. A01/ENttlROUS • H...1 .~~~.~...~~ .1~.. .~ .,~.. .. ~1 ..R. ~ : ~.. 1erEN111o1s 8991 6Zto"- e0st ZesZs
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~~ :. :ro~:~d~~~.~: e~.~ * ~:~~ ~~ ~~. ~ '~~.~:~~.~ . ~ ~ ON THE •OTTOM LINE, YA PERCEPTIONS OF BUD DO CHANQE• , i.~. IN 1980, MILLER HAD ALL THE KEY PERCEPTIONS ON ITS SIDE• eY 1983, BUD MAO MANAGED TO14UNIP .~...~. .RF1 Y 1• PERCEPTIONS OF PRODUCT SUPERIORITY SWUNG FROM MILLER TO BUD, SASED ON FYLL-sODIED TASTE (NOTE THIS 1s NOT OPPOSITE TO &LIGHTe)• 2• PERCEPTIONS OF QUALITY WHICH MEAN 06000 YALUE* REGARDLESS OF PRICE• 3• A MORE YOI/THFUL IMAGE, AND THE IMPORTANT sENEFIT OF PEER PRESSURE• T 43 > 65 58 <- - 50 uPER1OR ASTE T F -B 50 > 65 64 < 4 ASTE ODIED ULL 9 33 LIGHT TASTE > 59 33 > 5 7 N O 56 > 67 60 <- - 52 IeM VALITY GOOD YALrE 3 7 43 39 <- - 30 FREQUENTLY ON SALE 36 31 35 30 IMAGE MASCULINE 62 <- - 57 65 ~- 60. REGULAR PERSON 66 63 SELF CONFIDENT PRESTIGE 58 NA > 55 NA 3 Sb1 6 0595 58 MoDERN/YovTMFrL 54 6 1 66 63 5 OPULAR qq > < 2 YA RE6. B~Al1~SHA,~~~~ A''I:~ T15XiI~ `~`~'IZZ e£9i b2LOS OLLt T08TS
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P~:lil[)O.dfl
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~. , ...r/ tV V - .~ ac. , ( IHANAGENENT SUHHARY1 PURPOSE: Thia purpose of this report is to provide results on consumer reaction to various creative approaches for SALEM's new campaign for the inner city Black lead market. BACKGROUND: Reversing RJR's declining trend among younger adult Black smokers is key to ' 'tthc: company's long-term grovth potential. As a result, a Black YAS Initiative vil.l be launched into lead market In 1989 with the objective of reversing ~~. RJE;'s ceclining share among Black YAS. All marketing resources will focus Z~,behind SALEM and against inner city Blacks. This is because SALEM is an '" ~facc:eptable choice for Black YAS and currently accounts for approximately twa-thirds of RJR's share of Black YAS. Additionally the focus vill be against inner city Blacks since the majority of Blacks, 60%, live in urban ;~,~xg..,,qinr,er ci ty areas. ~ *W, ::}wVn^:.S} ~ k ~ ThE program v.,il,,be comprised of nev creative, promotion, and field marketing events target.e.~li' oh a local basis against inner city young adult Black smokers. The advertising:.agency, LKP, completed their first creative exploratory ~M,` resulting in::a~i::~t~"'different creative approaches/campaigns. The Brand Team , ' ,• }.~: explored,consunid'r: reaction to these executions via focus groups conducted k <Decem~e'r~:19 an.d.,:;~0 in Chicago. 0k's.:x€ RESEAR~ff ~ OBJECTI•ilJ~: .~ v.,v..' ,.hn , . he purpose of"'f ese focus groups vas to qualitatively explore the appeal, yx0:relevancy, and;;:.;COmmunication of various creative approaches/campaigns for >4\.wv...v'i., ~Y -SALEH among yQunger adult inner city Black smokers. : W'41'~jf,CAUTIONARY NOTE: nterpretation of the learning from qualitative research is subjective. yp generated in this study should not be considered 'Therefore, the h otheses ,#~.A... ef ini tive. ~ UHMARY OF FINDINGS/KEY HYPOTHESES: ;=A$ 0~ Findings were very consistent between the male and female focus groups. As such, findings are reported for all focus groups highlighting differences between the male and female groups where they exist.
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prodt:icecl by KJR`T(_' 4. ExcllEMNT ~. • RIIETINS RELEYANCE ~. 1.„.. j.m.PH.REV I , - FOR TOOAY*S FWrAS. EXCITEMENT 13 NOT SIMPLY 'A 6009 T1ME&• - IT is LIVING ON THE EDGE/THE LiM1T ... OR, AT LEAST, IMA61NiN6 so. 4991 6ZLOS 96Lfii Z08TS
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Mr. G. W. McKenna Page Two October 19, 1984 £ Y IMPLICATIONS (Cont.) MORE could target two segments: the Brand would continue to be for smokers who want to stand out from all other individuals and it would also be for a Fubyas subgroup who wants to be seen as different from all other groups. The older smoker who switches to MORE has the self-confidence and maturity to make a strong statement. The group provides this same security for the younger adult smoker who selects MORE. ,r. • The MORE ro osition is ver consistent with the risinq trend amon oun er adu ts of 'living on the ece.w --fl a signi icant number of younger adults retain t is attitude as they age, it may increase the base of smokers interested in the MORE proposition. • A co~'ldsion from this analysis, and one that applies to MORE' urrent advertising, is to "see things through thei~~arget) eyes." Address the target's wants and ,~~eeds t rough symbols and cues which are relevant to hem:; '• r example, MORE is a Brand on the edge, for " ~~Reo : Wtho want to stand out. Therefore, everythin.g abou~t;,,Xt~RE's ads and promotions should reinforce this ima ' 4i'The wardrobe should make the smoker stand out in ayy that is relevant to her. Naomi NEXT ST~.•PS : • Develop a plan to test the feasibility of marketing MORE to a Fubyas subgroup while maintaining marketing efforts against the current target. • Continue to monitor the rising trend of "living on the edge" and develop ways to capitalize on the trend if it spreads to older smokers. Please let me know if you would lilp to discuss this further. LJB: jh CC: Mr. A. T. Sterling ~-Ms. S. C. Nassar Ms. A. M. Duggan 503440794.05
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proaucea fly KEY TRENDS PURCHASE PATTERN '1'C 1R.- 'ly YAS SMOKE 25 CIGARETTE~YDAY'~:OHPARED~T~31/OAY1FOR THE AVERAGE SMOKER. . RATE/DAY 1986 1987 1988 YAS 25.8 25.7 25.2 TOTAL SMOKERS 31.2 31.1 30.7 • YAS ARE MUCH MORE LIKELY TO BUY BY THE PACK. YAS INDEX VS. 1986 1987 1988 TOTAL PACK 71 71 72 163 CARTON 29 29 28 50 ~-d INN 01 1TR_ATIO LLLV T08TS Sb9T bZLOS
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L. J. Beasley Page 3 February 6, 1990 • I. "DAKQTA" Issuas (Cont'd) C. 'Sexual' fconnations As anti-ssoking zealots oftsn invent •issues" to serve their own purposes, it is feasible that DAKOTA s+ay be accused of using sex to sell cigarettes. Recosvanded responses: 1) Denial 2) Should pressure persist, explain our advertising depicts .a facets of our target's life, none of which are overtly sexua Also, point out that research found no mention of saxual positioning among our target. 3) In the went that our headline, "phere Smooth Comes Rasy," comes under fire: a) Deny any sexual intant. b) Point out that out of 1,000+ smokers in quantitative testing, not one s»ntion.d any sexually suggestive implication of the headline. c) Indicate that if target smokers in our test market are found to irterprat our headline as such, we will consider changing to new copy. d) Replace "Nhere Smooth Comes Easy" with "The Attitude • PN0 of Ssaoth". II. ~E-E.11w.ggestiona In a ' to the above Drand-speeific actions, vs racosmend eons era ion of the following suggestions to strengthen ItJRT's axte relations overall: A. that our actions are building a stronger tobacco company and publ pressurs is merely a cost of doing business in this industry, it likely that the financial co..uaiity may turn a daaf ear to the majority of aedia/public criticism. strategies to key financial opinion leadars. If ve can des)oastrat in the financial world weakens due to public prassura, considerat should be given to axplaininj our Corporate goals and broad only in bottos•lias parforsanoo. In tbe event that RJR?'s positio1%. ,1[•)q T -\-Il-),W-7j1 00\1I4M NA1W*1k.1-1t1dit - 1-N1-41ft Hhile oonsuswrs and Sovernsental officials often respond irrationa,7 or yield to public pressure, the financial eosoKatity is interested<, &b 508768350 0508768350
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pINKILIced by R,JR7'(' 3. IIPN/IRB Stt1Y1M6 .~ ~.R ~. • MHAt no FtAiYAS MEAN H EI f At q~ ~ . ... . ~._ `. . . .. ......... .. .....~ . FUBYAS VS. SMITLNERS \ UPMARD STRIVING UPNARD STRIYING SUCCESS RELATES TO TODAY SUCCESS RELATES TO TOMORRON • REALITY-sASED AND FAIITASY-BASED SUCCESS • ASPIRATIONAL SUCCESS ' REALITY-BASED -' TODAY/ACNtEVASLE - Joe. CAREER SUCCESS • A DATE - II1 GH 1 NCOME • A GOOD PARTY - NICE NONE • A*COUP* IN FRONT OF TNE 6ANa - FANTASY-BASED -- TODAY/UNACH1EVASl.E • NO INTENT TO STRIVE • 'R1DING-TNE BIG NAVE" 9991 $1ZLOS 06Lfii T08t5 1
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i'rodJce(I by RJRTF(11 . ll7 LAST -- l1UT SURELY NOT FI~. I. T f .1~...~ .~.M.~ ..i. ~, .~.~1 ..ll.. ~ _ ~ ~ FIBYAS VS. SN1IC11E6S • LOTS Of DATES • CLOSER RELATIONSHIPS ' LINKS TO SUCCESS NEED • ANYTNtN6 BoEs - LINKS TO EXCITEMENT NEED \ OL9Z tiZLOS Z08t T08tS
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produced b, in RJR IS DEVELOPING T - R •. EMENT GM PROGRAM. THESE PROqT ~M tk/t 4fp4-.017(% OF TOTAL YAS. X OF YAS PROGRAM HISPANIC BLACK COVERED 10% 15 MILITARY 10 ANGLO INTERESTS 75 0ti9t trZLOS ZLLV T08T5
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I • February 6, 1990 TO: L. J. seasley RE: DAtcOrA Public/QMveriv.ent_Re3ations Plan rolicy, therefore requiring consideration and consensus of Executive nanagesent. our reeom.ended actions are somewhat eontrovarsial and say effect Corporate':V ment Selations (aee llaura Payns's proposed plar - Attaehaient I) several of:~ rscomaendations have beer forsulatsd in conjunction with Public and Govern- This forwards a sumary of •issuss" likely to ariss due to DAXOTA's intro• duction as well as the Erasd's recoasanded response plan. While the Brand's` 1. "DAKOTA• Issues A. operating on infora,ation sore than six months old. In early.:*! developmental stages it became apparent that DAKOTA's proposition appealed to both sales and females, and rather d' tar et w ti l th nra ' il t i i Note that no press release will be made. Any responses by RJRT will result directly frosi external inquiries. Female Positioninc ~s bable that DA[GOTA's preliminary criticism will regard feAale:; ~ing, keeosmended rssponaes in erder are: Given recent articles in the •Atlanta Constitution" and "Adweek", i once expected to skew female, the media's "anonyaous" source; , Deny female positioning as outlined in attached QbJ1's (1~12) . '`2, If criticissi/skepticisa persists, explain that while DAKOTA general, continuing to stipulate that DAKOTA, however, is female brand. active measures should be taken to defend female positioni4 3) Should forces continue to criticise DAKOTA as a femals brand.', &0 expandad to include both gendsrs. a n s g unaecassar y restr ot ng our po en e a) Deslop advertising designed to appeal to consumers' essotions and coasson ssnse with heavy plaeessnt in female sections of influential daily newspapers. • The contention that fesale positioning is somehow less aeeeptable than other general sarket strategies suggests that women are unable to saks their own choices/look out for themselves (a step back for women's liberation and equality). Defend the right to advertise a legal product. Keep governsent from inflicting soral views on the country as a whole. MJCCI Ex}u'brt # Date: S-- L ( - YV Alfred A. Betz, RMR 508768348 0508768348
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. I a!°~sttucecl ht~ ~2,I12.1'(' 4. EXCITEMENT • 1ll a FM,,; H'JM~'H121~,Y~ - HAVE FUI! IN EVERY WAY POSSleLE - HAVE FUN SELECTIVELY AT EVERY TIME POSSIBLE • AYOID BOREDOM, RUT, ROUTINE • SELECT ACTIVITIES OF INTEREST • BE SPONTANEOUS • DEVELOP EXPERTISE 51801 4795 • NO FUN - PARENTS • PURSUE IN ALLOCATED LEISURE TiME • FURYAS FUN IS SUCCESS -- ENjoY TODAY/THE MOMENT To THE LIMIT :~ TR ,~N °:~~•~ k .~.. ~.A~ ~Cst E99T 6ZLOS
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EFFECTS OF AGIHG 011 SHARE OF SMOKERS MARL8oR0 HISTORICAL 1st Heit 1980 1981 1902 1983 18-24 SMOKER SHARE 32.4 34.3 36.3 41.2 Ch4nge vs. Yr. Ago •1.8 +1.9 +210 +4.9 23-34 SMOKER SHARE 20.1 21.9 23.0 24.9 Chenge vs. Yr. Ago +.5 +1.8 +1.1 +1.9 Aging Effect +1.2 +1.3 +1.4 •1.4 Other Etf•cts -.7 +.5 -,3 +.S 35-49 SMOKER SHARE 11.0 11141 12.0 13.3 Cheng• vs. Yr. Ago +1.0 +.4 +.6 •1.3 Aging Effect +.8 +.7 +1.0 +1.0 Other Eff•cts +.2 -.3 -.4 +.3 S0t SMOKER SHARE 5.6 516 5.6 6,3 Chang• vs. Yr. Ago •.1 •.2 -.2 •.7 Agfng Effect +.2 +.2 +.2 •.2 Oth•r Effects -.1 MC -.A +. S TOTAL 1e+ SMOKER S11NtE 15.6 16.6 17,0 10.9 Cheng• vs. Yr. Ago +.6 41.0 •,4 •1.9 Aglnq Effect +.7 +.9 +.A +1.5 Other Effects -.1 +.1 -.4 4.4 PROJECTED • If Marlboro were to merely hold Its 1983 share of younger adults and contInse to be effected only by aqing. Its smoker share five years from now would be nearly :2f. a gain of 3 fuli points over the first half of 1983. 1980-83 Annual Avo. Cho. 42.7 Ist Haif PROJECTED 1903 1984 1985 1988 +1.3 Aging Effect +1.3 ia-24 41,2 41,2 41.2 41.2 NC 25-34 24.9 26.6 28.1 32.1 35-49 13.3 t4,3 15.4 18,5 50+ 6.3 6.5 6,8 7,7 +.a +.9 totel 16.9 19.1 19,8 21,9 -,1 Other Effects (Cwe.) HC NC HC OVERALL 16.9 19.1 19.8 21,9 • If Marlboro were to contlnu• to gain among younger adults at the rate seen slnce 1980, It could achieve a 55% share among younger adults and a 243 share of all smokers by 1988. +.9 +•9 MC AgIng Effect 18-24 VE9V T08iS 25-34 0ESe MoS 35-49 • Over the lest 3 1/2 Yeers, Marlboro hes gelned an average of .9 share 50* potnts per year of total smokers. Total • Marlboro's long-term growth Is enttrely ettrtbutebl• to Its lerge, Other Effects (Cu•s) steady getns among younger edults. Gains In older smoker groups OVERALL eooeer.to be solely the result of epina. 1st Hnlf -. .. PROJECTED 1983 1984 1985 1988 41.2 43.9 46.6 54.7 rh 24.9 26.6 28.2 33.8 C 13.3 14.3 15,4 18.7 6.3 6.5 6.8 7.1 18.9 19,5 20.6 24.2 16.9 19.5 20.6 24.2
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produced by RJ.RTC y. F'l(t_ ITEMENT • 'TNE ED6E'_ . T~ COMES fROM PUSHING AN t~M~•14X~ ~ •OTHE EDGEa REPRESENTIT~( G.JtNj ~w IDEA TO THE ED6E• •OTHE EDAE~ IS NOT LIMITED TO A MACHO/PHYSICAf. DAN6ER CONTEXT "/TS S AN IMAGE, AN IDEA. AND CAN APPLY TO CLOTHES, SEX, DRUGS, LANGUAGE, CARS, ANY WAY YOU CAN 'TAKE iT TO THE LIMIT' IN YOUR MIND• Z08fii t08t5 6991 bZLOS
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Iticed-by IY,111'0'f' e 3. tlP1111110 STRIYIY6 OIfFERENTIAiES FUBYAS ! B't ~El , i 9S9T J~ZtoS
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p-roduced by Rilt"1'4'' 3. UPYA B STRIYIN6 +~ ~ .U~. • THE 600D OLD DAYS (N N 1S ~, ,~ ~ .. . F. ~r ,~~_ ~...~.1~..~.~d .,~.. BOTH SMOKERS AND YAS FIND ROMANCE IN THE FANTASY OF 'THE GOOD OLD DAYS' AND THiS TENDENCY 1= GROMiN6• TOTAL POPULATION SMOKERS YAS SOtlRCEi YANKEL0VICH • 1979-87 PERCENT AGREE Z im im I R im mk im 13 15 15 18 16 19 100 14 16 17 NA 20 23 117 20 28 30 NA 35 38 215 ~ (..'ONi1t4"NTIAt.: TNIS COULD LINK TO THE SUCCESS OF JACK DANIELS, PERNAPS EVEN IIARLAORO• t99t YZtOS £6LV T08T5
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~, ..,~ ... ,~ • dES'ITE TNIS =TEA ~"~ 1~~',,~ ~iT ~TO~-^7EARS " •EFORE .~' BUD CAI/QN? MILLER ON• YOUNGER AWLTS• 4 REGULAR R4I~~USA6E AGE 18-2q • dYT MMEN THEY 010. THE PAYOFF WAS S/6• gE~flfl _A_R q_R_ANO $N_A__R_E_ 18-24 1m 1m ~u0ME1SER .3 t : `~!5V NTI A, I C 'JIM £E9I bZLOS S9LV ti@8T5
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There vere four executions with the "Fresh On The Scene^ copy - man ana woman; one man tipping hat; two men close up; and three men clowning around. All four are provided in Attachment III. . ~ ;:..~,. One of the "Fresh On The Scene" executions, "the man and voman" seemed to confirm all of the ingoing hypotheses. It was perceived as: More appealing and relevant to younger adult inner city Black smokers than is current "Refreshest" campaign. Communicating that SALEM is a brand for younger adult Black smokers. Using language that is relevant and exciting. Is impactful and vould be intrusive in the Inner city Black environment. The man and woman was the preferred visual primarily because they were perceived as a couple. The male only executions were disliked primarily because the models were not perceived as fresh. The man tipping his hat was felt to be a sailor. And the three men clowning around were perceived.as upscale college guys. Unlike the "Smokin "' campaign, the strength of this campaign and the favored male and female execution was solely in the copy line "Fresh On The Scene." This,:vas;;;definitely relevant language and communicated numerous positive ;.: messa& . 0sn,, = both product and user. "SAU ~f's fresh on the scene, a never brand, a better brand." "SALE?4,'s new on the scene." ~~ 1:t'I t h i t." "Sibtne-thing nev happening to SALEM." "l4ean~,s SALEM's coming back more updated." ~ere." "vi th i t ." "l'.,~wrrioving." ~.. The only concern with this copy is that respondents are expecting SALEM to be different and better. If they discover the same light tasting, minty product, they may be disappointed since "Fresh On The Scene" promises something new. The "scene" was perceived to be almost anywhere respondents wanted to be. In fact, the majority of respondents felt this copy line fit best on their favorite visual - "Smokin' at Heroes or Percy's Palace." Ln The visuals used in "Fresh On The Scene" did not receive many positive ~ comments. Most respondents did not like the visual treatment in these m executions. It vas perceived as: ,~ ~ ~ "Blury. Needs a better, clearer picture." m "Looks like off a TV set that needs to be fine tuned." "A computer picture. Ugly." Additionally, there was no sense of place or "the scene" in these executions.
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produced a KEY TRENDS BRANDS THE MAJOR TRENDS IN BRAND USAGE AMONG SMOKERS 18-20 ARE THE FOLLOwING: • MARLBORO HAS 63% SHARE AND IS GROWING. • NEWPORT IS THE #2 BRAND. IT'S STRENGTH IS AMONG BLACK SMOKERS 18-20 (68%). • CAMEL SHARE RESPONDED TO NEW CAMPAIGN IN 1988. • VIRGINIA SLIMS AND KOOL HAVE LOST THEIR APPEAL TO YAS. SOS AMONG SMOKERS 18-20 BRAND 1982 1983 1984 1985 1986 1987 1988 MARLBORO 42.4 47.6 52.2 55.1 57.5 60.6 63.3 NEMPORT 9.4 10.7 10.8 12.1 12.8 11.8 11.8 CAMEL 3.2 3.3 2.6 3.3 3.1 3.2 5.3 VIRGINIA SLIMS 6.6 6.6 5.3 4.7 5.2 3.9 3.6 KOOL ~..ON I 11) F 0 ~9'1 -A I :-A -R Mf:kl;, " SOURCE: TRACKER p7.l.OS SLLV T08TS 8b9i
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pro(I.Uce(JRJItTC 4. iAYlTY`1 111 • tNE 6RArff aAY.* YOUN6E E i E TAf EsCR/sE THE REST OF Us AR tE1N8 IN A RrT• ~ - rrum H 1 'V Z99t tiZTOS Ti6Lfii T08IS 4s 1
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• • L. J. beasley raa. S February 6, 1990 Qrls,inal Delta task foree_ be established ismediatelr to ensrer the follovins ouestions• strategies as sound and solid as our current strategic plan. I would welc the opportunity to participate in this aission. attention and careful planning, we can develop Public and Covernsent Relatio'~ " `` these issues so our objectives SM be set. I aa optiaistic that with propel~ ~ objectives. As such, I contend we sust siake it a top 1990 strategy to addr 1) What ars the best ways to avoid and deflect negative press and governaental pressures? 2) How can we build an effective sulti-interest coalition/support force? 3) How oan ve mobilise saokers and other First Amends,ent/Pro-Choice/ anti-governnent consuserst 4) How can we assess the level of public resistance prior to oaking our plans public? Clearly, unless we can isiprove our ability to sanase, nesative external pressure, it will be virtually ispossible to teet our lon,g•tero share Please let.Abj*nov if you wish to discuss f)Arther. ~ :.~ :srh Attachnen cc: K. T(i,,,Paybe D. D. Dyer R. L. ltosingo 0508768352 iuu 508768352
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I)ro(.Jtice(i by R,f R'l'C 3. rPYAA9 STRIYIN6 . " ; ~ l .J[). "~ • ARl(Et I NB REIEYANCE f -~ F.~ .~.~..#R.. ~.~.~ ,~ .~J..1Ti..~.~ii.. F .~..~..~~.....,~ ~,.,. ' UPWARD STRIVING MOTIVES AND THEREFORE CUES AND SYMdOLS RELATED TO TOMORROW ARE NOT RELEVANT TO FUBYAS• ' YANKELOYICH DATA SUGGESTS TWO FORMS OF FANTASY MAr sE sOTH DIFFERENTIATING AND GROII I N6 AMONG YAS t • ESCAPE INTO IMAGINATION • THE GOOD OLD DAYS 6991 b7,C0s T6Lt T08TS
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: :,. ., . • . . . • , . , . . . , ;. ft. to. tt. MMii ...kss. QYiL bi. 4...1.'.L . am ::lw:d~s.~ ea~stsa .rs.1~' ta ~ as.iy tww" :rse+.a .a.p.t+., it w. ....3.~.. rM1!!~ qis oY~L tMe]~ _ . s.t«st.t trtc 't1~: sr.irs i~Iric c+~..s~a ~. tslr+ir a tr.s sn.~! . sde: to ^be@!. .rr...r sr.sef.s to •tM'.w aM. Us p+..q .: t'.s .al.: : 4 f.ri.>,ws+. ...imst.t s. •.e~Me ti .~l. ~.autatti~. .~r.ws l..tM.,l~':; , . t1M sli~it~ ~[ !rr a/r tq 'Mt.r .ir•. attMtts • a.t - dr everau aff"l ; ,:. •i...rtiior. tM N"~ . .. . . . far al the Sau' M" _aud* lM~rt~ ~1+~ 1~at1l~ Y~ *eeiNat -.rsrtso" of CAUR. 2: tr.ir .t.". CiliiL wi tfovot to be a feoi.ett r..kM 1w O3Ns aalM* twrr.r. rtssN to ; tir yor.es .&irit ais aPwsri to •~s..a.t i.rr..n twt attttiis.• -l1~ --" ~ ..rrt st..rd prlasl3y !son tw ewaraat.eclatlass 1r..r, ri t.l.~rrq t~ irwM ai.lt ar& - st. O.tt.is aM- 4"enww tlrt ..s.p trat Cr1& wa r..saptttu tli.iOf ls rw.ra .Mit rMra. i.. ' . ~ p1tN'l arm et tiM am !,t •pwysr Malt'.';° ' NN* ai JOAN& ~ a" Vllttt AM. 1no, Ni *a '1ppear to wtwe t"atlrt=r al 60 lrpM~• l ~~ ...sjwtw. ` i . •. . . . • • . M.ta~".M T~t• rd l.11 416 St As aM is.a. !rs .morttow me+. a", '.•,0: ~..z . . • . • . . •r . ., . ~. • • i. . i.. ,; . t ~ r
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PF0(I.t1cEa by LI R .TC • rLlw-.l • A MARKETER CAN SELE T ~ ;rLEARNINBs f .~....IA.. .~.~;~~1 .T~.. - SEX AS THE TOTAL MARKETING EFFORT• (JOVAN/CALVIN KLEIN) ' USE SELECTED ELEMENTS OF THE MARKETING MIX TO TARGET THE SEX THEME TO FIRYAS ONLV• (T-SHIRT LINES) ' USE THE LEARNING DEFENSIVELY, 1•E•, EXECUTE OTHER RELEVANT MARKETING EFFORTS THAT OON0 T APPEAR OUT-OF-SYNC NITH FWAS VIENPOINT• SOUEAKY CLEAN LOOKS 6000 TO US, BUT IT iS LIKELY TO BE SEEN SY THEM AS NOT SPEAKING TO TNEM, NOT UNDERSTANDING, NOT RELEVANT TO THEIR LIFESTYLE• (.'ON I'll) 1. : 11 -k V: ZL9I P?LOS v08 t 10819
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produced YOUNGER ADULT SMOKERS STRATEGIC IMPORTANCE 0 in ~ .~~ ~. YAS R WILL os F~LJAJi1L.tI ri. E A LOT ~ c RJ ... o~TrNUES ABOUT 14 POINTs ovER 20 YEARS. THIS covLD REPRESENT ... • DIRECT LOSS OF SHARE • LOST OPPORTUNITY RJR PROJECTED S05 QW-P 1989 11 IM 2004 M 18-20 11.9 8.5 6.1 4.4 3.2 18+ 30.8 27.7 24.6 21.0 17.0 Am. Loss .62 .62 .66 .76 .84 A.~~'~~ :~~~~~'~ A. "~`~~~~ ~.t:.:~..I X I `l(t 6191 b7•LO5 tSLV Z08ZS
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prochoced B~r~ H2.lil7'(' 4% • hARICETlMB RELEVANCE In HUIVE.PtI.REY SMOKERS AND YAS CLEARLY HAVE MORE LISERAL ATTITUDES TOWARD SEX• x 35.1 171 I ~`(MA.#..:~.J.) 1L9t VZLOs.S.. £08v T08T5 I
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pro(ItJcecl by Jfll~: lJ[ 0 I.J." • THE NEXT SECTION HOMES *Ef T 1~ D_.F~RENTlATE TNE fUBYAS MIMDSET y TODAY t ~ ' _ .. . . .. ....~ . - FROM FIBYAS OF YESTERDAY - FROM YA SMtTCHERS - WITHIN THE FMYAS GROUP • OUR INTENT 13 TO ACCURATELY HIGHLIGHT THESE KEY DIFFERENCES -- ALTHOUGH, CLEARLY, NOT EVERY INOIYIDUAL F1BYAS WILL FIT THE MOLD• THE BEST FIT WILL BE FOUND AMONG OLESS EDUCATED' YAS. WHO ARE THE BULK OF THE FUBYAS GROUP• T:X TOVAC ~:.'0~1.11'14; 0 6b9i bZLOS 08L~ T08js
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L. J. Seaaley Pas. 2 February 6, 1990 • I. "D d• Issues (Cont'd) A. Female Positioninc (Cont'd) b) Consider placing a12mak xJR spokesperson on key consumer talk shovs (i.e., Good Morning Amsrica, Today, NiRhtlina, etc.). c) Search for and enlist the aid of female opinion leaders;'<: who recoaniss the danger of suggesting voasn nsed to be„• • • protscted citizens . classifisd as gst minors to ssoke. Recomaended responses: •proof" that tobacco cosipanies (and RJRT in particular) are trying!?6v', The Srand believea anti-smoking factions sy serve DAKOTA up as n. Eneeuras3,as Miner: to Seeka 1) Cateaorically deny that RJRT is targeting to minors or non-sswkers (see QiA M9). This can be accomplished by '" may become aecessary to UM ve do not vart minors to smoki; likely that nothing we AU can deflect criticism. If the Cnvolnms of criticism rsacbu unmanapable levels, I belisvs i0 2) In the event that siedia/sovern.eatal pressure continues, it FOO a) Require proof of age at retail (non•complying retailers to be finad or loss license to sell cigarsttes). b) Limit vending machine locations to those visible by utablishmsot personnel. phile this response should only be made if absolutely necessary, it offers three eil,nifieant benafits: a) Pxows that ve are twt trying to get minors to smoke `•'; ' i and believe as+oking is an adult custom. This provide credibility to our claims and should lift pressure no4; only from DAKOTA but all RJRT brands. b) Provides soma poaitive ereas for it.IRT. • c) ® cortroversial a~yLztising raerictien:, axtendln6 ourt ability to effectively aarkat key younger adult brands: (Note that Covarnment Relations has drafted sample verbaas such legislation indsnaedent of DAKATA's introduction • See Attachment II.) I 508768349 0508768349 .
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, I)r(.)d.UeCd by RJR'T1(1 ~ ~ f ~1 • MITH REGARD TO 'SOCIAL , R 1 1ONjf ?JND 1 LiYE IN A MOYIE -- THEY KNOW THE ROLES THEY KNOW THE SCRIPT -- THEY KNOW THE COSTUMES -- THEY KNOW THE PROPs • WE WANT TO SUPPLY ONE OF TIIE PROPS -- TNEIR BRAND OF CiGARETTES 4 •1 Vi !`..bAIAT. -XIINN1`.1 0T.~. I.( LL9i bZLOS 608t i08TS
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_.,.._ ....._......,..... _. ® ® ® "REROIC CAlfEL" AOVRRTISINC PSRIORitANCE Advertising test results indicate oxtr•.ely positive p.rtor.aaee oi the "Meroic CAMEL" caapaign versus the "Bob Saek/CAMtL Vorldg advertising as wil as all other RJR eaapaigns tested previously. • Attitude Iaorove•ent The i.proveaent in attitudes toward G1NEL achieved by "w•roie CANri" is the largest for any easpaiRet tested previously and d•sbnstrates the eupaiRtt's ability to be highly aotivatins to younger adult aale target ssakers. • Aehi•vs a positive attitude shift aaons target eeapotitive saokars that Is tvic• as hiSh as any other 9revioua RdR easpaiRtt tostN. - Isprovas •pinions of CAMtL anons 4!Y of sale toapetitiva target smokers. • Actually shifts 34X of CAMEL franchise s.okers$ attitudes sore positively suggesting reintorceaent of CAMaL brand loyalty. \ • I.pact Potential •M•roic CAMtL" daaonstrates strong potential to break through the clutter of cigarette advertising and caoture the lnter•st and attention of ywr•r adult aale target ssokers. - Is rated tvo to three tises higher than "6ob S.ek" as vell as all other RJR caapaips for its attantion-•gettinj, o6levar, uni,w and fun advertising torsat. - Crwat•s a highly isapinativa, appealing and relevant advertising is"• that is uniquely ovnable by CAMIL. • Advertisinr Coasunication "Heroic CAMEL• cosunicates an advertising a•ssate which saiatains the positiv aspects of the "aob eeek/CAY•.L Vorld" eoawniication wt also adds disensions vhich stren4then CAriiL'a appeal a.onR younger adult target saokers. "Saooth Charaeter" heightens eoa+atatieation of the edaroie CIOttL" visuals and isprovos overall CAlitL pareaptions a.ottR target aaokars. - Creates positive product aisociation with "s.oothness" which has bean an historically veak perception for CAltLL. - Provides strong fit with the user personality portrayed in the visuals. - Exceeds !ob beck as a.ora fun, social and likeable personality. - Provides aor• "young•r adult• iaagety than fob Nek. • 0•adline Perioraa.nee - fq uals bob leek in cowunieation of a syseulin., indepondent user isap. J 01090069
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t • L. J. Beaslsy Page 4 February 6, 1990 II. Cans_ r__1 SuE`estiets (Cont'd) b. Zstab ish a 'treedom CoalitiQn" the following: As anti-amokitg forces utfite parties with cosswn interests, it soon vi11 become mandatory that we do ths sams. A vocal "pro-tobacco" coalition should be formed .rhich effectively unitsa a combination of • Tobacco cospaniss - Ci6arsttas - Smokeless • Other coipani•s/industriss timdsr fir• - bser - Wine - Liquor - Firearms • Etc. ganizations with profits dependent on above's ability to srtis• a # PM0 Maiasinas - 00fi suppliers p08 printars/urchandissra ~ - Adwrtisitg asencies r,qt_~mpari•s vhoss profits ar• dependent on sale of "eontroversi ems F Liquor chains Vending suppliers Ear owners Di•tributors othar retailers (t) • First A4eadseat/1"r••dos of Cboio• advocates • Politicians representing tobacco-ori•ntsd areas • Tobacco varshousars • Tobacco farurs • Smokers Lynn, it is my fir. belief that, as a Cospany, u. .ust l.aro bov to effectively deal with external pressures. Ne cannot afford to forfeit any marketing tools. As such, ~,p~os.lnd tlLt a task feres aiiilar tQ-the 0508768351 508768351
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~ The in oin h othesis that the new creative for SALEFt is more a ealin ` and relevant to oun er adult inner cit B ac smokers than is the current "Refreshest" campaign seems to be correct for tvo o t e campaigns - "Smokin "' and "Fresh On The Scene." The strength of the "Smokin'" campaign was in the visuals, particularly the "Heroes" and "Percy's Palace" executions. The strength and appeal_of these executions was a result of the way the models portrayed these Black smokers in a positive situation with which they could relate - when one dresses up, goes out on the town, and has a good time. The models were dressed fashionable, the way people they admire would dress, but not too far out of their reach. There was action and color in the visuals which appeared to enhance respondents' positive emotional reaction to these executions. They also liked one way the male model had "c.enter stage" and was in charge with his girl (female model) on his arm. The strength of the "Fresh on the Scene" campaign was in the copy. The language in this copy was very relevant and carried both a product and user message. It maant the SALEM product vould be new and different. It communicated that the user vas cool, sexy, up-to-date/contemporary and had' the "right" attitude. The "scene" could be anywhere. However, respondents reacted most favorably to the club scene portrayed in the "Smokin at Heroes/Percy's Palace" visual. . .~;. ,. The majok.iay :bf the executions in the new creative communicated that SALEM is a brand for younger adult BacFsmokers, our ingoing hypot esis. Since ~° SALEM's usj . ~r-'imagery among this group is negative (i.e. older females, ~ primarily v~ite) almost all the executions were able to communicate a ~~ yo;u`nger ad..u.t" Black smoker image - with some being more relevant than otrs as,:::?`i•s;cussed above. These executions made them feel like SALEM was '~younger,,,:•.mor~ with it." A few exceptions to this were the "Smokin at , . ' f"';..•' `. n n Bentley s;.~;and SALEH Into It executions which communicated an older user image. `,xYr.v The rou s' reaction was also consistent with our in oin h othesis •that the new creative uses an ua e that is re evant an excitin vit "Fresh on the Scene" by far the strongest copy as iscusse above._ The on y concern with this copy is that respondents are expecting SALEM to taste different, but better. If they discover the same light tasting, minty product, they may be disappointed since "Fresh on the Scene" promises ;~ something new. Other copy that was not as strong, but also liked by respondents included "Smokin at Heroes," "Vord. Smooth" and "Fresh Like ~~M ~ Lamont." All utilized language that was more relevant to these respondents because it was language they used. (A glossary of slanguage used by these target smokers is included in Attachment II.)
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pt-f~clu~~ed Ii~, ~. VE CAN APPLY THESE 3'PRiNCIPLES't Vt ill : . w...,66.4d~1A'L~i:T,k81ZI~ . • USING GROWTH SECTORS • MEANINGFUL BRAND DIFFERENCE AMONG YA SMOKERS TOOAY, IN A VARIETY OF WAYS: • DEMOGRAPHIC TRENDS - LESS EDUCATED - FEMALES - HISPANICS - BLACKS • MfNDSETS L09[ bZLOS 6LLV Z09tS
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pI'(:)cItIc.e(I by ItJIt`T(, 2• lEINs DfFFEREs? • %YT TNEY ALSO • • 0 41 ~ 44 a a 0 ii-ANJ01 tEIN6 I A ~ (ef~°'~~~~~~~~ 41 F!fPIN T,j 19!~~~ °~ "I°!!~~tp pf'f~j~1"9sjJ~ "tit NE IOOK THROUGH jHEI$ EYES RATHER THAN OURS• t8Lt T08TS ZS9T 6ZLOS
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larcrdUCe(I b~' RJ~Z'J'C ~~ 3. lIPMARO STRIYIN6 ui • ~'~""`I 1`~'T1~`fP`[7`Tti?:Y YAS ARE MUCH MORE LIKELY TO DEAL M1TH L1FE 0Y ESCAPING INTO THE IMA6INATION• x . dstREE Id1tEK TOTAL POPULATION 24•6 100 SMOKERS 27.0 110 YAS 39.1 159 SOURCE! YANKELOYtCH 1979'$ 7 TI~i~._~~1/~:1~ ~k.~0l8~11iYi 1SER1S )M~t~.E~`~11i '. ~ ~ ~ 099i bZLOS z6LV t0$tS
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y I{.IR'TC' produced b Ft®YAS SOC11J ~OUPS SP_ECTRINI ; • ~'~'.u~[P[IitI+.Y i -•GROUPS oN CONFORMING END OF SCALE VIEW NONCOMFORMING GROUPS M1TN DISTASTE• - NONCONFORMING GROUPS TEND TO RESENT CONFORMING GROUPS• • PHONT • THE 'NAYE'S* -- DON'T HAVE TO STRUGGLE FOR THINGS - ALL GROUPS TEND TO ADMIRE THE MOST NON-CONFORMfNG GROI/PS• • NOT WHAT GROUP DOES • RUT WHAT dEHAV/OR REPRESENTS: - THE 'GUTS~ TO NOT CONFORM - BEING ON 'THE EDGE' IN FACT AS WELL AS MIND• ( `()'~I~~1~~~'. ~`( _~~~:~~:'t.'~~ 0991 bZLOS ZT8V T08TS
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~~ CuiJe I hies Cur l•;l [ecl ivv, 51801 4821 ~ ilarketing to YAS 50724 1689 ;...~ ~.. ~.).~ 1 ( I L'I N, ! A21111-Idl ~~:LNfN ,~Q pa)11p(.Lt(i
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18-0 20- Y.a Oldai ,-A:j ~a ,~~-.,r:. : Anrwl N ot +800H 4 - '.1 '0- _ "._'.. - .'-.,_ S0okesa ::- - sS r1' .`';~~..+..i.~' ~y `Ly:.rfN~::`i r,~ ' ~p+Ms^ t4 ° Nuaib.r o! ~New Snokera i Share , . Newpo it ` ' = ' Kaslboro ~ _ ==STON ... ., Total R,7R Total PH Of Y.airi oi A8e t " •' '• Ouittera I : ~.. . •1,300K G".I ~ 63% .. ` '+SO4H' ~ 8% •120H +384M +4.2 +.6 •. . ., . • ' - - :•" 4% '+32H 11% •16SH •133H •1.S •.3 12t +96H~ 1% -1SH +81H +0.9 +.Z 91 •13SH •111H •1.2 •.2 s• •7SH •3SH •0.4 •.1 14• +112H 36% •S40H •4Z8H •4.7 •.9 70% +S60H . 24% •360H +200M +2.2 +.4 *Actual average Lndustry annual loss over last 5 years: 7.4 billion
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"Bentley's," did not. The primary weakness of the "SmokSn' At Bentley's" execution was that the male model was perceived as much older. This perceptlon may have been enhanced by the word "Bentley" which also had connotations of something old. A few respondents even mentioned that it reminded them of an old Bentley car. Additionally, the woman in this execution was perceived as turning away from the man. As a result, they vere felt by respondents as either being mad at each other or not even together. "Guy not attractive" "Guy and gal's outfits don't go together" "Older, more upscale" "Sounds like club a white person would go to - too upscale" "Doesn't sound like a place you'd have fun" "35+ years old" The only weakness of this campaign overall was in the copy "Smokin At ,.." While respondents liked the language, they perceived the copy as advertising both SALEM as vell as the club specified (i.e. The club was hot/smokin' or . people were smokin' SALEM's at the club). "Say's smokin at Percy's Palace is in." ' ' ' " ' s going on. s SALEM Club is a popular place and ~ Say x th.ey're smokin' SALEM's there." "Th8 ~lace is advertising the cigarettes. The cigarettes are .: . advertising the place. Works both ways." 6i"'are you advertising, club or cigarette? Or what cigarette, smokin' says any cigarette." :=~,'~uA p.y.;>`says whatever you want to smoke you can smoke it at u :;Per •cy s P a 1 a c e. ~, ,},.......:: "Smok•3n means jamming, having a good time, jiving." As a"r'e5'ttlt, respondents wanted more than just the SALEM name in the ad to clardy,.,:;ahat i t was an ad for SALEM cigarettes. Many mentioned that a pack of SA,I:~N"`s or a cigarette would make the connection between SALEM and the `~:O>~}a}~ club more clear. Perhaps the incorporation of a mnemonic, currently being developed, could also enhance the communication that the ad was for SALEM '~ cigarettes. }H!!.W.}W.py ~:,:C[Aj, ViC}" Host respondents recognized Al B. Sure in the "Smokin' At Heroes" execution ~ and Jody Watley In the "Smoking At Percy's Palace" execution. It Is unknown ~. ~~ how much this contributed to respondent's positive reactions. While it is felt this campaign's performance would be strong regardless of the use of a renowned model, future executions should avoid using famous people due to their Smpact on consumer reaction. Host respondents also recognized Heroes as a local club but not Percy's Palace or Bentley's. While a recognizable local popular club appears to enhance a positive reaction, it does not appear imperative. ~ m L ~n C r
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WE CAN'T t!l.AME -n-IE BOYS for having a water (ight now and thm 9 roa woakcd in Jack Danicf's dckrsrd. you d stm one too. Looking afar a bamemng hanl maple rick is a hot job. Bac it's one we dn i do without. You sce, we take the charcovl Ehat resUlts and use it to help smooth out our whtskty. . - Thx's donc by sccping it down thnough huge vxs cwARCOat packed tight with this untowEo charcoal. Just a taste of a Jac* ~N 's•~~~~C~`~~~ ' and you a6rrc ic s wo+Eh ST osor a water Gghc or two. .~.nr..r.~•wla.• ~w.r...ww ~....~..~.•.. /w s.!" M0. pm"lhr 11M. *.-w Nlff Prew. Mb w.r.w.r AqN•~ df••wr A.n.." w toonl s..a. Cw..rM.wo ® ed by [:;(~~"~'(' • 4k., 0 A•IT 000 AMONG THE tOTTLE' ~ 1:~ Y 11tY1: THE ADS 'SEEMEA REVOLUTtONARY AT THE TIME " THE LONG COPY WITH NO NEAOLINE, NLACK AND WHITE MN)T0, FRACTIONNL'PAGE SIZE... - NESTLED IN THE FOOTHILLS OF THE CUMOERI.AND MOUNTAINS AT LYNCHDURG, jN (pop. 361). - IN A DRY COUNTY (THEREFORE O1LL1C1TR)• N jrHE TJOp~4 : :~:; : 4- :*.~~~`a ~`~`~. .~~ " . 6Z9 i t~ZLOS U t9LV T08T5 i . 0 BEAUTIFUL PEOPLE ADS•a (AA • VISUALS AND COPY ARE 'DONN HOME', UNDER' STATED, AND A BIT IRREVERENT, BUT GENERATE THE HIGHEST AWARENESS NUMBERS IN THE ENTIRE LIOUOR INDUSTRY• •.IB HAS A MYSTIQUE, SOME OF WHICH IS ACCIDENTAL, SUCH AS CELEBRITY ASSOCIATION• • BUT A HELPS THE MYST1oUE• ITS DISTILLERY IS ADVERTISED TO sEt
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produced by It,TR'CC DIFFERENTIATING "y1~°~ NOMOGE~~S 1IPH. EY • FWYAS ARE !lQI ONE ~i ; • TNIS IS GOOD NEMS. BECAUSE THEREIN LIES DIFFERENTIATION AND OPPORTUNiTY• • THE TYPE OF DIFFERENTIATION THAT FIlBYAS THEMSELYES KNOW ARE THEIR SOCIAL GROUPS. THESE FORM A SPECTRUM -- A POTENTIALLY USEFUL MARKETING TOOL• - SPECTRUM REFLECTS ATTITUDINAL STANCES OR MINDSETS TOWARD DEALING WITN LIFE/MITN NEEDS - FROM VERY CONSERVATIVE To OUTRAGEOUSLY EXTREME - LIFESTYLE CUES AND SYMBOLS ARE ALSO DISTRIBUTED ACROSS • ACTIVITIES • MUSIC • DRESS • PRODUCT/BRAND SELECTION THE SOCIAL GROUPS SPECTRUM M I'~4'~1`,`~()~~~ A. ~~()!A:~~.. • IN NET, THE SOCIAL GROUPS SEEM TO DIFFERENTIATE BETTER THAN 00 DEMOGRAPHICS• bL9t 4ZZDS 908v t08T5
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tREME IFMIIY i 10DAY'S SOCIAL A 9 600DY 600DIES • PREPS • 60's 0 • ROCKERS I REME • BURNOUTS ® li,il/:h&0,41. UI 0 MUSIc AS BACK61lOUND 0 k~E:f .llili , Lddt DRINKS - 9YEaALL THE FASHION MERCEDEs LOOK YoLVo CAMARO MUS/C AS A ANTf-FASHION USED CAR LIFE STATEMENT TO ' F/XED nt OUTRAGEOUS - SOUPED UP - IMMERStON - OLD BLACK VAN - CONCERTS T-SHIRT PfCK YP - PERFORMERS SELECTED FOR NE R ZMA~E. , ~. ~~_l. ~~~ AC,CO LVJl("_AT 0T8fii T08T5 8L91 bZLOS - SPIKES ON WHEELS CLOTHES i HAIR T H MIxED E DNtNKS L L16HT BEER 0 NEINEKEN 0 K OF THINGS JACK OANIELS BUDWEISER T N E OF TNINGS
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, Moseb.r 4, 1447 tol 1et. i. J. ?aekalaan TtDMi 4s. r. T. L1esighton Kr. V. !. tsetek suaJjcrj 1kj.3Mts .><M cKaa 757% n;tRC~L.Mt~wo cona>Rlc+~tIo_~ s~ .•.~r.r ~~~r.w..r Tt.. Coltovtn4 hi;hlitAts k.v tletdtnA• and eoselwtows Crow eowusteatttes tsscied of CAM's 75th lirthdsl sA.•rttsttu; awsey .als tartat •nok•rt, at•d tp-3• Tsars •ld. The test sthsdolsgy ur•d to ass•as this •dvartisint rss vary •t.ilar to •rs.low eowunitatloer t•stint tor CAtRt. sueh thst tasult• eaa to eo%ta=.d to 1946 ttest r•sulcs t•e th• •Pestsrs• eMsattw as a bsaehsart. Oser aed treduet toaite Cs+.uniestton • '• 7 h atrthda •dv•rtist eo.euntested vser tea • vhith to D hl eons! sm rth w_144nt o e st.~.~ e set. e• c trt s. ea.oa titava+l a us•r r•tl • vhieh eosbte•s tM dsatt.d ehataetse- tsttes e Lndaad•aes indi.idw itn nith rs ata t Lt7 and -44COltsnee ti• tM s+Ne troue . aa TarRet swok.r• rated the 7Sth lirthdsy ad..rtisisg tiettit above a.ers%• for Ladl• isw aod ~ear Qreu c•otsne• 1•Oan •nt Geu oa. O N riesds Ma1w kis evn d•eisiosa RaoMS how to b,a.• tuo ltand• uo for beliefs Naa alot ot t»TSOSalitl Not afraid to •aor•ss i•,di.idu.lic? Sa..os. I eaa ralato to 1caoW what h. vssts tsjops b•inR diCt•r.at 7Sth ltrthdav advsetistsa di!!•rs tros ch• 19At •MsSers' eaw.•s A CAfCE y ,, Exhibi " •'`/ /~,~t Date: 9e Alfred A. Betz, RMR a • tv•n thouSh the 7Sch lttthdaT usar iaatsty was hi;hly 'sslstabls' to tsrRet •.oUcs, saresetios• ot the GlRL soor.r rs.aia•d above aarat• for 'a lot older thm aa' aed wrs sllRhtl>• hiRher thaa tor the 'tostats' ase*aite. relate to'; wors ot a loa•r; 1•ss •oawaa who "toss alo" vSth the ero.d'). t bt t to aee n• th • a .t_ tAsss ehABeset-s_t Che GM~SL ui•ra.a~. ' T -The - •OSt•!a estiNtRn sa • t taC mes than 73th lirthday !or aLl tndi.idualLs.-rslat.d ssasYrss, as sll as tsr ssaseultaitT .d o+cetts..ne. now.ar, tht• eaasatt;n ws ratad siRsitleantly lovr for ratatabtlity than the 75th ritthesy <L.s., 1•sa ••o.sss 1 ess • Yhs 75th tiTChdaT adr•Ttistat alto eo#.evalaatsd oositi.. •rod.et osttet+tios, vhieh wrs eona/stant with tha oroduec eharaetsristies eowusieat.d 1t '1P•tcsrs' on sat diarnatona. The 75th lirthdav •asatqn tan•ratal *tt% ratta4s for "authancis', 'tualitT and 'sstistttet' altata ts dtisll asaa.dsl thoa of the 'postsrs' e;aaeatgn. TRIAL EXHIBIT 12,951
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J:):i:'.ui.uced J;y ,j4,jR'i't' I%,tf.l .I PROMOTiONAL NERCHANOISEf ESPECIALLY CIOTHING L ~cx~u~ !tl".'a l"-~ k::' S•:•~ 73 M.w sm, lfwMwc 1N »ri! • JACK UANIEL'4 F1ElA TEStEIt S111Rn nM «e,s+Of .K *mb w wAre ker.Ne. N.ar Rt .r srh uwr ft arrer k.w./ a-Aca •M.ers OYR. 1te1/1rMe~"w/4AeM Mdt .1 Sim tMM Sff..Mrem M" ..* asq w ser" f1m s...e tos aM/r.w .w w.. mn.0. K. «.irc+.o.a+e %a +•~e So+ sL s. .t t. x Sn.w .~. ww~w..~..w«...~.w~.w.. wwa..w....+sba r..r..m ... r.*ra wsr...w.r. 0 , l211rNM !t. UwcMwr. T1:1 »>!2 111 V 1 MARKETEO THROUGH THE 'LYNCHBURG HARDNARE AND GENERAL STORE*, MHICN 13 NEADED S11 A CORPORATE VP• ExEc• VP BRAND MARKETING JACK DANIEL'S F1El.D TFS7ER CAP 1wb• aw%Mk wMsaaw: fiw o~~ Nsdwe:*{W aM M4/a .R tire har ae-bd ea.krs Fic+r fe:tn- r."M weMa.t- iUMmNee.bs/skr«r em aN staft a 1d .1 cawensh.es rr t6.St N~ce Ma.fts rsl~ee .rwwwt. M o.Q..A.r «wa sulftr lw•a ..w aa.r..~...e.a w~.~... ......a Mr....rr... w...~, ~... ~.. ora.... r~.b s..~ w/i. ~..w.M... ww.q-fMt.n ('0 N I A -1 ) l~:N I °I :~ I :: VN r__~ A MAJOR ELEMENT IN .ID'! MARKETING PROGRAM. 0 YP - BRAND ADYERTISING ~ YP'-LYNCHNURG HARDMARE = GENERAL STORE" • THE *LYNCHM/R6 STORE* RUNS ITS OWN SEPARATE, NATIONAL CAMPAIGN FOR MEARAM.ES• ' N ~NOT 11, TOP, W.ll}_~.~'~ I Z9LV i08TS 069, tZL05 ~
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a~,j cg ~ v ~it~rc 0 m A _ 0_ TooAr's SOCIAL 6R .ivnT~lJrzr,;v sg LNMB1rGElr6 OIFFERENTl STRIVINa EY,ellMFMl su • 600DY 60001ES 'SUCCESS' iS EsTAe'• DON'T 60 NEAR AVOID LISNMENT APPROVAL 'TlIE ED6E* EEX • PREPS • 60's • AQCKERS APPRECtATE EDGE, LIBERAL BUT RARELY PART- ICIPATE LIVE AT EDGE MORE NOM ANO THEN LIBERAL • PdNKERS 'SuccESS' IS EsTAS- TNE YERY M0sT LISNMENT OtlTRA6E EDGE LIBERAL i.NTLAL: 9L9t+2LOS 808V T081S
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J., w ~ , ^ = 04. .:' .. _'~. + I , tase is th.t twy di1 st slieit ,as.o .aceitsos.t ae a.tirl.a... It app..es ttrt ttse ss still .rsti .m ,esw ta tat" ....1.~s.t ....2 trts..M:t3aA3at aM fes.p. • ~..~ ? _:Oi tro sds t2rs, ••Ou Mlth It' aaA the "2ts.eti Causls• app.as+.d to • '• attsact tts'asst peaitive *tt..tios. Ossrsal s.actiwt -to e.esi th.s was ; ~-. .•~ d. tbllsMr: ' . . . • ., 1. 'Or•witti It" lfias .aoscsti.os wra geowa11Y liked . tsaass of trs yo..e cosple, "s;.itastiae" they wrs ia-a:d trs wwwmrweto! /rrsa.es ef the ca.e1. locas =roap ~s.iss oo.ld.7 sslats to. tti.'sorsla a.d tiris setiViti.a--tbss.tos~, trsrs Mr a s.l.:a.ep.tos:}oas~ss adult the ta.tasp a.p:et -ad tU: ada (.r ss~s...at.t'-y; ct1.. o~sl).' Uswves, the tag 11ic4ps atti_ It•, apps.rrM to ke tLt :a./ ostdstei. lMso ads ws" wtll s.csi.M drs to the iu./ti..os a.r.cta et ttir catteaas. lbss thssa MY otbs tLsas, "Is `pse.el Car3s' aPPOat.d to attt.ft the ssspo.isata• attastioa. 21s wia dsasbacks of ttisss ' asss.tiws ..rs t1rt: os., tMy my be .ors appealing to an w..a 7o.ops ap sso.p a.d too, tlissa is sor ceai..ios as to the saaiap bsbtial'tbs. (sos toaoa group sa.ti.a sZSe tisrd-ps+ssaed to e7qlain ~ tb.Vespoes of the ads). P9141L _. 'tisZosr to tbs O"Is" Tiws '6ds lell NLort because the 'Oasis` coscspt ..s aot aramiWnl or clear to the pov~as adult smokss. To sos s.spoadasts, the oasis co.saicat.d a plaae to cos for ralaoatioa. Nor..es, .am did sot..oerstesd vby a casl aad a Ma.Ld bsd rssu plscsd in diifereat settiap. The ta.tasp ela..at wa set aaetsss smou2b, aad was tb.retose lost ia this 2soup. ZostDes.ort, the ppradd tiose no aaieetstioa to the CdiQL pack a.oap tlrse rssposdeats, aad tl+ns the Ussitast/4stiqv. ralitl of the eaoscdtioas Ms israls.ant. i• '9.ohe 2itW• ~.......~_ .. In tlrse .iswls, the younger idnit smokars did aot understand the coss.ctioo 1atw.o the ads aad CdMOs s.okia2 billboard. Coesa4w~t17, the ads appeared sessMbat 'stnpid' and umdaas. The artptioo to this ws the dedssNt.r lilitiasrd. This particular ad co.biosd the vmaxp.ctsd nith the rseaeplaioatile, and as a result tt secsivad positive tasarack. iewvas, trch of this positive feedback Mss ds to the actual u.desw.tar visMal aM sst ttis vwrall concept •: askm" nsw' :..~,m= yw.-r T t & .
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procluced by IZ.Ilt'CC in FIUJ\'IPH.REY 1 • SINCE THE EXACT LAIELS YA PLACE ON THIS SPECTRUM CHANGE OVER TIME, AND THE CUES AND sYMBO1,S CHANGE RAPIDLY, OUR GOAL IS TO IDENTIFY THE ENDURING MINDSETS BEHIND THE SOCIAL BROUPS• • USE THE GROUP LABELS NOT AS TAR6ETS, BUT AS REMINDERS TO HELP EXECUTE RIGHT FOR TODAY. • ~.."C.~':'~~~`I1) 1 4 :`~'t'1:~~.; `~~.~~'~'FS (Y F L08V T08TS SL9T b7LOS
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produced by LII2'CC. Slide: CRE002A* Opid: ighton slds-roung Job N: 9888 DDS:6000 size: 354 Set Sep 1712:33:051988 0 ~. ~~. FlU]. f `.t...PHRE.,R. Sour OR 14 RJR Tracker, Diary Panel, SIRS, Purchase Pattern Study RJR Qualitative and Quantitative Ad Research Simmons, Yankelovich i"~`Il A I fiiZ8t 108T5 V Z691 tiZLOS
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• 4. EXC[TEMENT • 'TN EDCE 86LV T08TS 0 967 As ONE WHO STANDS Otftw~IVIPIIRE :AA M~M:::COLITU 999, irZLOS
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pro(riuced 1)ti' R.IR'TC V. ~ ,1 j1111' i lil ti)1i U'; V .~.ri . A. THERE ARE MAJOR ISSUES/TRENDS THAT MUST BE CONSIDERED IN DETERMINING THE BEST DIRECTIONS• INtsOME CASES, FURTHER RESEARCH IS NEEDED• l• PREPS DON'T SMOKE " THE MARKET 15 LIKELY TO BECOME INCREASINGLY ORIENTED TO THE VALUES OF NON-COLLEGE SMOKERS, ROCKERS• THE SQUEAKY CLEAN LOOKS WILL BE OUT- _ IN MARKETING TO YOUNGER ADULT SMOKERS, THE CRITICAL REACTION IS 'NEY, THEY'RE TALKING TO ME•tv THIS SUGGESTS THAT VIABLE POSIT1ONiNGS AND EXECUTIONAL THEMES MUST MORE THAN JUST 0 APPEALa TO YAS, THEY MUST APPEAL TO YAS IN A WAY THAT RDIFFERENTIATES* THEM FROM ALL OTHER GROUPS AND DIFFERENTIATES OUR BRAND FROM ALL OTHERS IN A MEANINGFUL MAY• F6 ~ ~.. Y~.IN "N ( 9891 tiZLOS 8i8V T08t5
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prucluced J.)y il,)[t'TC IN THE NISTORICAL ANALYStS. jN ° E T~1., E. .., I~VCESSION OF MAJOR FIRST USUAL BRANDS OF THE PAST• NSi~C~ ~T~ S~ ~ IlE1N6 •IN TuNE• OR 'OUT OF 1UNE, IN TERMS OF PRODUCT, POSITIONING, OR EXECUTION• EXAIIPLrt MARLSORO'S UNSMILING COWBOY WAS BETTER ATTUNED TO THE RESELLIOUS, FLOMER- CHILD 1960's THAN LIGHTHEARTED OALL AMERICAN` HINSTQN -- AND WAS A MILDER, SMOOTHER PRODUCT• 2. fiROMTM SECTORS -- 'CATCHINa THE RISING TREND' [XmP1,ESs - PALL HALL LEVERAGED THE DEMOGRAPHIC SHIFT TO MORE YA WOMEN SMOKERS IN THE 19q0'S• - WINSTON WAS IN PLACE MITH A POSITIVE MESSAGE TO CATCH THE RUSH TO FILTERS IN THE EARLY 1950•s. 3. PROVIf t01'+l1 iifWfkj4*4!Q IV° VLLV T08TS Zy9t 4ZLCS
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. > Mtien.l M.aauras • The 73th btrthda advertist ansr. e+1 a•er atron and sitive s.o lenal rassons. atonc 1*-34 rear e sa e tarRet =so ars. ..r. .~~...~~..~.~ ....~.. 1. ltiwulation'Itntartalnsent Tha 7Sth tlrthday advertisinq was .SudRed by tae4st swokara to bo •ettr hitRlr sci.ulseiriR/entertainint. ia taet, this advsrtioleK vaa rateA siqniticantl7 hs;bar on these .aasure• than atl other CMRL e4waidne tested in 11AA inelwltaR the 'Peaters' eaaralRs. ?ht• isalydos all diwenaions related tor 2. t.aatlr. .,:.::. Tha erawanssnta of the 'atoathr' eida of these raseonses ievolvsd teilms ransind teoa a''ersoaai/istim.ts' tone to very 'esatietie' sistimtona that are identifiable sM relatable to eonsusees. The osly area where the 75th lirthdsy was rated b1iRh1y in tatwa of o„atMr p.ehatl• nsiains ita •trost eor[otsaseo is the ares of relatability. Taiget awkar rated tho advertiair4 aa retrewal? 'trioMll', 'aa 'adltssiooate' end s• 'advsrtielaS 2 eaa relate to'. This eontraots with the 'lostars' cawosign rhere the laellnR• Reesrated rrrolved aro.ad the citaant of the draatie sitwatios sad the nos,r _taiSla of the old .ovie aar. - Ori~inalitr/Ueiawnas - Ave~alin~/Likaabts - Rn~orabte/Musint - lraoatchiat/tao.attul - Qtfvar/antertsinin~ O.ar halt and in aost cas a tva-thirds of these rale tartat aweksra c1ds.l aRraeaant on thsse asasures tor the 73th •lrthda7 ad.ertialad. 3. Dro+,d RaintorcNant and R.l..ant N.v. The 7Sth tirthdar ca.aiRn was Judted to be very 'hosesc', 'belt•vabl•', aod 'wrth ressab.rtaK'. It qeasrated above averaRe ratisss ter 'deoenAabla besnd', '.akas as teel •eed about the brand', 'a tood brand I vould eacowRand to ethars , aad 'th. •reduet was botter thae t thouthc'. All of the ratinta ia the area of brand retatoreawst sod rel.vant n.vs a:c.aded those achievad bt the 'Footara' aas•aiRs. 4. 04 11s 0 The 7Sth •irthAay cawoaiqn do.a not sees to hava any areas tor ooaeern based on 'ta.ilisrity' or 'eontu•ion'. Ad4itienally, tMea results indieate that this advertlsinR was not 'etteaetve', 'ieritatlnR' er 'insultinR to .r intsliitsace'. I .
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I H
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51801 4773 Oi 9C Z£ 979 #Z OZ 9t Z l 9 f 0 . I i i I T I w/wPa9 • wNOli3 w/4•1u v v evNw11 simft w•i v si,oas ,q.A • w/vlN *+•M•jUI • ••/Mail/Al v sa/uuiaq3T n~oes t~11Mw1 • . 0 ~ .. 9 .. 9t . OZ y v V~ 1~ »Il A.iN'i:iIFVfi 11 7 I beu ao,t a nq p3npoict I I I 1 I I I 7 I I • I iW8M""#ml G" 60111003 w1~iw1~A V w/wq T wX3 a/sN v Ald•AOiWd NIo+A t •i4 v BZ ., 7i£ M ., r 59724 1641
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. )i.()(IUCC(I bv I&IRTC Slide: CRE010•# Opid: Aighton stds-young Job #: 9888 DDSA0 size: 136 Sat Sep 17 12:54:57 1988 in HUMPHItIi.Y Demographic Profile. Evenly Split Between Males and Females `._,' . ~ • [ i < !' ` 11 L. 1t ~ f 5 i. I • L ; i[ <( ~.. ~ \. ~. • : i . 1• ~.1 7 : ~.. ~..' "`.! 00LT 6ZLOS TE8V t08TS
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b.otional M.aaura. • The 7Sth btrthd• advartisl enaratM ••er stron and siti.a eoottenal response aAonc l4-34 yar e asa e target sso •rs. 1. ltiwulatton/tnt.rtainaant The 7Sch sirthday advertising n.a Judted by target awokar• to be verv highly stiwulsti+it/entartainint. In taet, this advertising ws rate4 aiRaiticsntly hith.r en these .easuros than all other C4RL ea"sitns tested in 11AA ineiuAtat the 'tostars' eaaoatp. !bi• isalWa• 411 diw•nsions ralatad tot I - oritinalit~/astawnas - Apo.alin~/Lika ~bto - RnJoyabla/Anustnf • trecatchin4/Ia.anttul - Q'lfvar/tntertainint Over halt and In most caaas tra-thirda of these sala tartet smokers class" aSreemaoc oa these ••asuras for the 7Sth •Lrthday advarttsist. 2. t.eatM Tha ep.oMoants ot the 'a4oathr' side of the•a rasooosas ievolved t.il!'14• ran;in; trom a'o.rseaal/ietiisata' tone to very 'rsalistie' sipsslons that are idantitiable and relatable to eonsu.ers. The only at•& whara the 7Sth 1lrthdar was rated hiigdly in tama of eaathy oerhaoo e=olains its •tro.R vertorm.eae ia the aras of relatability. Taigat smoker ratad tAe advertiain4 as eatr•ma11 *triendlv', •as 'atte,ttiooate' and •• 'advartising I can relate to'. This eontra.t• with tM 'toatars' camoaitn where the taelin;s generated revolved arorsd the .#citewant of the dra.atic situation and tha nostalsto of the old aavia ur. 3. Drand Reintorc.%act and •al..ant N.vs The 7lth firthday oa.eaiRn vas Ju+dgad to be very 'hosest', 'boltevable', and 'w rth resaebariat'. Ic generated above avaraRa ratists for 'dap.nAabls brand', 'sukas me taal toed about the brana', 'a teo0 brand I.rould racownand to othars , and 'tha oroduct was better thae I thouRht'. illl of the ratings to tha area of brand raietereowsat asd ral.vanc news e:ca.dad those achieved by the 'toeters' ca.ataiR+o. 4. taA tlats The 7Sth ltrth4ay caspaitn doas not ••em to have any are4s for concern based on 'ta.iliarity' or 'eontusion'. Additionally, thess results indicata that this advarttaint vaa not 'etts.sive', 'irritatint' et 'insultieug to •r intallitanes'. I A O I
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I wod.ticed by RJ R'Tl' • JUNIOR LEVEL COMMITMENT ~ ~. .~ ~. 'ONCE AU6UST BUSCH REALLY.~SHOMED H~ WAS QVNL YTE T~ .o NeER ADULT MARKETING, DOORS OPENED UP AND A A P TH DEAS• BEFORE THEN, THE IDEAS WERE THERE SU P P M R f 1 L ~T EM• THE IDEAS FOR THIS MARKET OFTEN COME FROM JUNIOR PEOPLE• TNEY'RE THE ONES MITN THE ENERGY TO PUT INTO FIELD MARKETIN6• AUT THEY DON'T HAVE THE CRED1sILITr SO SOMEONE AT A HIGHER LEVEL MUST •ELIEVE IN THEM AND GET THE IDEAS TO THE TOP PEOPLE•' WE NEED TO REMEMBER THAT 810 PAY-OFFS MAY TAKE 3 OR q YEARS TO ACHIEVE dOTTOM-LfNE RESULTS. A SOLID STRATEGY iS NEEDED AS WELL AS THE RESOURCES TO IMPLEMENT IT AND MONITOR ITS PR06RESS. FOR EXAMPLE, THE BUDWEISER PROGRAM HAS BROMN.fROM 1 MANAIM11 TO 18 PEOPLE/fIOMM• :CO 1.t'!1t.:ATION i S89i bZLOS LTBV T08TS
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produced by xJItll on in • Al.L OF THESE KEY NEEDS ARl:-444 4,4144R.E Y • OTHER SETS OF NEEDS MAY ALSO BE PERTINENT• • A FEM CONCISE IDEAS CAN BE CAPTURED FROM THESE NEEDS AND THEIR INTERRELATIONSHIPS TO SERVE AS READY"REFERENCE GUIDELINES: FOR THE FIlATAS WHAT IS CRITICAL is: l. TODAY, NOT TOMORROW 2. STAYING YOUNG/NOT IN THE RUT 3. ON TNE EDGE, NOT THE MIDDLE GROUND t..'t_~Ni~ ~i~~~:~'~ i:~l.: ~~~~"~~~:w~.~ f :~ ~~.'t:.'~~ 1,1`1`~~.;:~~~ ~~ ~`~ SEE TIIINGS TIIROUGtf TNEIR EYES. £L9t bZLOS S0Bi, T08TS
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~ ~~. :~ced ~~~ ~~ ,*~~.I-'~ ~ r~~~~ . Slide: CREOl2*0 Opid: gfitoa slds-yonng . Job 1: 9888 DpS:6000 size: 132 Wed Oct S 12:32581988 s lll HUMPHREY Demographic Profile 72% High School Education or Less . :t.~~`t.~ „~~(.) ~ 1>i~(..f. ZOLI 1'ZLO9 EEBt T08TS
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j!~ t~ ..~:.'~tx.~.~~~ ~~ ~ ..ll~., ~-. ~ ~ ~~ ~.~ ~.: ~ ~.. ~ +~~ ~.~ ~_ 7 ~ Slide: CRE013'R Opid: ighton sids-yamg )ob *: 9888 DDS:6000 size: 90 Sat Sep 1713:01:171988 Ill HiJMPHREY Demographic Profile 74% Not Married 9£8V T08T5 50Lt bZLOS
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.~ o~~~~~ed . ~ bv RJRTC Stide: CRE013~N Opid: 1igbton slds-young Job 1: 9888 DDS:6000 size: 712 Sat Sep t714:28:051988 N HIJII\'l.PITI.REY _Demographic Profile !nc Less than $10,000... 20% Less than $15,000. a .42% Less than $20,000. . .57% Less than $25,000. .. 68% Less than $35,000. . . 80% {'()N1~°11#I;ti'i't:lt.: 11tTM~'!1;!~;(.)`~:.1 "6`C}K:1(.:t.`() I.1'1'tt::1 ! (t)'ti £OLI tiZLOS TiE8t T@8T5
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Tr~~~rlh~• ~ prod-t 0 'Ii um7u • c car Akdr,16441 i I • GOODY GOODIES 0 - • PREPS • 60's • ROCKER LOW P~~RS 0 , t.-'t.? '~~ ~~~ N1(:~1:9 • BURNOUTS 1991 b7LOS EtBfii T08ZS OPREFs D011' T SMOKEO • `C16ARETTE TRENDS WOULD START MiTN ROCKERS OR PUNKERS' I I
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~:~~~ed ~:~ ~~. ~~.~~. C Silde: CRE017A Opid: ishton s ~~lds-yonn8 Job N: 9888 DDS:I aize: 4S2 Snt Sep 1713:04:491988 s In HUMPHREY Lifestyle Music Ut Heavy  Country Pop ~ Oldies (:~~:)NF1DFNrF1A1.: M INN ES(Y F-11 TOR ACO 1.-1 JG :~TION BOLt tiZZOS 6£8fii 10819
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5. ~~:~:~~:-~ :~ ~.~ ~~ e~~ ~. ~ ~. ~. . ~ CAMEL, NiNSTON, AND SALEM EACH HAVE 01~ NT STRENGTHS AND MEAKNESSES- .R..~~. O CAMEL -- TENOS TO R~ M R P~ t.~ t ~~ S A R OTHER BRANDS ALTHOUGH ITS .r~ . ~ M...~., NON•FiLTER HERITAGE~ S 3T L PROMINENT• . . ~ T S STRON6 VISUAL IDENTITY MAKES THE BRAND INTERESTING AND LENDS ITSELF TO SPECIAL PROMOTION• PEOPLE NOTICE CAMEL. WHILE ITS NON-FILTER HERITAGE MAY SUGGEST PRODUCT NEGATIVES, IT DOES FORM A SOLID L1NK TO AUTHENTICITY AND QUALITY -- ITS ORIGIN 10 THE '6000 OLD DAYS" iS NOT A NEGATIVE• • MiNSTON/SALEM -- IGNORED MORE THAN HATED. THESE BRANDS CARRY THE BAGGAGE OF BEING IN KANSAS CITY FOR SO LONG •.• AND THE USER IMAGE ASSOCIATED NITH THIS. THE BRANDS ARE sIMP1:Y NOT VERY INTERESTING. THESE ARE SEEN AS CLEAR 12 BRANDS WITH PRODUCT NE6ATf1IES• G. THE ONLY ATTITUDES THAT SOUNDED STRONG ENOUGH TO BLOCK A BRAND WERE USUALLY EXPRESSED IN PRODUCT TERMS '_ a THEY ARE REALLY ROUGH BECAUSE THEY'RE NOT FILTERED& , OR 'THEY TASTE LIKE STALE MARLSOROS°, OR 'THEY TASTE LIKE COTTON% THIS MAY MEAN OUR PRODUCT PERCEPTIONS NEED TO BE TURNED AROUND " AS BUDMEISER'S MERE• ~.-(.~' ~ ~~~,1~~`.~~~ ~;~~~ ~~:. ~1 ~ i 1( )*. CB9I bZLOS ST8t T08T5
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proIuced by R,)RTC MRKEi1NiA1D0 iNPLICATIONS ° 3• MARKETING TO YOUNGER A!. 0 E 1i"1tt2'P'? . ~`~&/E S sU1LT ON A sOL1D Is UNDERSTANDING OF THEM A, tiO E N~ L AND USERS• • AN UNDERSTANDING OF DEMOGRAPHICS, SEGMENT, OR CATEGORY LOYALTY 15 NOT ADEOUATE BECAUSE SMOKER MINDSETS 60 BEYOND THESE DOUNDARIES• • POSITIONING AGAINST 'DRIVING MOTIVES' -- BELONGING, DIFFERENCE, UPMARD STRIVING, EXCITEMENT AND SEX -- CAN POSE PROSLEMS, SINCE THESE WANTS FORM A TIGHTLY KNIT BUNDLE TO 18-20 SMOKERS• IF ONE MOTIVE IS SELECTED FOR PRIMARY EMPHASIS IN POlITIONIN6, CARE MUST BE TAKEN NOT TO VIOLATE THE OTHERS• • THE HEART OF AN EFFECTIVE STRATEGY NAY eE AS MUCH THE MEDIUM AS THE MESSAGE '- - f1ELD MARKETiN6, SPECIAL EVENTS, ETC•, ARE OPPORTUNITY AREAS THROUGH WHICH WE CAN REACH THIS IMPORTANT DEMOGRAPHIC GROUP• • As YOUNGER ADULT SMOKERS BECOME INCREASINGLY NON-COLLEGE AND NON-PREPPY, THE GAP sdtiL'~ ~s 1L~11Lt ~ro~~~i14E0`446 1 T INCREASINGLY IMPORTANT TO STAY a 1N TOUCHff AND BE CREATIVE AND IMAGINATIVE IN A REL£VXNT MAr• \ 6I8fi7 Z081S lB9T h7l(1c;
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~ .~'~ ~ ~ ced b~ ~. Slide: CRE01800 Opid. hton slds-roun6 Job N: 9888 DDS: I~ :R size: 862 Sat Sep 1713:06fl1 1988 • in ufesry,e HUNIPHIZrY ~ ever~es ,.In.. "'Routf," Regular Soft Drinks M Diet Soft Drinks Regular Beer M Light Beers ~ Vodka, Rum,  Scotch Tequila, Gin  Traditional  Bubbly Wines Wines ]c;ArION 0V8V T08T5 6011 bZLOS
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~ .,#E. ~. T~1....i i.. ~..~ /1.+~ .,I~~ ~~~~~ ~ ~ Slidt: CRFAI4~0 Opid: 'ron stds-yoang Job 8: 9888 DDS:ft0 sizt:122 Sat Sep 1713:00:041988 s I11 IJUNIPHIT4EY Demographic Profile Blue Collar Occupations S£8V T08IS bOLT OZLOS
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proch~ced bv ItJ R'1'C' . . Til I , % . iT THE ABSOLUTE BOTTOM LINE iS THE NEED FOR I• spOMMIT ~ 11• IMA8INATIVE STRATEGIES AND EXECUTiONS 1. cQmi1 T"E T ! i bZLOS THE FOLLOWING •UOTES WERE TAKEN FROM THE ~EXPERT WORKSHOP, IN NEW YORK -- AND EVERYONE IN THE ROOM•SMILED AND NODDED• • TOP MANAGEMENT COMMITMENT *MITNOUT HAVING SOLD AUGUST RUSCH ON THE NATURE AND THE RISKS OF YOUNGER ADULT MAQKETIN6, WE COULD NEVER HAVE TURNED AROUND gUDMEISER• Y01/ JUST CANf T DO IT MITNOtlT THE SUPPORT OF TOP MANAGEMENT•~ • MIDDLE MANAGEMENT COMMITMENT ffTHE PR0ILEM MHEN YOU HAVE A GOOD IDEA FOR THE VOtINGER ADULT MARKET AND YOU HAVE TO 60 UP THE CHANNEL FOR APPROVAL IT GETS WATERED DOWN VERY OUICKLY._ EVERYBODY WANTS TO TAKE RISKS AND BE THE ENTREPRENEUR• BUT WHEN THE BRAND MANAGER'S JOB IS ofi'#~t)lEt`Muii GN I #0N--s"'tEti~:`i~~ a AiA i~i~.~r~ 9 ''i0 THROM SEER AT PEOPLE'-- HIS PRODUCT, YOUt VE GOT TO KNOw AUGUST BUSCH -- YOU START TO LOSE TNAT RISKING ABILITY INSIDE• THE IDEAS GET WATERED DOWN AND THE COMPANY FA1LS AT YOUNGER ADULT MARKETiNG•~ 9T8t T08IS
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b.~~.~~,~~ '~. :~~ Slide: CRE0I7• Opid:ji:rodtJccd hton slh-yonns Job 0: 9888 DDSA0 size: 672 Sat Sep I713:03:14 1998 0 lil Ufestyle HUMPHREY 6°S Small Cars Fast Cars Offroad Vehicles C Sedans Station Wagons Motorcycles 1.1 Vans C.`t:)NUIPP. .:NTUAL: \ 8E8fii T08TS LOLt OZLOS
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~ . ~ . ~. .i~.r.~.~ "l., ~ ~ ~. i~~ ~ _ .1~. ~~ #,. ~ ~ ~~ ~ ~ Slide: CRE028*I~ Opid: bron sids-yoeng !ob A: 9888 DDS:60& size: 464 Sat Sep 1713:20:261988 s Lifestyle LZLt VELOS in HUiI\'IPIHIREY en's Maaazines Penthouse GO Playboy so tiff (None) ~l~`~1~~~:`~~;`~'~;~ '~ ~'~` k~~`(:) ~~:~.t:::~.::1€::~ 8t8fii T08TS
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produced by RjRFC Slide: CRE0338 Opid: Creighton sids-yomig Job #: 9888 DDS:6000 size: 832 Sat Sep 17 13:29:20 1988 • ui Lifestyle Leisure Time - Away from Home „In., .,"Out fff Visit Friends L9 Community Go to Parties Activities M Bars and Discos P! Play Golf Movies ~ 13 Church Music Conce~rts: . . ~'r~~~l.i,.r().~ +(t)f:4`4I:1i.: 1 €'~:l1~.4tD#':t"~'4?l3:1 ... .' FIUrVIPHREY ES8Ti T08TS ZZLT 4ZLOS
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Slide: YOUSb14B 'Opid: s- r, ~ (,~ ~ ~ .~.~l. .~:~,.r.~'..~ ~ ~+~ ~~ ~ ~. ~.~ ~ ~ ~ ~. ~ ,. ~ _ Job C DDS:6000 size: 4756. Mon Sep 19 09:17:061988 0 r r r r r r r • r .•.
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iv~~ .~`~~_~~. ~~.~ .~.~.~ "~...~ ~. .~-~. . 3~ ~ ..~.~. _~. ~.~~ ~ Stide• CRE023 Op3d: C Mon skis-young Job !1: 9888 DDS:6A siu: 574 S.t Sep 1713:15:291988 lil uteswe E I tJ.NT.P11.R.F4V TV Entertainment/Variety '"'nn Saturday Night Live Tracey Ullman MW f~"1. .,~,Fl "~~ ~ ~ , Dolly I bZLt bZtOS 5t8t Z08ZS
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i produced .by .~~.~~.r~.~'~..~ Slide: CRE ~ 030'A Opid: ton sids-young Job #: 9888 DDS:6dbO siu: S 10 Set Sep 17 13:23:211988 0 utestyle I1ui\1IHRLi.. Sports Magazines 6 TL i bZ'ZOg Sports Illustrated Sport Outdoor Life 0S8t T08TS Ut" Golf Digest
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:u V
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mod.u~~..~ed b~-..~~ ,~.~~:.'1~:"~::~~ ~ Slide: CRE031 *g Opid: Ctr ghton shls-yonng Job #: 9888 DDSA size: 554 Set Sep 1713:24:551988 UtesWe HL1MYIIRl+;Y Automotive Magazines „C3ut„ Hot Rod ~ (None) ~ Popular Hot Rod 9,21 Popular Mechanics Car and Driver OW VZL-OS T58V T08T5
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I)~-()c~~~cec~. by M~,J ~ PIRYAS SOLt4 "llp SP CiRINI ~ _I ,° : i • A FEW T-SHIRT LINES MHi E- O C TiE O0SOCIAL GROUPS , SOC 1 AL „~0 UP I-SN IRT LINE 6000Y s00DiES - NONE (ri000Y 600DIES ARE BORIN6. T-SHIRTS AREN'T•) PREPS - IT'S NOT WHETHER YOU WIN OR LOSE• It'S HOM YOU LOOK PLAYING THE Discos 6AME• ROCKERS - IT'S IMPORTANT TO.NAVE DELIEFS. I DELIEVE IV HAVE ANOTHER SEER• PUNKERS - IF YOU LOVE SOMETHING, SET IT FREE• IF IT DOESNOT COME eACK TO YOU, HUNT IT DOWN AND KILL IT• 8l/RNOUTS~..•~..~~`~~` ~'i~11AE~F<1A 6L9t bZLOS tt8fii t08Z5
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r~~d~ :~ ~.'.~d ~ "`~~~----~ ~.. ~,. ..E..~.. ~..~.~ , ~ ~ Slide: CRB024 Opid: Mon alds-young Job N: 9888 bDS: size: 386 Sat Sep 1713:16:59198 ~ IO 8 HUAIPHREY Lifestyte TV Ga n1~ ~~oWs ll In /l "lout Ef ~ Win, Lose M, Jeopardy or Draw . Y V :~ vo I ;ACCO t.F 1 *1 C :~1 :1 9V8t Z08I5 StLt bZt45
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j.~. "Ik.. ~ L1.V~..)~3.~ ~`~ ~.. ed .~` 1t Slide: CR~ZO Opid: ighton slds-young Job N: 9888 DDS: siu: 480 Sat Sep t713:10:28198s w 111-J.M.P11.REX ufestffle TV Soa „In., 0 0 Ut" Divorce Court All Daytime N Dallas M, Falcon Crest ~'~ ~:~~.: t~:~ ~,I~~ ~~: ZliBfii T08TS TILT bZLOS
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BBAND ATTITUDE in:duced by RJIt't'C "'""` IIUMP1IRI+',Y l. VERY FEW SMOKERS IR-Z0 SAY THEY ARE AWARE OF CIGARETTE ADVERTISING -- NOM THEY ARE a POSITIONEOa• BRAND PERCEPTIONS ARE MORE LIKELY TO COME FROM USERS THEY SEE• Z. RESPONDENTS TENDED TO ASSOCIATE taRANDS NITN THEIR GROUP STEREOTYPES AS FOLLOMS: •'PREP' BRANDS: V• SLIMS, BKII, VANTAGE. •'ROCKER* BRANDS: CAMEL, NINSTON, MARLRORO, AND KooL. Ofi1/1OUSLY. MARLDORO WAS 'ACCEPTED' IN ALL 6ROUPS• 3. THE MOST SENSITIVE POINT IN TNEIR EYES IN TERMS OF IMAGERY 13 A SENSE OF PRETENDING TO faE MORE THAN YOU ARE -- SOMEWHAT LIKE THE ROCKER0 S ATTITUDE TOWARD PREPS• b. ATTITUDES AfOUT C18ARETTE RRANDS ARE NOT EXTREME IN MOST CASES -- USUALLY THEY ARE i'T8v t08tS Z991 bZLOS
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rou~..~ ~ ~~ ~~ ~ ~:~ 1.~.~...~~.~.,~.~ ~-/ ~ ~ Siide: CRE011'# Opid: Crtighton sids-yonng lob #: 9888 DDS:6000 siu: 256 Wed Oct S 12:31:521988 a. • Ill i'jJ'vl.pi'RF:y '' Demoqraphic Profile w One-third 18 to 20 Years Old Two-thirds 21 to 24 Years Old C1 O• l Fi R ;T 7 t.' : 'k , E , ! A[ . : i • I..IN: \I"<>... f `, ~. I• ~ 7. • i (.)lF i k(.• '... t (.)t i 1r 1• ; i . Y f :4 i . 1(~ ); R Z88V i08ZS .I TOLI bZLOS
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\ ~ -... *, v-- ~ ...., HE:HODOLOGY: Six focus group sessions vere conducted in Chicago, Illinois December 19 and 20. All groups were comprised of 18-24 year old (vith the majority being 18-20) dowmscale inner city Black smokers of Newport and Kool. There were 4 male focus groups and 2 female groups. Smokers were recruited to be representative of inner city Blacks via screening from designated zip code areas identified as having a)0X or greater Black population density. Smokers were dovnscale with annual household incomes less than $20,000 and had no more than a high school education. HYPOTHESES EXPLORED: ~ .%Hypo*,heses explored included: • New creative for SALEM is more appealing and relevant to younger adult inner city Black smokers than is the current "Refreshest" campaign. ~,. ~ • New creative communicates that SALEM is a brand for younger adult Black smokers. "~ • Nev creative uses lan ua e that is relevant and excitin g g g. vp- • Nev crtaaive is impactful and would be intrusive in the inner city Black environmen;t. ~ DE1.AI1,Ep: SUHHARY'"OF FINDINGS: I. ;_e•styl' ^~I:anguage Exploratory ,•• `~ ~"- t: .} . A . Clubs.;;...«: :. x Virtl&l:-~y all respondents liked to go to clubs. Most preferred to go vi th friei3ds versus a date. This is most likely due to the fact that these consumers do not have a lot of money as velY as problems with their own ~~ self esteem which makes dating stressful. Sometimes they like to dress up when they go to clubs, but most of the time they like to go casually dressed, ~ The most popular clubs are located in or near to where these respondents ~ live. The admissions fee ranges anywhere from $6.00 - $12.00 and they will spend anywhere from $20.00 - $40.00 on drinks. The most popular N}n• clubs seemed to remain popular about 3-5 years. Clubs are also referred • to as "discos, lounges, or music boxes." However, "club" appeared to be the most.commonly used name. The most often mentioned clubs respondents vent to included: Chicky Ricks The Copper Box The Taste AKA Coconuts Riviera Ln N CO m ~ The Fantasy Heroes ~ The Surr ~ m The complete list of clubs mentioned is included in Attachment I. rn
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produced b RR.TC Y Stide: CRE019• Opid: hton sWs-young )ob *: 9888 DDS:6000 size: 614 Sat Sep 1713:0g:451986 • LifesfiyleH. l.J . T ..1g..PHRE.i. T Sitcoms "'n n "nut"  Cosby E (None) Family Ties  Cheers Who's The Boss IVBV I08IS OtLt bZLOS
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0 ma O, Poo ~ ~ +.~r ~ ~ . .,. .~. Y ... ~ ' ~ .. ra,~ 11 "r00.
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~~:~~~~ ~~d~~~ ~~ , ~ 7.:~~ :~~.~~I~ ~ ~ ~~. ~. Slide: CRE027*N Opid: ighton stds-yonng !ob g: 9888 DDSA0 size: 802 Sst Sep 1713:18:031988 ill lifestyle eneral „In„ NTI afC7az9nes TV Guide People Rolling Stone Nat'l Enquirer Soap Opera Diqest ~In9P[tIZI,: alow% aa ~~ t Readers Digest Better Homes and Gardens M Family Circle () Y3 LVB~i T08T5 9iL1 bZtOS
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~~ ~ :~~. :~~.~:~:~ ~~ Slide: CRE0398/e Opid: QrOd.IJC.Cd ton stds-youn6 Job #1 : 9888 DDS: sine: 268 Sat Sep 17 13:13:,61988 • iii IiUMPI-IRI±.1' Lifestyle rc:es-Vfomen Attractive Physical Appearance Combined with Self-determination (Cherj Z98v Z08tiS 0£L1 `ZLOg^'
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:~ .. ~ ~ ~ ~~ ~ - , :.~~. :~~.~:1:~ . . ~~~~~ ~ ~~ ~ ~ sra~: c~oss• ~ '~ Opid: QKi~on - lob R: 9888 DDS:6000 re: ~06 Sat 1714. . l'~"6 .19.191488 II.l1M1'IIIZ(;l' Advertising to Younger Adults ~rd t~ i'yk Effective Advertising Incorporates All Guidelines Ineffective Advertising Misses One (or Morel Guidelines ~..~0 ~~1 0 1,I I-! ( s. 8L8fii T08TS 9bLT -!-ZLOS
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~. ~ ~ ~ .~ . f ~ ~ N./ d S 14 Slide: crc47• Opid: Creig slds-young !ob R: 9888 DDS:6U00 ~Ifie: 1836 Sat Sep 1714:04:151988 0 In Guldetlne '.)I. A I TFICNI"JON 9£LT VZLOS 0L8V T08TS
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pi'()dt.JC.Cd . b ~ R.J.R.1."C Slide: CRE02t •#t Opid: ghton slds-young Job #: 9888 DDS: size: 700 Sat Sep 1713:11:521988 ~ ~17 Lifestyle ~~tJni>>iiarv TV Crirrse Series "in.. Moonlighting Miami Vice Houston Knights J.J. Starbuck Buck James Jake and the Fatman Matlock v. ZILi bZLOS EtBt Z08TS
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.I..I.~ ~..,€ ~ .~~.,.~.~ ** ~~ ~~ ~ ~1. ~ ~ ,~ ~. ~ ~ ~ ~ ~. ~ Slide: ete049SSS Opid: Cre on slds•roun6 Job I~: 9~8E DDS:600~'"sine:1494 Sat Sep 1714:30:031988 s In ~.10 1 VI ~.N t . I A.I ZL8Ii t08TS ObL I bZ/_OS
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Slide: CRE057'F Opid: P.~::~ ~ . ~ _.~ ~ .~ :~.~..M,~..~ produced ~. ~_~.~.. ~..~~ ~.~ Job /1: 9-17-8 DOS:6000 sine: ~16 Sat Scp 1716:13:251988 0 Ill ~-TUMPHRF,Y Ineffectiv yentismg ~ CO, i I ~IDE?. MAk i o LbLt bZLOS 6L8fii T08TS roaches 11
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[:~ ~ ::. R.~ produced ~ S1ide: CRE039AN Opid: hton sids-ymg lob N: 4888 DDS:6ft sile: 306 Sat Sep 1713:41:41 198E w I 1 ~ ~ ~ ~ ~ ~ ~ ~ . . .. . ~ . . (.~... ..~ Life~~ ~ CdrC) Self Made Men (Donald Trump, Elvis) FM tndivIdualists (Joe Piscapol r;~r Successful Go-getters (Michael J. Fox/ Cool under Pressure t~e NQptf, ~: S;()1~ rot; 6ZLt 4ZLOS Z98V Z08ZS I
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:~~~~~~. ~ :~ .~ ti~..~~ -:~~.. ~ :~ 1-)~ ~ ...~::~, ~ ~ ~. ~ ~ . Slide: CRE039• Opid: &igMon sids•young Job 0: 9888 DDS.*%00 sine: 599 Sat Sep 1713:aS:3S 1988 N'l...P[[3tE Y Personal Owality Wants Risk Taker NO Young Adult Exciting Stylish p Rugged Romantic ~ Streetwise Adventurous M Spontaneous ~~INN FSO`V:1. T()1;A('(_.'() LITIC1010`~ 098V T08TS BZL t . 1tZLOS
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pcoduced by l,,,t4-fi, T l~ ~ a. SEE TNIN6S T/M0116N ilEit EYES. '~~~1t.;~;'1`~:~t1.Q M~I~'~'~~°:S~.~'~ :~ '~~t.~~~I l+.C.:~..'t.~ I11 TNERE ARE SEVERAL OENE D ES ~ 0~ ikRED iN ANY EFFORTS TO ADDRESS RMOKERS is-2O•~ ~~ ~l •'ULL STRATEGIES ARE EFFECTIVE. 1•E•. DRAWING CONSUMERS TO THE •RANO AND AVOIDING TNE NARO =ELL• AVO10 GIVING AN IMPRESSION OF TRYING TOO NARD• • MARKETING EFFORTS THAT ARE "CLOSE TO THE EDGE* APPEAR TO OFFER THE GREATEST POTENTIAL• CARE MUST BE TAKEN TO AVOID CHASING A TREND THAT NAS ALREADY HAPPENED• • EXECUTIONS SHOULD HAVE INTERNAL INTEGRITY IN TERMS OF PREPPY Vf• ROCKER LbOKS AND ACTIVITIES• • THE MARKETING SHOULD FIT . • • I. TODAY, NOT TOMORROW 2. STAYING YOUN6/NOT IN THE RUT 3. ON TNE,ED6E. NOT TNE MIDDLE GROUND 8891 bZLOS 0Z8v T08t5
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produced ~.) f ::~~ ':~~~~~ ~ Slide: CRE054. F Opid: Job ~1: 9-17-8 DDS:6000 si~e: 2~14 Sat Sep 1715:59:271985 Effe~tiveand' J Younger Adults CO}N-p j.j)1`.•~rjIk .I0 LITICtATIOw~ StbL t bZLOS LLBfii T08T5 iheffective Advertisina
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~ (::)d_ u~ ~,.. ~v d by ~.~.t:~,. r~1~ Slide: CRE040*F ~~i' Opid: Job #: 9•17-8 DDSA000 six6 Sat Se p 1715:55:00 l988 0 ` Guidelines for E arketing to Youn tilt Smokers t£Lt 6ZL08 (.'~i~~'~"~~~[..: ~=~1~.;`~~~,~~£3^t',1 `~`O~~~.'C'f~) 1 iit.~ !~'~~'~~ E98fii T08TS
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l:)IIKI.tICe(I oby :I.,i 2 R7'(' Slide: CRFA34•R Opid: ' hton sids•yonn8 Job #: 9888 DpS, sim 376 Sep 1713:31:481985 I1 U.IV1.PH..REY 9~ecent Eig Life Changes M. Financial Crisis/Hardship Changed Jobs Began (Endedj Romantic Relationship Changed Circle of Friends £ZL T b7.LOS fiiSBt Z08T5
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- d *~~~~,:~~~~. ~~ ~ ~:~:~ -~ ~_ ~ ~ Slide: CRE022 Opid: C Mon slds-yamg Job ~: 9888 DDS:6* siu: 480 Sat Sep 17 13:14:041988 ~ !11 ft tl t I 11111'` Xl IJfestyle IV Talks '9n" David Letterman ws/News „Qut,. 01 Today Good Morning America CONFIVU-NUIAt.: MUN."~:~~;S(:1: ~ 1 *0 1; A C c:10 V V V 1 (.:4111 N fiILi _-V7LOS Vfii8V 108T5
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4 CAMIa. Revttallzetlon )IL'I',i, I O,.) :. .)N M M. x AA ~l,tl Z! 1 Iei i 4 51801 4905 50724 1774 ,) ; A1 f.i: iUI p31:lp()id
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N:H~S :4 Nu'~I ik' 51801 4867 uo (US+a)II * ,....,.. .. .... „,.. ul 50724 1735 mjlpPh!) .~ • 886i [ayS~E! Lt ~SxS 9161 ~~ 0009-Sa0 88H6 :Mqot &m4'sPlS.,9iIW3:P!d4 N.1Wo:VIS ~...~ ~....~..,~ ~..,.~.. ~i._. ~ ~ ~ ~. I
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ps-oeltsced hy R.i HUR'11'HItI+,Y "HEROIC CAMEL" ADVERTISING TEST MARCH, 1988 SLL-I- OZLOS 906V T08TS . 1 0
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Slide: P(,`0p4•Ff .pr~d~ ced RJRTC . .~ ~ by Opid. Job *: 9-1 8-8 DDS:G000 si 3 14 Mon Scp 19 07:01:45 1988 s in Philip Morr~' ~~~ Share of Market ~ .i ~ ~_ ~ .1 ~` ..~ ' 40 38 36 34 32 30 OIarf Years of 1988 _. ' 9Z8v 10819 691 bZLOS
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.~ ..~* ~..~ ~.~.~ ~~ ~..ed by .~.'~.1E.1. ~ ~ ~ Slide: creO42bR Opid: Creiahtoe sids-roims lob N: 9a88 DDS:600D sae: 3454 Sat Sep I713:S1 A319S8 Gt/ldeNf1e ~.^ :i at..~'.a!i8l:.ii.i:~~ t~.i~, 998fii I@8TS V£Li fZLOS
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pi:'octuced by ItJ ~'1'C S1'ide: CItE032*8 Opid: ighton sids-yomg Job 1: 9888 DDS: size: 938 Sat Sep 1713:26:341985 • In f I 1_-_F 1-..1 1111-4 Lifestyle Leisure Time - At Home Listen to Music U IZLI bZLOS Watch TV Rent Movies (VCRJ f • ; C~ e ~:~~~ ~~~:~ ~ ~:~~:: N11~t~~11:~~:)V~. ~~t~"tt11e ~th:~w "Out" M Neediecraff/ Sewing W Read Books Watch Contact Sports IM Yardwork Spend Time 0 Home Improvement ZS8V T08TS
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51801 4859 50724 1727 aa iaiucj H86I £tiIVEI LI &S WS OSEI :at!s 0009j,Saa 88Q6 :U 4Of $u"A-SP[s uoWBI "J9E0aa---p!IS . ~ 1 Atl ~. ~ ~. ' ~~)3I1OJU ~. ...,a~ 3 .-.~...i ~ ._ .. , . 1 ~.
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,.~..,.-....-.~- ` 0 . ... • A!w..
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r~~ ~ ~' _ . IF ~ ~ .~. `~r~. .~. ~r,. '.~s'~..,, ~ ~. ~ ~l• ~~~~~~~~ Stide: CRE03S• OpiQ: oe slds•ronn8 !ob M: gg8s ppS-A 'm,e: 362 Sst Sep 17 13:33:29 I9d8 ~. ~~. HUMJ`)HRI.~.`Y. Recent Wg Life Changes M Became Unemployed Got a Promotion Returned to Work EM Became Responsible for Own Support fZLt tiGLOS S58i, Z08ZS
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pn: ~ HEROIC CAMEL BoB BECK , IMPROVEo 18-20 43 < 12 18-24 45 < 12 25-34 ~l < '17 FRANCHISE ® < 17 HiGH BDI 41 <--- 13 Low BDI 43 < 16 , • THE POSITIVE SHIFT IN ATTITUDES TOWARD CAMEi. GENERATED BY HEROIC CAMEI. OCCURRED ACROSS ALL MAJOR DEMOGRAPHIC SUBGROUPS. ~All. 1( 1 P 11:N O90 yZLns TT6V i08TS
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produ .~ .~,~. H~ .~,. ~~~..~.~~.~..~.~..~ If~.. ~ • To COMPARE PERFORMANCE OF THE "NEROIC CAMEL'I CAMPAIGN TO THE CURRENT CAMEL "SHARE A NEW ADVENTURE". • TO ASSESS THE EMOTIONAL RESPONSE GENERATED BY THE ADVERTISING AMONG TARGET AND FRANCHISE SMOKERS. • TO DETERMINE RELEVANCE AND MOTIVATION. • To EVALUATE USER AND PRODUCT IMAGERY CONMUNICATED BY THE ADVERTISING. I ~.W~~...~.'~.~ LLL~~'ZLOS 806fii T08TS
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. Slide: CRE029'g Opid: reighton slds-yvung Job M: 9888 DDS AO size: 658 Sat Sep 17 13:21:41 1988 ~ sII Ilfestyle 1II'fR1I'I1IZI'sY Women's Maqazines Cosmopolitan M Ladies Home Glamour Journal Parent's ~ Good Vogue Housekeeping 91Li 6ZLOS 6fii8fii 108T5
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proaucec~ by uJrir[~C SURGEON GENERAL'S WARNING: C4nnte Sm.k• C..l.ies C.r1ee Monn.iA.. 868V T08TS L9Li b7LOS
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F"~ s~~ ~ ~ ~ ~~. ~.....~ ~....~ ~ ~,, .,~ ~. ~.~ .,i ~. ~!. i ~ ~ ~f. ~ ~ Slide: creOSf • Opid: Cte' sids-yotms Job N: 488a DDS:(i000 stk:1384 Sat 1714:12:351985 Guidellne C< JJ`IM`. ZtiL t FZLOS 0 ~.. ~ .IJ. VLBV j08ZS e ~T A( .
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m I a ~. _ ~.. ..,~ .._~.::~. I
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... s a .::...~ : s:3.... ; :'s the first •a' ' v on and the iast thing off. ~ ut why ta~Ce 3f, your Swatch Mt all? It's a great sleep acrlc~ssory. '.W:i know when :9st::, e zo wake up. en it's ti e # .o s-: ~ ~. A:: d u're i :~c~~ some~~r 51 t ask yomoo tjw time of .-% . ~ .. + rr.." ~•.~~.+~ - :.: . ^,& ' A tr'! ti i &.6 S" 60 ..--t bta~sy ' .r droin.da . ~~ ~i.fl(~il{I1fIllll~~;~ I1I111I1~11(I~III(11111h ~
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KOHNI.-M.111 50724 1725 AI, ie.,aua ul 51801 4856 B ~ 886181:SE:f 1 11 (IS WS ;t0/ ~~!s :SaU H886 :# qot 9amA-SPIs vo :P!d0 IqI1V9£Ow:aP!IS ny 1J:PJ"Pvau
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H U..Y~..~. .~ ... '1R,. .~....~ ~'~ I THE REASONS FOR NO CHANGE IN OP..~ ('.~,INION OF CAMEL FOR "HEROIC CAMEL" INCLUDED: • NOT INFLUENCED BY ADVERTISING • PREFER MY BRAND • DON'T LIKE CAMEL/TASTE OF CAMEL • HAVE ALREAOY SMOKED CAMEL FOR "BOB BECK": • HAVE SEEN THIS AD BEFORE i 14 I I ! ET6fii Z@8Z5 ZBLt 4ZLOS
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0 • SAMPLE COMPOSITION - 18-34 YEAR OLD MAL. f - 18-34 YEAR OLD MALE CAMEL SMOlCERS • TEST MATERIALS Rs, - ADVERTISING PORTFOLIOS, FOUR EXECUTIONS EACH IN OUT-OF-HOME ADVERTISING FORMAT. • QUESTIONNAIRE FLow - ATTITUOE SHIFT - EMOTIONAL RESPONSE -- ENTERTAINMENT -- EMPATHY -- BRAND REINFORCEMENT -- RELEVANT NEhIS -- RED FLAGS - ADVERTISING COI+MNUNICATION -- MAIN IDEA -- PRODUCT PERCEPTIONS ,..: .j.. ` 606V T08tS 9LLI bZLOS
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prod.ti BRAND Rf~NFORCEMENT (TOP 2 . AGREE) HUMPHREY.' TARGET HEROIC BOB CAME~ BECK (~aOOD BRAND, WOULD RECONMEND 27 < 22 MADE ME T"INK MORE ABOUT BUYING BRAND 33 < 22 BRAND I" D LIKE TO TRY 25 < 16 • HEROIC CAMEL POSITIVELY REINFORCED CAMEL's BRAND PERCEPTIONS AND CREATED MORE INTEREST IN CAMEL AMONG TARGET SMOKERS THAN BOB BECK. - S9L t bZLOS 9T6t I08TS 0
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PrO4iaaca 0 HI oar ai~ t~ • THE LARGE SHIFT IN POSITIVE ATTITUDES TOWARD CAMEL ACHIEVED BY THE HEROIC CAMEI. ADVERTISING INDICATES: - POSITIVE MOTIVATIONAL ASPECTS AMONG TARGET SMOKERS. - REINFORCEMENT OF BRAND LOYALTY AMONG FRANCHISE SMOKERS. VT6t t08tS £9Lt --tpZLOS
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Slide: CRE002•R Opid: - ~ ~:~ ~:~ ~~. ~.~.ce~~. ~:~ ~ RJRTU .- ~ .~ ~_ Job *: 9-17-8 DDS:6000 s~u: 3338 Sat Sep 1715:36:101988 A 1; Importance of Younger Adult Smokers to RJR i<;~. ~r..~;amp es of Effective and tneffe ~:~: ::;.; iJAdve'tising ,.to Younger Adults r'1:°I~~~.,: ~~~.'~"~1~~;S(:)`~'A':i"()i~~~~;t::~C) 1,l'~J~~~-::~ `-['~~ ~'~ . i69T 6ZLO5
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J Iz't' Rov 2 $AGREE) 11.1MPttxi,,v I TOTAL TARGET HEROIC BOB m BEC I 35 < TMouCMT PROOUCT BETTER neAN 34 < GAVE ME A NEW IDEA 21 < MADE ME WANT TO KNOW MORE PRODIlCT NoTHING TO Do WITH AD 18 <- MADE ME THINK ABOUT BRAM IN A NEW AND DIFFERENT WAY 34 < D BRAIB)/pRODUCT IMAGERY IMPROVED SIGNIFICANTLY WITH THE HEROIC CANEL ADVERTISING VERSUS BOB BECK. ~. 0 Nl I `I V, 1 ~'.1 1 ` S ~ ~ 1 'VORA( LBLI t'ZLOS 8T6V T08TS
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~~ ~ .1W.. . ~ produced ~.'~ ~~ ~ ~, Slide: cr~OSOS~,9 oo OPi4 P : 1ob R: 9-17-8 DDS:6000 sin~: 70 Sat Se 1716:2&OS 1988 0 1 11U~€1'lilt[:~' ., ~ Be Fresh, Unique : ~ r ~ and C)riginaf : Guldellne ttiLt 4ZLOS £L8V T08TS
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~~ ~~AN1 s) :L1,1 0s.J..~N! x10J. ;`,l.'.~ 1sawa''1 Un 3no 50724 1726 I(epo,L JOI aAn I rz.cau~~ a U61 LS:9f:f i Ll dS WS ti001:u!$ plq:SaU SSu =M 9ot 20"A-sP{s voW$. :PldO ~189fOw :aP!1S ~ ~~.(l p~ t~~~,~_~~.~~ S. ~ ~...~. ~ ~,.~J ...~... 51801 4857 ssa»ns pue Il.~~ (1~ a.inun.4 ;o weagi inoqe kuotA
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produc1Ls e -, .~.. "THE ADVERTISING WILL POSITION CAMEL AS AN AUTHENTIC BRAND FOR SMOKERS WHO ARE ADMIRED AND RESPECTED BY TNEIR PEERS BECAUSE TNEIR ATTITUDES AND LIFESTYLES DISTINGUISN THEM AS INDIVIDUALS WHO HAVE 1NEIR OWN IDENTITY AND MAKE THEIR OWN DECISIONS." ADVERTISING OBJECTIVES • OWNABLE BY CAMEL. • ELICITS POSITIVE EMOTIONAL RESPONSE. • RELEVANT, RELATABLE TO YOUNGER ADULT MALE SMOKERS. • FRESH, CONTEMPORARY CREATIVE FORMAT. r 1~.112.f.4 ' 9[U~TY1ilZl+'d' 9LLT ItZLOS L06V T08LS
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.... I
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a son ~~~-~~~~~~ Z tr1 TNE PRIMARY REASONS 4. . ~p~ I LIU • LIKABILITY OF CAMEL CNARACTER • EYECATCHING/AITENTIpN GETTING ADVERTISING • ORIGINAL/DIF'FERENT/UNIQUE ADS .• IIP-TO-DATE/CONTEMppRARY ADS • NWoaous/FuNNY TONE FOR "BOB BECK": • OUTDOOR SETTING • MAN • D PL~ LINGS N~ I ~.. 1 L~ R "HEROIC CAMEL": ZI6V T08Z8 ZBLt bZLOS
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A _ `X ~7 _~-jj]~~S!`S!_v~_v11~_JJ, Z+:vrE~ ' _.. . ........... . ~. '>,;::ew, .:~.`~-~ MAL . . . . . C~ , . .t .'4' a.~ ON! i i°, ~ Aprils, 1989 i ~ ~ ~ ~ :rl e .1 •- k }~+:• 1 h ' '' - c• . _._ ..... , , . -rr~_ • ,, 11 1 i :t a : .'3AF ~ :~ 1FA7Ri .y•i^n• e . ..a':...c - r'! .•.T.i.•. .. ~.. . . .. • . . Y ' -" ••rf~..~`t. :-TOt'-• Mr: L. W. Hall, Jr. •. .~• . . . '•' Tha 1eneet nt keine: oa:eocraehics and olueeand SoM V _ ~.f%:r. +.;. . . ~'tp..:,: • for some'time, we have been wrestling with the difficulty of .• ~ on a brand's volume and SOM. Ttiis approach is overly simplified and doesn't try to be statistically sound. For example, not all 18-20 year olds are new smokers, not all 50+ smokers quit in a given year, many smokers undor 50 Qa quit, and the consumption factor used (11,000 cigarettes per year/per smoker) doea vary by age. However, I recognize these over-simplitications and can accept them in the interest of explaining the demographic phenomenon in terms that executive management can grasp and that explain volume/SOH trends reasonably closely. Precision should take a back seat to the more pressing need of gaining full concurrence to the undeniable finding that young adult smokers are RJR's most critical problem. Please review this and let•s discuss how this might be modified for use as a tool in explaining the key factor affecting industry, company, and brand performance and how we can use it ettectiveiy to set up the key issue in our strategic plan. we should also attempt to set up a similar analysis of the volume and SOM importance of occaisional users and switchers. Ln N CO ~ (S) . f.." J. V. Winebrenner ,~ S~oportant and the ottect that a young (vs. o) pro e can ave - my own attempt to show, in simple terms, whylydoung =~ilts are so showinq why younger adult smokers are so important and how to communicate this im rtance to top management. The attached is _j JTWl/bm w Attachment cc: Mr. E. J. Fackelman V_I**_ Mr. E. M. Blackmer Mr. R. M. Sanders Ms. L. J. 8reininger Mr. R. C. Nordine &*ftrY Exbibit# Date: S-Z(- 9C Alfred A. Betz, RMR tJl 0 w ~ A v ~
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produced by RiR"('E; a .X. ,IDlia[,;Y PERCEPTIONS TRACKING STUDY CAMEL EX. REGULAR JAN. 1988/JAN. 1989 1 `A , )UP, A.~ -- 0£6V T08TS 66Lt dZLOS
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51801 4869 50724 1737 auliapm Un ~ I a861 E l:14fi ct daS xS 08cf :arc!s,.j)009 SOO 8886 :M 9or 9uMA-sms uoNjaj :P!d0 NM.9YOpo:aP!s paallpam, ~ ~.. ~~ ~,.~.. ~...~ ~._~ . .... ~ ..
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pA•udu a El TOTAL TARGE T HEROIC BOB ~AME Bm AD CONTEMPORARY & UP-TO-DATE 64 35 I CAN RELATE TO THIS ADVERTISING 48 < 42 VE ME GOOD FEELINGS ABOUT BRAND G 38 < 29 A VERY REALISTIC/TRUE TO LIFE 18 > 40 UNREALISTIC/VERY FARFETCHED 22 > 9 TRIED TO IMAGINE BEING THERE 24 > 32 • NEROIC CAMEL WAS CONSIDERED TO BE SIGNIFICANTLY MORE CONTEMPORARY AND RELATABLE ADVERTISING THAN BOB BECK AND GENERATED MORE POSITIVE FEELINGS TOW/~.)~~ft ~~~ REALISTIC ADVERTISING. 98Li fZL7g LT6fii I@8TS
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Sbde: CRE058F ~ ~ :~ ~-~ ~~ ': ~.~ . r:~:~ ~:::: ,~ ~ .~~. ~ ~...~,~ ~:~ ~~ ~. ~ !ob #: 9_17_8 DDS:6000 sine: 33W6 Sat Sep 1716:19:221988 0 OPM: IIIJMPHREI... Summary GU 06~J@0lf~~~ Create Brand _Personfi 2;.~EJicItEI0tb0M fEResponse ` e Relevant, Contemporary Tone e. Fresh, ' Unique and Original e Consistent i. O'~+FI'1i~~•?`~~IrR i.~~~; Nlf'~~1~f.~"~t.~~~,~~i R~ ~4 ~'~ 9L8Ti T08TS btiLi bZLOS
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51801 4858 50724 -1697 rjeaA oZ OE Otp os ~ Pal:)arOJd uj #A 8861 SFLWLO 61 d2S VOW 9LLZ,:22!s 0009:Sa4 8'81-6 'M 40l ~pld0 d//.LOO,~r! :2p11S ~~ ~ ~~~. ~~~~~ ~~ ~... ,~ ~..~ ~'..~. . ~' ~ ~~~ ..~ ~
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51801 4865 NO I:a:~ _.)LIA"I UI 10 50724 1733 wlWpin!) 886101=WIt LI P-S 9Z91=af . 0009:Saa 8886 ~1/ Qot &MA-SP s~•.!~J =W.dO pZOOw :~P!IS ~ ~ ~, .. ~ ~ ~~ ~.. ~~ 4.,~ 111.,~ ~ ~._ ~ ~.. . ~~. ~ ~ ~ ~.. .. . ~..~ 'a.,.~.
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(Top 2 COX AGREE) ..1. 11 I 6..L.TJB..~~l.d.~ 4 ~ i HENOIC ~ CAME prodl-1, BoB 6_ECK AD wAS AmsING 72 < 21 CLEVER & ENTERTAINING ' 69 < 28 CHARACTERS CAPTURE ATTENTION 76 < 36 AD It D STOP AND LOOK AT 70 <-- 33 PLEASANT TO LOOK AT 67 < 52 AD WAS ORIGINAL 64 ~- 23 FUN TO READ ANO LOOK AT 68 < 23 AD wAS UNIOUE 65 < 26 AD WAS PLAYFUL 66 <- 18 EmmusiASM is cATCHiNG 56 < 30 AD was ExcrriNG 46 < 21 MIGNT HANG ON WALL 55 < 19 DULL Attu BORING 5 < 13 I • THE HEROIC CAMEI. ADVERTISING ACHIEVED EXTREMELY HIGH LEVELS OF EMjR T.jlPTrMJST b8tt 'rZLOS ST6fii T08tS
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pr 0 Url HEROIC BoB CAME~ BECK IMPROVED 42 15 WoRSENED 2 1 DID NOT CHANGE 56 8r Yl, .~.'7.c~ WINSTON . SALEM (FACES) (REF) 21 24 - 2 79 74 • HEROIC CAMEL OUTPERFORMED ALL CANPAIGNS TESTED TO DATE IN ITS ABILITY TO SHIFT ATTITt/DES POSITIVELY AMONG TARGET SMOKERS.* (..'ONI 1A 11.: I 6LLT -F-ZL4S 0z 6V T08T5
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Ill ~ HUMPHREY • THE "HEROIC CAMEL" CAMPAIGN ACHIEVED A VERY STRONG AND POSITIVE EMOTIONAL RESPONSE AMONG MALE TARGET SMOKERS, PRIMARILY AS A RESULT OF ITS EXTREMELY HIGH ENTERTAINMENT AND STIMULATION QUALITIES. "HEROIC CAMEL" OUTPERFORMED THE BOB BECK CAMPAIGN ON VIRTUALLY ALL EMOTIONAL MEASURES. • THE EMOTIONAL RESPONSE GENERATED BY "HEROIC CAMEL" AMONG CAMEL FRANCHISE SMOKERS WAS AS POSITIVE AND OFTEN EVEN HIGHER THAN AMONG TARGET SMOKERS. • iS-Z4 YEAR OLD MALE TARGET SMOKERS JUDGED "HEROIC CAMELn TO BE MORE ENTERTAINING/STIMULATING, NIORE CONTEMPORARY, AND MORE RELATABLE ADVERTISING TNAN THE Z5-34 YEAR OLD MALE SMOKERS. ALL OTHER EMOTIONAL MEASURES WERE SIMILAR ACROSS AGE SUBGROUPS. N f I N ~1 :A.~•~.~ 69Lt bZLOS 0Z6t I08TS
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1)r()(It1CU • SAMPLE COMPOSITION~ [\'l..rBr[azt,,N 1H-34 YEAR OLD MALE COMPETITIVE NON-MENTHOL SMOKERS WHO RESIDE WITHIN CAMEL'S EMPHASIS AREAS. • QUESTIONNAIRE FLOW - USUAL BRAND AND 2ND/3RD CHOICE BRANDS - AWARENESS AND USAGE - PERCEPTIONS - USER AND PRODUCT - AD AwARENESS AND SOURCE - SLOGAN RECOGNITION - AD RECOGNITION ~..:~'o 11 t09t dZLOS ZE6V T08IS
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J)Efl(ILJCC(i . !1i HLJ niP rrrzi:Y IN MARKET ADOPTION PROCESS • AWARENESS • RECOGNITION ~~ PERCEPTION TRACKING STUDY • PERCEPTIONS • ATTITUDES • PURCHASES • OCCASIONAL USAGE • ADOPTION ~'I :A L.. Al 86Lt tiZLOS TRACKING SYsTEMs DIARY TRAcKER 6Z6V T08IS
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11
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v .111 ~. ~ .~ .M.P11REY ~. .~. ~ • HEROIC CAMEL COMWUNICATES CAMEL's INDEPENDENT/INDIVIDUALISTIC USER IMAGE. AS WELL AS TNE BOB BECK CAMPAIGN. HEROIC CAMEL ADDS A MORE FUN PERSONALITY AND A MORE SOCIAL PERSONAL NATURE TO THE OVERALL ADVERTISING MESSAGE WHICH EXCEEDS BOB BECK. • HEROIC CAMEL IS PERCEIVED AS MORE YOUNGER ADULT 7HAN B08 BECK, HOWEVER, THE IMAGE REMAINS MORE OLDER RATHER THAN YOUNGER ADULT. ~ HEROIC CAMEL COMMIlNICATES THE OVERALL COPY STRATEGY AS WELL OR BETTER AMONG FRANCHISE SMOKERS VERSUS THE TARGET. O COMr1UNICATION OF HEROIC CAMEL WAS VERY SIMILAR ACROSS 18-24 YEAR OLD AND 25-34 YEAR OLD AGE SUBGROUPS. i bZL~S 9Z6V T@8I5 56Lj
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produce` . . .~~..".~~ ~~~ ~ .~~ ~ ~ ~ . Slide• CRE041 ••F Opid: lob It: 4-i?-8 DDS:6000 si~t: 2858 Sat Sep 171 S:S8~31988 . ' V98t T08TS Z£Lj 1'ZLOS
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1 rr 51801 4902 t.~.- •- 50724 1771
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I c lll HUMP}IRI!:Y • LARGE INCREASES WERE OBSERVED IN UNAIDED AND AIDED RECALL OF CANEL ADVERTISING ACROSS 1~! THREE AGE GROUPS. - UNAIDED AWARENESS OF CAMEL'S ADVERTISING IS EQUAL TO MARLBORO?S LEVELS. ADVERTISING AWARENESS TO A 18-20 21- 4 25-34 UNAIDED ADS LAST 3 NIOs. (•'c) (s) (~) (:) CAMEL 80++++ ,93±±++_ 84+++f+ 77++++ MARLBORO 84++ 92± 83+ 82+++ hfINSTON AIDED ADS LAST 3 Mos. 42++ 44+ 38++ 43+++ CAMEL 90++++ ® 92+++ 89+++++ t:('() 1.1 I'li t NOTE: EVERY "+" IS 5-10 POINT INCREASE VS. YAG. ZOOT bZLOS ££6fii T08TS
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t A OM f- ~ PRAO a
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, .... ~~ ~~ ~ ~ ~~. ~.~..~.~.. I ~..-,-~ .~ ~ ~ ~. ~~ ~. '~.. ~ ~ . ~ ~ ~.-~ ~ ~` !. Slide: cre052' ': Gei hl~hn slds- lob N: 9888 DDS:G000 3~~e:1828 Sat 1714:1 71 ~ 8 l'~8 SeP 33 98a Guideline Don't Diffuse Image Use Don't Umit Reach ~:~~.:~~1~~~1)~~°Nf~.4 ~::t~:~ 1.~~~ s. ~ r SLBfi T08TS £tLt b2LOS ~ BIG BI°UVG :. ~ ~~. - - ON
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produ u J~ iiJnrPrrRrv • CAMELtS NET SLOGAN/BRAND FIT IS STRONGER AMONG YAS. - AMONG 18-20's, ITS LEVEL OF CORRECT AWARENESS IS STRONGER THAN VIRGINIA SLIMS AND 2/3'S THE LEVEL OF MARLBORO. NET SLOGAN/BRAND FIT* T TA 18-20 21-24 25-34 CAMEL 19 29 24 16 MARLBORO 49 47 44 50 WINSTON 2_ 2 2 2 VIRGINIA SLIMS 24 26 22 24 I :`~~~°:~~~:~~ ~. :~, ~: * TOTAL % OF SMOKERS WHO ARE AWARE OF SLOGAN AND CORRECTLY IDENTIFY IT WITH CAMEL. ,t fli .,.I -d •.-••*€ 9E6v T08tS S09T bZLOS
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Ch 0 om ..~.. !!~?.. ..~... t ~Za.,.a~ .~ N' IHtu.i.iLiRFw To TRACK THE GROWTH IN AWARENESS OF ADVERTISING AND ITS IMPACT ON IN-MARKET PERCEPTIONSATTITUDES TOWARD CAMEL AMONG TARGET SMOKERS. : ra.. :..a ., i~ t < ~_s .~. r * ~.~..:~.'(Jr, 008, tiZLOG T86V I08T5
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REM FLAGS (TOP 2 11PGREE) *y ..1&.. 11t? 1•t( IRiI'iI121?l' .' ..i?f... .. . . . .... ..... . . ... . .. . .. , ~ TOTAL TARGEj HEROIC 6OB CAME B_~ SAN4E OLD THING 9 SEEN MANY TIMES/TIRED OF IT 5 COULD BE AD FOR ANY BRAND 17 Too coMPLEx 7 e NEROIC CAMEL IS LESS FAMILIAR-LOOKING ADVERTISING THAN BOB BECK BUT BOTH CAMPAIGNS PROVIDE A SIMPLE MESSAGE. HEROIC CAMEL PROVIDES A MORE OWNABLE IMAGE FOR CAMEL. VaLOs ~- 6T6V 108ZS
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~ C,1NEL 1990 Overvleu 51801 4951 50724 1820 ~i:ti?IH~ILVIl~1 ca t Aq p)3L.ii)Oi(I
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i ~~0 1 :I;Na.~~.~ I 3'. 1GIA10 06brt 13WV3 . ~. ~. ~.. ~ 51801 4952 50724 1621
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0 I "il
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prodt4g,t. L r Pk . .~. • ~ .,...~ . ..~..79t. ~'7l~. I G~ puff 1.11 ,:. ~ a.~ ~ `~" T, I "~":.~ ` , ~: ..,1 ..t.. "WILD PACK" PAGE 'WILD PACK" SPREAD "WILD PACK„-POP-UP MUSICAL B-DAY CARD PILOT PAGE HOLLYWOOD PAGE HOLLYWOOD SPREAD VIRILE SEGMENT NORM PAGE CIGARETTE NORM PAGE CIGARETTE NORM SPREAD 18-34 37 56 94 83 34 42 38 •22 18 24 33 38 49 60 92 95 85 82 38 31 40 43 41 36 - • ALL 1175TM B-DAY" AND "HEROIC CAMEV EXECUTIONS TESTED WERE RECALLED AT LEVELS SIGNIFICANTLY HIGHER THAN NORMS. (.~~ONi401`::~f.JAL, ~,ZL05 961-1 4~A AMONG MALEs l$- 4_ 25-34 LZ6t, T08TS
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prod as~ ~d111~Ill"HREY • THE MAJORITY OF TARGET SMOKERS CORRECTLY IDENTIFY CAMEL AS THE BRAND HAVING THE SLOGAN "SMOOTH CHARACTER". - THIS LEVEL OF CORRECT IDENTIFICATION IS VERY HIGH WlIEN COMPARED TO VIRGINIA SLIMS WHICH HAS A VERY INTRUSIVE SLOGAN/CAMPAIGN OVER A MUCH LONGER TIME. z SAYING CORRECT BRAND/SLOGAN. TOTAL 18-20 21-24 25-34 ('c) (%) (1) (%) CAMEL: 75TH/SMooTM CHARAcTER 65 66 ® 62 SHARE A NEW ADVENTURE 18- 19- 9-- 21 ItD WALK A MILE 85 63++ 85+ 87- MARLBORO: COME TO THE FLAVOR 87 83 87 88- LONG M1AY gABY f ~. .:~.'( .) 68- bOBT bZLOS SE6fii 10819
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0 ~. .~, ~. .~......~'A.. ~a... ~ .S.~j .~...~..~ .~. J~. ..ii..~c. .~.....f ~'~ • AIDED RECOGNITION ALSO INCREASED DRAMATICALLY FOR CURRENT CAMPAIGN. - AWARENESS IS HIGHEST At~ INCREASED THE MOST AMONG YAS. - AMONG THOSE WHO RECOGNIZED MORE THAN ONE CANEL CAMPAIGN, MOST SAID THEY SAW THE CURRENT CAMPAIGN LAST. SAw ADV. LAST 3 MoNTHS TOTAL M 18-20 M • 21-24 25-34_ (s) (s) - CURRENT 87+ 90+ 86+ CAMPAIGi~S LAST SEEN - CURRENT 73+ 70 77++ 73 - PAST 23- 27 19- 23 - BoGUS 2 2- 2 2 PROVEN RECOGNITION* 67 67 70 65 ('(?'~~~`~~~~~:'~~'1 1 :~ ~ ° ~~I I ~:~~I ~'~:) ~ . . ~"( ~, ~ N~.'~:'~ ~ ~i:~'~ ~~ * ONLY SAW CURRENT CAMPAIGN OR SAW IT LAST (MOST LIKELY DEFINITION). 908I b"LLOS LE6V I08T5
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proilt.i 1ce 4.0 • THE % OF 18-24 SMOKERSBUYING ~AMr L INCREASED SIGNIFICANTLY WITH THE INTRODUCTION OF THE 75TH ADYERTISING/PROMOTIONAL PROGRAMS. ALTHOUqI AT A SLOWER RATE, THIS GROWm IN 18-24 PURCHASES APPEARS TO BE CONTINUING iN 1989. PURCHASES - % OF 18-24'S BUYING CAMEL (NATIONAL D1ARY PANEL) 16 :. ~ 444. 1~~<<... 1 . J-J"I1 S'd`N t'1 J F M A M I of 18-24 - Buying CAt4EL % OF 18-24 BUYERS 14 12 10 8 6 4 I 87 I 88 5.6 ~ 8.2 1 tzr tc ~ . HiIZli;ti' -~ 89 ( 9.7 bTBT 4ZLOS SV6V T08t5
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prodc~~ 0 1.11 , .:~ ~ .:„, .~l~ ~_~..~. ~~~ ~ ~.. ~ .~. . .~.~ .~ • nEIEROIC. .~ CAMEL" OUTPERFORMED "BOB BECK" CAMPAIGN. IT SUCCESSFULLY COM4UNICATED THE COPY STRATEGY AND MET ALL ADVERTISING OBJECTIVES. - COMNUNICATED INDEPENDENT/INDIVIDUAl.IST USER IMAGE WITH SOCIAL AND EMULATABLE PERSONALITY. - ELICITED HIGH EMOTIONAL RESPONSE - MORE ENTERTAINING, PROVIDED MORE BRAND REINFORCEMENT AND RELEVANT NEWS AND HAD LESS RED FLAGS. - RELEVANT TO MALE YAS TARGET - THEY COULD RELATE TO ADS MORE, IT GENERATED N1ORE POSITIVE FEELINGS TOldARDS CAMEI, AND WAS PERCEIVED MORE FOR SOMEONE THEY WOULD LIKE TO KNOW AND WAS MORE FOR YAS. - HAVE FRESH, CONTEMPORARY CREATIVE FORMAT - MORE EYE CATCNING, ATTENTION GETTING AND ABOVE AVERAGE IN INIPACTFt1LNESS. - POSITIVE SHIFT IN ATTITUDES TOWARDS CAMEL. `~~~~.:~t.~..:~.'~~ ~ ~~~ ~ _ A~.'I 8Z6V t@8TS L6L [ -fiZLOS
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i I : :~:
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produ 0 111 • OCCASIONAL USAGE F, DURING 75TN PROMOTIONAL PROGRAMS, PARTICU~.1 ...... . ~ .A.. . .. OM COUPONS APRIL/MAY '88. To DATE IN 1989, OCCASIONAL USAGE IS AT LEVELS COMPARABLE TO PRE 75TN B-DAY PROGRAMS. 18-24 CAMEL NON-UB BUYERS (NATIONAL DIARY PANEL) 60 50 40 30 20 40 % REQUIREMENTS SATISFIED O 9 a i i i_LI _.L_I_L~L_t IJ~ L . I I I I_t_ 1 M J J A S O N D J F M A M J J A S O N D J F M A M I 87 I 88 1 89 1 I of A11 Cigt. to CAMEI, 19 9ii6v T08I5 5,i$1 h7.ln q 25 <. 19 ' f i# ~ ~~~.
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CAMEL BRAND PROMOTION OPPORTUN=S I AGENDA • PROMOTIONAL OBJECTIVE AND KEY STRATEGIES • CONCEPT AND PREMIUM GUIDELINES • ATTITUDINAL AND LIFESTYLE CONSIDERATIONS • TACTICAL RECOMMENDATIONS Entertainment-Oriented Fun-Oriented Utilitarian
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iro 41 1; v 1 4 ~. 1~11j1~ ~ '~. ~ .. . .... ~ .. ..... . .1 ~ • VERSUS YAG, PRODUCT PERCEPTIONS I . MPROVED AMONG YAS ON THE ATTRIBUTES . "QUALITY" AND "STRENGTH". - FEwER YAS saw CAMEL AS "TOO STRONG". "PROOUCT" PERCEPTIOas OF CAMEL OF HIGH QUALITY Too STRONG JUST RIGHT NOT STRONG ENOUGH oTA 18-2Q 21-24 25-34 (t) M (t) (t) 57 E-w~: - 5 58 42 3 5- 4 - 43 55 + 5 55 .3 8 2- 2 ; k !f VHtA: I lf}~~ BOBi 6ZLOS 6E6fii Z081S
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51801 4871 {N~A ~...~N <I t~,1. N :L ~ ~IS' I 5072,4 1739 1 lir asn  aulIaPA'M!) ~ S86t 6Z~94ft ll daS xS Z1fE :~ 0009=5GO HM :o9of 9uaoi-spls 9w~ :pldp . i. i .. ~..7(iv~t~... A~ Aq .~I~.7 ..~ ~ ~ ~ ~ .ftw:MIS
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51801 4986 50737 6428
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Irudtacc 'Ii [lJ lt'1't:' IPH.RE\ • C/IMEL.'S SHARE OF 18-24 MALES HAS ALSO INCREASED SIGNIFICANTLY OYER THE LAST TWO YEARS. THE BRAND HAS ALSO SHOWN SOME GRmm AMONG MALES 25-34. l 0'l 0 f :-a - i i :-+ r E f F f : : i : i - . . -- --- --- - Mar-Jun- Sep Dec-Mar-Jun- Sep Dec-Mar-Jun- Sep Dec-Mar-Jun- Sep Dec-Mar-Jun- 85 85 -85 85 86 86 -86 86 87 87 -87 87 88 88 -88 88 89 89 ». Males ' low ~..`0 1 , ATIC': 18-24 4.5 4.9 F- 2 8 -+ 1 5 -- 6 . . -0 .5 25-34 6.3 E- 4.8 4.7 -~ 5.3 --~ 5.7 3,5-49 2.7 -~ 3.4 3.5 3.8 3.9 50+ 2.8 -~ 3.5 E--- 2.9 f- 2.6 F-- 2.3 1101 b7./_n;
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rociucc,~ p ' II~JI~!(PI~ in R-r1 '~ Cl*~t . Eult INDEPENDENT/INDIVIDUALIST INDEPENDENT 66 69 IN CONTROL OF LIFE 56 55 KNOWS hMAT HE WANTS 62 <- 57 NOT CONCERNED W/OTHERS 41 > 53 FJ(PRESSES INDIVIDUALITY 64 < --- 57 ENJOYS BEING DIFFERENT 57 55 STANDS UP FOR BELIEFS 63 62 MAKES OWN DECISIONS 67 63 ~1•"~f~t°.~') ~z x $~4 Y 1 ' ~, x:i • BOTH HEROIC CAMEL AND BOB BECK COMNUNICATE HIGH DEGREE OF INDEPENOENCE/INDIVIDUALISM TO TARGET SMOKERS. 06L1 bZfo-S TZ6V T08T5
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prod~if~?t9~I~R" 0 Ill . 11U01 ~ ~ ...~,~ ~ PERCE~f~ ^ EVE CAN L. • As WITH USER NTS E UU& FROM HAVING ANY PERCEPTUAL PRODUCT AOVANTAGES. THIS GAP IS EVEN MORE PRONOUNCED AMONG THE YOUNGER 18-20 SUB-GROUPS..- 1989 TOTAL TOTAL "USER PERCEPT_Io.___N~ CAME RLB JUST 'ME RiGHT Toeacco TASTE A STATE OF THE ART BRAND OF HIGH QUALITY JUST THE RIGHT STRENGTH G00D OVERALL TASTE REFRESHING 66 31 57 55 47 32 84i 58 84 83 79 LIQ DIFFERENCE TA ~20 -18 -29 -27 -36 -28 -45 -28 -34 -32 -43 -38 -56 ~'ONN ~'~~~~`,~~~~ Y~~., ~~'~.~»~¢ ~ ~ k. ~~.~..:~. ~.~ 1,~ 14 '~: OtBt-tiuOS tt6v Z08TS
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pro(JutA1J99hfrLRYUj t1 . II. BUSINESS OBJECTIVES HQRT TERI~ • GROWTH AMONG YOUNGER ADULT MALE SMOKERS • SHARE OF MARKET STABILITY * C. G • CONTTERM INUED GROWTfI AMONG YOUNGER ADULT SMOKERS • SHARE OF MARKET GROWIN I SZB1 bU09 9S6t I08TS 0
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c summRy 111 • ~.. 1~ _.~ ~ J.MPHR.EY IT IS HYPOTHESIZED THAT THE STRONG YAS APPEAL OF THE CURRENT ADVERTISING ENABLED IT TO MORE DIRECTLY IMPACT ATTITUDES/PERCEPTIONS OF YAS (PARTICULARLY 1S-Z0'S) ToWARD CAMEL THAN THE OLDER AGE GROUPS. THEY ARE MORE LIKELY TO: - CLAIM CAMEL AS THEIR ZND CHOICE'BRAND. - CLAIM RECENT TRIAL. - HAVE STRONGER AWARENESS OF CURRENT SLOGAN. - HAVE CHANGED THEIR PERCEPTIONS TOWARD CAMEL ON SEVERAL USER/PRODUCT DIMENSIONS ASSOCIATED WITH THE CHANGE TO THE CURRENT ADVERTISING. • As WAS EXPECTED, MARLBORO'S GREATER SON POSITION AMONG TARGET SMOKERS LED TO IT HAVE STRONG PERCEPTUAL ADVANTAGES OVER CAMEL. C<; ~VV6f, T08tS £[9T bZLOS
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51801 4978 50737 6420
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CAME . BRAND PROMOTION OPPOR_, ES ENTERTAINMENT-ORIENTED INCENTIVES (Cont'd) T$E CAMEL CASSETTE TAPE (Cont'd) All tapes used by RJRT can be customized with Brand colors, graphics and advertising on overwrap, J-Card, and in the cassette. Costs are significantly reduced to RJRT. All prices include freight and duties for the GX-90 Normal Bias tape: 1,000,044 3,000,004 5,000,000 78¢ 74¢ 70¢. Lead times. • Stock: 60 days. • Customized: 90 - 120 days. Tie-in with New York Music Awards as a Trade and Consumer Sweepstakes overlay. SKC customized tapes currently in use by the Menthol Initiative Group.
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f t!G . ..1l,°A. .~ .:lF.. 1.jt.J.m.. ~.~ ,~. ,.~. ..>. . ~.~..~ ~~ • SLOGAN RECALL ALSO IMPROVED DRAMATICALLY AND IS ALREADY EQUAL TO OTHER WELL KNOWN/ESTABLISHED SLOGANS (SUCH AS V SLIMS). - AMONG 18-20's, 71d0 OTHER BRANDS WITN YAS POSITIONINGS ALSO ACHIEVED DRAMATIC SLOGAN GROWTN. CIGT, SLOG. SEEN PAST 3 MOS. TOTAL 0) SMOOTH CHARACTER/75TH 29++ COME TO WHERE THE FLAVOR 56 LONG WAY BABY 35 I'D WALK A MILE 25+ ULTRA TASTE PERF'ORMANCE 18++ GOOD SMOKE/GREAT PRICE 8+ fiiE6t I08T5 18-20 (:) 16++ Z~?_4 25-3 (~) (1) 32++ 26++ 50 57 32 35 17 28+ 21++ 16++ 7+ 8+ 6O8[ bZLOS
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----------------------- -------------- ------------ TARGET SMOKERS pERCEPTIONS OF THE CAMEL SMOKER BOB BECK ---------------------------------------- ---------------------------------------- PRO.7EC'I'IVE PIUTURE DRAWI23G TECHNIOUE «.a "e target smoker perceptions generated by the ;#dvertising include: ~ The outdoorsman who is a strong, virile, and competent man. .~.. «.` ~ ~ Bob,Beck ~ ; physica powerful ,s~ A professional outdoorsman, not just a weekend %Lt. is seen as physically highly competent, an actio (farmer, rancher, cowboy, lumberjack, forest ran Seen as a loner in the outdoors, not with frien4swW ;;. A, co-workers. 4 X-0m. Independent, free to come and go, unencumbered b "Icia~ obligations. Target smokers do not romanticize this outdoors heroic or dramatized (not seen struggling with *M* competing for prizes, achieving anything difficttAAM Life is somewhat barren, devoid of much plaasur3'ot hunting and fishinq. Smoking and drinking seem; off rigors of outdoor life. -•.o- Perceived best and most clearly among men over ~ younger adult smokers in the target view him as ««~ the rigors of outdoor life. ~ ~ 25 he is not e, er than ake edge Muft f€ years of age.-- not adequate teS ~ ;;"'-p
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q I. BApC6R011ND ~ ~~ l1 B. KErFecros 1i[ jf\'1JI4Rt2.\ • OLDER FRANCHISE IS DRIVING DECLINES - OOITrING - PRICE SENSITIVIT Y •NEGATIVE CONStIMER P ERCEPTIONS INHIBITS NEW BUSINESS IMAGE PERCEPTION S OF OLD, OUIDATED, DOWNSCALE - PRODUCT PERCEPTI ONS OF HOT, HARSH, TOO STRONG, NON-FILTERED •RECENT POSITIVE PER FORM4NCE DRIVEN BY FOCUSED YAS STRATEGY - IMAGE ENHANCEMEN T - TRIAL ORIENTED - BROADER GEOGRAPH IC SCOPE • YAS PROVIDE LOWER S HORT-TERM VOLUME CONTRIBUTIONS ~', i , 1 6 * AC . ~ w ` k TI : ~[;. ~ : x y . s, .. ~ ~: a 3 EE \a .~. ~. ~.. 1 ~A~ vS6fii ti08ZS £Z8t bZLOS
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PrO(I.UCed by uwEi i mmId VII. STRATEGIC VISION t F=m~ IIUMPHREI.. ~ • bAGE ENHANCEwNT EMPHASIS NIGH IMPACT OWNABLE CONSUMER INVOLVEMENT/INTERACTION • RoVIOE CONTINUITY - REACN/FREQUENCY - NAME GENERATION/FOLLOW-UP • SPECIAL INTEREST OPTIMIZATION L96V T08TS 9691 4ZLOS 9
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EO u lo 51801 4989 50737 6431 . ~
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prosluced I~y ~~,IIZ'~'( CAMEL.!W-OVV,a III Vt1. 5IR.-ffGICV,_.O" i j [JMI'[IItI+;4' ~ • INCREASED OON PRESENCE NATIONALLY - BROAD EXPOSURE, witH YAS HEAVY-UP - SPECTACULAR UNITS/INCREASED PAf~I~I,~GRAPNICS '~PA- • STRONG PRINT PL~IN - TARGETED BOOKS (MASS/SPECIALTY) - SPECIALIZED UNITS - - MEDIA-DELIVERED PROMOTIONS • vNIQ11E/INNOVATIVE OPPORTUNITIES - SPECIAL INTEREST - NEW TECHNIQUES , ~- Z96t T08iS tfiBi bZLOS
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a - TOTAL MARKETING 300 WEST SEVENTH ST • WINSTON-SALEM, NC 27101, 919-722-4709 CA1MML B PROMOTION OPPORTUNITIES Ln ~4 co m ~ Submitted: ~ May 4, 1990 0 ~ ~4 w V D) A f1cnIlEr tO L((g_ Exbibit Date: Alfred A. Betz, RNIR
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~ y ~ 'C cky VII. STRATEGIC VISION ROMOTIO CAMEL 1980 OVERVIEW .~...11 _JfVT1'I[lzf1-' • IMAGE ENHANCEMENT UTILIZATION - CONSISTENT WITH BRAND PERSONALITY - BIG BRAND PRESENCE - RELEVANT/APPEALING OFFERS • AGGRESSIVELY IMPACT CONSUMER BEHAVIOR - BREAKTHROUGH MAaKET-PLACE CLUTTER - TARGETED TRIAL OPPORTUNITIES - CONTINVITY/INVOLVEMENT - KEY PROMOTION CHANNELS • RETAIL • DIRECT MARKETING - GENERATE NEW NAMES • SPECIAL/TARGETED INTEREST EMPHASIS N I £96V Z081S Z£8t tiZL05
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prod.iuced by VII. STRATEGIC VISION SINGLE-MINDEO FOCU~~ AGAINST MALES 18-20. • CONTINUE TO IMPROVE PERCEP`rIONS - EFFECTIVE CREATIVE - BIG BRAiB) PRESENCE - „NEW NEWS" • AGS*RESSIVELY IMPACT CONSUMER BEHAVIOR - TARGETED TRIAL OPPORTUNITIES - CONTINUITY/INVOLVEMENT ~ IMPROVED PRODUCTS - PROJECT FC • INTEGRATEO MARKETING PLAN 18-Z4, wITN EMPNASIS - CONSISTENT COMNUNICATION - EFFECTIVELY TARGETED ~~~BRV..ADER~BpS4 • SP~~IAL I~ITEREST ASSOCIATION - SIGNIFICANT RESOURCE ALLOCATIONS . CAMEL 1920 OVERVIEW ~.~~. OEBI tiZLOS t96fii T08I5
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Produ.t*dqAiuRvU.IR 10 VI. ~..~~ MANAGING THE BRAND PERSONALITY 1.. .~. UMPl4R.~..~jy A. CAMEUS SUCCESS AGAINST YOUNGER ADULT SMOKERS IS DRIVEN BY THE ESTABLISHMENT OF A UNI(]UE "BRAND PERSONALITY" THAT U RELEVA.NT/APPEALING AMONG 18-24 YEAR OLD SNOKERS. CONTEI4ORARY • LIGHTNEARTED FUN • IRREVERENT • UNEXPECTED • ON THEIR TERMS/AT THEIR LEVEL ~ ,~ ~ (~:~ I.l'~ t~ ~ ~. ~ 3€ ` ~~ ~ ~ ~, ~ ~. Szpt fZL09 656t Z08T5
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CAMEL BRAND PROMOTION OPPORTUNI'TIES ENTERTAI ENT-ORIENTED TNCENTIVES THE CAMEL CASSF,'ITE TAPE • The blank cassette tape market is growing from a large base: Nationally, there are 73 million music consumers. 81% of all music consumers purchase blank audio tape. The use of blank tape closely parallels young adult Hispanic interests and lifestyles. Reason Consumers Record Music on Blank Tapes % of Music Consumers Citing this ps "Main Reason" • For use in car 27.4% • To record a friend's album or CD 21.1% • To record selected songs from the music that I own 15.2% • To record music off the radio 14.6% • To preserve the original of an. LP or cassette 10.4% • Other 11.3% Souroa The Street Pube Group and SKC, 1989. • SKC Audio Tapes provide higher quality and performance at a lower cost to RJRT than TDK. SKC manufactures 25% of the current prerecorded cassette tape used in the USA. • Major labels using SKC tape because of its quality and price include: MCA, Polygram and Warner Brothers. • Market share increasing due to pronounced superior performance vs. competition and broad promotion support.
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IK ` ~.~ .~.~ .~.~r. .~~.~ 1 .~. ~ ~ .~ .~.... ~ • 18-20's ARE MORE LIKELY T0: - CLAIM CAMEL AS A 2ND CHOICE BRAND - HAVE TRIED CAMEL RECENTLY I • VERSUS YAG, STRONGEST ATTITUDE IMPROVEMENTS WERE AMONG 18-20's FOLLOWED sY 21-24. ATnTiroES TowaRO CAMEL TOTa 18-20 21-24 25-34 (%) (t) (%) (%) 2ND CHOICE 37 3RO CHOiCE 24+ 58++ 40+ 33 16 25 25 EvER TRIED 97+ TRIED PAST 4 WKS. 33- ZV6V T@8T5 94+ 40 97+ 27- I Tt81 bZLOS
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'3['tRC~t1 v <~Il~~' V. KEY OPPORTUNITY .~ ~. .t j~-~_ . ` ~~~~ ~ ~~ :~ ~ ~ -:~ _ . . . . . .. .._,.. _.. . . .. .. ACCELERATE GROWTH AMONG YOUNGER ADULT SMOKERS BY LEVERAGING THE BRAND'S UNIOUE PERSONALITY. I '_ 8S6fii Z08tiS LZ9I bZLOS
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ii(IIiTI'I1D tFV . $UNMARY • AMONG TOTAL COMPETITIVE MALES 18-34, CAMEL ACHIEVED SIGNIFICANT GROWTH IN MARKET PENETRATION FOR ITS CURRENT SLOGAN AND ADVERTISING. - VERSUS YAG, AWARENESS FOR THE CURRENT SLOGAN HAS GROWN SO FAST THAT IT NOW RIVALS AWARENESS LEVELS FOR COMPETITIVE SLOGANS THAT HAVE BEEN IN THE MARKET MUCH LONGER. - MOST TARGET SMOKERS CORRECTLY STATE THAT CAMEL IS THE BRAND WITH THE nSN100TH CHARACTERn SLOGAN. - AWARENESS FOR THE CURRENT ADVERTISING HAS ALREADY SURPASSED ITS PREDECESSOR "SHARE OF NEW ADVENTURE". IN ADDITION, AMONG TARGET SMOKERS AWARE OF BOTH CAMPAIGNS, MOST CORRECTLY RECALL THAT THEY SAW THE CURRENT LAST. IT IS IMPORTANT TO NOTE THAT AMONG THE TOTAL TARGET. THE IMPACT OF THE CURR~1i l i0 ~ JA~ . ,"~ ~~~~Ts0 ~ . G ' ~'~USE THE MOMENTUM SHOWN-AMONG ~~S ANO Z1- 4~S WERE HELD BACK BY LITTLE/NO CHANGE AMONG THE LARGER 25-34 GROUP. ZIBt tZLOS 8t6t T08TS
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50724 1837 51801 4968 0f.1 V : ~I.i,I N AA )tiAIN.N. JNI13)M1/W Q13I-J - 1zvi3a - A111/'JINdVa90N3a - Al11/'JI11d1HJ039 - amosil Affluslu • 1Mi tRl 3J 3 • A;~~arI ~,~,~ NOISIA 31531VUS UI 143lAH3roascY ,m a Acl PMiP4L1(t 'IIA .J _,
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d~ ~. ..~ ~ ~~ ]oWRV ~ . . . .. vt ~. .~: ~. VI. MANAGING THE BRAND PERSONALITY ..~.'9~. ..~.~.,1 ..•f LJ\IV1i B. WHAT MAKES THE RAND s ERSONALITY" OWNABLE TO CAMEL IS THE UTILIZATI0~1 OF_THE "SMOOTH CHARACTER" HIMSELF. JOE CANEL. JOE nTNE ULTIMA~E_ SMOOTH CHARACTER" CAMEI. IS: • CONTEMPORARY/UP-TO-DATE • LARGER THAN LIFE • SMOOTH AND SELF-CONFIDENT, BUT NOT PRETENTIOUS • A MAN'S MAN WHOSE ATTITUDE/LIFESTYLE IS ATTRACTIVE TO WOMEN • ENERGETIC AND ENJOYS LIFE TO THE FULLEST • INTO CHALLENGES AND LIKES TO TAKE RISKS 0 INDEPENDENT, YET ADMIRED AND RESPECTED BY PEERS 14 6Z9t b7.LOS 096V j08i5
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pt°oda~ce~ 1~.112 0 HUfi1PIiREY ~ • CAMEL'S SHARE OF IH-24 FEMALES IS UP SIGNIFICANTLY SINCE THE BRANDt S REVITALIZATION. THIS IS CONTINUING IN, 1989 ALONG WI?H INCREASES IN SHARE AMONG Z5-34 AND 35-49 FEmALES. CAMEL EX REGULAR SOS 0.0y. Mar-Jun- Sep Oec-Mar-Jun- Sep Dec-Mar-Jun- Sep Dec-Mar-Jun- Sep Dec-Mar-,lun- ~ 8~6 ~1 ~ !~sN~? ~~~ ~8f . 910 0s: k e~e ~-W ieFb ~ ~ sdi4 ~' Females SIX MIAV 1 H5 NULLING AVERAGE .: 18-24 1.2 1.0 .9 -~ 1.5 ---~ 2.3 25-34 .9 1.0 .7 --~ 1.5 -35-49 .5 .9 .8 .6 -i 1.1 50+ 1.4 1.2 -1.0 1.0 .8 91Bi bZLOS
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CAMEL BRAND PROMOTION OPPORTUNiTtES UTILITARIAN INCENTIVES THE CAMEL TOOL KIT • A beautiful and functional item for anyone who has ever needed a screwdriver or opener and didn't have one. • The CAMEL Tool Kit provides a combination of four versatile screwdrivers and openers for all possible uses. • High-impact plastic packaging and unique, hi-tech appearance make this a "high perceived vakie" item. The kit shell and implement housings can be molded in a variety of colors to match desired Brand colorations. • Cost includes an on-case logo and freight. Leadtime is 90-120 days. FOB Los Angeles. 1,000,000 3,000,000 5.000,Mg $2.22 $1.96 $1.93 THE CAMEL DIVERS WATCH • An attractive, three-function watch that looks lOce an expensive divers watch. - The water-resistant, liquid quartz time mechanism can be set to monitor the time, date or can be used as a stop watch. - The watch face can be custom-designed to include the CAMEL logo. - Each watch in its own polybag with instructions. • Cost includes freight and duty. FOB Los Angeles. Leadtime is 120 days. QQ 1,000,000 3,000,000 5,000,000 $1.66 $1.58 $1.54
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CAMEL BRAND PROMOTION OPPORTUNITIES UITLITARIAN INCEN'TIVES (Cont'd) CAMELWARE • Beverage glasses with decorative Camel logos or graphics abounding. - Perfect for daily use and pleasure. - Perfect for set building. • Costs include all manufacturing expense (ex. art) and four-color printing. FOB Midwest USA. Lead time is 100 days. 1,444,.444 3,004,004 5.444.444 16 oz. 360 34¢ 33¢ 15 oz. (heavy) 47¢ 45¢ 43¢ 14 oz. (heavy) 51¢ 48¢ 45¢ CAMEL HARDWOOD COA S • The perfect accessory for Camelware. • Hardwood-backed with cork to prevent slipping and scratching. • Each 4" coaster is covered with Camel graphics, advertising or logos, creating and expandable set. • Costs include manufacturing (ex. art and separations), and shrink wrapping. FOB New York. Leadtime is 120 days. 1,000,000 3,000,000 5,000,000 sets of 4 sets of 4 sets of 4 81¢ 72¢ 63¢ i
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S'Y:.ATEGTES • Use premium incentives in conjunction with retail pack promotions and field marketing programs to increase Brand awareness, trial and repurchase rates among taFgetetir prospects. Y CONCEPT AND P GUIDELINES • Concepts and premiums should lend themselves to the Brand's personality and reinforce Brand positioning. • Concepts and premiums should complement user lifestyles and psychographic tendencies. • Premiums should, optionally, be utilitarian, not trinkets, manufactured with high quality standards. • Premiums should be available in mass quantities with reasonable lead times. • Pricing Constraints: - Multiple pack incentives: Up to $2.50.
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50724 1736 51801 4868 ~~qY ~~:~:~. ?.-~.~f~ ~ ~ ~;.~..~~ ~~~'~,~. ~ ~:~~~~~~ ~~~$~ ` ~ ~ ~ ~ a AG ~ aSl.IOC~Sa~ " U I 46 8861 W9S=f 1 l.l xS Ob0£ :-Yfg OU09:S0(1 8886 -114ot SUMA-sPts urp.Qo:P!d4 #•500~ :--P4S ;),L?If2l At Pu1PK
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CAMEL BRAND PROMOTION OPPORTUNITIES I FUN-ORIENTED INCENTIVES lCont'dl THE CAMEL CAN COOLER . , C, '~`" i\ (y 1 ti La' , ./ { ~ • A new item that brings "Joe" to life. i • The CAMEL Can Cooler is molded with a life-like relief of Joe's face - perfect for holding cans or cigarettes, or kissing. - A series of "Joe" can coolers can be developed which expresses Joe's moods and Brand satisfaction. i ~ • - Graphics and words can be molded-in for added impact. ; • Cost includes all production, freight and duty. Leadtime is four months. ' Includes a one-color imprint. FOB Los Angeles. 1,000,MQ 3,000, ~ 5,400,944 $1.47 $1.43 $1.36 CAMEL SLIDERS • A great table-top game similar to shuffleboard or curling or bocce ball. - The object is to get closest to the target. The longer the distance, the harder it gets. - CAMEL can "invenr" its own games and contests for retail promotion and field marketing. - Slider top can be molded to look like Joe. • Cost for two "sliders" includes all production, freight and duty expense. A one- color logo is included. Leadtime is three months. FOB Los Angeles. 1,Qp0.QQQ 3,000,000 $.000.000 56¢ 48¢ 46¢ I
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CAME'-L BRAND p~tOMOTION OPPORTUNITIES ENTERTAINMENT-ORIENTED INCENTIVES (Cont'd) THE CAMEL WALKMAN CASE • Perfect for carrying your Walkman! A new item, the CAMEL Walkman Case is covered in cotton material designed to reflect today's style. A sewn-on CAMEL logo patch 'pays off' the denim look. The CAMEL Walkman Case is fully lined and comes with a strong "multi fly" zipper and shoulder strap. A belt-loop is sewn on the back for a tighter fit. i.eadtime is four months. 1.000.000 3,000,000 Q 5,000.90 $1.80 $1.75 $1.68 THE CAMEL "SMOOZZ MOVE"CASSETTE TAPE WRAP • Perfect for storing your favorite tapes! Fabricated in nylon, the CAMEL Tape Wrap holds up to twelve cassette tapes for easy carrying and protection. • The interior can be designed to hold the tapes a' or without their jewel cases. - The Tape Wra comes in any color that dyes nylon and a one-color logo on the Wrap's ~ront. • Cost includes all freight, a one-color logo and twelve weeks lead time. yQQ~000 3,000,000 5,000,000 00 $2.19 $2.15 $2.12 • Consider using the Tape Wrap as: - A Multi-Pack Premium - An On-site or Giveaway Premium
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Pim(.,(I1ICC(1 j)31 RiR'1'f' CAMEL 10 OVERVIEI~ VII. STRATEGIC VISION SPECIAL EVENTS sn i1UNI..PII.REY • BRAW PERSONALITY INTEGRATION • LEVERAGE SPONSORSHIPS 0 PRE-EVENT PROGRAMS AT-EVENT ACTIVITIES NAME GENERATION POST-EVENT CONTINUITY/INVOLVEMIENT • NCREASED AUTARENESS[OPTIMIZATION - ON - PRINT - O7HER (CAMEL GT; CAMEL PRO, CAMEL SuPERcRoss; MoNsTER TRUcKs) ~1 N F'~~.~ 996fii Z08Z5 S£81 tiZLOS
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AMEL BRAND 1'ROMOTION OPPORTLINMES UTTLITARIAN INCENTIVES (Cont'd1 IHE CAMEL STOPWATCH • A fully-functional stopwatch and time piece which can be used at work and at play. - Major functions include time (hour, minute, second), date, day, elapsed time and alarm. • Each CAMEL Stopwatch comes fully customized in up to five colors (as shown), with a color-coordinated neck cord. • Each CAMEL Stopwatch is packed in an individual polybag with instructions. • Cost includes all product (ex. art), freight and duties. FOB Los Angeles. Leadtime is 120 days. 1,000,000 4 3,450,444 5.00Q.QM $1.77 $1.68 $1.61 ME_CAMEL JACKET • Beautifully fabricated from vinyl, the CAMEL Jacket features elasticized cuffs and waistband to insure a good sizing fit for all target smokers. - Two side pockets provide ample room for your Camels. • The jacket is complemented with a woven collar to provide warmth as well as good looks. • Cost includes all manufacturing, freight and duty charges as well as a one-color logo in front or back. FOB Los Angeles. Leadtime is 120 days. Each jacket is individually polybagged. 1•0oo•00Q 3,444,444 5,440,444 $2.37 $2.23 $2.15
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ic .~.~ i~ .~.. ~ ~tc 1roU.UJ1yiL, 0 II. BUSINESS OBJECTIVES A. CoRPOaaTE RoLE IiU(11PllIt[+.Y' • loENTIFIEO GROMITt~ BRANo - BEST CORPORATE OPPORTUNITY AGAINST YOUNGER ADULT SMOKERS - PROVEN PERFOAMANCE/ESTABLISHED MOMEN711M 1M {'~.'I~.f ~:A.~.. NIV ~,.~~`::~~~~~ A. ~~O~i ~.~.:~ x. . bZBT bZLOS 55O T08TS
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prouE~~et~.lis i ~ 0 in TOTAL TARGET BOB BECK AUTNENTIc cIGARETTE A ci.ASSrc REAl. TOBACCO FLAVOR 61 57 63 QUALITY CIGARETTE 61 SATISFYING CIGARETTE 54 24 < 32 RicHT AMOUNT OF STRENGTN 47 <r 38 SMOOTN TASTING 5o <---- 38 0 PROOUCT I wouLO ENjoY 42 BAD T*" < 55 < 52 G < 62 56 51 37 N 14. J 1 1.[fI81f (0 -N • PRODUCT PERCEPTIONS AMONG TARGET SMOKERS ARE CONINUNICATED MORE POSITIVELY BY NEROIC CAMEL THAN BOB BECK. 761.1 b7.LnS EZ6V T08TS
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CAMEL BRAND PROMOTION OPPOR'I'CTtyrt'rF~ UTILITARIAN INCENTIVES (Cont'd) A BIC CORPORATION BUS S - RELAnONSHTP (Cont'd) ITEM Suggested eta 000 000 5.000m BIC Metal Shaver 40¢ 12e 12e 12¢ BIC Lighter 69¢ 38¢ 33c 32¢ (Imprinted. I color) BIC Mini Lighter 65¢ 36¢ 33e 32¢ (Imprinted, 1 color) BIC Sport Fragran,,e $7.50 60e 53¢ 52¢ BIC Executive Metal Point Roller Pen $139 33a 27a 25¢ (Imprinted, 1 color) OFFER # OFFYRS • Suggested Corabined Retail Value Cost of Each 3,000m Offers 1) • 3 Metal Roller Pens $4.17 81¢ 2) • 4 Metal Shavers $1.60 48¢ 3) • Offer #2 + 2 Metal Roller Pens $4.38 $1.08 4) • 2 Mini Lighters + 1 Metal Roller Pen $2.69 99¢ 5) • Offer #2 + 1 Sport Fragrance $9.10 $1.08 11
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produced tsv' R CAMEL 1990 6VERVIa VIII. NExT STEPS 1.11 - FINALIZE STRATEGIES - DETERMINE TACTICAL OPPORTUNITIES • INTEGRATED MARKETING PLAN APPROVAL • FINALIZE TACTICAL PROGRAMS/BUDGETS I I ~~I N -N I V k T() DA 696fii T08TS 9991 bZLOS
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CAMEL BRAND PROMOTION OPPORTUNTTIES THE CAMEL POCKET GAME • A new design in classic board games that will surely please all players "on the move." - Company and sturdy in design, the CAMEL "Passport" game fits easily into the pocket or purse. - Each game is a classic; Chess/Checkers, Dominoes, Parchisi, Backgammon, Scrabble, etc. The choices are unlimited. - All game pieces are magnetized for easy use while in transit or poolside. Perfect for today's active, on-the-go consumer. - CAMEL can even go so far as to design its own game to reinforce major marketing themes. • Each playin board, exterior and clear plastic carrying case can be customized with • C logs, graphics and visuals. • Cost includes all manufacturing costs (ex. art), duties and freight (FOB West Coast). 1,00910 3,000.000 5.000.000 $1.72 $1.55 $1.46
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IP CONCEUSIONS . . .~.!~ ~~ . I II11f1t1'dil~isY ArrlTUnE SHiFr WiTM AovERTisING AWARENESS (UNAIDED) RECOGNITION (AIDED) PERCEPTIONS ArnrvuES PURCHASES OCCASIONAL USAGE AooPtioN H V F 0S6V T08tS UP UP UP SOME IMPROVING, BUT STILL BELOW_MARLBORO UP UP UP DURING NEAYY 7STH SPENDING UP T((..)VA(..(..'(.) 11171C a >r~110 I 6IAt bZLOS
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CAMF•_h BR ,Nn PROMOTION OPPORTUNITIES TERTAINMENT-ORIENTED INCENTIVES (Cont'd) CAMELCBS RECORDS PROMOTION OPPORTUNITY ROUND: C S RECORDS SPECIAL PRODUCTS A thirty year-old Division of CBS Records, Inc. - the world's largest record label. , • Encompasses Columbia, Epic, Portrait, Monument and Nashville labels. - Provides a powerful conduit for leasing material from = major label worldwide. • CBS has the world's largest cassette manufacturing facility. - Capable of manufacturing one million cassettes each day. • CBS also has the world's largest state-of-the-art Compact Disc plant. • Industry leadership in terms of sales, distribution, production and technical expertise yields etIlciency to CBS Records Special Products customers. - High quality and highly competitive pricing yields a satisfied cadre of customers including Proctor & Gamble, McDonalds, Canada Dry, Chrysler, Ford and Philip Morris. I
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CAMEL B PROMOTION OPPORTUNTTIES UTILITARIAN INCENTIVES (Cont'd) SMOOTH CHARACTER EYEWF.AR • A variety of contemporary eyewear that will compliment target user's, appearance. - These are new designs in sunglasses which will be customized for CAMEL - New colors, design and technology make these sunglasses appealing, attractive and functional. • Cost includes freight, logo work and individual packaging. Leadtunes are less than five months. ITEM # 1,000,000 3.000.000 5,000,000 CAMEL Wayfarer 9003 93e 87¢ 78¢ "TERMINATOR" Wayfarer 9307 93c 87¢ 78¢ "TERMIIdATOR" Look 9275 85¢ 78¢ 68¢ WINGS 9508 $1.34 $1.23 $1.17 CURVED 1652 $1.38 $1.28 $1.24 STRAP 9212 $1.47 $136 $1.31 GOLD MJG $1.42 $1.37 $1.32 FACE WRAP w/5 color logo 92¢ 81a 73¢ • Combine CAMEL eyewear with colorful 25 inch sungt ass retainers featuring a pack - graphic slider, for a great look. Cost includes all production (ex. art), freight and duty. Leadtime is 3'fs months. 1,000,404 3,404,044 5,404,444 46c 41¢ 39¢ I
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CAM" L BRAND PROMOTION OPPORTUMTIES L_PTILITARIAN INCEIVTIVES (Cont'd) THE CAMEL PONCHO • Perfect for outdoor use on an otherwise wet day. • Made from vinyl the CAMEL Poncho comes in a variety of colors to suit Brand preference. - One size fits all. • Cost includes all manufacturing, freight and duty charges. FOB Los Angeles. Leadtime is 120 days. Includes a polybag and one-color logo. 1,000.0QQ 1,=Q00 5,000,000 $1.86 $1.73 $1.65 THE CAMEL OPENER • A new, high utility, durable item sure to please CAMEL's target smoker. • The CAMEL Opener is a multi-purpose device that opens pop top and screw top containers as well as bottles. The three openers are compact in design and are complemented with a keyring for pocket use. 1,000,004 ~000,.004 5,004,.44Q $1.02 96¢ 93¢ THE CAMEL STEIN • Every CAMEL target smoker would love a custom Camel Stein made in high- quality, heavy glass. • Perfect for all favorite beverages, the Camel must will be custom designed and molded to include Joe, his favorite palm trees and any special touches that he desires. - Ideal for a'7imited-run" collectable and as the beginning of subsequent "limited run" offers. • Cost is all inclusive. FOB Midwest USA. A small charge for acrylic models. Leadtime is 100 days. 1,000,000 3,000,000 Q 5.000.000 $1.15 $1.05 98¢
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CAMEL BRAND PROMOTION OPPORTUMTIES ENTERTAINMENT•ORIENTED INCENTIVES (Cont'd) THE CAMEL CASSECTE CARRIER • A new versatile item which all "casseae" audiophiles can use. - Fully lined and finished with a heavy-duty zipper, the CAMEL Cassette Carrier is truly unique: . • The protective interior plastic case holds either ten cassettes in the jewel cases or sixteen cassettes without their jewel cases. - Each CAMEL Cassette Carrier comes in CAMEL preferred colors with a one-color logo. • Offers and CAMEL advertising can be in-packed to achieve additional consumer satisfaction and loyalty. • Cost includes all manufacturing duty and freight charges. FOB Los Angeles. Leadtime is 120 days. 1,044,004 2,000, 3,000,000 $2.14 $1.97 $1.92 CA_MM "CASSETTE" MINI HEADPHONES • Perfect for stereo listening to your compact tape or disc player, Walkman or radio. - The set of compact mini headphones store and remove easily from their cassette-sized housing. • Each mini headphone set is beautifully constructed and comes in its own cassette jewel case for easy carrying. - The J-Card within the jewel case will be customized with CAMEL's four- color graphics. • Costs include all freight and duty: 1,000,000 3,000,000 5,000,000 $1.63' $1.54 $1.47 0 Leadtime is 120 days.
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in ~ ~' "".~. ~~. ~~..~~~` ' ~. ~ Tj , MOST OF THE CHANGES IN USER PERCEPTIONS •$UPPORTING AM VERSUS YAG TOOK PLACE ANlONG YAS, PARTICULARLY 18-20. - MOST CHANGES WERE DECREASES IN PERCEPTIONS CONNECTED WITH THE PRIOR "SHARE OF NEW ADVENTURE" CAMPAIGN. i - TNEY WERE ALSO MORE LIKELY TO STATE TmT CAMEI. IS A„BRAND I WOULD CONSIDER SMOKING" AND THAT IT „MAKES A DEFINITE STATEMENTn. "USER" PERCEPTIONS OF CAMEi. MAKES DEF. STATEMENT FOR WORKING CLASS SMOKERs BRAND WOULD CONSIDER SMOKING FOR INDEPENDENT PEOPLE FOR ADVENTUROUS PEOPLE FOR ACTIVE/EXCITING GUYS FOR YOUNGER ADULT SMOKERS 8£6v Z08Z5 ToTA~ 18-20 21- ~ 25-34 M M M (1) 55 . 44 43 38- ® 6- 44+ 29- 34-- 24-- 28- 19-- . ~.: . fA T, 57- 55 42- 47- 44+ 42 36- 39 35 35-- 24-- 31 LOBt bZLOS
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produc. (TOP 2 BOX IGREE) .j.~... .~. 'tJmP RELATABILITII,[EMUlATABILITY SOMEONE I CAN RELATE TO COULD BE ONE OF MY FRIENDS ATTRACTIVE TO OPPOSITE SEX SOMEONE ItO LIKE TO KNOW RESPECTED AND ADMIRED BY FRIENDS GOES ALONG WITH CROWD LoNER FUN PERSQNAUUTr HAS A LOT OF PERSONALITY KNOWS NON TO HAVE FUN aGE/SEX YOUNGER ADULT SMOKER A LOT OLDER TNAN ME MASCULINE TOTAL TARGET Bois R E Y B ECK 45 > 51 56 53 61 < 45 42 < 35 .41 39 32 < 22 21 > 38 53 < 43 60 < 48 32 < 25 42 42 52 > 60 • BOB BECK IS SOMEWHAT MORE RELATABLE TO TARGET SMOKERS THAN TNE HEROIC .." fk.fJ ~RO ~~JN-qQ~ ~ T~~ PERSONALITY, IS MORE A PART OF A GROUP AND IS MORE OF A YOUNGER ADULT SMOKER. NOWEVER, BOTH CAMPAIGNS CONMUNICATED MORE OF AN OLDER TNAN YOUNGER ADULT SMOKER IMAGE. t6L1 d7LO5 ZZ6V Z08I5
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CAMEL BRAND PRO OTIOIV OPPOR ~ UTILITARIAN INCENTIVES (Cont'dl CAMEL LIGHTERS • A variety of innovative lighters which provide distinction as well as a point of conversation or light humor. All quotes include duty, freight and insurance. FOB Los Angeles. THE CAMEL MATCHBOOK LIGH'!'ER • A new, innovative cigarette lighter, presented to CAMEL in prototype format. - Replicates a book of matches. - Produced as a disposable lig hter. - Advertising and product information can be printed on all cover surfaces. • Initial order leadtime must accommodate production mold tool-up (2 months), plus production and shipment timing (3 months). Re-orders would be available in three months. • Cost: 114oo.QOO 3,000,000 s•ooo•QN $1.18 $1.16 $1.15 ME CAMEL WATERPROOF LIGIITER • Perfect for outdoor work or at the beach. Holds cigarettes in a watertight compartment and the detachable top houses a refillable lighter. The entire lighter is worn or carried by its own color-coordinated cord. Currently used by CAMEL on a regional basis. • Cost includes a one-color logo and instructions packed inside. Leadtime is four months. 1.4ffl.044 3,000,000 5,000,444 $1.45 $1.33 $1.28
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CAMEL BRAND PROMOTION OPPORTU S • . ATTITUDINAL AND LIFESTYLE CONSiDERATIONS • Target smokers are approaching adulthood, hence they are sensitive to peer group perceptions regarding their maturity and masculinity. Incentives which reinforce the perception that they are "smart skoppers" who "spend their money wfsely" are more effective than those which connote frivolity. I I • Given their age and environmental/economic conditions, target young adult smokers have limited disposable incomes. Therefore, they try to get as much as they can for their dollar spent. Quality, known Brand names and high perceived value considerably influence their purchase decisions. Buying something "low in qualt'ty", not needed, or contrary to desired perceptions is seen as wasteful and undesirable. • Young adult target smokers are active, sociable and fun-loving in nature. Their key interests include girls, cars, music, sports and dancing - all of which can include family and friends and can be accomplished on a limited budget. • Therefore, Total Marketing's tactical recommendations are organized to accommodate these attitudinal and lifestyle considerations. Major sections herein focus on entertainment and fun-oriented incentives and utilitarian items. High quality standards are a"given" throughout. tn 0 j w ~ ; ; m A r ~
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trartlu4~~+99~ RY lEIIJii t,'~-' 0 111 III. pyyffiONIN N.I g~ qIZI~. ~B l ~ IV7l~~ f CAMEL IS THE NEW BRAND OF CHOICE AMONG YOUNGER ADULT MALE SMOKERS. IV. CREATIVE STRATEGY POSITION CAMEL AS A SMOOTH-TASTING BRAND FOR YOUNGER ADULT MALE SMOKERS WHOSE ATTI?UDES AND LIFESTYLES DISTINGUISH THEM AS INDIVIDUALS WHO HAVE THEIR OWN IDENTITY AM MAKE THEIR OWN DECISIONS. - FRESN, CONTEI~ORARY CREATIVE FORMAT - POSITIVE EMOTIONAL RESPONSE - OWNABLE BY CAMEL v~ ~1.> szer b2cos L56V T08T5
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prod.uced8Lk . . RJRTC TOP 10 ITB}i S ~T SMOKBRS ST ACB• E•tlwa •1. v•~~1t0 HRli-.17.L.1A-24 25-34 35-49 50 i OVEA Seok.rs (Millions) 36 2 10 13 16 15 I COHPARATIVi SALES RANK $.O.N.e• ITZM 1 12.7 uIN9TOD King i Box 11 13 15 13 !! 9 2 10.9 Marlboro King & Box 9 40 24 10 4 3 3 7.4 Kool Filter King 5 13 10. 3 4 3 4 7.3 Pall Nall King 5 • 0 1 6 7 6 S 6.5 SALCM King 7 5 7 7 7 7 6 4.7 CAH6L tegular 4 1 2 3 4 7 7 3.7 ' Kent King 5 1 2 5 6 6 8 2.9 Viceroy King 2 1 2 3 3 2 9 2.9 WINSTON Super Ki ng 2 1 2 3 2 ' 2 10 2.3 Tareyton Filter 3 2. 4 2 2 3 *Sourcet April, 1972, N1'0 Screening •*Source: June Qtr., 1972, Couparative Sales , 6dLE SEZOS E00S I08TS t
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= TCPrx R&S== aZSTITVrs sTWz F~aauMwa CMASSi'M MIiM LM2K', 7, Sr1 =E SCAOOL LNfl COISB~GE STUMiZS IlZ 80 C1T=S THROtrIHOtr! TFE BNI'!Sa STATES, OCSOEIgB - N041D=, 1959. ++r.~ ~.. SUt4SAm OF FDIDDiGS /789A DECDM, 1959 WILLIAM ISTY COMPANY, lot.
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0 I. BACKGROUND in i ..~ .. . F v ~ : ~ ~~ ~: ~ ~ ... ...~~ .. ... . ...,~ I A. RECENT MARKETING ISTORY • NIOVED TO YOUNGER ADULT SMOKER EMPNASIS IN LATE 1987 - CURRENT • 75TH BIRTHDAY CELEBRATION IN 1988 (aDYERTISING/PROMOTION) •"SNIOOTH CHARACTER" CAMPAIGN INTROD!lCED IN JULY 1988 •,INTEGRATED PROMOTIONAL THEME ("SMOOTH MOVES") IN 1989 ZZQLbZLOS 856V j08TS
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CAMEL BRAND PROMOTION OPPORTUNITIES ENTERTAINMENT-ORIENTED INCENTIVES (Cont'd) THE CONCEPT: RETAIL OFFER (Cont'd) CO OFFER • Total Marketing and CBS RSP recommend that Camel in-pack a continuity offer with each tape or CD offered at retail. - Since the CBS audio product has been researched and designed to maximize competitive smoker appeal, it is reasoned that Camel should keep these desired triers on board" with Camel. • Recommendation: Offer Camel triers and re-triers more customized tapes and/or CD's for Camel Carton proofs-of-purchase. • To supplement Brand research, in addition to respondent name and address, request usual Brand purchased and anitudinal reaction questions regarding the audio offer. (i.e., "Did you like the selection?" "Are diere special selections that you'd like to receive?"). - Based upon Competitive Smoker response, evaluate the prospect of an on-going mail, media and retail-delivered promotion offering customized and/or stock tapes and CD's as part of the Camel Hot ?lracks Music Club. • Features customized tapes/CD's as retail offers and stock tapes/CD's for mail-in proofs-of-purchase. • Provides a forum for liquidating excess Camel premiums for proofs-of-purchase or as a showcase for new Camel items. Provides Camel with the latitude to allocate additional focus and event frequency to known competitive smokers who are music prone.
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CAMEL BRAND PROMOTION OPPORTUNTTIES I I r UTILITARI_A_N INCENTIVES (Cont'd) A BIC CORPORATION BUS SS RELATIONSMp (Cont'd) A -New Relationship • The BIC Corporation, at the request of Total Marketing, seeks a relationship with R.J. Reynolds Tobacco that will build hQjh companies businesses. - To that end, BIC will work with R.J. Reynolds Tobacco to build its cigarette consumer base. • The Relationshin: In exchange for a CAMEL Brand national trial incentive program employing BIC razors, lighters or fragrances, BIC will: • In-Pack CAMEL offers over 7 million BIC retail five-pack and two-pack packages. • Flag each BIC package with the CAMEL offer. • Benefits for CAMEL Brand: . - - - - - - - BIC sells its disposable lighters to smokers. Assuming an RJRT SOM of 30% and pro-rata purchase patterns, RJRT would reach 5.46 million competitive smokers with an initial offer in 7.8 million BIC packages. BIC welcomes a continuing relationship with R.J. Reynolds Tobacco and further inter-company programs that will build RJRT's business. - The program is excellently targeted to yield highly efficient delivery of competitive Marlboro triers. • BIC also manufacturers the Executive Metal Point Roller pen and is prepared to work with CAMEL to build the CAMEL business by using this item. • For an order of 1,000m imprinted Executive Metal Point Roller pens, BIC will supply CAMEL with 50,000 imprinted Executive Metal Point Roller pens for Sales Force use at no charge. • Therefore CAMEL can combine BIC lighters, pens, shavers and fragrances to create retail incentives which are extremely attractive to men and women while capitalizing on a BIC new product introduction and/or the Executive Point Roller pen offer. I
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ir°uduced by R.IR VII. SI,RATEGIC YisloN DIRECT MARKETING r OVERVIEW I~. IILll4iPITI.R.EY • IMPACT CONSUMER PUR CHASE PATTERNS - INTEGRATED WI?N TOTAL PLAN -. PROVIDE CONTINUI TY • PROVIOE PERSONAL CO NTACT/INVOLVEMENT - IMAGE ENHANCEMEN T VEHICLE - PERSONALIZATION - SPECIAL INTEREST CAPITALIZATION • EXPAND/UPDATE NANE LIST - - 21-24 NALES/FaNALEs - COMPETITIVE AND FRANCHISE - RE-OUALIFY ALL NAMES ~.;011N1 11) V N. V96fii I08ZS f 4' R t . ~~ CEBI bZLOS
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TABIW :I 14-17 AC= GROUP :. . M-P.T=D P=PC_N"' OF TOTAL INDUSTRY VCi.::,mL I t of Total Indust_v Volume Spring Fall 1975 1979 1979 RJR .88 .43 .40 WINSTON :40 .17 .14 SALEM .33 .2i .16 P. Mcrris 1.25 1.18 1.25 Marlboro 1.14 1.03 1.04 American .04 .01 .02 B&W .70 .18 .11 Kool " ' .63 .13 .08 P. LorillA-A .23 .19 .22 Newoort .14 .15 .18 Liggett 9--Mp:p-rs .04 .02 .00 Total % o€.:Industry Volume 3.14 2.00 2.00* SOURCE: tstimates based on number of teenage dap and share of smokers. smokers, rate psr Because Populat'_on was assumed to remain the same from Spring to Fa11,-'1979 and because rate per day did not change during this time, total industry volume among 14-17 year olds was also assumed to remain the same from Spring to Fail. Share for Fall 1979 is provided to illustrate how share has shifted' between brands and companies from Spring to Fall. 4
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CAME~ BRAND PROMOTION OPPORTUNPiTFs UTILITARIAN INCEN'ITVES (Cont'd) A BIC CORPORATION BUSINESS REI.ATIONcHM Bac ound • The BIC Corporation of Milford, Connecticut is a multi-national manufacturer and marketer of convenience-oriented personal accessories including: Disposable razors Disposable cigarette lighters Male and female fragrances I • Total Marketing represents BIC and has presented its products to RJ. Reynolds Tobacco extensively during 1989. • Due to its noted appeal to prospect smokers in focus group research, R.J. Reynolds Tobacco had planned to offer five new BIC Metal Razors as a CAMEL trial incentive m Pack Action locations. A $3.00 retail value costing RJR 60a. Program delayed due to restructuring. • In previous years, R.J. Reynolds Tobacco has used BIC disposable lighters as trial incentives: BIC is the #1 disposable li hter Brand in the world. BIC U.S. marketshare - ¢~%. BIC has the best retail distribution of all disposable lighter manufacturers including grocery, drug, convenience, mass and "Mom & Pop" outlets. I I
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51801 4965 ~ ~ S3 03 3~ • 50724 1834 A;~l?(H~I~~if1Fi Nomv N5vd t-11 M3IA83A0 0 3WO
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BDI Marlboro WINSTON CAMEL Priority Regions ~• - Boston 119 112 85 ! New Jersey 110 71 57 Philadelphia 106 79 63 ; New York 110 58 . 46 Hartford 109 99 . 85 _ Washington 99 85.. 61 Dallas 126 106 -.•.- . 75 Houston 109 107,:. 71 San Antonio 122 117 -- 83 San Francisco 123 65 182 Lo- Angeles 130 64 128 Denver 120 76 190 Riverside Remaining Regions 142 67 159 Winston-Salem 75 138 63 Atlanta 84 138 59 South Florida 96 113 67 Birmingham 80 153 75 North Florida 101 120 74 Pittsburgh 85 108 107 Cincinnati 89 117 103 Buffalo 86 108 93 Detroit 78 99 92 Richmond 92 122 78 Oklahoma City 113 101 114 Memphis 84 128 82 New Orleans 78 116 66 Seattle 101 93 259 Hawaii 61 34 60 Indianapolis 95 104 121 Chicago 78 95 76 Minneapolis 92 83 129 Ln St. Louis 90 98 107 N Kansas City 99 93 117 OD m N Ln m N v
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F CAMEL BRAND PROMOTION OPPORTUNiTIES , ENTERTAINMENT•ORIENTED INCENTIVES (Cont'd) THE CONCEPT: RETAIL OFFER • CBS Records Special Products will produce a customized cassette tape of Compact Disc which maximizes Camel target consumer appeal, thereby maximizing competitive trial and retail movement. CBS will work with Camel Brand to isolate key demographic, psychographic and lifestyle data pertinent to the Camel target prospect. CBS will then encode this data for a computer- generated search of all existent music titles and related consumer data to ou ut a recommended listing of titles that provide the maximum appeal to the Camel prospect smoker. CBS will work with the Camel Brand to prescreen these titles and actual music samples in Camel- sponsored attitudinal research groups. Once final title selections have been approvedby the Camel Brand, CBS will negotiate royalty fees wi11 all involved artists. • CBS will coordinate all pertinent contracts with RJR attorneys. CBS will then manufacture Camel's customized cassette tape or CD with the utmost attention paid to quality, security and timing. Cost is determined by artists selected, their royalty requirements and the number of titles used on the cassette or disc. Representative pricing follows, based upon 2,000,000 units and a representative list of involved artists (Michael Jackson and Tina Turner are eztra. ) All prices include full packaging customization ex. art. Six Song. Compact. Disc, --- Under $2.15 Eight Song Compact Disc Under $2.35 Eight Song Cassette Tape Under $1.95 l
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B. NEW ADULT SMOKERS AND QUITTE?S The purpose of this analysis is to identify trends amona new smokers and quitters, and to estirrate their impact on company and key brands' share. It is not designed to be used as a tool for developing marketing strategies for these population se5men ts . The analysis is divided into three sections: • New smokers and quitters by demographics. • New smokers and quitters by categories. • Estimated impact of new smokers and quitters on R7R and competitive companies share. '• The pre vious report included a summary table on the number of new smokers and quitters and their effect on total industry volume:z_zBecause there are nc data available to suggest new smoking and quitting rates changed from Spring to Fall 1979, this tabZe has been omitted. This table will be provided on a yearl^Y-basis rather than twice a year. NOTE: NFO~ efines a smoker as a person who has smoked cigarettes in tlze past seven days.. The n•:..*nber of new smokers and quitters teni!°Lb be over estimated since this definition includes sanok,ers•who "start" and "quit" several times a year. However, the "share of new smokers and quitters across demographic groups and.::ccmpanies is .:elieved to be unbiased. As a result, NFO ficures were combined with HEW estimates of the total new smoke s and quitters to calculate the effect on company share. I - 9 - 50125 4297 •
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(CO^ t_.._ec) SU.-.:,=,R:' OF : r'N.D:NGS :. S^ckinc ?:nonc ^_'a=_ 14-17 t:ce (Grouo/?~cinc (Cont_:,:e~) . American, Liggett & Myers and Bo: all conti.^.ue to lose share due to the aging process, primarily because of decreasing shares among 18 year olds, and stable or increasing shares among the 50+ age group. Lorillard nearly breaks even due to the aging process. 2. New Adult Smokers P.nd Quitters • Males and 18-24 year old smokers are the most active groups in terms of starting and quitting smokina; that is,relative to their share they have the highest startinq and quitting rates. . There is no indication that the ultra low tar•category is walking smokers out of the market: relati've to share the-quit rate among ultra low tar smokers is not signif- icantly greater than the quit rate among either fuller flaxar low tar smokers, or =uli•flavor smokers. :•.i . • RJ8 continues to lose share due to the effect of new smokers and quitters. RJR had an increase in losses in Fa12-Cm-1979 (-.16 share versus -.04 share in Spring 1979) due-,m both a decrease in new smokers and an increase in ,gKitters. -.....; . Lorillard and American both lose share due to the effect of new smokers and quitters. Liggett & Myers app.roximately breaks even, while P. Morris and B&W gaitL,share from the effect of new smokers and quitters. .._ . u, F~ CO m r : ~ . ~ m 0)
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1:)r1eci I' + (e . • MARLBORO'S DOMINANT SON/SOS POSIJ&j AMONG YAS CURRENTLY PREVENTS CAMEL FROM HAVING SIGNIFICANT PERCEPTUAL USER ADVANTAGES. , - THE YOUNGER 1 ulASS FAVORABLE PERCEPTIONS . ` .~~~~.QM A BRAND FOR YAS THAT <... . .. IS MODERN/UP-TO-DATE. 1989 TOTAL TOTAL DIFFERENCE "USER PERCEPTIONS CAMEL R B TOTA 18-20 M Q) (%) Q) FOR MALE SMOKERS DOESN'T TAKE ITSELF Too SERIOUS FOR INDEPENDENT PEOPLE MAKES DEF. STATEMENT FoR PEOPLE WHO TAKE PRIDE ~ 33 55 62 -3 -9 -10 -19 -12 -22 -14 - -30 25 38 55 32 FoR ADVENTUROUS PEOPLE 34 FOR WORKING CLASS SMOKERS 44 FoR AcnVE/ExcITING Guys 28 FOR PEOPLE RESP./ADMIRED 17 FOR YOUNGER ADULT SMOKERS 15 A MODERN/UP-TO-DATE 48 F4~- N~'~!~ "`P~t° g~~ ~ ~~ 1:~~~ A pOPULAR ~RAND BRAND hIOULD CONSIDER SMOKING 43 BRAND FRIENDS WOULD USE 40 27 48 67 46 49 59 49 38 36 77 83 85 -15 -16 -21 -21 -22 -24 -32 -34 -29 i ~ -33 -42 -40 -53 -45 =54 60A1 67LOS 0t6t Z08IS
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:A1u tt ti=T~s tt :oP 10 lsiu :nAxss et aae• rvrat ~4E~Ei Lt ~ 11.:3: _ - s 4 s t. U~±L s un atx sor.=R 1 n` t07 ! . & e• r 1 lfif 12 11 •• 6* 21 20 13 13 11. 10 10 , ! 1972 11 13 17 13 1 9 0 Ifarl~.e• ti o 1 A l0 i 4 3 \ lfif S 13 1 4 3 ,. 1972 f 34 19 10 A 3 ~.i~:a.% t.01 r 11 t T ~ ~'~f 1fT 3 . ~ lfif .. • .. . s s ~ ~ . v lf ~: .~1 s u i s • ~ r. 1 xa 1f i 10 9 13 ! f ~o 1flf . 1 ~ 1 1 7 1f7t S 1 2 i 7 6 . • •. 10 i0 ~ • . ~ 7 7 7 • 7 i 7 7 7 7 pm•z *cOwz. / •• r 3 7 12 , lfif i •• 3 4 ~• ! : ~ 1f72 ~ 1 • 2 3 4 7. } l :a~t L1. V lfif i •• ~ s 7 ~ ' 1f72 3 1 2 , 3 i i aC. r • T .• .• .. •. •• .. 1lif 3 ~ 1972 2 2 3 3 2 ~ Y ItlTOf tV a 1ltf .2 > 1 1172 . 2 1 2 3 2 =~ Tar..tea Til e (tl F-+ 1 ii 1969 - ..•.., •• 1 r• .a . 3 •• 2 •• 3 •• 3 OD m 1/72 .7 ~ A 2 2 3 N *t.ureas srrias 11TO Sera.ainsa lfii, Sfif, 1972 cn •at.t Avat1a11• -3. m • m 14 t~cwen
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Z. j 'ilC+'•:SC i.clnc F-ranChise agino is the .^.atu-al process of young ad;:lt smokers (18 year olds) ent_r_:,g the snoking ropulat•on, and older smokers (50+) leaving the smoking pc?ulat:on. This analysis addresses the e:fec:t of this process on each of the six companies and five key brands. TABLE III SHAR_r AMONG 8 AND 50+ yrro CLDS ! Share %mona 18 Share Amono 50+ Spring sall Spring Fal 1975 1979 1979 1975 1979 1979 RJR 28.0 25.0 23.6 33.3 33.3 32.6 WINSTON 12.8 9.2 8.2 11.2 9.6 9.8 SALEM 10.5 11.4 10.2 8.1 9.3 8.4 P. Morris 44.0 .52.0 54.9 15.3 15.7 16.5 Marlboro 34.6 41.2 42.1 5.0 ., 3.8 4.9 American ~ 1.4 .5 .9 17.7 17.9 17.3 B&W r + 18.0 11.1 9.6 12.5 12.3 12.6 Koo l 18.0 8.7 7.9 4.2 3.8 3.9 P. Lorillard 8.0 10.5 10.7 12.3 12.9 14.0 Newport•== 3.5 9.0 8.0 .6 .3 .3 ~ ., ~~...~ Hvers Liggett & .6 .7 .3 7.5 6.6 5.9 _ _... .,.....~ ., SOURCE: ;Share estimates based on NFO data. Share a,mong 18 year olds e#f^:.mated by trending share a.*~ong 16-17 to 18-20. _.: •<. TABLE IV .•: NET EFFECT OF AGING Share Point Cha_nce Spr-ng Fall 1975 1979* 1979* RJR _ .. , -.06 -.10 -.11 v, ~ WINSTON .00 -.02 -.03 00 S ALEM +.04 +.03 +.02 m . P. Morris +.40 +.40 +.42 Un m Marlboro +.40 +.41 +.41 ~ m American -.22 -.19 -.18 U 0 B&W +.06 -.03 -.04 N NN Kool +.20 +.04 +.03 61 M ~ P. Lorillard -.03 -.01 -.02 ~ Newport +.03 +.10 t.08 Liggett & Myers .06 -.06 -.08 Source: Estimates calculated based on rate per day and share of smokers. ~ Spring and Fall 1979 share points are annualized; that is, they represent the share cains/losses that would be realized for an entire year based
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CAMEL BRAND PROMOTION OPPORTUNTrIES ,.. i... UTILITARIAN INCENTIVES (Cont'd) CAMEL LIGHTERS (Cont'd) THE CAMEL SURFBOARD Perfect for CAMEL's Sunbelt consumers. • Cost includes three color graphics and instructions. Leadtime is four-five months. 1,040,~ 3,000,000 5,400,.400 $2.34 $2.12 $1.96 THE CAMEL FILMSTAR • You ought to be in pictures. • Custom graphics on all sides make this conversation piece. • Priced as a disposable. Leadtime is four months. 00 3.000.000 5.000.000 i $1.14 $1.08 94¢ THE CAMEI. LIGHTER • A new item shown in prototype form. - Will be produced to look like two Camels laying side-by-side. - Slim in design and as tasteful as a Camel. - Priced as a disposable. Leadtime is five months for initial orders, three months on reorders. 1.000.000 3•000•000 5•000•QQ0 $1.15 $1.08 97c.
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t'ev F• i^cs r.nd ^'-ends • RJR lost .11 share points in Fall 1979 due to aging, vers-us a loss of .10 i.n Spring 1979. - RJR's increasing losses are due to a declining share among 18 year olds coupled with a relative_y stable share among 50+ smo~cers. - Some of RJR's losses are due to Winston, which is losing share -mong 18 year olds, and to Salem, which is experiencing decreases in its net gains due to aging. - There are no indications that these trends will level off in the near future. • Of the six companies, Philip Morris is the only one which realizes substantial gains from aging. Philip Morris ga'_ned .40 share in Spring 1~-W and .42 share in Fall 1979 due to the aging process. Much of *Philip Morris' gains came from Marlboro, althouch it apoears=.that Marlboro's share among 18 year olds is beginning to stabiliae, with only a .9% increase in share from Spring to Fall I 1979.,~, - The grn.rth of other Philip Morris brands among 18 year olds will hilip Morris to continue to gain `.rom the allow..,2 aging process _ even if riarlboro stablizes (total Philip Morris' share of 18 year olds'iaCreased by 2.9% from Spring to Fall 1979, versus Marlboro's increase' of only .9$) . • Lorillar3-.nearly breaks even in ` ter:ns of the aging process. In Fall 1973 it lost .02 share points due to aging, and lost .01 share points in Spring 1979. While Lorillard is gaining share among 18 year olds, it is also gaining share among the 50+ age group, thus causing the ef!ects of aging to wash out. Newport . has a positive effect on Lorillard in terms of aging (it gained .08 shase•points in Fall 1979) , but it is neutralized by losses from other Loril lard brands. o American and Liggett & 2-,yers are both losing share points due to the aging process, although their rates of loss appear to have stablized. - American has the largest loss of any company. (.18 in Fall 1979) , which is traced to its very low share among 18 year olds coupled with its high share among the 50+ age group. - Liggett also has a very low share among 18 year olds, but its losses (.08 ir. Fall 1979) are somewhat offset by a low share among the 50+ age group.. 5~1~S ~29e
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~ YOUNG DRUBICAM NEW YORK 0 .* • 9I91r1tre Joe w/.= omue0• • Sekt Brochune Ky&k.• Ha Atr Sallooa" - I Ja Ski•• rFishMrML ermin~"~nt • Doep a Aishine• , y v Conv. • Btse nnd Pool Out • Pitino~ - Gbnvettible$ • Swamjbott*• Jeep~ ~I Sa,il,boat!.: ' .' '' .' ' ...' .......... ,~iir p~ 6c~ n ~ ~ Warktp•• Polo$• Movla Sttro• • Pool ~~,~~ ~....... .., .. -•. ... • C~ea ve Presenation . S{r1w~!! r ,. - r•-
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1. New Smokers anc: Qu:tte_s bv Democraahics TABLE V PERCE*:TAGE OF NEW SMOKERS AND QUITTERS BY DEMOGrZl,PWICS natiD THEIR INDEX Rr:.?.TI VE TO THE_ P, S:AP` I ! Of New Smokers % Of Quitters r Index of New Smokers• Index of Ouittc:s' Soriro Fall Spring Fall Spr:ng Fall Spring Fall 197_6 1979 1979 1976 1979 1979 1976 1g79 1979 :976 1979 '1979 58.6 56.7 55.5 57.8 56.6 56.5 103 _ 110 108 110 110 109 F;:ale 43.2 ;3.3 44.5 42.2 43.4 43.5 91 89 9f 89 89 90 :..SL Tt,. 18.4 2 0.p ~ 21. C 15.4 12.9 13.8 182 190 188 152 123 123 .r. `~ 25-34,- 27.0 27Ja:,.23.1 28.8 26.6 26.3 101 118 84 107 `_13 96 3S;-~ 26.2 25.3`•:••'23.1 24.6 26.9 26.6 87 62 7S 62 88 87 r 28.4 26.3- 32.8 31.2 33.6 33.3 86 76 107 95 95 108 ..._.,,._ _ ~ . . ..~.. . _ =y~curce~NFO Estimates ~ * The;W+'>;dexes represent the percentage of t~Ew (Quit) s,::okers the.ae~nographic break relative to the percentage of total smok~xs in the demographic break. ~ z" Key Findiiigs; . Males are more active than females in terms of both quitters and smokers, relative to what would be expected based on their 6hare. In addition, while ~:.ale's share of the smoking market hr.s been steadily declining, their percentage of quitters and new smokers has declined proportionately, still leaving them more active than females in terms of quitters and new smokers.• . The 18-24 year olds are more active than any other age group in terms of both cuitters and new smokers, relative to what would be expected based on their share. Their percentage of quitters did drop in both Spring and Fall 1979 versus 1976, but relative to share quitting still remained higher than any other age group. ~OfzS 4 29e •• 10 -
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Kev Finc.^cs ane '^r^nds: (Cor•,...zued) ' L. . B6W, while caining share in 1975 (.06) d;:e to acinc, is now losing share due to aging, •.:ith s css of .03 in Sprirq 1979 and .04 in Fall 1979. The losses are rart:a'_ly dse to a steady decline in Kool's share among 18 ye== olds, couDled with BsW's stable share among the 50+ age erc-zp. It appears that B6W will continue to lose share due to the aging process. I - 8 -
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T6RLE 3 .--m3iI =-II f MAU 1353 n, 1m A- Ia.SsS&l S In Eaeh Crx2 Prefe n=_ Eaebt Tocal G n =otLI X&Ie ,,,, rocu rMLIe 2=*/Bm,nd Preferred l s 1 l 13.~3 13~ -r;... ~ ~ z z z v, 1 ",_ _ TecA? 33 LQ 3A 1d 2~ U , Pa11 Xa?1 10 12 12 14 8 9 CAJ(CL,e-.4- 8 9 10 u 6 7 Luck7wBlselke 6 7 6 8 5 6 Cheetartield 5 6 5 7 3 5 Philip y6rris 2 2 2 2 2 2 811 oi'if" 2 4 3 4 2 3 ~ :f up lilr~~ hf x .0 Sk ?4 Ak WINSTpiyw: 12 12 13 13 9 10 Lent --- 11 9 10 8 13 12 sAiSKI- -- S 3 3 2 8 5 Pi cero,=_ S 7 6 8 4 7 ..~ L 4 I~ S 6 5 6 4 6 ?larlbov+ S 4 5 4 4 S ..: +ty Hit Pai+rd. 4 6 3 4 6 8 N ewport 4 2 3 2 5 3 Parliaaeat 3 2 2 1 6 4 All other aenthol tilters 6 3 6 3 6 3 Reeriaizg tilter bras*As 4 3 4 3 5 3 j0 PrefewI= 3 2 2 1 4 4 WILIIAM ISTY COMPANY, loe.
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Produce m 1i'll 10- it1 ~...~ ~ .~ .~...~.. • CANEL'S SHARE INCR S NG MALE HAS COME PRIMARILY FRON 18-20 AND SECONDARILY FROM 21-24 YEAR OLDS. RECENT SOFTNESS IS BELIEVED TO BE ATTRIBUTABLE TO LESS SUPPORT/FOCUS DURING NAGNA'S NATIONAL INTROOUCTION. CAMEL EX REGULAR SOS 10.0y 9.0% 9.0y. 7.0% 6.0y. 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% ~ M 21-24 •_0' IN °---C~ 0 fhlr ~~g-~ Jlnhc_~ ~odtar t 6 fii 6 fii Z 08 t s Mar Jun- Sep Dec Mar Jun- Sep Dec Mar-Jun- Sep Dec Mar Jun- Sep Uec Mar Jun- • r.l. S•~ort 1. Vot. Sepfart f Vol. Sup o • tAS • lStd . Nin. • pRGN/1 1t1a1t~C. .~t[!k~ _!lttlrbY_ Acl.._.14tro. • MS tle•.y-.r /. MISA /letstl Prlority Reg. S.p. le N.tlor•1 M011E • Illnl.al 85 -85 -Q5. 6 86 .86r c86 ~ ~ '. ~ six iT S noL~ AvERAACE 3 3 3 7 1 3 -~ 1 5 . . . . 5.0 5.4 2.7 -> 5.2 5.9 11 igh Low 113 gh Very fl igh BTBT tiZLOS
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Kev 'indcs . R7R's s.`.are of teenaae smokers decl:ned from 21.3t in spr::,g . 1979 to 19.91 in Fall 1979. Winston's share of teenage smokers has declined steadily from 1975 to Spring and Fall 1979, with a share of 7.2% e in Fall 1979. Salem's share of teenage smokers remained steady from 1975 to Spring 1979 (10.6%) and then dropped considerably in Fall 1979 (to 7.9%). A fourth reporting period is necessary to dete rline whether Salem's decline in Fall 1979 indicates a significant trend. • Philip Morris continues to gain among teenage smokers, accountinq for 62.6% of the 14-17 year old market in Fall 1979 versus 58.8% in Spring 1979. •. MarlSoro, which continues to gain share among teenagers, accocihts for a large portion of P. Morris' share among this age crzop. Marlboro's share of teenagers was 52% in Fall 1979i. . .; : ;Tr U. --~•' •,~-V, - Other P". Morris brands are also increasing in share amon= teen:agt`smokers. B&H, Virginia Slims, Merit, Saratoga, and ParliA=ent's combined share increased from 6.8% of the teenage smok,e~s.,in Spring 1979 to 9.2% in Fall 1979. (Because none .-of the orands individually account for much of the teenage znark:iet - 2.8% at most - they are not presented in the table.) . ~.i,. „ • P. Loritiard, is the only company o ther than P. Morris to be gaininc _I~b are among the 14-17 year olds. Newport's increasing populailLy among this group is the prime contributor to Lorillard's growth_:.a share among the 14-17 year olds. Newport overtook both SALEM and,.Kool in share of the teenage market in Fall 1979, making Newport-the second most popular brand among teenagers, after Marlboro..: . American's share among 14-17 year olds declined from 1975 to Spring 1979, and increased slightly in Fall 1979. The increase is not sicnificant and may not indicate a positive trend for t,,merican among this age group. American remains an unimportant factor in the teenage market along with Liggett & Myers, whose share among the teenage market was.only 0.2% in Fahl 1979. o B&W's share amon: 14-17 year olds has been.steadily decreasing, primar'-ly due to Kool's decline among the teenage market. in Fall 1979, B&w held only 5.2% of the teenage market versus 22.0% in 1975. - 5 -
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Filte UL . ...-- U .L~ ~ns mvwg . U.L. Carton I + Filters Carton Lighu Guton ~ Lighu p Ltfi ___ L Carolers ~ Video W Dance Party ~ piano Hard Pack Club Carmell.oYo Hard Pack mmk Genuine Imposter Wata Skier ~ Camel in Purple Shi Camel Pack June Pop-Up SpRywoth Moves Star Pro Camel w/ Trophy HoUyWood 11 Arcoc Spy Treasure Hunt I'iusician 507647980
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Kev Findincs (Continued) • The 25 and ove: age croups are relatively similar in their quitting and new sraoking activities. While there are some fluctuations bet- ween 1976, Spring 1979 and Fall 1979, the fluctuations are not consistent enough to indicate any clear_trends in quitters or new smokers imong the various age groups. , 2. New Smokers and Quitters bv Catecories TABLE VI PERCENTAGE OF NEW SMOKERS AND QUIT^-'z'RS BY CATEGORIES AND THEIR INDEX RELATIVE TO THEIR SHARE . ~ ... !`, ? 1 0: New S.-nokers t Of Quitters ~ Inde x Of New Sa.okers• Index 0! .= Spring 1979 Fall 1979 Spri.Iq 19i9 Fall 1979 M Sprir.g 1979 Fall 1979 Spring i979 X -FIL ~ 7.4 7.0 6.3 7.0 ~ 73 81 62 NOr'-M?=F'i - 0L ~ F nhr~'Tv or .:.~ ~ 31.2 26.1 33.1 32.4 100 88 106 30.6 31.9 30. S 31.9 104 98 104 vkaXer Flavor Low T ar~ . 24.4 25.8 ~24.3 24.9 106 102 105 ~ J ~ ~ • "` ~ a L : ow Tar . 6 2 6 1 6 2 7 0 100 8S 100 . 01 . . . . ~ ~ .~..- eF-rTr--Iav cr 6 15 2 16 15.9 13.4 93 117 9S Lo:x"~ r ,~ .s . 15.2 . 18.8 14.2 /S.2 122 121 114 _ 1...a Fuller Flavor Low~ 12.0 1s.1 11.0 12.3 120 120 110 flI'Gra Low Tar 3.2 3.7 3.2 2.9 128 128 .128 Source: NFO Estimates * The indexes represent the percentage of New (Quit) smokers in the category relative to the percentage of total smokers in the category. Key Findinas: 0ui:tczs• Fall 109 98 98 97 97 98 98 100 o There is no indication as of yet that the ultra low tar category is walking smokers out of the market: relative to their share, ultra low tar smokers are no more likely to quit smoking than are fuller flavor low tar smokers or full flavor smokers. How- ever, the low tar category, particularly menthol, obtains more I 50125 •299
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~m•~ rS1MENTSs - Sr~BM.T I~~ ~C ~ PR8F~t8~lCb5 B- $2 Z.iIL& x Of Students I___ n,_Sach Orouo Preferrit& Sach: R Freahman - Soohomcre Junior - Senior Male MRa1 l_ ~f ema l e Pref.rred S~ 1 $ 3 l ~ ~ ~ 1em-1pi. 2" 1r2 {1Z 2~ 31 4~ U 21 33 - Pall ?4a11 12 14 10 9 10 13 9 12 CA?QZ. 13 12 6 7 10 10 5 6 Lucky Striks 8 10 5 7 10 12 5 5 = "' : Chesterfi Td"~e 5 6 3 5 6 7 4 5 ~ Phil'io ltorsf8m 2 3 1 1 4 4 1 2 - r.. All 'M1er .R 2 3 1 2 4 5 2 3 :4+ ~- ~.~ 31 U 23 A2 .U Ad 22 Al Kent _ 9 8 17 14 9 7 16 16 WRtt5TON 10 8 7 9 8 8 8 7 oieeroy 6 9 6 7 7 7 5 5 S4M 2 1 9 7 3 2 8 6 LkK 6 7 5 7 6 7 5 6 ~ . ISarlboro 7 6 5 6 5 4 4 5 . Hit Parade 2 4 6 5 2 3 5 7 ~ Parliaaent 3 2 4 3 3 2 4 2 . Il.+rport 2 1 3 3 2 1 4 2 A.11 other sentbol filters 5 3 6 4 5 3 e 6 ''m". Resmirsina filter brands ANN" 5 4 5 2 5 4 5 3 Ho Pref.renea 1 1 1 2 1 1 2 2 WILLIAM ISTY COMPANY, Inc.
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B10 Sam EMR= -ZM= = i MM PRUEM= isss na I= B. atiMan _ Tne/8rrd P2hMed ~ ~ ~ ~ ~ ~ ~ ~ r r tion-Filter. ii Q 22 22 ii 12 fii U Ps11 1Sa11 10 14, 6 7 13 14 8 9 CJIMM 9 8 4 7 10 12 6 7 Lucky Strik%ev. 5 7 4 5 7 9 5 6 Cbestertie ~ 7 6 4 4 5 7 3 5 1 2 1 2 2 2 2 3 All O~er '` 3 4 3 3 2 4 2 4 . . ~„ ~.~ jamr• . %1W "Of='t 1 t er . ?ottl 62 16 ?5 bZ bQ 33 b3 b3 r • ~~- ~ WZ1iSTON U 13 8 10 14 13 9 10 1C.nt _ ~ 11 8 16 14 10 7 13 11 Ak- • SAL$K -~ 4 3 7 4 3 2 8 5 •= Viceroy ~„ 4 6 5 9 7 8 4 7 Licli 4 6 5 7 5 6 4 5 K.rlboro ~ 6 5 4 5 4 4 4 5 Rit Parade 5 4 5 6 3 4 6 9 Newport 3 2 5 4 3 2 4 3 Parliasent 2 2 7 4 2 1 5 3 ~ 411 other aenthol tilters 6 2 7 2 6 3 7 3 ,,,,,8Mairsirg tilter brands 6 5 6 2 3 3 5 3 ]JO r=efereres 3 3 3 5 1 ~ 5 3 • Less tban 0.5% !~ Of StudeQts In Saeh Orono Preferr,Lne Eaeb: Presssan - SQ,p~aoor, _ Juxior - Senior l~iale Te~ale ~e Te~als WILLIAM ISTY COMPANY, Isc.
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Y.ev Findincs: (Continued) than its share of new smokers. This may somewhat re_°iect the phenomenon of smokers startina and quitting several times.a year. New smokers and quitters by category will continue to be tracl;ed r in the future in order to gain a better understanding of the effect the ultra low tar category has on new smokers and quitters. 3. S~.are of New Adult Smokers and Quitters Amonc Comoanies and Key B-ar•cs, and E_fect on Share The first table presents the share of new smokers and quitters by company and key brands, and the second table presents estimates of the net impact of new smokers and quitters on•,company share of market. ..._s TABLE VrI SFiARE OF NEW ADULT SMOKERS AND QUITTERS AMONG COMPANIES AND KEY BRANDS Share of New Smokers Share of Quitters . .. . ~i . Spring Fall Spring Fall 1976 1979 1979 1976 1979 1979 . -, :,~ -~ RJ R rs; 36.0 34.8 34.5 35.5 34.7 36.5 WINSTON 13.0 11.9 13.3 13.5 13.3 10.7 ,lw: SALEM 10.0 11.4 10.1 11.3 10.5 12.5 P. Morris 25.1 26.2 36.7 23.2 26.4 27.6 Marlboro-=' 13.9 14.2 20.8 13.1 13.2 15.8 American ~ 11.6 9.6 7.5 12.0 11.4 9.6 A k w 13.4 13.0 8.4 14.3 11.9 y.a ~ Kool 2 8. 6. 5 5. 7 7 . 6 5.9 D•s P. Lorillard 10.3 13•.0 11.5 10.5 12.7 14.3 New ort 1.0 1.6 1.8 1.2 1.1 1.7 p • c,., Liggett & Myer s 3.1 2.9 1.4 4.4 2.7 1-1 2.1 ~ N Total 0 New/Qu its 1.8 2.1 2.1* 3.1 3.4 3.4`' ~ (Millions) . m ~, m Source: NFO Estimates '~ Because no new data was available to suggest otherwise, the number of new/auits• was assumed to remain the same from Spring to Fall 1979. Share for Fall 1979 was provided to illustrate how share has shifted between companies and brands from Spring to Fall. - - ~ ~ _ 5o1PS ~~oC
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, WILLIAM ESTY COMPANY ..t.......t. A D V! R T 1 S 1 N G C ~~~~~7A_ ~ 5 -~ WnLL&jA c. tAsoROE REGtSTEREp PROF. REPORTER 4 : t ia~ o..L M. BANTA .5*P 100 fAfT at•• Sr.tit M(W vpRY +y YOVIN RF.SEARCH L\STTTLIT4 1959 CIGARBTTE SHOKZVC SNIIY AMONG HICH SCHOt2 A.YD COILEGE STVDEN*S i %ir. W. A. Sttgg R. T.. Reynolds Tobacco Coarpa,n7 Winsteit-Salem, North Carolina 1 Dear- Archie: .1 Attsehed are six copies of a su:ensry of the :ind3ngs of subject stbd# together with the like findings of the Institutets 19S8 studFjNfor convenient ccazparison. Th.re studies indicate little change in the incidence and volisne of smoAing and a further shift in preference from non-filters to the filters and especiall.y to the menthol filters. Preference-wise, WGZ and WDMON are shown as holding their shares substaatia717 constant s+hile SALEM increased its share, eapeQ3a11T smong h3.gh school students. Additional copies are available, if desired. 4 ~ tb best regatds. ~ %V'ad Att. hEo=y Exhibit # 1 Date: s2 Alfred A. Betz, RMR 00
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• YOUN_G EsRU81CAM NEW 1(ORK MYOAK, /KW Y~ MEW n0(1•HMi A!. A. 4lOAR18SEV VloM Pns>ant 1A&nop.TMM (llt) 1109811 Mr. Sdmund C, Senior Br.nd M a jer R. J. Reynold~ baooo Co. 401 Norih M.In tnet Wincton-Ssaem, C 27102 Deu Ned: A. per our di.c Illon, the followin= itenu In-houoe or In 6tomr,e will be destroyed: (tee key for notations) 0 Msmt. Meeft hollday AIL_ 2 *i ; I..~r.::.....:::M.f Pvs Rrova ~ ; ~ ;H!`oroccy ciei.. ofinement work . Jet Skl • e - $ou* - Motoecyciss : ~nj.• - Fithin=" - S.ilinr • St. Lo s Focus Groups • Gbnocptutl Drnwlnjs•• - Tuxedo* • Joa AAy-~lo~ - UltraGed • • Joe Video $cnsen•(PMl) • Neon loe* • Phase y, 11 • `Yoe w%~7Y'YAS,- uoa+ • Anmtnl Joe. • ODnaptg.. ~~rhsr,,-t Exhibit # (Q f,( Date: Alfi'ed A. Betz, RMR 507647978 i I
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A. c!v01;?NC n,`SONG ':ur t 4-1 7:,GE GRO:JP Scroking behavior of 14-17 year clds is analyzed :n crde: to improve our ability to forecast futu:e trends. It is not desic-.ed to be used as a tool for developing marketinc strategies for this population croup. The analysis is divided into two sections: . Share of each of the six com=anies and five key brands among the age group. • Net effect of aging on each of the six company's franchises and five key brand's franchises, and :uture trends. The previous report provided a demographic desc.ription of 14-17 year old smokers, including population, incidence, rate and volume. Since population estimates are'made only on a yearly basis, this table will be provided once a year rather-:han semi-annually (it will be provided semi-annually if there is a major chanae in rate per day, which would affect-volume ficures). 1. Share•of Company and Key Brand Among 14-17 Year Old Smokers Table I il'.:strates share of companies and key brands zre,-ng teenagers, and Table II illustrates the percent .of:industry volume for teenagers among companies and *:- )Cey brands. TABLE I ~ SeiAP.E AMONG 14=i7 AGE GROUP ~ .! , j. . Share P.mor.a 14-17 --T 1975 Sp==ng 1979 Fall 1979 RJR ' ' 29.9 21.3 19.9 WINSTON. 12.5 8.3 7.2 .: , SALEM 10.6 10.6 7.9 7 P. Morris 39.6 58.8 62.6 ~ Marlboro American 36.1 1.2 51.6 .3 52.0 .8 B&W 22.0 8.8 5.2 Kool 19.8 6.4 4.2 P. Lorillard 7.3 9.7 11.1 Newport 4.3 7.6 8.9 ett & t4yers Li 1.3 1.0 .2 gg Total of 5 Brands 83.3 84.5 80.2 Source: NFO Estimates -3-
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f G A =0 Alfred A. Betz, RMR tMOC~l-V A a L-T 4 8es SHARS OP SKOLEYS: DT LCE - TOP TEN nkAAD 2TEMS Attached are shares broken by ate for the top tna brand iteas (ranked according to June narter Comparative Sales). Aa you knov, these breakouts are ased on pF0 sbare of amokers and don't exactly aatch cosparative cales shares for several reasons. Table I;,thovs share by a in April, 1972. Of the top ten braad la tenap,&j7( iteas, .Winston Ein=,j Marlboro Kina and Lool King have sianif- " icantl iS er shares amqnt younger smokers than amonS the population Table t` vs cha¢Ses i share by age for the top tea brand itema the past six ears. Marlboro Ling and Kool Ling are the oal nds that ha shovn substantial gains anont youn=• adults ~o= the pa ix years and these, of course, have beea tk~ee}t overall er:or>rera a:.on: the top ten. JHSbspd~-'`~ cce Mrr'`'olin Stokes 2!r H. Stone Mr •. 3lavins, Jr. Mr. T.' P. 8aller • iLn N co m ~ Ln m m N Exhibit # Date: ~ L c ~ 9d
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TARGET SMOKERS PERCEPTIONS OF THE CAMEL SMOKER "HEROIC CAMEL" ---------------------------------------- -- «PROJECTIVE PICTVRE DRAWING <4;~ i,k In the overall, "Heroic CAMEL" ads seem to convey the idea of V%W the CAMEL smoker pursuing the good life, having 0*A*gs going xy~ "" both nicely and just as he wants. There is a s of the• Imm'"t CAMEL smoker being one of life's fortunate peop;im..The CAMEL iftm "° smoker perceived by the target group for "HeroicaCRIEL" is: ~ ...~;,~ ~. Above all, enjoying life. he's on an "up" mood. Fond of sensual pleasures. He pursues these, ains them *` and enjoys them, and not the least of which is, i enjoyment - ~ ~ of smoking CAMEL cigarettes. ,m.`,- A coolly self-confident man either of the aggr «M; true easygoing type. 4** ~e ~.~ Woe ,~ ve WOW ~~ - Living in a social environment, interacting wther e po le p . °~ 001"0 Seen as having positive personality traits suc~ being ~°~: ~- M110 friendly, helpful, a nice guy, etc. ~ If the smoker imagery generated by the advertisi..~~re to ba ~ ~ typecast, two distinct images of the CAMEL smoke rge: ~ . ~- The aggressive mach2 ty2g, who is a virile, muscular, somewha "" strong macho type who tends to dominate his surroundings. h is a freewheeling hedonist, pursuing thrills and excitement. "" he goes for fast cars, fast women and whatever makes him teelr. ~ good. ~ ,~. ~~- The s_snuq selt-satisfied tvfle who is not aggressive at all. >A` This CAMEL smoker is relaxed, easy going and contented. He ~ takes it easy. Everything is going his way. ~ SWI
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volm Z momo i2.Zq n• = 5=2 Ma.h School Students. Total 10 2 I 3 w 2 Total Taaag Men 60 64 10 7 24 25 6 4 T ot al Zouaa Yomen 76 86 u 7 10 7 3 2 Freshmah-.Se&omore Classes 21 Z LO 3 11 L" 4 3 Total 71mmg Men 65 71 11 8 19 18 5 3 Total Zbarig Wam= 83 90 7 5 7 3 3 2 :,r; ,Tuni,ot-Setl.nr~ Classes % §3 21 3 ?b A 1 3 J Total ?oung Men 59 61 10 6 25 28 6 4 Total Ybmag Motsw 74 82 12 8 11 8 3 2 -co11eAe Studeert'e. Total h? !l I JU U X s A Total X.0 41 38 10 i2 38 42 u e Total 8#eem 57 57 6 8 30 33 7 3 Preshmarr-Soohomore CLases 4.9 ~ 1 U X 22 LO 1 . Total Xen 43 40 8 13 37 39 12 8 Total xoaea 60 56 5 6 28 35 7 3 Juaior-Smior Cls.eses 0 41 LO U 3Z 2 1 A . Total Men 38 37 12 11 41 45 9 7 Total Vonen 55 58 6 9 32 30 7 3 ~ Y 0 WILLIAM ISTY COMPANY.10c. N
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a~q~~stL4tP~Ii(P ~~oe in Front of Postiei ; - ~ 1LlghtaSida o 7oe w/o S .Vi '~ • .. d c ~ ~ /. 14 Hard Pack. Scaffoldin~ ~ mooth 1 Cover ~t • a ~ .. , :..• .., ,. . , . , .,..~.~. • . ~..,,. .~' Sail' X 4 .. r . • .. ~,. . , . . .. ,. . ~ .,~ . : . . ~~ ': ~ ; : ... . gIAIM sh ~ c 'T•Shirts Nlardi Grasll•lar~-Ps ~ ' fOt Catnal CteatlVE $Oln; fOrward• . ~ irt of this work (~n the forms ad ~ave purpote•.stron ty tuS$estin$. '~ otr u We wiU neq Addiaonally, this wor has not been rete ~~ ~~a ~1 once you'va raviewed e list. deswetion is approp su st this jurteture• 507647981
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To : Emily ,,--Ann E. Biswell October 15, 1987 Re: Project LF Potential Year 1 Marketing Strategy As discussed, the Brand will explore introducing Project LF in 13 priority regions rather than a traditional national launch as is currently planned for January 1989. Prolect LF is a wider circumference non-menthol cigarette targeted at younger aduit male smoker (primarily 13-24 year old male Marlboro smokers). This product is also being explored as a CAMEL line extension and will be evaluated (new brand vs. line extension) following receipt of TPT teet results which will be received for both products early next year. Ultimately, this decision will be based on the relative potential profitability of these propositions. Attached, please find a list of RJR sales regions with Marlboro, WINSTON and CAMEL BDI's separated as priority and remaining markets. The Brand will work with Financial Services - Marketing to project/compare the relative profitability of a regional launch versus a national launch for LP. We will need to provide the following information to Financial Services in order to complete this analysis. o Spending Levels - we are assuming S100MM for a national launch and ;70MM for a regional introduction. o Share of market projections - pending more formal share projections from the Forecasting Group, Brand and MDD previously agreed that .6 SOM is the most likely outcome of a national launch. Financial Services will also need optimistic, pessimistic, and most likely S0M/volume projections for the thirteen priority regions. As we discussed, since no TPT results are available at this time, these projections may be based on a percent of regional industry volumes. o Cannibalization rate - again, without TPT results this number will be a rough estimate for both a national and regional launch. If I can help in any way, or provide additional information, please feel free" to call. er ,.J. S. Mil ~ JfRf: st Attachment cc: H. T. Parks A Gkt[Er Exhibit # (0 L( 2 Date: (- S~ Alfred A. Betz, RMR i
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== =b f ~ mnA3m A- III 2gil ~..~_ 1..n Eaeh Ore~ue Preferrint Eael~ t ._I~..~.~~._~ typ,elara:,e preferred Am ~l ~ ~Lx„~e ~ so~ ~ AMA Nnr--- Tet. Z 3Z 42 4.3 a A 31 Pa11 Kal~ 11 12 11 13 9 10 Ct,KSi.. .v 9 9 12 11 S 6 LuekT4NImiLke 7 9 9 il S 6 sld Cheet S 6 S 6 4 S ~ Philip rris 2 3 3 3 1 1 flll 010111m 3 4 3 4 2 3 FOt. sr+ *-_i AZ 12 1A S1 22 bl . Kent t** 12 10 9 8 17 15 XDtSTOlt 9 8 9 8 8 8 oieerv7 ' 6 7 7 8 S 6 SALEK . , S. 4 2 2 9. 7 , L & K 5 7 6 7 5 7 Xar1bar,060 5 5 6 5 4 6 Rit Pamir 3 4 2 3 5 6 Parliament 3 2 3 2 4 2 N.wport, 2 2 2 1 3 3 Ln llll other msAthol filters 6 4 4 3 7 5 ~-A 8edaiairg tilter bra,-4s 6 4 6 4 5 2 co m ~ jo Preferenee 1 1 1 1 2 2 Ln m N 4 40 WILLIAM ISTY COMPANY, Inc.
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':A*JL~, •iII' ErF EC': OF NEW SMOKE?5 =,ND OU_ :":'ERS ON SHARE OF MARKET Spring Fa11 1976 1979 1979 ~ RJR -.04 -.04 -.16 P. Morris +.08 +.05 +.30 American +.02 -.05 -.01 B & W +.03 +.12 +.07 Lorillard -.05 -.09 -.20 . •. Liggett & :".yers -.04 +.02 0 ' 0.~:.i Source: Esti,. 1tes calculated based on number ~-, of New/Quits, rate per day, and share ~-~ .. of smokers. Kev Findinqs:" .'..''Ur.; ~~Com-~y s~~ was not significantly affected by new smokers and quitters in e:~her,~.976 or Spring 1979; however, in Fal: 1979 there were some majoxashif,_in new smckers and quitters between companies, generating larger gains and larger losses for some companies. Another reporting i%do period isSecessary to determine whether the changes are significant a• and indica~lonc-ter•n trends for the companies. • R.7-R-lost .16 share points in Fall 1979, versus a .04 ~ lo.isin share in both 1976 and Spring 1979. The in- crease in loss was due to both a decrease in new smokers .•..., ~~ art3"-~n increase in quitters. • P. Morris gained .30 share points in Fall 1979 (versus .05 in Spring 1979), primarily due to surge of new smokers to Marlboro. 1:11~ ~ • Lorillard lost .20 share points in Fall 1979 (versus .09 in -Spring 1979) due to both a decrease in new smokers and an increase in quitters. • American, B&W and Liggett & Myers have all been relatively stable in terms of their gains/losses from new smokers and quitters. If you have any questions, please call. K&.( .DWA Kay Duf f ,y cc: Mr. J. R. Moore Mr. S. R. Perry 43p1 .. !5 I
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December 16, 1987 7 J TO: R.M.-Tnders RE:e,""Ca.*TL 75th Birthday - Bask,-tb#kll Visual This forvards Brand's recommendation regarding the attached CAMEL basketball visual. BackAround N.arch Brand is plinninq to run a group of innovative mfdia visuals depict:~.g the French CA?~7, in various sports situations (fisherman, racecar driver, motorcycle rider and basketball player).•VBramd's legal coansel has; ~ %sdvised against using the basketball vie•ual on the grounds that the tsme of ON asketball is a "youth activity" (see attached .emo from Tom Rucker). ~ ~~v'K~'i, Recommendation ~.Srand recommends running the basketball visual. While sensitive to Leqal's r., J, -eoncerns, Britrid"''feels that this visual is no more or less appealing to youth sing; _sing on the market. f than other adftz:t_ Rationale ;~ ~r< > I I I I I I ~"~o Bas.k.:e;tball"i&`<:not a youth sport but appeals to peovle of all ages. A lavP•._ as P :rk"ru Sa p l~aver's iust as likely to have middle-aYed/younger adult p ~ :: ::..':<.;~ 8 . ~ y :.L'~?:;;z:. of:;•othtr aqes. o The baskettaI2°visual complies with Cigarette Advertising Code (Article Yo) , =n that is not involved in activity "requiring stamina or athletic ~ condition_~RNlevond that of normal recreation". Z'he CAMEL shown is la::ly :;a spinning a ball, not engaRed in rigorous sportq activity. WW o This visual does not show the Ca?4FL in a professional, organized background !X but rather an informal pick-up game atmosphere. ....r. -i:4~ o Finally, this campaiqn is intended to be tonque-ir-cheek. Camels do not play basketball, and this beast 's certainly not a star (i.e., Larry Bird/ ~ `iichael Jordo.n) that vouth carn aspire to or want to be when they grow up. ~~ . ext Steps As you are aware, the timing for production of the sports visuals is extremely tight. Brand would appreciate your feedback re¢arding the basketball visual Rs soon as possible. If you have further queftions, please advise. • . 4 r. r M. P. LaBrecque Attachment cc: L. J. Rreininqer b CA'SC~ Exbibit S 0 Date: A~ed A. Betz, P'MR
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FiC~iCE_ QP C1ru8L~T!'E smmc =n•= Ntiab.r Of _ _ I In LcU'LORlp „Ybo = Re a ~ ~ Swck e 9w** Do 0 ot .S=P ~ . FAth Scbool Stadants. Total VOI = -a a hk a Total Tatag Xen 1574 1749 61 63 39 37 Total 7oaa6 Yomea 1127 1303 49 51 51 49 tresh®an-Seohmor+ Classe s LU 1066 a ~ X 1% Total -Tiaaa Mec 465 593 49 56 51 46 TaAta Yoarea 347 473 32 35 68 65 Jualor-Senior Cls.aaes ~$$Y ~ 9 A+t 2 U i Tot.x.T.w4 xen 1109 1.~.56 65 68 35 32 Total 2aag Komea 780 830 57 60 43 40 = CoUege Studenta. T~ IS$?'~ MN U Z a 22 Total lf.r 3027 3212 75 72 25 28 Total Yoneei 1793 1848 76 74 24 26 LZ,qe 5nbowr+ Clsaaes W& 22A U A A A Total X.n 1558 1872 77 73 23 27 Total Yomm 866 1042 76 75 24 25 -~ c.n N . JiaioSer3ior~ Claa~ass~ = _2Uk 2h 2& A A OD m Total ?Sea Total wamea 1469 927 1340 806 73 76 71 74 27 24 29 26 p a Ln m N m WILLIAM ISTY COMPANY, /.e.
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Ju1y 9 , 1480 TO: Mr. Uziel Frydman ;iL~..~ yyRML" C. L/lSCr1DE MG1STERED PROF. REPORT'cR EXHIBfT N0. °.= de4SLC`f M. BANTA,S/W/97 SUBJECT: TEENAGE SMOKERS (14-17) kND NEW ADULT S?:pKEP.S AND QUITTERS INTRCDUCTION This is the second report tracking teenage smokers and new adult smokers and quitters. The first report, released in January, presented Spring 1979 data; this report updates that to include '- Fall 1979 data. Similar reports will be provided semi-annually, coinciding with the semi-annual release of National'Family Opinion, Inc. , (NFOl data. ....:= The data analyzed in this report was obtained from NFO of Toledo, Ohio, whicb••i:aintains a panel of cor.sumers for the purpose of conducting-~ecnsumer surveys. For the past 15 years RJR has used NFO for proAuct testing and regularly tracking smoker profiles and switcln.i.ag information. The data regarding teenagers, new smokers, a`nn cuitters is a natural by-product of the tracking of adult smoi'reea. , :.,::. . w.. .~~. teenage smoiers and new adult smokers and quitters. SUMMARY Qt'~ sS.EY FINDINGS Below is=aiurmary of the key findings based on the analvsis of 1. Smok-irrg Among The 14-17 Ace Group/Aging . RJ'F~is continuing to lose share among teenage smokers, w1W 19.9$ of the teenage smokers in Fall 1979 versus 2.1:34 in Spring 1979. Both WINSTON and SALEM have been steadily losing share among this age group: WINSTON'S share was 7.2% in Fall 1979 versus 8.3% in Spring 1979, while SALEM'S share was 7.9% in Fall 1979 versus 10.6% in Spring 1979. In addition, RJR is losing share points due to aging, which is the natural process of 18 year olds entering the market and 50+ smokers leaving the market. RJR's losses are due to a declining share among 1E year olds coupled with a relatively steady share among 50+ smokers. • P. Morris con:inues to gain share among the 14-17 year old age group, with 62.6% in Fall 1979 versus 58.8% in Spring 1979. Marlboro, which had $2.0% of teenage smokers in Fall•1979, accounts for a large portion of P. Morris' share among teenagers. However, nearly all of their brands experienced share increases among teenagers frc+m Spring to Fall 1979 (B&H, Virginia Slims, Merit, Parliar+ent and Saratoga all gained in share). P. Morris' large share among 18 year olds has made it the only company to realize substantial share gains due to the aging process. I cn 0 N 0 F i N m 10
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Trouthts on Tounzer Adult Saokar Study t.s. z July 16, 1984 3. Ar• braods significantly out of touch with the values and lifestyles of younser adults? Srhat are tha key wtivationa sad litastylse and how do they relat• to b.lisf• about asisting brandat Discussioni A lot of our thiakint revolves around this issue. V• nasd to understand the drivins s,otives of youn=ar adults and the vay they a:prass th•s• motivs• in their lifestrlas. This ia rhar• ouss and n"bola b.eos iaportant. This is•ue is the 'aoftcst' of those to be aYplor.d. It isn't altogether clear vhat w ss.an by 'dri.inl' .otiV'ations. Ms vill need to identify •os fras+.vork for 'drivin= notivatioAs'. One possibtlitp ia to usa risalor. 1la classifies ft•da is taras of a hiarareAyt • S•lf /letualisation ~ 0 Status/Z•t•es ~ • talonsini • Security • Survival This i•T~bgI/ idind block systsa with fuliillsant of on• susd following on the satiafactil5 of a low r 1s.a1 na•d. Thus, people first vorry about sarvival, thsn s•edM •tc. There •r• other spst.u that w cas tiss, btit I thidk ~' that it portant to identify ._err• spstam to ordani.. our afforta. 4. ara+"=` produet vanta of younger adult ssolterat rov wil do existing a ~ st~a ..asur• up? ~ biacuas ~ Y• are aot~ kslr to have sueb lsarnini about product based on current ~~ intoras c this has been a key factor co.tributini to the growth of ~ brands a t s=roup. V• asad to d•tersiao how younger adult asokars J p•resivr"IitY•rant brand styles on product diasnaions. .as a.r ;=OThsrs are t~,,,pzbsr issu•s that have eoos up in discussions with and•usars which .~ eould shad i~Sir light on the Younger Adult lsokar 1tndy. They aras ,~ l. Bov do trss,ds fat started asont younger adultst Do they ?ust happ•nt ifbat -400 categories 4as erupted and why? Rev loa; did they last -- a tad or a trend? + Are th.ra trena lsadars -- role .od•is, blaeks, ste. ~ ew*12. What 'rui•s of thunb• ara there are developing •ffsetiw younger adult •nokar 411110010 ssarkating prograssst lo.e that have b•an atggsat•d arat Use of a'soit s•11'. Use husor. Stras• •.otion not rsaaon. Avoid discouatins. Don't copy •osou• alaa - be diffdraat. 1io '=imieks'. ! tichard C. Nordie• Marketing Dsrvelopsat RClttdf
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July 16, 1984 ro: C. S. furTovs S. 1F. ev.as x. D. Ha rr i s D. S. Jahnaoa' J. Vhaley tRDMk A, C. Nordias f ~ SUbJSGT t' T1laVGHfB Oii YQUNtZh •JID1tL.~ :.5. .r.il ..u. .•• . r • . . . ~ . . . . . . - . Ve need'a•o. a"iekpa3yt:how ne.Vikk'sos' CWtk~RR.ths,~Lii~• :LS?~4c+r1.1L'baLp ...vw atructurtJc" steps Aa6'VWrA#[ aI tsarrorlc•foT.•Cirt14MOwotatWa.;..Abs.ftelrv _ ve na.d..ta .18wt1#tedthe' ktr;'lodtas ,tbtM-Ml:lanclusions riil be ba.ed on. Ii w eonaids e Tounss.•Ad.kt ~Otas Opportseait7 +~lysis as the basis for this study, th,toltAbaC.ft should, thsn thars are tour kay issues that w nesd to dealrvit* . a ,... .. ' W 1h .30 1. What typas o attitudss do ..oksrs havs towfd bfandst Why do they havs ..:5N the!! !L C t . ; . . . . ..- - ' ' . . . . . . . ~ . . ~ •... . b.....1i~N. ..1 ..... ...IY . U~.V=i:.~ .w .. . . ~I~ . .. • . .... .~- ~ ... . • ._. .~...16~ • YVl l. al'• M~13orl,t~s~~t~LK~ .WItAy~.?[Clln~ wy~;~~a and ~ s~,~~~ of !1~ views are 'sai' wl+sa they ara younger adult ss,okass. It is a~ . '4"'TC tA ~ e~..rtL~+G ~l3~ ~4 ii~i .:... ~. : . .. . ~ I ~• ~.__..._ . Man This is +rhaLjoansar adult saolcas are so i.pftant. Z'hsy."dseids' that one •~ d_e_aaQft k.• .ft and have ao reason to consider otasrt. ffands that tail to do ~~ ~tdult..tsnhasa ~ha,aa !t hA~~, ~l,Q+. ratia~ i .a sdb istu~ ~tk },rt,e,l4?.ilind r4+tl+~~, ss~, a~+qfild ~to• ViidCi~.lo¢aItsaa` i t~E~ bsaada. shis .asdbist tae irisda, lits ;irLlfl~`dK ~ria'~L ~ -Jl~l1lL"~~1CaA~ds:thai~ta~GR.rist;~X.J11~,~~a4S.~r3lOwoisr adult ssokars. 'r :Shas.a i~:~}.dLiSssan~s ~ ._~it~W .aa.attltud~.ot..ladltSatsnaa aad a. asjatLys ateltud .oRj:Yo~lF-adn~t;apto~,~sl,~ip.tl~~ ~tI1a7011.is •tos older ~ smokers a~isid~uy they wouldn't s.a aonsidst It, iR1K?GII hii litcli 4W oPPo~wa~lCiw?re ,LVttt~!!! 2!rlS~aclt~...~arawsr it t#leX.ass iad.ttt- re_nt to/razd ~ ... ... _ -ra~a. ......~- ._ .. _ .. :. . • -•- th• questions of ahat tyoea ot attituds Morova=is 6dult s~aoksrs have toward ed b.aods wak3he n.aoas 1*r ade esa sttit~elas.#sos, a6~ ~a.ltl.a~ d.eidLas bAV . to eddrres ~e:pralilas: _.~w~sil.+aa~stM~.ioi•a,ls,tss 'doJ :. Vbieh••eatriast 41hat typa. -et• s/ev brasl. •.r.•aasdrdt . Asa.aasatiw•.tlt~s+4.o: dw•.co peoduct, isliil,..o.t litaCC7l• ftii®at~..•1• 2., What trends exist asiond younger adult in tsroa of ssyokin,g inoidsnes m Ln F~ 00 m ~ U1 m m m des,ographia or lifestyle? . .. . . _ ... ~" o ' Diseusato~t ' . ' •+ In the past, trsnda vithin ths younger adult sector hars led to =rovth•' brands. ftsrls• led Tall )tall's =rovth ia the !0's, aalss for Marlboro in „ w the 60's, and 3lacks in the 1960's and 70's for T.eol and 1lwprt. Vhat are the kay ineidenes trends auong younsar adults in the 19t0'st • fiE-O.tlC-t Ekhibit # (0 Date: S- 2 ( - 'qd Alfred A. Betz, RMR r~"'A --~ , E:tzibit DM -5 OF a7 Mr1WIJd C. l.A80RDE REGISTERED PROF. R_roORTFR +~•• • ta . t... -. . .
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