Tobacco Documents Online

3 4 5 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 cigarettes? A No. •They wou~d all apply equally to that decision. Q What is a basic model of consumer decision-making? A A basic model of consumer decision-making presents all the different influences on an individual consumer with respect to any decision about choosing a brand•of good or a service to use. - Q Does consumer decision-making also involve whether or not to purchase a product in general, not just a specific brand of a product? A We study the ways in which people make those decisions also, yes. Q What are some of the factors that play on decision-making? consumer A Consumer decision-making is an extremely complex process and for each individual consumer it literally is possible that literally dozens of factors affect that individual consumer in making a decision. factors that influence regard to cigarettes and two different thing.s? in your opinion, what are some of the consumer decision-making with smoking., which, is probably 21

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Which one would you li~e me Q Smoking first. A The decision in what aspect Q Whether to smoke or not, smoking initiation. A Okay, proper level of but if context, we find school, variety kind of Q In your opinion, does advertising have any influence whatsoever on smoking initiation? advertising does not decision. to comment on? of smoking? smoking initiation. Again, the analysis is the individual consumer, we look at consumer decision-making in any including the decision to smoke cigarettes~ that factors like peers, family, friend~, religion, situational factors, lifestyle, a of others, will all come to bear on that a•decision. It is my opinion that the smoking initiation Not at all? Not at all. Once a per.son influence A influence A Q advertising smoker? A help. the becomes a smoker does whether or not they stay a In my opinion, no. In your opinion, does consumer smoker decide advertising simply which brand of 22

1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 19 20 21 22 23 24 25 cigarettes to A Yes. Q And statement role that factors, factors decisions generally A will smoke? Q testify in paragraph 3 on your expert it says that you will testify about the peers, friends, family, sitdational lifestyle and a variety of broad societal and social influences play in consumer about smoking, which I think we just covered; is that correct? Yes. At the end of paragraph 3 itsays that you that there is no basis to believe that these principles of consumer decision-making generally or as applied to consumer decisions smoking operated any Mississippi. To rephrase differently on consumers that, then, is it that the people in Mississippi are just everybody else in the United States when consumer decision-making? A Yes. about in your opinion like it comes Q At the beginning of paragraph 4 it says that you will testify about brand advertising and the various strategic influencesof advertising, including advertising for cigarettes. What are the to .23

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 various strategic does that mean? . influences of advertising? What A That means that advertising plays a role' in a marketer's strategy to influence consumers to choose that marketer's brand of product rather than any of the competitor's brands. Q Marketing generally includes things like not just also customer service, customer things like that? It's not just right? A Q A advertising, but relations, other advertising; is that Yes. And what exactly Marketing is the does marketing encompass? discipline of business that within an organization it's responsible for the decisions with respect to p#oduct dev~lopment, pricing the product, promoting it, and distributing it. Q Is it important for a business to get the consumer involved with the business, to feel like they're a part of the business? A That would be an individual strategic decision rather than a fundamental principle. Q As a part of marketing, would a company consider ways to establish itself in the community as a do-gooder, so to speak? 24

l 2 3 4 5 7 8 9 l0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A an individual company principle. Q In the last expert statement it says Also an individual strategic decision b~ rather than. a fundamental the nature and magnitude expenditures, including expenditures. Are you going to, if you know, compare amount of money that is spent by the tobacco industry on advertising and promotion with other paragraph on page 1 of your that you will testify about of advertising. cigarette advertising companies? A your head, a whole on or 19967 A I review them. the If I'm asked to I can do that. Are you aware, if you know off the top of how much generally the industry spends as advertising and promotion, say, for 1995 have all those data. ~ would like 1996 data is not available yet. There's always at least a one year lag before Advertisinu Aue publishes those data. Q So for 1995 you have the data, don't want to speculate as to what it was? A No, not at this moment. ~ have organized in an analytical way. to but you that 25

1 2 3 4 5 7 8 9 10 ll 12 13 14 15 16 17 18 19 2O 21 22 24 25 says that demand cigarette brand current smoker? A Yes. So if of the advertising Q The last sentence that you will testify that there is cigarette brand for cigarettes. So basically your advertising fourth paragraph no evidence affects primary opinion is that is just directed at the teens, a teenager is a current smoker, wouldn't A question? Q at the then they would fall into that category, they? I'm sorry, could you rephrase, the If advertising for cigarettes is directed smoker to get them to try your brand, then the teenager as a smoker would be included in that over 18 years of age who is a would be the targeted teenager, category? A A teenager legal smoker, that 18, 19-y~ar-olds. Q So cigarette advertising that's the smokers does not include a smoker who the age of 18? A That would be an illegal target Q But wouldn't you agree that the aimed at is under audience. 26

1 2 4 5 6 7 8 9 10 ll 12 13 14 15 16 17 18 19 2O 21 22. 23 24 25 advertising would be seen by the teenage smoker? A It's possible;because the company does control everyone who sees its advertising. Q Wouldn't you agree that a smoker versus a nonsmoker would probably pay more attention to cigarette brand advertising because they would .have more of an interest in the product? A Yes. Q Wouldn't a teenage smoker more not probably pay attention to cigarette brand advertising versus a teenage nonsmoker because they would be interested in the product? A If that individual had decided to be a smoker then that would be more relevant advertising than for products he or she had not decided to use. Q So regardless of the intent of the tobacco company of their target audience, the teenage smoker would probably pay attention to the cigarette brand advertising, aside from any intent of the tobacco industry? A Yes. In the last paragraph of your expert statement it says that thelevel of expenditure for cigarette advertising reflects the fact that it. operates in a cluttered and highly competitive 27

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 advertising environment. What is a cluttered environment? A to the in the is that A Yes. Q And the cigarette environment? A It because it's a mature product multiple competitors. advertising A cluttered advertising environment refers fact that there are. many competing messages same product category. Competing messages for different brands; what you mean by that? in your opinion, why is the tobacco, field, a highly competitive is a highly competitive environment category and there Q What do you mean when you say "a mature product category"? A That the product category has been in the market for many years. new Q Does that also mean that introduction brands is difficult in a mature~market? A That would not be necessarily Q So the cigarette market would considered a growth market in any way? MR. HELMS: Objection to the term are of a condition. not be "growth 28

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 market" as vague. Q (BY MS. COLEY) How do you use the term "growth market"? A Well, there are levels of growth, is how we use the term. - Q Okay. Can you explain those levels to me? A There can be from negative growth, which means it's a declining market, through zero growth, through very high accelerating growth. Q would any part of the cigarette market fall into a growth market category? A Well, yes. It would be some level of growth, yes, as I have described it. Q In what way? A In that we would take a look at the total consumption in the industry Year-.to-year, whether it's automobiles, cigarettes, milk, whatever, and identify the extent to which the market is growing or contracting. Q Would the cigarette market be considered growth market because the cigarette market, the industry needs to replace Smokers who quit or die? A. Any industry that has customers who stop using their product or die, wouldhave to replace those customers, or to seek new customers with new a 29

2 4 5 6 7 8 9 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 products. That would be a common, typical marketing strategy. Q But in seeking new customers into the cigarette market, your opinion is that the industry is not seeking new smokers, they're, seeking people who have already started smoking just to get them to start smoking their brand? Is that your opinion? A The industry is looking for-- yes, that's my opinion. Q Is there any other product category that markets that way, to an established product user? A I believe, yes, in my opinion, there are many. Q Can you give me some examples that you would use to, say, c~mpare ro the cigarette market? A The milk industry, the chewing gum industry. Those would be two that come to mind. Q market? A and are choose Q How are they similar to the There are people who choose milk drinkers and there are not to drink milk. And the milk industry as cigarette to drink milk people who think that their advertising .campaign is non-milk drinkers to drink milk at all? a whole, do you to get 3O