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r MARLBORO M(J$I 1992 MARKETING PI1~N OVERVIEW For ten years, Marlboro Music has been an effective promotional vehicle which strongly supports the Brand's country/western imagery, heritage, and leadership position while reaching large numbers of consumers with a unique and proprietary Marlboro message. The program also offers the flexibility to reach key Marlboro markets as determined by brand criteria. This is a unique attribute as many programs do not have the same degree of market flexibility. With on-site visibility, retail support, public relations, and advertising, Marlboro Music supports the brand through proprietary vehicles designed to impact the business. Today, country music has broadened both musically and in its audience appeal. New artists such as Garth Brooks, Clint Black, Lyle Lovett, and the Kentucky Headhunters are extending the music's reach to a younger urban audience. The country format is now the second most popular radio format across the U.S. and country artists continue to cross-over to the music industry's "pop" charts. Since its inception in 1983, Marlboro Music has been country music's premier sponsor. From the seven years of arena tours to the introduction of the "festival" concept in 1989, Marlboro has had a significant impact on country music and its audiences. However, today, with the music's growing audience, other sponsors have entered the field including Budweiser, Miller, and GMC Trucks. With this, it is key that in 1992 Marlboro insures its leadership position. Next year, 1992, Marlboro Music will celebrate its 10th Anniversary. This milestone provides a platform and theme for the 1992 program. Over the last ten years, Marlboro (Country) Music has presented the premier talent in the country music industry in cities across the country. From Alabama, Randy Travis, and The Judds to Kathy Mattea, Lyle Lovett, Alan Jackson, and The Kentucky Headhunters, Marlboro has been a leader in showcasing the best in country music. The 10th Anniversary platform will reinforce Marlboro's commitment to and leadership role in country music, and its long term affiliation with the top names in the industry.

The 1992 Marlboro Music program continues to support two existing program components -- the Talent Round-Up and the Military Tour. The plan incorporates significant suggestions and improvements to maximize the impact and effectiveness of these programs. The plan also introduces a larger five-market concert tour concept designed to reach audiences of 15,000+ to restore the luster of the program's initial arena concert concept.

PROGRAM CHANGES/ENHANCEMENTS CONCERT TOUR The Marlboro Music tour will include five concerts presented free to consumers. Sites for the concerts will be a mix of state fairs, city sponsored festivals, and city parks, to provide audiences of 15,000+. The artist roster will be a multiple headline bill of artists who have appeared on the tour over the last ten years. However, all artists will be chosen based on their current stature and audience appeal to insure the concerts have an exciting edge. For example, one package could include W nonna Judd on her first solo tour, The Kentucky Headhunters ana roo s unn. ~ The production of the tour would be incorporated into the military tour to realize cost efficiency (i.e. the consumer concerts would be routed with the military dates). The Marlboro Music tour will reach large on-site audiences, provide a unique proprietary Marlboro promotion, and restore the "big event" element to the overall program without the big event expenses. TALENT ROUND-UP The Talent Round-Up has been a key element of the Marlboro Music program since its inception. The program offers a grassroots element that provides strong community involvement over an extended period of time. The national finals provide the overlay of a prestigious, national program which reinforces Marlboro's premier sponsor position in the music community. ' Reduce the number of markets from eleven to eight to reduce costs without affecting national stature of program. ° Reduce the number of semi-final competitions in each market from three to two to both reduce costs and to help insure a higher caliber of contestants each night. • Hold both semi-finals and finals in a one-week period. • Increase advertising support to include ads for competition nights as well as "call for entry" ads.

MILITARY TOUR Through a joint effort with Military Sales, Marlboro Music has successfully presented concerts on Military bases since 1989. The concerts provide the only advertising and promo- tional programs for Marlboro allowed on bases. Also, the program enables military sales to work with high ranking military officials in all branches of the service. The program has been well received by the armed services and has been held as the "gold standard" for sponsored events in the military. In 1991, the program was expanded from ten to twenty-four concerts to celebrate the troops homecoming, extending the program to bases that had major deployments. ' Reduce the number of outdoor concerts to the original ten concerts. ' Kick-off the series with a July 4 concert featuring bigger name talent to increase national P.R. ° Reduce the number of promotional items distributed at each event from 3,000 to 1,000. ' Incorporate six indoor shows in 3-4,000 capacity base sites in the Fall. These concerts will be held on bases that can not support the large outdoor shows. Both the production and talent line-up will be scaled down for the smaller sites. MARKETS Markets for all programs will be finalized when program elements are confirmed to allow cost-effective routing. All markets will be selected from Brand's key share development index listing.

1992 ADD-ONS 10th ANNIVERSARY CONCERT - SPECIAL EVENT The 10th Anniversary of Marlboro Music provides an opportunity for a major kick-off concert event similar to Woodstock or Live Aid featuring artists who have appeared on the program over the last ten years. The concert would be held at a major outdoor facility (15,000+). The event provides major P.R. opportunities and the ability to reinforce Marlboro's leadership position as a sponsor of country music. The concert would also be taped for use as a promotion cassette in 1993. This will provide additional continuity for the program and a unique promotional vehicle for the brand. A list of artists who have performed over the last ten years is attached. Estimated cost: Minimum $1,000,000

MARLBORO MUSIC 92 hAN 19 CONCERTS _ Element 1991 1992 Artist Fees 760,000 625,000 CMF Fee 75,000 Promoter Fee 63,000 45,000 Production Costs 258,000 Production Fee 24,000 P.R. Affiliate Fees 120,000 33,000 P.R. Affiliate Expenses 75,000 25,000 Media Day Expenses 20,000 5,000 Advertising 100,000 100,000 Back-drops 10,000 Sampling Company 100,000 POS * 50,000 -- -_~ _ ~-- $1,323,000 $1,165,000 * included in "Common to All Elements" budget Variance (135,000) ( 75,000) ( 18,000) 258,000 24,000 ( 87,000) ( 50,000) ( 15,000) ( 10,000) (100,000) 50,000 ($158,000) The budget includes five multiple headliner concert events with a talent budget of $125,000 per concert. Production costs do not include staging, lights, or sound, as these are included in the military tour production budget.

MILITARY TOUR Element 1990 1991 1992 Variance Artist Fees 500,000 1,150,000 790,000 (360,000) Promoter Fees 75,000 198,000 144,000 ( 54,000) Production Expenses 500,00 1,104,000 580,000 (524,000) Production Fee 40,000 105,600 76,500 ( 29,100) Advertising 20,000 48,000 45,000 ( 3,000) Media Days 25,000 20,000 18,000 ( 2,000) Affiliate Fees 55,000 132,000 105,600 ( 26,400) Affiliate Expenses 75,000 154,000 118,400 ( 35,600) Consumer Incentives * 216,000 40,000 (176,000) Set Design Production 10,000 5,000 30,000 25,000 POS * * 90,000 90,000 $1,300,000 $3,123,600 $2,037,500 ($1,095,100) * Included in "Common To All Elements" budget. The budget reflects a reduction from twenty-four outdoor concerts to ten outdoor concerts plus six indoor concerts. The talent budget for outdoor U.S. concerts has been increased from $50,000 to $60,000 per concert to reflect industry costs and includes a $40,000 supplement for either a July 4th kick-off of Labor Day finale. The talent budget for indoor shows is $25,000 per event. Supplier fees have been increased 5%. Consumer incentives have been reduced from 3,000 items to 1,000 items per concert.

TALENT ROUND-UP Element 1991 1992 Variance Producer Fee 126,500 90,000 ( 36,500) Production Expenses 787,000 570,000 (217,000) Affiliate Fees 48,000 60,000 12,000 Affiliate Expenses 60,000 60,000 - POS * 90,000 90,000 Advertising 110,000 120,000 10,000 $1,131,500 $990,000 ($141,500) * included in "Common To All Elements" budget The TRU program includes eight markets and a national final. All fees/expenses have been reduced or unchanged to reflect a reduction in the number of markets, the number of semi-finals from 3 to 2, and incorporating all events in one-week.

ELEMENTS COMMON TO ALL PROJECTS Element 1991 1992 $ Variance Staffing Fees 70,000 90,000 20,000 Staffing Expenses 20,000 30,000 10,000 Soundata 15,000 ( 15,000) CMA Membership/Trade Ads 15,000 20,000 5,000 Media Training 10,000 10,000 Leo Burnett 250,000 250,000 Posters/Flyers/Brochures 360,000 * (360,000) Samples 100,000 50,000 ( 50,000) Press Kits/Materials 100,000 50,000 ( 50,000) Promotional Materials 150,000 125,000 ( 25,000) $1,090,000 $625,000 ($465,000) • Staffing fees operators and include a 6% increase for full-time a full-time PR staff person. staff * included in individual program budgets

TOTAL BUDGET Element 1991 1992 Variance Festival/Concerts 1,323,000 1,165,000 ( 158,000) Talent Round-Up 1,131,500 990,000 ( 41,500) Military Tour 3,132,600 2,037,500 (1,095,100) Misc. All Projects 1,090,000 625,000 ( 465,000) $6,677,100 $4,817,500 ($1,759,600) Funding 1991 1992 Variance MM Budget 3,800,000 3,567,500 (232,500) Military Sales 1,850,000 1,250,000 (600,000) Add'1 Funding Mil. 850,000 (850,000) Concerts Credit Equip. Sales 170,000 (170,000) $6,670,000 $4,817,500 ($1,852,500)