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:We hav~ concluded that we should launch a precisely directed -~:" effort against ~be Chicano sub-segment because it account, s .. ~ .~ ~or 70% o£ Hisp~nlc volume and has the ~reatest potential . ~ . Our suppoTt r~tio~ale is b~sed primarily on the 1979 ~ispa~Jc Study whi+h Gited the +ollowing; ++~ ++.. +~+ • His~ngcs have a higher smoking incidence [45%) Shah the ~enera] population [36%). The Chicano segment enjoys the highest incidence o£ smoking [S5%] o£ any .~ other s~gmen~. : ~ -

C • Mr. Allan G. Forsythc -2~ March 16) 1981 gro~,n g Nilliamson ' ~ e Th~ Chicano market is the largest Hispanic group in the populatlon and has the highest annuallzed growth projection (4|). • In addition to having the highest switching r~te among Hispsnics, the Chicano market is the only gro1~p with a positive start/quit ratio. @ Viceroy has an above-average development, 140 index, in this group. Itg development is below ave:~age in the other 3 segments. • • • The Agency has calculated that the Ch~canos account for approximately 70% of Viceroy's total Hispanic s~les. Other Hi~panic segments account for significantly less, i.e., Tex-Mexlcans 17%, Puerto Rican$ 9%) and Cubans 4%. (Re[or to attachment). Source of Business -< -In determining Vicersy's source of business and target, {our points should be noted: • ~Jarlboro is over-developed among the Chicano s~egment, although no special advertising effort has been Im- plemented. Winston is much weaker hut they have special advertlsing, ~, • This segment is clearly domlna~ed by the NMFT brands; a development index of 137 relative to the total market. J~ • The average U.S. Hispanic is approximately seven years ~' younger than the C.S. population mean. The median age of U.S. Hispanics is 22.1 years of age. ~ • Although Viceroy has a high development overall among .~,& the Chicano segment) ~he brand needs to improve its capture rate among younger men who demonstrate ahigher smoker incidence. ~.- Therefore, ~t is recommended that at present, Viceroy Parent be supporte~ excluslvely and targeted against the younger NM Pull Taste smokers who are predominantly male. ,:~ Medls Upnn rre]iminary investigation of media vehicles availzb]e to ~s in selected markets~ it appears that 6-sheet OO~ would be the most effective medium due to its; geographic targetability in ethnic neighborhoods "outward" social statemen~ vs. more personal p]rint message

appropriate for thi:; effort, ~ i: "The Hispanic Study shows the Chicano populatlon to ~e~ighly con- .... ~, ¢entrated in California. Upon examination of the R~.w 1950 census i data, we are likely to find that there are less than ten major [ :!,: markets where the Chicano effort could be rolled-out. Based on ; ~ •" , this sm311.zeographic area, it may be b~tter to simply determine .~ [ the cities that will 5e supported an~ implement the program. ~.~ i ~" :Before determining ~he~her or not to ~est for ~itality, the cost • - to test should be exzmlned versus the cost ~or ~Ii markets. ' "~ ~ Promotion/POP Mhichever promotional vehicle is finally employed, i~ is imFortant that it be tied into the main thrust creative for this segment. Competitive Copy Ana]vsls ~e ate c~rYently conducting an analysis of competitive Copy that

eventually developed for this e:~fort, .- Competitive Copy Analysis ", Viceroy Heritage in Mexico ~+.- Purthercosts Investigation of Media Availability/ ..... Cunningha]n Market Selection ~- ~-.~,~ Brand Group/McCann ±- ~ Clarificatio~ o£ Chioano/T~x-MexicRn /~.7:~" DI ffer~nces

.\ | Peopl e --,° S~okincj Incidence% Packs Per Week Vic~zoy | people ~ Eb~oke AVg. Ca~ory ~/~Z~. Av~. Vice~ Pa~/~, % Vi~ Kispa,n.~c Sales (6905m Tot]l) VZ(~ IL~AITIC S~ 589m 182~ 542~ 662~ 45 43 36 55 ?.1 8.0 4.3 4.? 1.4 1.0 1.4 2.8 3~r. 784m ZEI5~m 3644r. 220~an 627~n 8394m 1"7127m 3~.~ E2J;m 1.17. ~ 479.5m 4.~ 9.]% 17.0~ 69.5% EXHIbiT So~xce: 1979 }llspan~c St~y