sample="quota" bates="2060171077" isource="pm" decade="1990" class="ui" date="19930205" PHILIP MORRIS USA INTER-OFFICE CORRESPONDENCE 120 PARK AVENUE, NEW YORK, NY 10017-5592 TO: Distribution DATE: February 5, 1993 FROM: Rebecca Wallach Gordon initialed: RG SUBJECT: Deep Discount (Store Brand Generic) Category Explosion In February, 1992, questions were added to the Continous Tracking Study fo that we could: Identify what consumers meant when they told us, on the telephone, that their current brand was a generic Monitor over time, whether consumers refer to their cigarettes by brand name or merely as a generic Determine the previous brands smoked by deep discount smokers Monitor deep discount brand activity Track any changes int he demographics of deep discount consumers This report highlights data from February through November 1992. Overview Growth in the deep discount catefory last year was explosive . In February, only 120 respondents (3.9%) told us they were deep discount smokers -- in November 222 people (7.4%) told us they smoked deep discount. Respondents who claimed to smoke a generic brand were asked to bring a pack of their cigarettes to the telephone -- in November 93% obliged. Each smoker who was able to do so was aked to read the name and UPC code from off the pack. The UPC and name was used to determine the brand and manufacturer of cigarettes: The remainin data presented in this report is for smokers who had their pack available. Among smokers we spoke to, PM remained the leader in the discount category (28.1%). However, PM and the other manufacturers lost share to RJR throughout 1992. Manufacturers Share of Deep Discount The most popular brands during the three months ending Novenber, GPC (27.2%), Best Value (21.3%) and Basic (15.9%), account for roughly two-thirds of the entire segment. RJR's share increase, during the year, is attributable to the growth in Best Value. Deep Discount Brands Share of Category During 1992, deep discount smokers use of brand names changed. During the three months ending May, 41% of discount smokers called their brand by name. The remaining smokers referred to their brand as "generic". During the three months ending November, 56% called their brand by name. Consumer Brand Reference Critically, 38% of these smokers, previously smoked a Philip Morris product. Marlboro made the greatest contribution to the category (22.6%), followed by Winston (9.6%) and Salem (6.4%). Interestingly, 7.4% of generic smokers claim to have no previous brand. Previous Brand of Deep Discount Smokers (Feb-Nov 1992) The profile of deep discount smokers differs from the total smoker profile: deep discount smokers skew female, and are older, lower income, less educated, more rural, carton buyers. Demographic Profile of Deep Discount Smokers (Feb-Nov 1992) cc: R. Anise, D. Ball, D. Beran, W. Bittner, G. D'Alessandro, K. Eisen, E. Gee, J. Greene, P. Henriques, P. Henriques, J. Isaacs, S. Janetta, S. LeVan, A. Lopez, N. Lund, M. Mahan, R. Mikulay, K. Miller, S. Piskor, N. Parmet, T. Saloun, A. Sinha, N. Suter, J. Taylor, L. Wexler