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3. VIRGINIA SLIMS OVALS TEST MARKETS I. Opening Remarks and Introductions of New York Personnel II. Product Rationale III. Profiles of Test Market and Positioning of Product IV. Elements of Introductory Program V. Management Account Sell-In Strategies and Test Market Objectives VI. Highlights of Retail Meetings VII. Meeting Wrap-Up

4. I. OPENING STATEMENT AND INTRODUCTION To set the stage for this Test Market and introduce personnel from Brand Management, the dialogue found on the preceding pages is one suggestion for a meeting "opener". II. PRODUCT RATIONALE Show Virginia Slims Ovals slide/tape presentation. III. PROFILES OF TEST MARKET AND POSITIONING OF PRODUCT This portion of your meeting is designed to apply the features of Virginia Slims Ovals to your test market's account, consumer, and sales profiles. Points to discuss may include: o Sales trends of the Virginia Slims brand and, in particular, Virginia Slims Lights packings. o Sales patterns of brands/packings within the Flavor Low Category. o Specific high volume accounts (e.g. super- markets) which are frequented by our target audience (100mm & 120mm female smokers of competitive brands). In addition, you may wish to share the following information provided by our Market Research Department, resulting from the 1983 Switching Study: Of all established brands on the market today, Virginia Slims is virtually tied (with Benson & Hedges) as the Industry's #1 brand in attracting more smokers than it loses. Therefore, our new, innovative Ovals line-extension affords the opportunity to attract even more smokers to the Virginia Slims brand. N 0 -P Cn N) OD 00 N ~

5. IV. ELEMENTS OF INTRODUCTORY PROGRAM The following is a list of topics to be discussed when reviewing the elements of the Virginia Slims Ovals Test Introduction. To structure and highlight portions of this presentation, you may wish to record key points on a flipchart before the meeting. The following materials can be used as props and resources to visualize/reinforce your pre- sentation: o Management Instructions o Trade Circulars o Management Sell-In Materials o Virginia Slims Ovals Point of Sale o Supplemental Merchandising Materials o B-Display filled with Virginia Slims Ovals in position #1 o Sampling Materials o Trade Sweepstakes Brochures A. TIMETABLES Review the Introductory Dates and highlight the schedule of Program details. Discuss how each phase of the Test Market Launch contributes to quicken market penetration, nurture top of mind awareness, generate availability and visibility at retail, promote consumer trial and conversion. Management Sell-In* Begins Immediately Ship To The Trade June 21 Retail Meetings June 29 Retail Sell-In July 2 - August 31 (9 weeks) Advertising July 2 (newspapers, supplements, regional magazines, outdoor billboards) Supplemental Merchandising Programs July 2 - September 21 Pack (Weeks 1 - 8) July 2 - August 24 Carton (Weeks 4 - 12) July 23 - September 21 Military Supplemental Merchandising Program* IV O Sampling Programs July 2 - August 24 ~ (Sales Force & Part-time) N *See Management Instructions for Special Military Account ~ Introductory Guidelines. ~

6. Trade Sweepstakes July 2 - August 31 B. SELL-IN FEATURES o Management Accounts - Discuss Introductory Allocation Program . Allocation -- 3/4 of 1% of sales/month . Dates -- June 21 - July 20 . Mix -- 50/50 50/50 split -- because of dramatic (sales) strength of Virginia Slims Lights Menthol packing - Review Introductory Materials . Letterhead . Sell-In Brochures . Mr. Retailer Card . Trade Circulars . Sell Sheets . Sell-In Samples o Retail Accounts - Introductory Sell-In July 2 - August 31 . Contract I; Set/Sell I . 10% Gratis Reinstated Up To 1 Carton/Outlet (Virginia Slims Ovals only) . Suggest mix -- 50/50 - Introductory Materials . Sell-In Brochure . Trade Sweepstakes Brochure . POS Items . Supplemental Merchandising Sell Sheets - Supplemental Merchandising Program . Pack Accounts (30 accounts/rep; 3 displays/account) . Carton Accounts (20 accounts/rep; 3 displays/account)

7. NOTE: Before discussing the features and benefits of Virginia Slims Ovals Supplemental Merchan- dising Program, reinforce our sales objective -- to gain quality placements in high volume pack and carton accounts throughout the duration of the Program. C. SUPPLEMENTAL MERCHANDISING PROGRAMS PACK ACCOUNTS Features Benef its Displays Dates Account Philip Morris SAMPLE 6 TOWER 50 Pack (Sample 6) Capacity 7/2 - 7/20 (Weeks 1 - 3) o Free Mer- chandise for cus- tomers o Immediate in-store availability & visibility TWO FOR ONE 7/23 - 8/10 o Impulse sales o Special o Gains rapid trial o Gains initial 30 Unit Capacity Counter Display (Weeks 4 - 6) value pro- motion for purchase commitment customers o Impulse sales o $2.00 payment per outlet o Increases po- tential of conversion through con- sumption of 40 units o Reinforces top of mind awareness through vis- ibility o Gains greater inventory depth

8. TWO WITH INCENTIVE 8/13 - 8/24 o Special o Gains full 30 Unit Capacity (Weeks 7 - 8) incentive 2 pack price Counter Display o promotion for custo- mers Promotes doubling single pack sales commitment from consu- mers o Reinforces packing feature (oval) & prof it margins (1 pack pur- chaser will buy 2 packs instead) o $3.00 per outlet CARTON OUTLETS Features Displays Dates TWO FOR ONE 7/23 - 8/10 14 Unit Checkout Capacity Display (Weeks 4 - 6) & 80 Unit Floor Bin Display Benef its Account o Special value offer for majority (female) of their smok- ing custo- mers o Impulse sales through in- centive benef it o Maintains strong in- store pre- sence o Nurtures conversion Philip Morris o Increased availability & visibility in key high volume carton accounts where target audi- ence pre- dominates (females) o Gains initial purchase commitment & trial 2045218828

9. CARTON OUTLETS (cont'd) TWO FOR ONE (cont'd) o $2.00 pay- o Reinforces ment for top of mind checkout awareness display through vis- (min. of 3; ibility max. of 6) o TWO WITH INCENTIVE 8/13 - 8/24 o 80 Unit Capacity Floor Bin Display (Weeks 7 - 8) $5.00 pay- ment for f loor bin display Special in- o Gains full centive pro- price com- motion for mitment from customers consumers o Promotes doubling single pack sales & prof it margins o $5.00 pay- CARTON WITH 9/3 - 9/21 o ment per outlet Special INCENTIVE (Week 10 - 12) promotion, 30 Unit Capacity guaranteed Floor Bin Display to increase sales volume o Unique incentive designed to appeal to primary customers (female) o Provides benefit of incentive which will reinforce packing feature o Maintains strong in- store pre- sence o Increases potential of conver- sion (con- sumption of 200 units) o Increases sales to our accounts by adapting inventories on packings to match promotional & consumer demands

10. CARTON OUTLETS (cont'd) CARTON WITH INCENTIVE (cont'd) o $6.00 pay- o Gains long ment per term con- outlet sumer iden- tification with the packing through the use of an incentive MILITARY ACCOUNTS Refer to Management Instructions regarding information on Special Introductory Military Programs. - $1.00 VPR - Supplemental Display Program SAMPLING PROGRAM Duration July 2 - August 24 (Weeks 1 - 8) Target Audience Female smokers of 100mm or 120mm non-Philip Morris brands Personnel/Allocations Field Sales Force Sales Reps, Military Managers, Division Managers (15) 20's and (15) Brochures/person/day Part-time Samplers (80) 6's per hour; 25 hours/week Features Sample 20's and 6's Distributed in Carriers Carriers and Brochures Contain postage paid mail-in offer for two free packs (Ovals Regular or Ovals Menthol) Redemption All participants receive two free packs of their prefer- ence (Regular or Menthol) in attractive gift box.

11. TRADE SWEEPSTAKES Duration - Introductory Period July 2 - August 31 Drawing Week of September 3 Purpose An additional tool to create excitement at retail Features Retail Winner Reps Grand Prize Video Recorder 19" Color with Camera TV value $1,000 or $1,000 cash lst Prize Color TV 35mm value $500 or Camera $500 cash 2nd Prize 35mm Camera Portable value $200 or Component $200 cash System Procedures Each account will automatically receive one entry when initially contacted by our reps on behalf of Virginia Slims Ovals. A second entry is awarded if the retailer agrees to place three or more POS pieces. During the second, third, and fourth calls, reps will award additional entries (maximum of 2 per call): o(one) if the retailer maintained the POS previously placed and o(one) for a minimum of three additional placements Therefore, each account has a potential of receiving 8 Virginia Slims Ovals Sweepstakes entries (maximum of 2 per call). Sweepstakes Materials Review S/R allocations of brochures, entry pads, and entry envelopes.

12. NOTE: Virginia Slims Ovals will award one Grand, First, and Second Prize within each Test Market. REPORTING INSTRUCTIONS Refer to Management Instructions and review special Introductory Reporting and Auditing Procedures. V. MANAGEMENT ACCOUNT SELL-IN STRATEGIES AND TEST MARKET OBJECTIVES This portion of your meeting should be used by your managers, individually and collectively, to plan the implementation of Virginia Slims Ovals. Allocation Sheets, Trade Circulars, and Management Instructions should be distributed, reviewed, and discussed. Account coverage and objectives should be deter- mined. Accounts targeted to participate in the Supplemental Merchandising Programs should be cited. Here, Headquarter and Retail Managers are also afforded the benefit of discussing problems and opportunities encountered during previous introductions, enabling them to plan a total complement of sales force efforts. VI. HIGHLIGHTS OF RETAIL MEETING Division Managers will receive a copy of this Leader's Guide along with the slide/tape show presented at your Management Meeting. Review/reinforce any specific meeting topics or Introductory objectives you want your Division Managers to cover. VII. MEETING WRAP-UP While this portion of your meeting marks an end, it also is just the beginning! Based on the information reviewed and discussed, summarize the high points of the meeting and the Introduction. . . America's #1 brand, especially made for women, a new innovative shape in smoking, a new opportunity for us, Philip Morris, the Industry, our accounts, and most importantly, the smoking consumer.