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CONFIDENTIAL Marketing Research' Report BID #90-82501 February 15, 1990 TO: Mr. W. S. Lindquist FROM: J. V. Bellis HISPANIC L.A. EXPLORATORY FOR FC AND NEW CAMEL FAMILY ADS Cobies to: Mr. E. J. Fackelman Mr. J. D. Weber . ~ W Mr. G. G. Strauss Mr. E. Turregano (Bravo) BIC PUBLISHED BY THE MARKETING RESEARCH DEPARTMENT R.J. REYNOLDS TOBACCO USA, WINSTON-SALEM, N.C. 27102 RJRT Fam 6752 - Rev. 7/88

1. LA EXPLORATORY FOR FC AND NEW CAMEL FAMILY ADVERTISIN.r, ~.:. (BID M82501 - I. MANAGEMENT SUMARY A. PURPOSE: . ;. To summarize learning from focus groups conducted tfl - explore the appeal and relevance of FC advertising campaigns, new Camel family advertising, Camel premiums, and the general market VF campaign among target young adult Hispanic smokers. B. BACKGROUND: In anticipation of FC's launch into the PMSA in May; 1990, target Hispanic input toward the FC concept and toward alternative Hispanic adaptations of general market FC advertising was needed. The Hispanic adaptation of the general market FC campaign was of particular concern since the general market creative borrowed heavily from American pop culture. Concurrently, RJR was exploring new advertising approaches/ formats for Old Joe in order to keep Camel advertising fresh and appealing to the target. There was a need to assess the appeal of a variety of these new formats. Additionally, there was a need to assess the female Hispanic smokers' interest in the VF proposition and campaign. Finally, in order to make maximum use of qualitative research conducted on the West Coast, potential premium items for Camel were also screened. Although not a primary objective, the groups began exploration into the'feasibility/potential of a Hispanic targeted brand. C. RESEARCH OBJECTIVES: o To explore the appeal and relevance of the FC proposition among target Hispanic male smokers (pack/cigarette configu- ration and smoking benefits). o To explore the appeal and communication of Hispanic FC advertising adaptations relative to each other and relative to the general market FC campaign among target Hispanic male smokers. N 0 o To explore the appeal and relevance of the FV proposition v (advertising, packaging) to YA Hispanic female smokers. tNn v t0 W

2. o To explore the appeal and communication of new Camel family '" advertising formats and to identify their potential advantages . relative to the current format. ~... -" - ,.. o To explore the appeal and purchase requirements that.target smokers attach to new potential premium items for Camel. o To explore target smoker attitudes and perceptions toward existing products/brands that are targeted to Hispanics and/or that have a Latin heritage. ' D. HYPOTHESES EXPLOREN o That the FC proposition will have at least moderate appeal to target male smokers (due more to the promise of smoother taste than to the wider configuration). o That the FC advertising adaptations will present the same potential for generating strong appeal/entertainment value and communication as the general market FC campaign. o That the FV proposition will have moderate appeal at best to YA Hispanic female smokers because of its lack of heritage/ big brand status and because its packaging/advertising is targeted to the Anglo female mindset (i.e., a less feminine, more independent/self-confident mindset). o That the new Camel family advertising formats will generate the same strong levels of appeal and entertainment value that were observed when 75th Birthday/Old Joe were first developed, and that target smokers will welcome the change to a new format. o Those Camel premium items that strike the best balance of usefulness, high perceived value and uniqueness will generate the strongest appeal. o Only those products/brands with an established Latin heritage can be successfully targeted to Hispanics. E. METHODOLOGY: Six focus groups were held in Los Angeles on January 8 and 9, 1990. All groups consisted of 18-24 year old Hispanic, non-college, smokers of competitive full priced FFNM or FFLTNM filtered brands. Of the six groups, two were females and four were males. All respondents had Spanish as their primary language used at home and regularly used Spanish language media. Prior to commencing discussion on the key topics outlined above, all groups were administered an attitudinal pack sort using the most popular brands in L.A., were probed for Camel advertising and promotion awareness, and were probed on awareness/trial/ purchase of Magna. tn 0 i N N 0) v ca 4

3. General attitudes and brand perceptions were discussed in aIl„groups. The VF creative was exposed to women only. FC packaging and prototypes were exposed to men only, althou$h. FC advertising was exposed to both sexes. .. NOTE: QUALITATIVE RESEARCH CAVEAT As with all qualitative research, this type of consumer feedback provides a basis for further developing and evaluating hypotheses and should be viewed as suggestive rather than definitive or projectable. :r F. SUMMARY OF KEY FINDINGSt(AS RELATED TO HYPOTHESES): 1. The FC proposition did not hold appeal to the target male smoker. This was due to the following: a. High level of satisfaction with YAHS' current brand b. A key consumer benefit relevant to the target was not perceived. c. FC perception was that of a stronger cigarette for older people. d. "Wider" did not translate to "smoother taste." 2. The FC advertising adaptations did not generate strong appeal/entertainment value and communication (as compared the general market or in the absolute). 3. o A key consumer benefit relevant to the target was not communicated. o Campaign was not seen as different from regular Camel advertising, thereby eliminating "news value," r`novelty " or surprise elements. o While YAHS liked the idea of teaser advertising, these executions did not imply that something major or of great importance was about to be introduced. The "Ya viene el gordo" adaptation was preferred. The mention of smoothness helped to neutralize the strong cigarette perception. The adaptation also resulted in the cigarette being called "El Gordo," which was seen as catchy and easy to remember. A potential problem for this adaptation, however, is its similarity to an existing advertising campaign in California for the state lottery. Future efforts should concentrate on explicitly communicating a consumer benefit such as "wider equals smoother." The FV proposition did not appeal to Hispanic women in that it did not communicate a relevant benefit such as style, femininity or elegance. It did not communicate a consistent image. Certain executions communicated roughness, low-class, and social isolation.

4. : 4. S. Camel premiums which were seen as most useful, valuable and unique were preferred. In this case, the white box lighter with the flip-open lid and the white T-shirt with the "pack" of camels on the back. The Camel family advertising formats did not generate the same strong levels of appeal and entertainment ,value seen when 75th Birthday was first developed.~~`^ The new formats were not easily distinguished from existing advertising. The format which uses a photo- graph to display the girl in the background was preferred due to YAHS strong interest in seeing pretty girls. The photograph made the girl more realistic and interesting to the men. r Executions which portray the camel as the hero who is in control and admired by women are preferred over those in which the camel is an active participant in the activity. The former is consistent with YARS' dreams and aspirations. 6. Hispanics appear to be open and receptive to a new brand of cigarettes which is specifically targeted to them. However, the brand must demonstrate superior benefits over their existing brand in order to affect a change.

5. . DEFAILED FINDINGS: 1. FC . a. Proposition Respondents did not appear to be personally interested in.a wider cigarette for many reasons: o New brands are considered "low interest." •'YAHS are very happy/satisfied with their usual brand (in most cases, Marlboro). There does not appear to be a reason to walk away from a brand that they consider to be the "gold standard" in terms of quality, taste and acceptance among peers. o Respondents for the most part could not translate "wider" into a perceived benefit. Once probed, respondents felt that perhaps a wider cigarette would be much stronger because of the additional quantity and concentration of tobacco. A wider Camel was seen as being a stronger Camel. This was considered to be a negative on top of a negative in that some YARS still consider regular Camel as being too strong for them. o The perception that FC would be very strong translated into a belief that the cigarette was more appropriate for older smokers who had graduated over time to a stronger cigarette. o Some respondents felt that perhaps a wider cigarette would be one that would last longer. They saw this as an "economy" message, i.e., more smoking for the money. This was not considered appealing in that they like to be seen with a cigarette that is considered high quality and almost a status symbol; buying an economy brand goes against this motivation. o No one translated wider into smoother or smoother tasting. b. Packaging Respondents were shown the packaging and later given boxes to handle. o When first exposed to the package, respondents did not notice that this was a line extension for regular Camel. N They believed that this was, in fact, regular Camel. o v N o Even after handling the packaging, approximately only N half noticed that it was measurably wider. m v CD o There was some confusion as to how many cigarettes this ~ new package contained. Was this the regular Camel in greater quantity? Was this FC with fewer cigarettes? Or was the box indeed wider because the cigarettes were wider?

6. c. Cigarette Prototypes Prototypes were distributed to respondents. o Once seeing and feeling the cigarette fn'their hands, respondents felt that the new size was acceptable to them. Nonetheless, YA}IS did not particularly see the wider.size as an advantage over their current brand. d. Advertising Campaigns ' Three executional series were presented. Each one included a teaser, and introductory board, and a sustaining board. The series were as follows: i. Llego un nuevo tipazo, el mas ancho (teaser) El mas ancho, nuevo Camel wides (intro) Sabor a todo lo ancho (sustaining) ii. Ya viene el gordo (teaser) - Nuevo el gordo, suave Camel wides (intro) Sabor en gordo (sustaining) iii. Ya viene el gordo, es una fiera (teaser) Es una fiera, nuevo Camel wides (intro) Sabor en gordo (sustaining) None of the adaptations presented the expected potential for generating strong appeal/entertainment value and communication as the general market FC campaign. The following are possible reasons: o The campaign was not seen as sufficiently different from regular Camel's advertising to create "news value" or an element of surprise. The advertising was not seen as unique. o While YAHS liked the idea of teaser advertising, the teasers in these executions did not appear to promise anything "new and major" or anything that would heighten their sense of anticipation or excitement. As already mentioned, new brands appear to be low interest. o None of the campaigns communicated a relevant consumer benefit. Even after one execut on was revise to say smooth," it was not sufficient to communicate that wider equals smoother taste. At best, reference to smooth in this particular execution neutralized the expectation that the cigarette would be stronger. tn 0 ~ N tn 0) v cn m

7. Additional learning on the advertising is as follows: o Series #2 (Ya viene el gordo) was preferred. -- Many respondents started calling the cigarettb "E1 Gordo." This was seen as catchy and proprietary. - Mention of "smooth" helped to neutralize the stronger cigarette expectation. - The camels' more formal dress style vs.the one with more casual clothing was seen as positive and elevating the quality expectation of the b)rand and the user. o Series # 3(Ya viene el gordo, es una fiera) was the one least liked. - the word fiera (beast) translated into a"strong, very powerful, harsh cigarette." - Fiera also has connotations of "ferocious." This was seen as incompatible with the likeable, simpatico nature of the camels. - The casual dress style of the camels downgraded the image, and appeared to some as representing street hoodlums. The street-alley background of the"se executions coupled with the dress probably contributed to the perception. o Series # 1 (Llego un nuevo tipazo, el mas ancho) received mixed reviews compared to the other two. - Some liked the clarity of the communication, i.e., it clearly describes the cigarette as being wider. - Some were amused by the sexual connotations they assigned to this creative. - However, in general, this was seen as lukewarm/not too interesting advertising. o While these campaigns were not disliked, the moderator believes that future efforts should concentrate on communicating that wider equals smoother taste. In other words, a key consumer-oriented benefit needs to be communicated strongly and as literally as possible without sacrificing creativity. o It is important to note that a large number of respondents equated the "El Gordo" campaigns with the California State Lottery's Hispanic campaign. Many stated that not only was the copy identical, but that there were many similarities with the "look" of the campaign. This should be examined further not only for reasons of uniqueness (or lack thereof), but for legal implications as well.

8. . VF BRAND FOR WOMEN (DAKOTA) • a. Proposition & Advertising ~. . As currently represented in the advertising campaign, young adult Hispanic female smokers do not appear to be interested or attracted to the Dakota brand. o Respondents were happy with their existing brands. i• - o The campaign did not promise a meaningful benefit. Many respondents could not explain what the benefit of the brand would be. When probed, some mentioned that the product would be smooth because the copy read, "Where smooth comes easy." However, female smokers are satisfied with the level of smoothness of their existing brands. o The campaign did not communicate a distinct image. It did not communicate that this was a cigarette for women. This was due to the inclusion of men in the smoking occasions. o Some executions ("Cowgirl" and "Motorbike Girl") communicated negatives such as "loneliness" or "solitary - not sociable" activity, or too much independence and roughness. o The "three people on bikes " execution downgraded the product as being for "bikers or rough types." o Respondents preferred the executions with the female friends in social occasions, or the couple because of the romantic implications. o The brand did not come across as feminine or elegant, two important elements with the female Hispanic mindset. b. Packaging o Respondents like the packaging, particularly the grey version for its "more stylish and elegant" appearance.

9. 3. CAMEL FAMILY ADVERTISING FORMATS Two versions were presented: a. Background girl as photograph b. Camel as participant in activity Neither one generated the same strong levels of appeal and entertainment value that were observed when 75th Birthday/Old Joe were first developed. ~•- Neither format was seen as a departure from current advertising on an unaided basis. Therefore, there was no element of newness or surprise to generate that excitement. Version A (Background girl as photograph) was preferred. YAHS are strongly attracted to pretty women in advertising and making the girl in the background more realistic by means of photography was seen as a definite plus. Respondents prefer to see the camel as hero as portrayed in the current campaign. When the camel was placed as an active participant in the situation, he lost the important aspects of "being in control," "being the object of desire by women," "being a smooth character." He was no longer "larger than life." As one respondent expressed it, "(Camel as participant) is where we already are; (Camel as Hero) is where we want to be." 4. CAMEL PREMIUMS Camel premium items that had the best balance of usefulness, high perceived value and uniqueness generated the strongest appeal. The best performers were the White Camel box lighter with the flip-open lid and the White T-shirt with the pack of camels drawing on the back. While respondents did not understand the pun about "pack" of Camels, they were very attracted to the picture. 5. HISPANIC TARGETED BRAND YAHS regularly purchase or consume Hispanic targeted products. However, for the most part, these brands.are-for products that are inherently Hispanic and not items normally consumed by the general market. Examples are foods typical to their country (tor- tillas.arid similar Mexican foods). There appears to be very limited use of Hispanic brands for general consumer goods. This appears to be a function of the following: o availability o imported goods usually carry a price premium o a desire to purchase well-known, mainstream (branded) products that are well advertised and popular in this country. It was interesting to note that many respondents considered major American brands to be Hispanic (e.g., Coca Cola, Nescafe, Colgate). This is perhaps a function of those brands being sold "back home" and advertising/promoting to the Hispanic market in the U.S. cn 0 v N N CY) OD 0 r

10. YAHS, generally, were favorably inclined toward trying ` a=new Hispanic cigarette brand. However, they mentioned they would switch brands only if they found the new cigare'tte to be superior (primarily in terms of taste);to their current brand. It is important to note that specific concepts were not presented during the focus groups and therefore, respondents were not able to react to image or positionings - elements which are vitally important to Hispanics. ff _ '6. MAGNA CIGARETTES There was virtually no awareness of Magna cigarettes. Perceptions based on the packaging alone were varied - some thought the product would be very strong because of the bold colors, the graphics and the brand name. Others thought the product would be very light and possibly inferior in quality. A few thought the product would be good quality, but would not have any advantages over their existing brand. When compared to packaging for Bucks (also an unknown brand with the groups), the majority preferred Magna. The packaging was preferred primarily because respondents liked the box style better than the soft pack. Box connotes higher quality. Additionally, many thought that Magna would be more modern and appeal to a younger audience than Bucks because of the graphic design elements used. 7. PACK SORT As expected based on market share, Marlboro was consistently ranked as the most popular brand among peers. What was interesting to note during the pack sort exercise was the elevation in ranking that Camel has received since the moderator first conducted groups in Los Angeles 1-11/2 years ago. Camel is now seen by the majority of respondents as a viable substitute for Marlboro when the latter is-not available. It is considered to be somewhat similar in taste (or at least more similar than other brands are to Marlboro). It is seen as a good quality brand, popular, active within the Hispanic community, and acceptable with their peers.

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