sample="quota" bates="507543286" isource="rjr" decade="1990" class="ui" date="19910100" PROJECT QC MACRO ASSESSOR TOTAL PROPOSITION TEST JANUARY 1991 BACKGROUND VANTAGE Excel was developed in response to smokers' a perceived want for a product which provides consumer and social benefits of Good taste Low sidestream smoke Four product styles were evaluated: Non-menthol FFLT 85mm & 100mm Menthol FFLT 85mm & 100mm RESEARCH OBJECTIVES Diagnostically assess the appeal and acceptance of the low sidestream smoke concept - Advertising - Product - Consumer adoption Provide a share projection range for VANTAGE Excel's selling rate at the 4-6 month period following DTS Project VANTAGE Excel's in-market sources of business from: - Competition - Cannibalization (VANTAGE and RJR) - Demographic/category usage METHODOLOGY Evaluation conducted in eight geographically dispersed markets Consumer sample included non-menthol and menthol filter cigarette smokers: males/females, 85mm/100mm+, FF/FFLT/ULT - Total 849 - VANTAGE (boosted) 210 - Competitive (ex VANTAGE) 639 Total proposition test incorporating - Advertising exposure in competitive clutter - Purchase opportunity in lab store - Product placement - Repurchase opportunities ACTION TO BE TAKEN Results of this research will be used: As input for making a 2nd QTR '91 launch decision For refining VANTAGE Excel's marketing elements For deciding the next course of action for VANTAGE Excel SUMMARY OF KEY FINDINGS The VANTAGE Excel proposition generated trial comparable to the "average" level for line extensions previously evaluated but significantly lower than VANTAGE Excel achieved in an early 1989 evaluation (VRP) - Fall-off in trial results from reduced interest among non-VANTAGE smokers - Proposition was perceived as less important, less different, less likeable, and less believable - Changes in the marketplace (restrictions on smoking in public ? places and/or the introduction of other "low smoke" products) appear to have reduced interest in the proposition Initial repeat purchase among triers was at the lower end of the range for previously tested line extensions but significantly higher than the level obtained by VRP - While product performance was improved vs. VRP, taste was the primary reason for non-repeat - Reactions to smoke reduction were favorable and there did not appear to be a top-of-mind ash problem (QC performed significantly better than VRP on ash issue) Projected long term retention for VANTAGE Excel QC is low but somewhat higher than achieved by VRP in early 1989 further supporting a somewhat improved project. SUMMARY OF KEY FINDINGS VANTAGE Excel's (QC) sustaining Share of Market projection (4-6 months) is low overall for a four style introduction. The QC and VRP propositions generate comparable SOM potential - Broader market audience (both non-menthol and menthol filter smokers) and somewhat higher retention for QC compensates for reduced trial appeal vs. VRP PROPOSITION ACCEPTANCE Advertising Performance - Recall - Communication Trial - Trial rates - Expectations leading to trial - Sources of trial ADVERTISING RECALL Unaided recall for QC was comparable to VRP but relatively low versus line extensions previously tested ADVERTISING RECALL Recall of advertising for QC and VRP was very similar - higher recall among females, franchise, and lab triers ADVERTISING COMMUNICATION Excel's advertising communication focused on "less smoke" followed by playback of the social acceptability benefit More focus on "less smoke from lit end" and less mention of the "less offensive" benefit for QC vs. VRP advertising ADVERTISING RATINGS QC Proposition is perceived as less important, less different, less believable, and less likeable. Changes in marketplace is hypothesized as diminishing the proposition's newsworthiness and impact ADVERTISING RATINGS The fall-off in perceptions of importance, difference, believability, and likability for QC vs. VRP/SRP occurs among competitive consumers. Perceptions among franchise smokers hold up overall with an increase in believability. TRIAL RATES VANTAGE Excel (QC) generated trial comparable to the overall average for line extensions previously evaluated but significantly below the level achieved by VRP in early 1989. Changes in marketplace conditions appear to have reduced interest in the proposition. NOTE: Trial rate for SALEM Excel (SRP) is among menthol smokers and trial rate for VANTAGE Excel (VRP) is among non-menthol smokers. TRIAL RATES Purchase in the lab store was significantly lower for VANTAGE Excel QC as a result of lower trial among competitive smokers SOURCE OF TRIAL Stronger trial interest among females, 35-49 years old, college educated, and mid to higher income smokers SOURCE OF TRIAL From usage perspective, higher trial interest among 100mm+ and Ultra Low Tar smokers PERPETUAL PRODUCT DIMENSIONS Good Taste Right amount of tobacco taste Satisfying cigarette Natural tobacco taste High quality cigarette Does not leave mouth dry Smooth Fresh aftertaste Not harsh Slow burn rate Smooth/Mild Mild Low tar & nicotine Not harsh Smooth [Not] strong tasting In-Crowd Brand Adult smokers 25 years or more 18-24 year old smokers Men Modern, contemporary person My friends would smoke Person who makes own decisions Concerned about impression they make Women Smokers who care about others Could be popular in 90's Different Gimmicky Different and unique Smokers who care about others Concerned about impression they make Slow burn rate PRE-TRIAL EXPECTATIONS Franchise smokers have stronger pre-trial expectations for VANTAGE Excel than competitive brand users; franchise users expect the product to be: - Better tasting - Somewhat smoother/milder - Somewhat more of an in-crowd product - More different More positive taste expectations and perceived difference appeared to be the primary motivators of trial among both franchise and competitive smokers While VANTAGE Excel had more positive taste expectations relative to non-purchasers, there was significant skepticism on the taste issue among purchasers prior to use SUMMARY - ADVERTISING & TRIAL The current advertising generates recall comparable to levels achieved previously in the VRP evaluation. Overall, recall for VANTAGE Excel falls below levels achieved on other line extension propositions. Advertising communication focuses on the issue of reduced smoke. However, consumers perceive the proposition to be less important, less different, less believable, and less likeable than when evaluated in early 1989. Changes in the marketplace may have impacted the newsworthiness and desire for this type of product VANTAGE Excel generated substantially lower trial relative to the VRP proposition evaluated in early 1989 (19% vs. 31% trial rate in laboratory store). The fall-off in trial resulted from lower interest among competitive smokers. Trial appeal was high among: - Franchise smokers - Females - Older smokers (35+) - Mid to high income ($15m+) - College educated - 100mm+ and Low Tar users More positive taste and difference expectations were primary motivators of trial. Significant taste skepticism even among consumers motivated to purchase. PRODUCT ACCEPTANCE Post-use evaluation Initial repeat purchase Long term retention POST-USE EVALUATION: PRODUCT ACCEPTANCE Overall ratings for VANTAGE Excel QC were stronger among triers than previously tested products Likes focused on "reduced smoke"; dislikes related to keeping the cigarette lit and taste POST-USE EVALUATION: ASH AND TASTE ISSUE QC product exhibited improvement versus VRP/SRP on ash flaking and notice of unusual taste POST-USE EVALUATION: LIKABILITY VS. USUAL BRAND The QC non-menthol product achieved stronger acceptance relative to smokers usual brand than the VRP non-menthol product. Acceptance for QC menthol among consumers motivated to try is comparable to acceptance for the SRP menthol product POST-USE EVALUATION: VERSUS USUAL BRAND/EXPECTATIONS The QC non-menthol product achieved more positive taste ratings vs. both usual brand and expectations relative to the VRP product. Negative aftertaste perceptions relative to usual brand increased. The QC menthol product was comparable to SRP versus usual brand and expectations with improvement in negative perceptions vs. expectations. POST-USE EVALUATION: USAGE OCCASIONS Stronger acceptance among triers for QC product POST-TRIAL PERCEPTIONS: TRIER REPEATS VS. NON-REPEATERS Taste acceptance was key determinant of repeat vs. non-repeat among brand triers INITIAL REPEAT PURCHASE VANTAGE Excel's (QC) initial repeat purchase among triers was at the lower end of the range for previously tested line extensions but significantly higher than the level obtained by VRP in early 1989 INITIAL REPEAT PURCHASE Higher initial repeat purchase for QC versus the VRP product among competitive triers and non-menthol triers overall DEPTH OF REPEAT The QC product generates a somewhat stronger repurchase commitment among consumers motivated to try the brand than observed on VRP However, adoption is a problem for both the QC and VRP products - by the third repurchase occasion repeat among trier-repeaters should be in the 90%+ range Commitment among repeaters LONG TERM RETENTION Projected long term retention for VANTAGE Excel (QC) is low overall but somewhat higher than achieved by the VRP product in early 1989 As expected, stronger retention among franchise triers than competitive triers (7.7% and 5.0% respectively) SUMMARY - PRODUCT ACCEPTANCE Acceptance among triers was improved with the QC product relative to VRP/SRP - Notice of ash flaking and unusual taste significantly down - Overall likability, likability vs. usual brand, and delivery vs. expectations generally stronger Reduced smoke was cited as primary likes for the product. However, taste acceptance and secondarily smoothness/mildness were the key factors in repeat vs. non-repeat purchase Initial repeat purchase improved versus VRP but was still at the lower end of the range for previously tested line extensions Analysis of depth of repeat indicates the QC product establishes a stronger post-use purchase commitment. However, adoption appears to be a problem for both QC and VRP Projected long term retention is low overall for QC but somewhat stronger than for VRP BUSINESS PROJECTIONS Share of market selling rate (4-6 months post DTS) Sources of business contribution SHARE PROJECTION: BASELINE SHARE PROJECTION VANTAGE Excel (QC) with four product styles generates a baseline share projection of 0.37% overall and 0.16% incremental - this is low relative to normative levels (which had only one or two product styles) SHARE PROJECTION: BY BRAND STYLE The 100mm product styles generate more potential than the 85mm styles of the same flavor type. Maintaining distribution on four styles could be very difficult. SOURCES OF BUSINESS: DEMOGRAPHICS Demographic sources of business skew to females, 35 years old+ smokers, college educated, and higher income consumers SOURCES OF BUSINESS: USAGE VANTAGE Excel draws a disproportionate share of business from low tar and RJR Non-VANTAGE smokers REVIEW OF REDUCED SMOKE PROPOSITIONS OVER TIME Analysis of response to the CC, VRP, and QC propositions indicate that 6% to 7% of smokers (Non-Menthol) have been motivated to try and repurchase a reduced smoke product. While trial and repeat rates have varied by proposition, this consistency suggests a limit for the potential of this type of product. Note: All three propositions reflect response among non-menthol smokers. CONCLUSIONS/IMPLICATIONS VANTAGE Excel has not demonstrated the potential for a successful market launch - Trial potential has fallen off with consumers perceiving the proposition as less important, less different, less believable, and less likeable than was the case in early 1989. Changes in marketplace conditions (additional restrictions on smoking in public places and/or the introduction of other reduced smoke products) are hypothesized as diminishing the impact and interest of the proposition. - While the QC product demonstrated improvement relative to VRP, initial repeat purchase and projected long term retention remain low and are problematic to a successful introduction. The opportunity for a reduced smoke product appears contingent on delivering a product which provides taste satisfaction comparable to, if not better than, interested consumers' usual brand. - There appears to be a relatively small group of consumers motivated to make a trial purchase and at least one repurchase on this type of product (only 6% to 7% of smokers with total marketing reach - 100% awareness and distribution). This strongly suggests limited market potential for the basic concept. - Taste acceptance is the key determinant of longer term retention, smokers appeal unwilling to trade-off taste for the secondary social benefits. POST-USE ATTRIBUTES POST-USE ATTRIBUTES (Con't)