sample="quota" bates="2050852733" isource="pm" decade="1990" class="ui" date="19920724" MANAGEMENT REVIEW - PROJECTS RX AND WIDES JULY 24, 1992 PROJECT RX PROJECT RX A shorter length Marlboro, designed to appeal to young adult male smokes, that is sold at a retail price proportionately lower than king size full margin products. OBJECTIVES Reduces alternate purchasing to discount brands by Marlboro smokers through an offering that reduces "sticker shock". Provide a compelling quality oriented alternative for competitive full margin alternate purchasers. Introduce a young male adult oriented product that is unique in the U.S. market - and fits with the times. STRATEGY Price at 35 to 50 cents lower than existing king size products (see research plan). Capitalize on "sticker shock" pressures. Capitalize on trends having less time to smoke. PROJECT RX POSITIONING A new Marlboro that delivers famous Marlboro flavor, but because its shorter, costs less than king size cigarettes. COPY STRATEGY Convince young adult male smokers that Marlboro Express is cool and different because it's short and costs less. PROJECT RX PLAN Prepare for nation -- 2Q 1993 launch. Full flavor and Lights -- 72mm length. Soft pack only -Requires sacrifice for box smokers. - Attacks weakest full margin competitive packings in most direct way. - Provides defense for Marlboro "soft packings." Extensive launch plan with "country derivative" imagery focussed against YAMS. - Maximize volume and competitive opportunity. - Capitalize on uniqueness of proposition. - Bring new "news" to Marlboro. PROJECT RX CURRENT STATUS Qualitative research undertaken May, June, and July 1992. - 22 focus groups in New York, Kansas City, Dallas, Los Angeles, and Minneapolis. - Among all smoker groups (YAMS 25 to 34 year old males, discount smokers, 100's smokers, female and urban smokers). KEY FINDINGS Strong appeal in three directions - YAMS who perceive a short cigarette to be "cool" (product is perceived to be higher in delivery than traditional king size products). - Marlboro price sensitive YAMS and 25 to 34 year olds. - Urban smokers including competitive full margin users who have fewer smoking opportunities. "The quick smoke". Polarized appeal among competitive full margin smokers. No appeal among "fully converted" price value smokers or 100's smokers. Critical that product is perceived to be a "real" Marlboro. - Flanker strategy consistently communicates cheap offering. - Key ingredient is quality of Marlboro - both in product and packaging. PROJECT RX ACTION PLAN Quanlitative pricing test 9/92 to identify optimum price level. Preparing for ad pack starting 9/92 with 4 packaging designs (2 x Red, 2 x Lights) - Separate tests to identify maximize competitive opportunity/minimize risk to marginal contribution. - Manufacturing product in Richmond semi-works 8/92. - Full results 11/8/92. Developing final product in Richmond. - Delivery, on a per puff basis, equal to king size products. Change-parts for national production ready for order. - Delivery to Richmond -- Jan., Feb., and March 1993. - Total Cost = $3.8 Million. - Installation 1Q 1993. - 10 Billion capacity (2.0 share) - 80% "worst case" cannibalization. Need management approval for order of parts. MARLBORO WIDES MARLBORO WIDES A defensive response to Camel Wides, is designed to appeal to young adult male smokers. OBJECTIVES Defend against outswitching/alternate purchasing. Provide more value for young adult male smokers. (The male equivalent of 100's?). Provide a destination for competitive smokers to whom a wider cigarette is appealing -- but not from Camel. STRATEGY Focus communications and imagery against YAMS. Capitalize on the awareness of a wider cigarette already created by Camel. MARLBORO WIDES POSITIONING The Marlboro that delivers famous flavor and, because it's wider, even more value. COPY STRATEGY Convince YAMS that Marlboro Wides delivers even more value because you get famous Marlboro flavor in a bigger, more masculine cigarette, i.e. every bit a Marlboro -- and more. MARLBORO WIDES CURRENT STATUS Qualitative research undertaken in May, June, and July 1992. - 14 focus groups in New York, Kansas City, Dallas, Los Angeles, and Minneapolis. KEY FINDINGS Product is of interest to some Marlboro smokers -- both full flavor and lights. - Many Marlboro smokers question why Marlboro would copy a small brand such as Camel but - Marlboro smokers would try and - Quantitative modeling from Camel Wides Ad Pack predicts share of around 1.5. Wides inherently communicates more value but fails to address "sticker shock". Wides descriptor most clearly communicates proposition. "XL" also (but to a lesser degree) communicates wider and potentially, better quality (different product?). "Extra" communicates more cigarettes. MARLBORO WIDES PLAN Prepare for national Introduction -- 2Q 1993. Full flavor and Lights -- 26.5mm circ/83.0mm length. - Perceptually, delivers even more value than Camel Wides -- and both red Box and Soft packings. Box only. - Insures clear differentiation from 25's. - Best appeal to YAMS. - Best answer to Camel. Currently developing against 20's. - 10's/12's/14's = offensive and threaten total franchise stability - Wides 12's offer logical answer to (say) Camel 10's. Extensive launch plan against YAM Audience. - Capitalize on communication weaknesses of Camel Wides - Maximize volume opportunity. MARLBORO WIDES ACTION PLAN Quantitative pack design test covering three pack and three name directions 8/92. - Wides - XL - Extra Preparing for "front-end" of ad pack starting 9/92. - Pretrial study - Results to management mid October. Developing product in Richmond. - No production available until September or October on semi-works. Need management approval to order change-parts ASAP - 10 billion capacity (2.0 share) - 80% cannibalization - 80% box cannibalization