• I

1 SALEM HISTORY

u •si Co

m

i

6ALEH HISTORY

Recognition of tho nocd for a filtjr cigarette. WINSTON was

developed. Consumer demand for filter tipped cigeretteain 1951

was found. '

Plana laid to get into the menthol market in 1954. Manufacturing

problems aolvcd with WINSTON, Product and advertising was yeared

for the entire smoking public, not just for the menthol smokor.

Menthol was put in for those who prefer it but the blend was designed

to appeal to virtually every smoker. It was fait that if a light

pleasant tasting cigarette could be developed, it would have imaediato

appeal.

The name SALEM was selected because it 1) appeared to be charged

with springtime freshness that characterised the cigarette, And 2)

wab & complement to WINSTON. Advertising keyed to tho theme of light,

refreshing springtime smoking, that is "refreshing at all outdoors*.

The green SALEM package suggested the perennial green buds that

draw the whole of American outdoors. Zt suggested gentle waters

lapping to shore line, a breete permeated with pine scents, the

aroma of apple blossoms and the myrrh of the first of roses. In a

word, springtime.

The original intention was to introduce SALEM in January of 1957,

but rumor in the industry stated that a competitor may make an

earlier appearance, Therefore, SALEM was introduced on April 30, 1956.

In the first 12 months, 4 billion cigarettes were reached, by the

second year 11 billion.

1 •• •.••.lrt«VAT

"•'is; :•:.".!

• .••.*•••'.•*.;

en ©

U> W

W

CREATIVE THCHEB

Product and Advertising was geared for the entire crooking public,

not juBt for the menthol smoker. Menthol was put in for those vho

prefer it but tho blend was designed to appeal to virtually every

smoker, it was felt that if a light ploasant tasting cigarette could

be developed, it would have immediate appeal.

SALEM advertising wac a littla softer, quieter and more refreshing

than WINSTON. No radio vas used in 6ALBM introduction. The presen­

tation was visual. Hood music vas yx%*& as background to set a musical

tone poem of soft, fresh springtime images. It was desired that people

see tho SALEM theme and that is one reason much space was used in

nagatine and TV,

To get across the genuine softnoss, mildness and freshness of SALEM,

it was felt to make full utilisation of photographs. The visual

illustrations were designed to make the pleasant introductions and do

the breezy springtime talking.

; »£-;•••:..',.

//*•;•&

:V-A

;.. < < M J 1 ^ '

: > V *

.'-»rr CREATIVE R^VIM

HISTORIC COPY DE'/OOPIEST

hi*

**'. 1956-l^a

1252

• A Kcw Idea in Snoldng

i SALEM Refreshes Your Tirto

* Add Springtiwo Freshness

1960-1961

• SALEM Refreshes lour T*rte

* Air Softens Every Puff

1&3

mi

mk

* SXLEX Refreshes Your Teste

* Tftko t Puff, I t ' i Springtime

"fence Post FleshbicV* "Doflrfood Couple Flashback"

• SALSH Softness Freshens Your T«te

• Step into the Uondorful World of SALE*

"Sprir.fi Flowers" "Pump"

(SO Hoport) - Copy tt,*ne M 196) through Oct.

"Forio Rov," *W»f>on V'hccl Rov. 2"

U.o* - k.a) ($A(400 - #9,300)

(6.UC)

(*17,100)

(7*3* - 6.WC)

($15,200 - $ie,ooo)

(8.8*)

<$ie,#o)

(e.s*)

(e.5«

($20,600)

**

3

' • s

1 , 1 .

. Ivr- ••'.

W W PIPAngTTfB

vmtm ww MCTOMC CCW I ffiLOWaOT'

(continued)

ItfS

Turn to SAI&K ior * Taste that'* Springtiae Frc»h

Try eoucthlng different for A change '

"lloraeUack" 'WooJ Chopper"

"Hew KnfAand" "3outh"

1966

ML

1268

* SALE.'; Hcfrcsheo Your Tart©

• Try the Flavor that's SprihfjtJue Troth

"Camping" •Hiver" "Sailboat"

»

(05) * SALE* Rcfroihes Tour Tart©

• Try the Taete that'a Springtiae Froth Iwry Tine You U 0>t Up

(5KS) • Try the Ono Kcnthol Taote Worth KJdng Longer

• Rofro»he» Your Tasto a Few Momento Longor

"TUheraan"' "Ducka" "Interrupter"

You Can Take SALEM Oat of the Country but.t.You Can't Take the Country Oat of SALEM

"Han in City" "Fifth /.venae" "Graphic*"

"Sidewalk Cafe" ,rTover Suite" "itain11

($2L,)00)

(8.W

<ta,?oo)

($22,000)

.(*26(OO0)

5)

u

-J

HMftWMnmn

HISTORIC COPY .Pg/SLODBNT

(continued)

You Can Tofco 5AUM Out of the Country butt , .

Take A Puff.«,H ^5 Springtime

"Jbat Stov" "ilonkv Tor.Sc" "KolJ: Sineer" "Voice in tho Forg»t" "JlohtAnc H*cku

"iVo fiiiea" . "CocfcUil Firly" "Ttxiceb" "Htttto r*ek"

Length Demonstration

Tou Ctn Tike SAL&M Dul of the Country but . . .

(e.W)

(ta,ooo)

(6.7*)

(*23,7»)

r

H I

ADVERTISING EXPENDITURES MENTHOL CATEGORY, OORY/SALEHAOOL

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1966

1969

1970

1971

Menthol Category

$ 8.9

17.9

28.6

40.6

43.1

45.6

42.1

62.6

60.4

53.2

68.4

87,0

75.8

75.5

95.9

74.5

ts

DC

H O o

tu ft

H

IF * 3

E WAS

Ol o u

<h % o o o

10 * Ct o o

H Ci « w o o

<ft K) KJ % O o o

H *0 ff« v j

*• o o

OJ * u o o

00 » VI o o

H Cn t CD O o

«/> *J o» * o © o

H* * ff> »

H

«> o o

v\ y

id O O

01 % CD O o

K> H « » Kf tft

V* h> U

o o o

M V0 s j

o

H <» M O C

#» * *. o o

s j * o o o

M CO * H O o

*» W U « CO o o

H y> 0% *

~8i3

A S j

v*fc

*• *• o o

in *. H O O

M * W o ©

N W % •si W *

<A H *» % CO o o

M u> v | H

f.? .ftftsi

H O

o «•> o

* *J o o

f j

* v l o o

W K)

* O o o

<* K) H

*. O o

M *f> %J N

, \

*." HEKTHOL CATEGORY

— 1956 share 4.3

— 1972 shore 25.0

-- Category before then was non-filter menthol primarily Kool, Kool.Reg. old brand. Kool King non-filter introduced in 1954.

— SALEM introduced 1956

•- Kool eliar.gsd to filter in 1956 (Kool King non-filter discontinued in 1957)

-- Steady growth - approximately 1 eharo point por year

— Recent category strength - result of 100mm growth and Kool growth.

-- Quarterly growth - steady

-- 80 - 95mm category - flat since 1967

.'66 .'67 _'68 '60 '70 '71 '72

18.5 17.5 17.0 17.1 17,4 17.3 17.6 mi A*

•; ', K V>

•» •-* r • 1 • • .i-

ro

w

SALEM copy

Objectives!

1. Position Brand as the most refreshing cigarette available*

2. Convince consumers that SM*EM offers a uniquo "natural menthol blend" found in no other cigarette.

3. Increase consumer awareness of SALEM Super King*

4. Continue to target executions to the young adult market with particular cmphns*E toward young adult urban males.

'•^"^.w^x.* -mi* ••^W'Wrt;.,

Strategyi

the Drand will teste vefrochme lush, green, na in contemporary and activity, will be emphaui programs (fashi

continue to capitalize on its traditional image of nt by depicting real/individualistic principals in tural outdoor settings. Principals will be shown , roalistiCf nnd imposed manners in both dress Naturalness, a current trend among young adults, zed. The Brand is also developing special creative on promotion) designed for the young adult market.

Visuals which stress masculine individualism in principalBr activities, and settings will be used.

"natural menthol blend*1 vill bo emphasised as the SALEM's refreshing taste. The mint leaf symbol • - , I a * i . * ft . A * a * L * J ft 4 . _ fc __ ^ „ * 4_

SALEH's unique reason why for _ _, ..., .. _ „ _ _«....... depicted is designed to visually symbolise SALEM*6 natural menthol blend.

Rationale'.

SALEM iirtb developed & strong rcfrcsnened outdoor image through years of advertising invectmc-nt. This heritage, with slight modifications in visual executions (more realistic persons/ activity/settings) end copy points ("SALEM Refreshes Naturally") will be maintained in 1973 because it offers an excellent defense against loss of our current franchise. In addition, the natural theme should aid in appoaling to the younger competitive smokers.

Reason why copy points which differentiate SALEM from other menthols provide the Urand a more aggressive, competitive position and reinforce SALEM'S traditional image by enhancing its relevancy. Adc'.ed emphasis on our natural menthol blend, combined with SALES's traditional outdoor image, provides a more meaningful selling message in today'K envitonment.

> f c ^

M

-. r'"-t u'r*"*'

INTRODUCTION DXTES

Xoo,l Filter

Spud (PM)

Newport

O&siB (L fc M)

Mpine

Spring (PL)

Belair

Philip Morris

Carlton

Marlboro

Pall Mall Menthol

WINSTON Menthol

SALEM Super

Kool Longs

Benson t Hedges

True

Newport 100's

Chesterfield

L t M 100

Belalr Longs

Virginia slims

1956

1956

1957

1957

1959

1959

1960

1963

1964

1966

1966

1967

1967

. 1967

1967

1967

1967

1967

1967

1966

1969

$M

S>

w

us

~5&

MENTHOL

CATEGORY

REVIEW

4,'.

I •4»**'<l •ir,TTT»" •fc p pi. lyii »i»»y

W

REVIEW AND DISCUSS

1, IMPORTANCE OF THE MENTHOL CATEGORY

2 PROFILE OF THE MENTHOL SHOKER

3*. SMOK.NG HAB.TS OF THE MENTHOL SMOKER

t|, »PUR£" VS. "SPINOFF* MENTHOLS

i n P M f F ™ ™ HFNT1I01 CATEGORY

SIZE

STYLE COHPOSITION

BRAND COMPOSITION

SALES TRENDS

RJR's POSITION

w^. > , ...... •!». tJ.V.'-iV'1?*' ** <•

SIZE QF THE HEHTHQL.CATECPBY -1*71

- APPROXIMATELY 16 MILLION SMOKERS

- 26 DIFFERENT BRANDS

- 35 DIFFERENT BRAND ITEMS

- 157.3 BILLION UNITS

- 27,2 SHARE OF MARKET

fea, •i •

:**&'i,; J.-!' •''•, l'-\ .'-''"

s>-;i\- • »

i ' V .

W <$• >£ CO

w <£ to CD

tA 1** /.-J". *"• -

BY SIZE 70HM (KOOLREG.)

80-95

95-101

BY TYPE

NON-FILTER

NORMAL FLAVOR

Low FLAVOR

SHARE OF JjF.NTHflL £AI£fifiBl

X

.7

68.8

30.5

;

.7

89.0

10.3

SHARE OF MARKET

X

.2

18.7

8.3

,2

21.2

2.8

•• . I*-' :-.-.

b

NORMAL FLAVORS

KOOL FILTER/BOX

SALEM KING/BOX

SALEM SUPER KING

KOOL LONGS

E&H MENTHOL

BELAIR KING

NEWPORT KING/BOX

ALL OTHERS

LOW FLAVORS VIRGINIA SLIMS

KOOL MILDS

TRUE KING/100'S

DORAL SILVA THINS

VANTAGE ALL OTHERS

SHARE OF MENTHOL CATEGORY

30.7

.22.7 9.6

6.2

H.7

3.a 2.9

8.'l

2,2 2.0

1.8

1.5 .8 .8

1.2

SHARE

MARKET.

M 6.2 2.6

1.7

1.2 1.0

.8.

2.3

.6

.5

.5

.'I

.2

.3

'.»•' •,'••'

ri. •*'.."

,' •.-.... •, r .. • i, '.,•,. • , •

wi*m

: * L * " * " • . * • • * . ' • ' . • " ' » " " • ' ' " * " ' ' ' • ' " ' . ' ' ' . - ' ' • ' . : " . ' * ' " , i ' . ' ' i ' ' ' , ' • ' . • • " • . ' • • ' r ' • ' . . • . ' • * J t , j i * J , : ' - \ • ' \ . - . ' ' ' • ' ' • "

,'.' t LVi'S, ' >>.'

SALES TRENDS IH THE MENTHOL CATE6QRY

CHANGE - '7<l VS. '7?

U SHARE

CATEGORY 1 MENTHOL

NORMAL FUVOR

Low FLAVOR

100 MM

MENTHOLS GAINING SHARF

TOTAL KOOL

TOTAL NEWPORT

TOTAL SALEM

VIRGINIA SLIMS

SILVA THINS

CARLTON

MENTHOLS LOSING SHARF

TOTAL BEUIR

PALL MALL

MONTCLAIR

+ 7

• 2

+ 7

+ 8

+ 9

+15

+ 3

•11 + 3

+86

- 2

- 7

-12

+1.0

- .3

• .8

+1.2

+ .7

• .2

+ .1

• .1

+ .1

+ .1

- .1

- .1

- .1

©

,' ! :.t \ .

in

W

|.v>-_,V* •*'"i' w

m'tp0S1T: [£fifiB^

1973 SHARE OF f./ffEflOM

1974 SHARE OF CATEGORY

SHARE POINT

1974 SHARE OF ^RKET

. -|-i f.W<|IWil,||!:J<itjJ[ -J! ,U - JL'M'WiffyJff'.'al'J Jjai !, J, -*

I

i i i i

PROFILE OF THE MENTHOL SMOKER

WHO HE IS - SEX

- AGE

- INCOME

- OCCUPATION

- RACE

- EJ' .AT(ON

WHERE HE LIVES - PART OF COUNTRY

- CITY SIZE

WHAT HE THINKS - SOCIAL VALUES

- ENJOYMENT OF SMOKING

- CONCERN AfiOUT SMOKING & HEALTH

- CONCERN ABOUT COST OF SMOKING

- CIGARETTE NEEDS

m^mpm

n TTF THF Mlm S f m

• TOTAL HENTHOLS SKEW FEMALE

I 85MM MENTHOLS SKEW HALE

t 100HM MENTHOLS SKEW HEAVILY FEMAUE

TOTAL SKAERS

HEU I

54

X

i|6

[ TOTAL MENTHOL

85HH MENTHOL

100MM MENTHOL

53

29

56 |

H7

71

•"'-:!\;V L.'

V2**P'

'.V;-:'-<- •

f

4

, y*vs ••*4v*,y< v*' *

*> <>> 2"*M£»^<V *

••v,;.

•-i v-••-,

I

e

&

AGE OF THE MENTHOL SMOKER

• MAJORITY OVER 35 BUT SKEWS YOUNGER THAN

TOTAL SMOKERS

• 85'S SKEW YOUNGER THAN 100'S

TOTAL SMOKERS

TOTAL MENTHOL

85MH MENTHOL

100MM MENTHOL

UNDER

X

37

13

«W

40

X

63

57

56

60

.•&;•• !*

lo

*£> CO 10 in

HlfllHF ftf THF HFHTHnt SH0KER

I Ho INCOME SKEWS FOR TOTAL MENTHOL OR 85'S

| 100'S SLIGHTLY ABOVE AVERAGE

JE

t TOTAL SMOKERS

\ TOTAL NENTHO_L

85HM MENTHOL

100IW MENTHOL

X

48 31 21

JL

50

H5

J9.

31

22

20

. .L

o

ID

• v • '„ I • i '

I l I

-,Urt **•*•"<*/ •^-a**- -<*•<• jLt»'j^»»-*^-t^A ^^a^^v^^^-^^ri^^

' 4 +'*

A l W ' i , .' '. ,'.•'•.', .•' ' f i*

r I

. T

I I I I

*»•• ».<,

1

I i I

r >r*'

OffllPATIMI OF THE ffNTHHI SKOKER

• No SKEW FOR TOTAL MENTHOLS

• 100'S MORE UPSCALE THAN 85'S

P mmw m\hW R/

TOTAL SMOKERS

I

25

I

| TOTAL MENTHOL

85MM MENTHOL

100MM MENTHOL

26 M

23

31

13

16

11

13

37

%

^•'•Vi-'1'. .'"

U1

CO

ro

CO

- J

SBPVW^Mu.flj^' xv

I l»

* I I m - « °™<" " T O ° K

w

00

;.•' j»>'.*i .

EDUCATION OF THF MENTHOl SHMFR

• TOTAL MENTHOL HAVE LITTLE SKEW

I 100'S ARE BETTER-EDUCATED THAN 85'S

TOTAL SMOKERS

I 10

TOTAL MENTHOL 9

L I 56

COLLEGE

I

34

55 36

85MM MENTHOL

100MM MENTHOL

11 56

53

33

41

*

£»

CV to

CENSUS « m w MENTHOLS HAVE tmi W£B&fi£ STRENGTH IN.

- EAST SOUTH CENTRAL

- EAST NORTH CENTRAL

- SOUTH ATLANTIC

MENTHOLS HAVE A^LEASE STRENGTH IN.

- WEST NORTH CENTRAL

- WEST SOUTH CENTRAL

MENTHOLS ARE RELATIVELY W J & IN,

* NEW ENGLAND

- MOUNTAIN

- PACIFIC

- MIDDLE ATLANTIC

»Y cm SIZE • TOTAL MENTHOLS HAVE LITTLE SKEW • MENTHOL 85'S HAVE ABOVE AVERAGE STRENGTH IN VERY URGE r I% (2MM +)

AND RURAL AREAS

MENTHOL 100'S DO BEST IN MEDIUM-URGE CITIES (5OM-5Q0M), AVERAGE

IN VERY URGE CITIES, AND BELOW AVERAGE IN SMALL TOWNS AND RURAU

AREAS.

* \ •

fjpr.TAl VALUES OF THE MEKTHOL SMOKER

MENTHOL SMOKERS ARE SOMEWHAT MORE LIKELY TO BELIEVE ni THE "NEW"

SOCIAL VALUES (YANKELOVICH) THAN OTHER SMOKERS

TOTAL SMOKERS

MENTHOL

NON-FILTER

NORMAL FLAVOR

Low FLAVOR

NFW VALUES Z 58

63

56

62

59

OLD YALUES Z 12

37

11

38

11

•

W to

HfHTHOI mm' FH.KIYHFF «= SHOKING

MENTHOL SMOKERS, PARTICULARLY MENTHOL 85 SMOKERS, DON'T ENJOY

SMOKING AS MUCH AS OTHER SMOKERS

PERCE I BWINfi.SK

TOTAL SMOKERS

85MM MENTHOLS

luOMtt MENTHOLS

HON-FILTERS

NORMAL FLAVORS

Low FLAVORS

56

7 if "J 47

M

69

57

54

ADDITIONALLY, SEGMENTATION STUDY INDICATES MENTHOL SMOKERS SMOKE

MORE FOR SOCIAL/PSYCHOLOGICAL REASONS THAN FOR SMOKING ENJOYMENT

i i* >:

HFNTHQL SMOKERS* CONrFRN AROIIT SMOKING AND HEALTH

MENTHOL 85 SMOKERS ARE MORE CONCERNED ABOUT THE ALLEGED HAZARDS OF

SMOKING THAN OTHER SMOKERS (EXCEPT LOW FLAVOR)

i »1

TOTAL SMOKERS

TOTAL MENTHOL

85MM MENTHOL

100MM MENTHOL

NON-FILTERS

NORMAL FLAVORS

Low FLAVORS

SWLffftJH! SCALE

62

63

65

59

55

62

67

ADDITIONALLY, NEARLY A THIRD OF THE "WORRIERS" CROUP IDENTIFIED

IN THE SEGMENTATION STUDY SMOKE MENTHOLS

mmmmm

T S S S P ^ * • • • • • • • ' • • • • • ' "•••••• * -. . - , . I •Ji-V7'»

i

MW^m^vmJWt-JKMasumm

SMOKING

TOTAL SMOKERS

[TOTAL MENTHOL

85KM MENTHOL

,K W MENTHOL

NON-FILTERS

NORMAL FLAVORS

LOW FLAVORS

:RCE

57

IL.

57

56

59

55

0

^&&3&$aM^

at

W

•W!W i, i»

,'"« 1 >..' .' V ' ••' •*• ;../:;;•;

CIGARETTE NEEDS OF THE MENTHOL SMOKER

IN TERMS OF FLAVOR LEVEL. MOST MENTHOL SMOKERS CLAtM TO WANT A

MEDIUM-FLAVOR CIGARETTE

STRONG TASTE

FLAVORFUL* NEITHER STRONG NOR LIGHT

HILLING TO SACRIFICE TASTE FOR LOW TAR AND NICOTINE

mm M M 22

KERS

58

20

OTHER PRODUCT ATTRIBUTES DESIRED MOST BY MENTHOL SMOKERS INCLUDE

FRESH/REFRESHING TASTE

SATISFYING TASTE

NO HARSHNESS WHEN INHALED

COOL TASTE

GOOD/PLEASANT TASTE

EASY ON THE THROAT

SMOOTH FEELING

• I •

•'£'*"•'-''•*•••••',

i*;'' ':•:•. • r, ••..•• •.

•':•"*• ,

w

SfflKlNfi HABITS OF THE MENTHOL SMOKER

- HOW MUCH HE SMOKES

- WHERE HE BUYS HIS CIGARETTES

- WHEN HE BUYS HIS CIGARETTES

- QUANTITIES HE BUYS IN

- His BRAND LOYALTY

- NEW SMOKER RATES

- SWITCHING RATES

- QUITTING RATES

- OCCASIONAL USAGE OF MENTHOLS

I i 9 in

G> <£> W to

SS

ViV^^>'-* % : •"•'••'- • .i • *""."?t*;'*,';.,.r-»" •. ' ,•*••.••

? .,.•*••••

l

I

I l i l

MENTHOL SMOKERS ARE THE LIGHTEST OF ALL SMOKERS

TOTAL SMOKERS

( TOTAL MENTHOL SMOKERS

85MM MENTHOLS

100MM MENTHOLS

TOTAL NON-FILTER

TOTAL NORMAL FLAVOR

TOTAL LOW FLAVOR

NUMBER CONTROL PAGE BATES NUMBER

NOT USED

o

©0

• •--J..- •.»*'{• 'Pl'Sp;*?. •>. l \C-:x'-'''-' • '. I' f ' •*• ^;-iBr::^?^^:*^'--

I I

<•,*•»* •

MHPRF THF MENTHOL SMOKER BUYS HIS CIGARETTES

• MORE MENTHOL CIGARETTES ARE SOLD IN SUPERMARKETS THAN ANY OTHER

TYPE OF OUTLET; THIS IS TRUE OF ALL TYPES OF CIOARETTES,

• RELATIVE TO OTHER TYPES OF CIGARETTES, MENTHOLS ARE,,,

STRONG IN DRUG STORES

AVERAGE IN SUPERMARKETS

OTHER (E.G., LIQUOR, CONVENIENCE STORES RESTAURANTS, BARS, „ ETC.) DISCOUNT HOUSES

HEAKIH SMALL GROCERY*

VENDING

. r

I

I I I

ALL BRANDS

MENTHOLS

NON-FILTERS

NORMAL FLAVOR

LOW FLAVOR

PFRCFfIT OF ClfiARFTTFS ROIMT IN EACH TYPE OUTLET

SUPERMARKETS X l

26 19

27. 26 25 30

13 12 22 23 12

VENDING I

17

ill 26

20

7

r.*«;v

r,'

WHEN THE HENTHOL SMOKER BUYS HIS CIGARETTES

• WHILE MOST MENTHOL CIGARETTES C51%) ARE PURCHASED TOWARD THE

END OF THE WEEK, KENTHOL SMOKERS ARE MORE LIKELY THAN OTHER

SMOKERS TO BUY At THE BEGINNING OF THE WEEK.

SEASONALITY.

• WITH THE EXCEPTION OF KOOL* MENTHOLS PERFORM BETTER IN THE

WINTER MONTHS THAN THE SUMMER MONTHS.

• WHILE KOOL ALSO PERFORMS WELL IN THE WINTER MONTHS* ITS GREATEST

SHARE GAINS IN RECENT YEARS HAVE OCCURRED -IN JULY-SEPTEMBER.

©

TT

\ (

I I I I

I I I I t

I

I I

^yZ^?*;r.-x--:^,;A-^ • ^ V^<A\—'*-• 'i •'• '•*:*•,».'.** *'V> *.' ,"'.«>*";'.«*",*i*. •*'"•*i

., •:.

iVJ

QUANTITIES PURCHASED BY THE MENTHOL SMOKER

HORE KENTHOL CIGARETTES ARE BOUGHT BY THE CARTON THAN BY THE PACK.

BUT TO NO Cfcf.ATER EXTENT THAN OTHER CIGARETTES

PERCENT BOUGHT BY THE

ALL BRANDS

MENTHOLS

NORMAL FLAVORS

NON-FILTERS

Low FLAVORS

CARTON

I

57

BACK z

57 «

55

57

62

15

'13

38

BRAND LOYALTY OF THE MENTHOL SMOKER

MENTHOL SMOKERS HAVE THE LOWEST BRAND LOYALTY

TOTAL SMOKERS

TOTAL MENTHOL SMOKERS

85MM MENTHOL

100MM MENTHOL

TOTAL NON-FILTER

TOTAL NORMAL FLAVOR

TOTAL LOW FLAVOR

77

73

n

71

86

77

76

• J :•*,•* + ., ; V.. •

niTITIIffl filM A"1™1"6 M E

SMOKERS SWITCH TO/FROM MENTHOLS AT A GREATER RATE THAN

OTHER BRANDS

TOTAL SMOKERS

t I

I .J.

1

I

-1 ..>*,V*a**f».

I

538W

K^i

I

!'>.>,-. •;

,'i

,;i

•. /•.'/

Y?r>

:^-:---M

;ti. ' .;*1

**cy *. v,

* -,..-•..->•.•'

1 &&1 i

fOTHQL SMOKERS1 QUITTING,RAT£S

MENTHOL SMOKERS (85MM) HAVE A HIGHER OMITTING RATE

THAN OTHER SMOKERS

fflilk TOTAL SMOKERS 6,9

TOTAL MENTHOL 7,8

85MM MENTHOL

100MM MENTHOL

NON-FILTER

NORMAL FLAVOR

Low FLAVOR

8,7

6,1

5,0

7.1

6,8

W

V "i t . - . :

^•V*;'i^>^T:-rv»^^4:*J(^«W.v ^*'v^^-^^^r^^-A+^^^*»; ^*^J*ft f.* ,'****-1-.«"

T*Vr • • " _ ' Y " , * , ' * " ' , ' • : ' : • • ' . ' ' • ' i , " ' "

OttKlimiJSfflf Of W I S

T REUTIVE TO THEIR SHARE OF MARKET, MENTHOLS RECEIVE SUBSTAN­

TIALLY MORE OCCASIONAL USAGE THAN OTHER TYPES OF CIGARETTES

• OCCASIONAL USAGE OF MENTHOLS IS HEAVIER IN THE WINTER MONTHS

THAN IN THE SUMMER MONTHS (KOOL EXCEPTED)

TOTAL MENTHOL

85MM MENTHOL

100MM MENTHOL

NON-FILTER

NORMAL FLAVOR

LOW FLAVOR

27

R

8

39

18

19

8

18

©

I, . S

V-V..V •• '

-./I

"PURE* VS. rSPIHQFF* RENTHOLS

Q l D I l t t f t

Do CONSUMERS THINK OF "PURE* MENTHOL BRANDS AS

'DIFFERENT ANIMALS" FROM SPINOFF MENTHOLS?

HOW DO BRANDS WITHIN EACH GROUP REUTE TO EACH

OTHER?

WHAT ARE THE MARKETING/ADVERTISING STRATEGY

IMPLICATIONS?

':<v

'PURE* VS, "SPINOFF* MENTHOLS

tram 1. CONSUMERS na THINK OF "PURE" MENTHOL BRANDS AS "DIFFERENT

ANIMALS* FROM "SPINOFF* MENTHOLS.

2. WINSTON MENTHOL'S REAL COMPETITOR IS B&H MENTHOL * NOT

KoOLi

3. THE SALEH BRANDS COMPETE WITH THE KOOLS AND NEWPORTS MORE

THAN THE "SPINOFF* MENTHOLS.

<K VANTAGE MENTHOL AND DORAL MENTHOL COMPETE MORE WITH THE

SPINOFF MENTHOLS THAN THE PURE MENTHOLS. THEY ALSO COMPETE

MORE WITH EACH OTHER THAN WITH TRUE* THEREFORE. THE bUCCESS

OF ONE COULD LIKELY BC AT THE EXPENSE OF THE OTHER.

5. "SPINOFF" MENTHOLS TAKE ON THE IMAGE OF THE PARENT OR

CAMPANION BRAND. THEREFORE* IT WOULD BE DIFFICULT TO

ESTABLISH A TOTALLY SEPARATE IMAGE FOR THE MENTHOL STYLE

OF A BRAND.

r- •

i..;

\ i

• t.

Ill

n.yY •*•*••* ;.-•'; •

WNW

•il

ffc-U

id

^ • • J

i l!*a ft4

<1

I

SV'*, .< ...;,>y'"> I f / A ^

W*^^!"'cvi:'

SUNK

IFFORTAMCF OF THF HEHTHOL CATEGORY

• IT'S LARGE

• IT'S GROWING

• RJR NOT KEEPING UP

PWOFILF- OF THE HEMTHQL SWOKER

• 85'S MALE, 100'S FEMALE • MAJORITY OVER 35 BUT YOUNGER THAN TOTAL SMOKERS

• 100'S UPSCALE IN INCOME/ EDUCATION. AND OCCUPATION; 85*S AVERAGE

• STRONGEST CATEGORY IN BLACK MARKET

• STRONGEST IN SOUTH AND CENTRAL* WEAKEST IN NORTHEAST AND WEST

t NEW SOCIAL VALUES

t LESS ENJOYMENT OP SMOKING; SMOKE FOR SOCIAL REASONS

• CONCERNED ABOUT HEALTH

• WANT A MEDIUM FLAVOR CIGARETTE

Sf1QKlHC7 HABITS OF THE • LIGHTEST OF ALL SMOKERS

• LOWEST BRAND LOYALTY

• HIGHEST NEW SMOKER/SWITCHING/QUITTING RATE

' p y r vs, 'SPINOFF* HEHTHQLS • SPINOFF MENTHOLS PERCEIVED DIFFERENT FROM PURE MENTHOLS

• SPINOFF MENTHOLS ASSUME PARENT BRAND IMAGE

in © 10

w to

M

:s;?^^I^w^ "n^v^'.

I. MENTHOL CATEGORY REVIEW

'/s*,.-—.*f -t,*>.- •«- »- • ^,...

, , J . „ V ' i " * 1 ; ' ! • • * • , ' ' • ; ^ , v * * ' i * v r ' H >

OUESTIONS: WHY SHOULD NEW BRANDS BE LOOKING

INTO THE MENTHOL CATEGORY?

AS ••* • *i>.

•••• < «*& •.-!-. a.v- «•

fflW * ' ¥ ! * • • • J1

fifiount

THE MENTHOL CATEGORY HAS GROWN IN THE PAST, AND WILL CONTINUE

TO GROW IN THE FUTURE,

m

1970

1971 1972

1973

1971 1975 1976

1977

1978 1979

1980

1981

1982

1983

1981

1985 1986

1987

TOTAL HENTHM S.Q.M.

X 22,7

23,1 21,3 25.1

26.5 27,1

28,0

28,1

29,3 30,0

31,0 31.1

32.1 32,8

33,2 33,7

31,5

.31.8

SOURCE: SEPTEMBER MRD FORECAST

*/*-,-•*„>-*- o-.

HHERE IS THE GROWTH IN THE MENTHOL CATEGORY

COMING FROM?

i i

r "'*•. J'

m

Efiou ISL

NON-MENTHOL -> MENTHOL

MENTHOL NON-MENTHOL

SOURCE: APR. 77 NFO

1 4

IK: 1 • Til-

1

w

H '

l^^^V

i

i n « i — — » • » —, • • i . -< -i »' 1.*. ••.' I ^ . ,

)*v/ , . •'•'...•'». '••". - '• • • •• ' « V i

SllAIOF STOKERS 1S-M Vttffi flm

GROWTH OF THE MENTHOL CATEGORY IS COMING FROM YOUNG SMOKERS

AND THEREFORE NEW SMOKERS.

BOTH FULL-FLAVOR AND HIF I MENTHOL DO BE'TER AMONG THE 18-21

AGE BRACKET THAN THEIR NON-MENTHOL COUNTERPARTS.

• *

J O K E R S 18 -21 ( J S > ( t a B ) <J f f l > « • • « > M ,

* x X

FULL FLAVOR NON-MENTHOL 19.6 (129) 17.1 (130) 11,2

FULL FLAVOR MENTHOL 28.7 (115) 28,0 (151) 25.2

H I - F I NON-MENTHOL 6.1 (61) 8.8 (70) 12.2

H I - F I MENTHOL 3,1 <103) 5.5 (105) 9.0

SOURCE: APRIL NFO

•

(INDEX)

(125)

(155)

(73)

(115)

1

to

KuKk

^1 Bv-jr'Jt*-.*

E T J O / U J

RjrrcJE

••ist>m

ii w

i ^ 1 w

RJR POSITION IN THF m M ] m m

SHARE OF CATF^ORY

RJR IS THE LEADER IN THE HI-FI MENTHOL SEGMENT.

BlM

RJR

PH

P> LORILLARD

ATC

1 ^

39.9

37.3

U.8

7.8

2.5

P"" F | t v f i p

15.7

38,6

8.0

6.2

1.2

- J

1 ^

17.2

19.3

14.8

13.3

5.0

TOTAL 100.0! 100,02 100,02

SOURCE: HSA SHIPMENTS - YEAR-TO-DATE 1977

• ' • t t v

•- » -.-.-r-.-.-.X---.\-«-. *^-.ils--.-f>v •"•A,-'„\^\-iA:''•', *~\r

ip ..•• ,..»,.-»„ ...,.."»<*l.1lM.',>*1'J(,/iM«)H*«l*»

SHARE OF HFHTHffl SMnftrMJQfiE

MENTHOL CATEGORY IS STRONGEST AMONG 18-21,YEAR OLD SMOKERS,

. A L L . SHQKEBS lH=2a (INDEX) 2S=Sl (INDEX) 2 H S (INDEX) SQt (IWEX)

BASE, (28,723) (4,547) (7,681) (8,065) (8,430) * * X X *

28,1 37.5 to) 28.9 (102) 27.3 (96) 24,0 (84)

,'**"

m

SOURCES A P R I L 77 NFO

fi*R$

1 (•• .t'.s •-

SUMMARY * WHY,THE hENTHQLXMfiQBt?

1 , MENTHOL I S A GROWTH CATEGORY, /

2. COMPANY STRENGTH I N MENTHOL AREA KEEPS RJR -

#1 OVERALL.

3. PM WEAKNESS - HAS TO BE THEIR PRIME CONCERN,

4. POTENTIAL TO IMPROVE RJR SHARE AMONG YOUNG

ADULTS,