sample="quota" bates="2045857649" isource="pm" decade="1990" class="ui" date="19950327" CONFIDENTIAL WEEKLY PERFORMANCE SUMMARY March 27, 1995 Marketing Information & Analysis C3 FILE COPY Philip Morris USA Summary WEEKLY UPDATE March 24, 1995 Shipments Industry volume held at 9.1 billion units for the last three weeks, but fell below projected levels this week. PM, higher than last week, and RJR, lower than last week, were both below projection. PM First Quarter volume (50.5 billion) was -70 million below budget and +1.7% above 1994. Through 3/24/95, PM share (45.9) remained favorable with First Quarter OB (45.3%). First Quarter share is expected to range between 45.8 - 46.0%, +0.7 points above OB and +2.9 points higher than year ago. Retail and Consumer Trends Basic's share gap with GPC remains the only performance measure below its trigger. PM-USA and Marlboro share increased, corresponding with increased MCS support. Discount category decline continues. Promotional Buydown incidence increased week-to-week for Montclair and Misty. GPC money-off and Basic free product incidence were unchanged. Competitive Premium promotional activity continues to expand. Camel B3G3F and Newport money-off incidence at 12 and 31%, respectively. The Retail Pack Gap (49%, 63¢) held steady. =<99¢ incidence (19%) remained at the high end of its recent range. PM-USA FIRST QUARTER PERFORMANCE W/E 3/24/95 Industry volume remained at 9.1 billion units over the last three weeks, but fell below expected levels. RJR decreased for the second straight week. B&W Discount shipments increased to a YTD high. PM USA's volume (4.3 billion) was higher than last week but below projected levels: Lower MCS promotional shipments than forecasted. A change in McLane's shipment delivery policy to aid in balancing shipments on a daily basis. Through 3/24/95, PM-USA's current shares increased and remain above First Quarter OB (45.3%). Week (47.5%) QTD (45.9%) PM-USA's First Quarter volume (50.7 billion) was -70 million units below budget +1.7% above last year. First Quarter share (45.9%), is expected to range between 45.8% and 46.0% for the First Quarter. +0.7 points above OB. +2.9 points above 1Q94. +0.5 above 4Q94. Basic's 13 week share of Discount was 15.1%. INDUSTRY VOLUME UNCHANGED FROM LAST WEEK, BUT BELOW EXPECTED LEVELS. PM'S HIGHER VOLUME, INCLUDING MCS PROMOTIONAL SHIPMENTS, WAS BELOW PROJECTION. RJR DECLINED FOR THE SECOND CONSECUTIVE WEEK. Philip Morris USA McLane Shipments PM SHIPMENTS TO MCLANE WERE BELOW NORM AND SHIPMENTS TO THEIR RETAILERS DUE TO A CHANGE IN THEIR SHIPMENT DELIVERY POLICY. B & W's RECENT SHARE PERFORMANCE WAS DRIVEN BY DISCOUNT, LOSSES DURING 1995 ARE PRIMARILY DUE TO MONTCLAIR PARTIALLY OFFSET BY SMALLER GPC GAINS. PM HAS HAD THE GREATEST INTERACTION WITH RJR. PM's GROWTH CYCLES HAVE BEEN DRIVEN, WHILE B+W's REMAIN RELATED TO DISCOUNT PROMOTIONS. RJR's HAS RECENTLY SWITCHED TO PREMIUM. Philip Morris USA Trigger Points PM-USA PERFORMANCE TRIGGERS FOR DISCUSSION (4wm Nielsen, Consumer Tracking Trend, Nielsen Pricing) Measures Marlboro share of Market Marlboro share of young adult smoker volume Marlboro share of young adult smokers Premium Category share of market Basic share of Discount Category Basic less GPC share of market Total Branded Products share of market Marlboro vs. Lowest Discount pack price gap PM-USA share of market New Nielsen pricing panel data are shown for 1995, while 1994 data reflects old pricing panel. Philip Morris USA Pricing PRICING - W/E 3/18/95 PERFORMANCE ISSUES PRICES C-store Pack Gap remained at 49%. $ Gap % Gap Supermarket Carton Gap fairly stable YTD. $ Gap % Gap INCIDENCE Basic's price disadvantage w/Lowest Incidence decreased Avg $ Disadvantage stable =<99¢ Incidence was stable Montclair money-off incidence increased Misty money-off incidence increased GPC money-off incidence remained unchanged PM'S ALL OUTLET COMBINED PERFORMANCE WEEKLY INTEGRATED NIELSEN - W/E 3/18/95 4-WEEK PERFORMANCE ISSUES PM Share Growth Rebounding as MCS Promotions Expand Marlboro Share Growth Resuming PM OPB Share Stable PM Discount Share Stable Basic SOC Increasing RJR Share Stabilizing Camel Share Stable - B3G3F Support Increasing Doral's Moderate Gains Continue Winston Share Stabilizing, as Promotions Sell Through Discount Category On Long Term Decline GPC 4Wk Share Remains at Highest Level To Date PM'S SHARE ADVANCE WERE DRIVEN BY MARLBORO: +0.3 POINTS TO 47.7% FOR THE WEEK AND +0.2 POINTS TO 47.4% FOR THE LATEST FOUR WEEKS. MARLBORO'S WEEKLY SHARE WAS UP +0.5 POINTS TO 30.9%, ITS HIGHEST LEVEL SINCE W/E 1/21/95. THIS WEEK'S PERFORMANCE BENEFITED IN PART FROM INCREASED FREE PRODUCT ACTIVITY. ON A FOUR-WEEK BASIS, PERFORMANCE WAS UP +0.2 POINTS. OPB'S WEEKLY AND FOUR-WEEK SHARES WERE STABLE AT 8.8% AND 8.9% RESPECTIVELY. PM DISCOUNT'S SHARE WAS DOWN -0.1 POINT ON BOTH A WEEKLY AND A FOUR-WEEK BASIS TO 8.0%. THIS WEEK'S LOSS WAS DRIVEN PRIMARILY BY BASIC. BASIC'S WEEKLY SHARE WAS DOWN -0.1 POINT TO 4.6%, WHILE FOUR-WEEK SHARE WAS STABLE. THE DISCOUNT CATEGORY'S WEEKLY SHARE WAS DOWN -0.6 POINTS TO 29.3%, MORE THAN NEGATING LAST WEEK'S GAIN. THIS WEEK'S LOSSES WERE DRIVEN BY RJR PL, GPC AND BASIC. FOUR-WEEK SHARE WAS DOWN -0.2 POINTS. GPC'S WEEKLY SHARE WAS DOWN -0.2 POINTS TO 5.3%, NEGATING MOST OF THE RECENT THREE WEEKS' GAINS. FOUR-WEEK SHARE WAS UP +0.1 POINT. PM-USA FIRST QUARTER PERFORMANCE W/E 3/24/95 Industry volume remained at 9.1 billion units over the last three weeks, but fell below expected levels. RJR decreased for the second straight week. B&W Discount shipments increased to a YTD high. PM USA's volume (4.3 billion) was higher than last week but below projected levels: Lower MCS promotional shipments than forecasted. A change in McClane's shipment delivery policy to aid in balancing shipments on a daily basis. PM-USA's current shares increased and remain above First Quarter OB. Week (47.5%) QTD (45.9%) PM-USA's QTD volume was -0.3 billion units below OB and -1.2% below last year. QTD share (45.9%), is expected to range between 45.9% and 46.0% for the First Quarter. +0.7 points above OB. +2.9 points above 1Q94. +0.5 above 4Q94. Basic's 13 week share of Discount was 15.1%. INDUSTRY VOLUME UNCHANGED FROM LAST WEEK, BUT BELOW EXPECTED LEVELS. PM'S HIGHER VOLUME, INCLUDING MCS PROMOTIONAL SHIPMENTS, WAS BELOW PROJECTION. RJR DECLINED FOR THE SECOND CONSECUTIVE WEEK. PM SHIPMENTS TO MCLANE WERE BELOW NORM AND SHIPMENTS TO THEIR RETAILERS DUE TO A CHANGE IN THEIR SHIPMENT DELIVERY POLICY. B & W's RECENT SHARE PERFORMANCE WAS DRIVEN BY DISCOUNT. LOSSES DURING 1995 ARE PRIMARILY DUE TO MONTCLAIR PARTIALLY OFFSET BY SMALLER GPC GAINS. PM HAS HAD THE GREATEST INTERACTION WITH RJR. PM's GROWTH CYCLES HAVE BEEN PREMIUM DRIVEN, WHILE B+W's REMAIN RELATED TO DISCOUNT PROMOTIONS. RJR's HAS RECENTLY SWITCHED TO PREMIUM. PM-USA PERFORMANCE TRIGGERS FOR DISCUSSION (4wm Nielsen, Consumer Tracking Trend, Nielsen Pricing) Measures Marlboro share of Market Marlboro share of young adult smoker volume Marlboro share of young adult smokers Premium Category share of market Basic share of Discount Category Basic less GPC share of market Total Branded Products share of market Marlboro vs. Lowest Discount pack price gap PM-USA share of market New Nielsen pricing panel data are shown for 1995, while 1994 data reflects old pricing panel. A change in the change's shipment deluxe policy to more realize daily shipments on a daily basis. PM-USA's current shares were stable increased and remain above First Quarter OB. Week (45.7%) (47.5%) QTD (45. 8 9%) PM-USA's QTD volume was-0. 1 3 billion units below OB and 2.6 -1.2% below last year. QTD share (45. 8 3%), is expected to rise to range between 45.9% and 46.0% for the First Quarter. +0.7 points above OB. +2.9 points above 1Q94. +0.5 above 4Q94. Basic's 13 week share of Discount was (15. 2 1% ) increased 0.2 points above last week. PM'S ALL OUTLET COMBINED PERFORMANCE WEEKLY INTEGRATED NIELSEN - W/E 3/18/95 add last graph 4-WEEK PERFORMANCE ISSUES PM Share Growth Rebounding as MCS Promotion al s Activity Expand s. Marlboro Share Growth Resuming PM OPD Share Stable, At Long Term Trend PM Discount Share Stable Basic SOC Stabilizing increasing RJR Share Stabilizing Camel Share Stable - BBG3F support Doral' S Moderate Gains Continue Winston Share Stabilizing, as Promotions Sell Through Discount Category On Long Term Decline GPC 4wk share at all-time highest level to date PM'S PERFORMANCE IN C-STORES WEEKLY C-STORE AUDITS - W/E 3/18/95 add base 4-WEEK PERFORMANCE ISSUES PM Share Growth Rebounding as MCS Promotion al s Activity Expand s Marlboro Share Growth Resuming PM OPD Share Stable, At Long Term Trend PM Discount Share Stable Basic SOC Stabilizing increasing RJR Share Stabilizing Camel Share Stable - BBG3F support Doral Share Stabilizing moderate gains Winston Share Stabilizing, as Promotions Sell Through Discount Category On Long Term Decline GPC 4wk sha at Highest level 4 wk share remains at Highest level to date. GPC'S WEEKLY SHARE WAS DOWN -0.2 POINTS TO 5.3%, NEGATING MOST OF THE RECENT three WEEKS' GAIN S FOUR-WEEK SHARE WAS UP +0.1 POINT. MARLBORO'S WEEKLY SHARE WAS UP +0.5 POINTS TO 30.9%, ITS HIGHEST LEVEL TO DATE since W/E 1/21/95. THIS WEEK'S PERFORMANCE LIKELY BENEFITED in part FROM INCREASED FREE PRODUCT ACTIVITY. ON A FOUR- WEEK BASIS, PERFORMANCE WAS UP +0.2 POINTS. I'm aware of this problem, and have spent time investigating it. I'm following up w/relevant people. PM'S WEEKLY SHARE ADVANCE D S were driven by Marlboro: +0.3 POINTS TO 47.7%, AS for the week and MARLBORO'S ADVANCE MORE THAN OFFSET BASIC'S DECLINE. FOUR WEEK SHARE INCREASED +0.2 POINTS TO 47.4% for the latest four weeks. DRIVEN PRIMARILY BY MARLBORO. PM'S WEEKLY PERFORMANCE WAS UP +0.5 POINTS TO 49.1%, MATCHING returning to January's Holiday bonus program level. ITS HIGHEST LEVEL during IN THE WEEK ENDING 6/4/94. MARLBORO'S GAIN MORE THAN OFFSET BASIC'S LOSS. FOUR-WEEK SHARE WAS UP +0.4 POINTS. MARLBORO'S WEEKLY SHARE INCREASED +0.6 POINTS TO 33.6%, REACHING ITS HIGHEST LEVEL TO DATE. THIS WEEK'S GAIN WAS LIKELY INFLUENCED BY coincided with EXPANDING FREE PRODUCT AND MAIL IN ACTIVITY. FOUR-WEEK SHARE WAS ALSO UP +0.5 POINTS TO 48.8% 33.3% PM DISCOUNT'S WEEKLY SHARE DECLINED -0.1 POINT TO 7.9%, WITH BASIC CONTRIBUTING TO THE LOSS. FOUR-WEEK SHARE WAS also DOWN . 0.1 POINT TO 7.8%. this week's THE DISCOUNT CATEGORY S WAS DOWN -0.7 POINT S loss THIS WEEK TO 29.9%, more than offset last week's gain WITH RJR PL AND GPC EXPERIENC ING ED THE LARGEST LOSSES. THE CATEGORY'S FOUR-WEEK SHARE WAS DOWN -0.4 POINTS lower. REGIONALLY, ON A WEEKLY BASIS PRICE GAPS REMAINED ST ALL GEOGRAPHIES EXCEPT REGION 1, AS THE AVERAGE LOW DISCOUNT PRICE DECLINED -2¢ DUE TO LOWEST AVERAGE PR REYNOLDS DORAL AND MONARCH. GPC'S WEEKLY PERFORMANCE WAS DOWN -0.3 POINTS TO 6.0%, REVERSING RECENT WEEKS' GAIN . FOUR-WEEK SHARE WAS UP +0.1 POINT. REGIONALLY, ON A WEEKLY BASIS PRICE GAPS REMAINED STABLE IN ALL GEOGRAPHIES EXCEPT REGION 1, AS THE AVERAGE LOWEST DISCOUNT PRICE DECLINED -2¢ DUE TO LOWEST AVERAGE PRICE ON REYNOLDS DORAL AND MONARCH. THE AVERAGE PACK PRICE GAP WAS UNCHANGED AT 63¢ OR 48.8%. THE AVERAGE PACK PRICE GAP WAS UNCHANGED AT 63¢ OR 48.8%. last 2 pages are tables without rhetorical value