<note> sample="quota" bates="03923293" isource="ll" decade="1980" class="ni" date="19830906" </note>

Lorillard MEMORANDUM 6 September, 1983 TO: See Distribution FROM:
L.R. Voegl RE: Semi-Annual 1983 Switching Study 

Following are the highlights of the 1983 Semi-Annual Switching Study.
The areas analyzed are: - Demographics - Category and Manufacturer
Switching - Unaided Low Tar Brand Awareness - Preference for Taste
vs. Low Tar If you have any questions, please call. L.R.V. LRV:sjh
att. cc: J. Asher M.A. Kayiatos N. Goldstein (JCM) S.R. Benson M.E.
Kiernan G. Hoefer (MCA) M.H. Burke P.R. Lawrence R. Thomas (PCB) M.K.
Capra V.D. Lindsley R. Wigdor (DFS) K.P. Curren T.H. Mau T. VandeKamp
(MCA) J.E. Daghlian L.R. Moroz E.F. DeLaura A. Pasheluk C. Elam I.J.
Staub E.P. Farrell G.R. Telford J.G. Flinn C.W. Toti C.G. Garbin R.D.
Hammer A. DEMOGRAPHICS Total and Category Demographics Overall, the
demographics of the smoking market have been stable, with the exception
of a gradual increase in the proportion of female smokers. The smoking
population is currently split evenly between males and females. The
increase in female smokers is primarily in the Reduced Tar categories.
There also appears to be a gradual decline in the level of education
in these categories. (Tables 1-4) Manufacturer Demographics The Lorillard
franchise has become more female since 1982 and is currently one of
the most female-dominated manufacturers (59%). In comparison to the
total smoking market, Lorillard smokers continue to be more likely
to be: female, older, and better educated. Overall, the demographics
of the other manufacturers have remained fairly stable, with the exception
of Liggett & Myers, whose demographic profile appears to be shifty
slightly, probably because of the growth of generics. The L&M franchise
has become increasingly more female, older, better educated, and white.
(Table 5) Lorillard Demographics Newport Since 1981, the Newport franchise
has become increasingly more female; females now dominate the brand
(58% vs. 43%). While Newport smokers used to be concentrated in the
18-20 year age range, they now are concentrated in the 25-34 year
age range (median age is 25.5 years). (Table 6) Kent The demographics
of Kent has been fairly stable. The franchise is roughly split by
males and females, older (median age is 48 years), as educated as
the total smoking market, and white. (Table 7) Golden Lights The Goldeb
Lights franchise appears to be skewing increasingly more female and
older; currently it is nearly two-thirds (63%) female and the median
age is 46.3 years. (Table 8) Kent III The Kent III demographics have
not demonstrated any clear trends since 1981; the profile continues
to be quite similar to that of Golden Lights. (Table 9) True The True
profile has remained stable, with the possible exception of a gradual
decline in the proportion of white smokers in the franchise. (Table
10) 

Table 1 TOTAL SMOKERS DEMOGRAPHICS 

Table 2 CATEGORY DEMOGRAPHICS 

Table 3 OCCUPATION 

Table 4 OCCUPATION 

TABLE 5 MANUFACTURER DEMOGRAPHICS 

Table 6 NEWPORT DEMOGRAPHICS 

Table 7 Kent Demographics 

Table 8 Golden Light Demographics 

Table 9 Kent III Demographics 

Table 10 True Demographics B. CATEGORY AND MANUFACTURER SWITCHING
1. Category Switching Incidence of Switching The proportion of smokers
who have switched their regular brand during the past two years has
steadily been declining, and is currently at 20.8% (Table 11) Category
Switching Half (50%) of all smokers who have switched brands during
the past two years switched to a Low Tar brand and one-third (31%)
switched to a ULT brand. Just 14% switched to a Lo-Fi brand; this
proportion has been slowly declining over time. (Table 12) Category
Source of Business Although there has been a decline in the proportion
of those switching within the Low-Fi category, the largest pool of
switchers to Low-Fi (49%) continues to come from within the program.
The majority of those who switch to a Low Tar brand continue to come
from Lo-Fi (56%), probably from a parent brand, and the largest proportion
of switchers to a ULT brand continue to come from Low Tar (47%), which
may also be a switch in the same brand family. This pattern exists
among all two-year brand switchers, as well as among those who switched
from a different category. (Table 13 and 14) Category Loss of Business
The majority (58%) of all those who leave a Lo-Fi brand tend to switch
down to a Low Tar brand. The largest proportion of switchers from
Low Tar brands (44%) and ULT brands (61%) tend to switch to other
brands within their respective categories. The majority of those Low
Tar smokers who leave the category tend to switch down to a ULT brand
(76%), and those ULT smokers who switch categories, not surprisingly,
switched up to a Low Tar brand (86%). (Tables 15 and 16) 2. Manufacturer
Loss of Business Of all manufacturers, Philip Morris retains the largest
proportion of switchers, with one-half (50%) remaining in the franchise.
Of those smokers who left a Lorillard brand, 16% switched to another
of our brands. The retention levels naturally parallel the relative
share of market of each manufacturer. (Table 17) 

Table 11 BRAND SWITCHING STUDY 

Table 12 CATEGORY SWITCHING 

TABLE 13 CATEGORY SOURCE OF BUSINESS 

TABLE 14 CATEGORY SOURCE OF BUSINESS (Excludes Switching Within Category)


TABLE 15 CATEGORY LOSS OF BUSINESS 

TABLE 16 CATEGORY LOSS OF BUSINESS (Excludes Switching Within Category)


TABLE 17 MANUFACTURER LOSS OF BUSINESS C. UNAIDED LOW TAR BRAND AWARENESS
Overall, Merit, Carlton, and Vantage continue to be the most frequently
mentioned brands among total smokers, in all filtration categories.
Marlboro Lights is also mentioned frequently among Lo-Fi and Low Tar
smokers. Mentions of Now and True are quite high among ULT smokers,
but decline as tar level increases. (Tables 18 and 19) 

Table 18 UNAIDED OF LOW TAR BRAND AWARENESS 

Table 19 UNAIDED LOW TAR BRAND AWARENESS D. PREFERENCE OF TASTE VS.
LOW TAR If forced to switch brands, the most important consideration
to Lo-Fi smokers continues to be taste. While the majority of Low
Tar and ULT smokers still claim that low tar is more important than
taste, this mention has been declining over the years. The decline
is a result of a gradual increase of those mentioning the importance
of taste, as well as a good proportion offering that both low tar
and taste are important. (Table 20) 

Table 20 PREFERENCE FOR TASTE VS. LOW TAR