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1980 2451 LEONARD REID, Pet., Cr-Ex i0 15 20 25 Now, I see in the middle a paragraph which is one (I) sentence long all by itself, and it reads as follows: It is a fundamental law of marketing in a mature market that increased sales must come from other brands within the category. You wrote that? Yes, I did. This fundamental law -- did you read that somewhere? Yes. Or did you make that up? It was based on my understanding of markets, my reading of this, reading of the literature that a fundamental law of mature markets is that increased sales come from brands within categories. Now, could you please tell the Court if this fundamental law -- where this -- where you have seen it stated that it's a fundamental law of marketing? This is not like Newton's law; this isn't a very important law, is it, Dr. Reid? It's a relative law. It's a relative law. It's not physical science. Where have you seen this relative law espoused as a principle anywhere? One (i) person that has espoused it as a principle is a fellow by the name of Scott Ward. Right. And who was this fellow, Scott Ward? AUDIOTRANSCRIPT, Di~i,ioo a~ P~erre Vilaire & As,o¢i@s Lt~e

2452 1981 LEONARD REID, Pet., Cr-Ex i0 15 2O 25 Am Am Scott Ward is a professor of Marketing at the University of Pennsylvania. Right. And did Scott Ward call this a fundamental law of marketing? I'm not -- I don't remember if he called it a fundamental law or not. Well, did he call it a law? I can't recall whether it was called a law or a principle or a tenet. But from -- you're citing one (i) person, this Scott Ward, of the University of Pennsylvania as though it's, you know, really special. I mean, before you call something a fundamental law, I'd presume that you're sufficiently careful, Dr. Reid, that you'd determine that it is in fact a fundamental law. So in connection with what I have just said, would you be good enough to tell the Court if anybody whose work you have ever read -- be it academic or otherwise -- has called this -- this mature market thing a fundamental law? I cannot say that it was -- it was described in the words of fundamental law, but it is a principle and a well-accepted point, a tenet in -- in marketing, that people believe that a mature market exists and increased sales come from inter-brand competition. Does Philip Kotler say that? AUDIOTRANSCRIPT, Division de P~erre Vilaire & Associ~s Lt~e

1982 2453 LEONARD REID, Pet., Cr-Ex I0 15 20 25 AE He doesn't say it -- he doesn't say it in his book that I've read right there that you've given me. This book that you've read right there? That I've read this -- no, it doesn't say that. Well, you're pointing to a book, parts of which have just been filed as AG-58. But does he say that in any of his other books? You know the one you referred to in -- at page eight (8) of your report, Philip Kotler's 'Principles of Marketing', Englewood Cliffs, New Jersey? In fact, that's a primer, isn't it, that book? It's for principles. Yes, for first-year marketing students? A principle's book, correct. Principles, right. And, in fact, this book that I've put to you this afternoon, 'Marketing Management', is for students who are in Masters programs at a lot of business schools in the United States; isn't that a fact? Or seniors. Or seniors, right. So maybe you want to tell the Court, given that you haven't read 'Marketing Management', where Philip Kotler has ever written anything that comes even close to what you have called a fundamental of marketing on page six (6) of your expert's report?

2454 1983 LEONARD REID, Pet., Cr-Ex 10 15 2O 25 A- As I've said, those -- the cite was used in terms of my general -- general response to the question. Philip Kotler in the 'Principles of Marketing' talked about product life cycles; he talked about the nature of the market; and he talked about the functions of advertising, to inform, persuade and to ... Q- No, that's not what I asked you. I asked you ... Me IRVING: Just a moment... Me BAKER: That is not responsive to the question, My Lord, and I don't think it's open to Mr. Irving to object. I asked him where he has read anything by Kotler that comes close. THE COURT: No, he can object anytime. That's for me to decide if it's well-founded. Me BAKER: I'll withdraw my objection to his objection. Me IRVING: And I do so now, My Lord: not for the first time this afternoon, but for the fourth or fifth time Mr. Baker has interrupted the witness and not let him finish his answer. He is coming very close just to harassing. He is now raising his voice continuously. I would ask that AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s Lt4e

2455 1984 LEONARD REID, Pet., Cr-Ex 5 i0 15 2O 25 he stop doing that and simply put questions in the ordinary and normally polite way to the witness, and let him answer. The witness was not finished answering -- again. THE COURT: With respect, Mr. Irving, I don't think Mr. Baker has been harassing the witness. He's been asking a question and he hasn't got an answer to that question. What is -- on what is the witness' assertion that it is a fundamental law of marketing in mature markets that increased sales must come from other brands within the category? And I don't think -- well, from my notes and from my ear -- that he's answered that question yet. Me IRVING: Well, I think that he was just trying to answer it just a moment ago. THE COURT: Well ... Me BAKER: Well, I'll try and put it to the witness in a more kindly manner. Q- Dr. Reid ... A- Yes? Q- Page six (6), your expert's report. fundamental law of marketing. You say that it's a Tell the Court if you've AUDIOTRANSCRIPT, o~,io, d~ ~ Viloi~ ~ Associgs Lt~e

2456 1985 LEONARD REID, Pet., Cr-Ex i0 15 2O 25 Am ever read anything by Philip Kotler that comes close to saying what you have called a fundamental law of marketing? I do not recall reading anything where the terms 'new' or 'mature' market were used by Philip Kotler. I beg your pardon? I do not recall reading the terms 'new' or 'mature' market in Philip Kotler. Isn't it fair to say, Dr. Reid, that it is simply unreliable as expert testimony to say that increased sales must come from other brands within the category as a fundamental law of a mature market? That's simply unreliable, isn't it, Dr. Reid? It is my opinion that -- and based on my readings, and understanding of what the role of advertising is in the marketplace, that it is true that sales must come from other brands within the category. But Dr. Reid, you're not even a marketing specialist! I was called to testify on advertising and its relationship to ... Ah -- but why you were called to testify is not my problem, sir. We're talking about your expertise now. You're not a marketing expert, are you? I am an advertising person and I have a degree, an undergraduate degree in marketing. I have taught in a AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ4s Li'4e

2457 1986 LEONARD REID, Pet., Cr-Ex i0 15 2O 25 business school, I've taught in marketing depart- ments. Q- As a matter of academic discipline, Dr. Reid, is it part of your everyday work and the research that you have done, until you started to work on this case, that you would even have the right to make the assertion that you've made on page six (6) of your expert's report? A- That I would have the right? Q- Yes, as a matter of academic discipline, any more than anybody in the street would have the right, Dr. Reid? A- I teach advertising management and to understand the limitations and power of advertising, you have to understand marketing in corporate strategy. That's why I'm familiar with this terminology that we're talking about. I have had courses in marketing. I have read -- published in Marketing. I have read marketing books. I don't know -- I do not teach marketing management. THE COURT: But, I mean, the statement 'fundamental law of marketing', it's pretty strong. I mean, it's -- what the question was is whether -- what authorities, if any, support that proposition? A- As I said, although it's not stated in Kotler ... THE COURT: Maybe not Kotler, but anybody else? I mean, what proposition supports that -- because it's a pretty AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s Lt4e

2458 1987 LEONARD REID, Pet., Cr-Ex 5 i0 15 2O 25 strong statement. A- The -- again, I've read the statement attributed to Scott Ward and the book that I previously cited by Martin Bell in Ginch -- talks about mature and new markets. It's accepted fact, and -- I shouldn't say fact -- an accepted belief that in mature markets, brand competition is where sales come from and advertising's role in mature markets is to reinforce and to persuade brand switching. Me BAKER: Q- Okay. Now, you've talked about a person by the name of Scott Ward; is that W-A-R-D? A- M'hm. Q- What was the name of the book that you're referring to? A- It was an article. Q- Where was the article? A.... Q- But didn't you just say attributed to Scott Ward? Does that mean that he didn't write it but somebody said that he wrote it? A- He wrote it. He wrote it. Q- Okay. Where did he write it, this fundamental law? A- I believe it was published in a paper in -- it was published in a paper in -- a journalism publication reported in the press, and I cannot recall the AUDIOTRANSCRIPT, Div~,~on de Pierre Vilolre & Associ~s Lt4e

2459 1988 LEONARD REID, Pet., Cr-Ex i0 15 20 25 9 publication at this point. I'm sorry? I cannot recall the title of the publication. Have you ever met this Scott Ward? Yes, I have. This is the Scott Ward -- do you know him well? No; I know him. You know him? Yes. And could you tell the Court where you met him? I met him at -- I believe -- in Miami at the Association for Consumer Research conference -- which is an academic meeting -- probably in nineteen seventy-eight (1978). Are you aware that, Dr. Reid, that Scott Ward is a man who testified on behalf of the U.S. tobacco companies in front of a U.S. Congressional Committee? No. You don't know that? No. Would it surprise you? I have no reason to be surprised or not surprised. Now ... THE COURT: Of course, that's not evidence. you've put. That's a question AUDIOTRANSCRIPT, Division de Pierre Vilaire & Assoc;@s Lt@e

2460 1989 LEONARD REID, Pet., Cr-Ex 10 15 20 25 Me BAKER: Q- That's why I didn't file the document. Did you ever read an article in the Harvard Business Review called, "Forget the Product Lifestyle Concept?" A- No, I have not. Me POTTER: Lifestyle? A- Life cycle. Me BAKER: Did I say "style?" Me IRVING: You said "lifestyle." Me BAKER: Thank you for correcting me, Mr. Potter. Q- Product Life Cycle Concept. THE COURT: What is the answer? A- No. I thought I'd said no. Me BAKER: Qm Are you sure? Yes, I think I'm sure. I do not recall it. He's going to need it again, Mr. Irving. In the literature of the product lifestyle. Cycle. Cycle, excuse me. I'm having a great deal of difficulty AUDIOTRANSCRIPT, D;~,~o. a~ Pi,rr, Milalre ~ As~oci~s L,~e