sample="quota" bates="670901238" isource="bw" decade="1980" class="ni" date="19890328" BROWN & WILLIAMSON TOBACCO CORPORATION Internal Correspondence TO: I. D. MACDONALD CC: J. L. HENDRICKS FROM: M. C. CANAVAN DATE: MARCH 28, 1989 SUBJECT: BARCLAY ULTRA LINE EXTENSION: PRODUCT DEVELOPMENT CHARTER Attached is the Product Development Charter for a BARCLAY Ultra (1 mg.) line extension. The charter identifies a need for King Size and 100's products for test marketing beginning 2nd Quarter, 1990. Approval for the charter should be obtained by senior management at the next CPDC in order to ensure product availability for a planned BARCLAY test next year. If you have any questions, please let me know. M. C. C. 0110CCte Attachment Product Development Charter BARCLAY Ultra Line Extension I. Product Objective To develop a 1 mg. ultra line extension product under the BARCLAY name. The products should be non-menthol and menthol Kings, 100's and 100's Box with conventional filters and tar levels of 1 mg. for Kings to 1-3 mg. for 100's styles. The products should attract current and new Ultra segment smokers, females and males (70% /30%), who are 35-55 years old. It should compete directly with lower tar ultra brands, the key competitive benchmark being NOW. II. Physical Dimensions/Smoke Deliveries A. Dimensions KS 100's Cigarette Length (mm) 84.0 99.0 Circumference (mm) 24.7 24.7 Tobacco Section Length (mm) 57.0 72.0 Tipping Length (mm) 32.0 32.0 Filter Length (mm) 27.0 27.0 Conventional Filter White Tipping B. Smoke Deliveries Tar: 1 mg. tar (Kings), 1-3 mg. tar (100's) Nicotine (mg.): TBD Puff Count (avg.): 8-9 III. Packaging A. Styles: Non-Menthol and Menthol Kings 100's 100's Box IV. Target Consumer/Price Prospect 70% female/30% male 35-55 primary; 25-34 secondary Upscale, better educated Lights and Ultra smokers V. Competitive Set CARLTON NM and M NOW NM and M VI. Segment Information A. CARLTON/NOW Share Trends (1985-1988) B. Competitive Analysis NOW (vs. Carlton) Lower share but growing (1.02 vs. 1.72) Largest style share: Non-menthol 100's (.50) Largest style share: Menthol Kings (.07) Tar level Kings (1 mg.), 100's (2-3 mg.) Positive mobility trend (Carlton has negative mobility) More starters/restarters, less quitters High loyal base - 67% (Carlton - 80%) Source of switchers-in - Kent, Carlton, Vantage, Marlboro, Salem - Full taste (37%), Ultras (38%), Lights (25%) - 100's (46%), Kings (44%), 120's (7%) - Soft pack (83%), Box (16%) - Standard price (96%), VEM (2%) Destination of switchers-out - Kent, Virginia Slims, Doral, Quitting - Ultras (47%), Lights (32%), Full Taste (21%) - 100's (79%), Kings (16%), 120's (5%) - Soft pack (90%), Box (11%) - Standard price (68%), VFM (32%) Target Audience (same as Carlton) - Females 35-55 (average age 50, Carlton -54) - White - $30M+ Non-menthol/menthol split: 68%/32% Source: Switcher Data/MSA 12/88 VII. Testing Methodology A. CPT To ensure product acceptability for an aggressive support strategy behind BARCLAY, testing versus primary competition (NOW) amongst target competitive smokers (Full Taste, Lights and Ultra cells) is recommended. Additionally, in order to ensure that any new product chosen for implementation based on results of the test above does not significantly jeopardize the current franchise, a test versus current BARCLAY amongst the current franchise should be performed. Such results would be used to assess the amount of risk to the current franchise were a product change to be implemented. A loss amongst BARCLAY franchise should not suggest that a new product candidate not be introduced (if test versus competition is positive), but may indicate a need for caution in implementation (e.g., test market versus national rollout.) B. Method Standard unidentified sequential monadic round robin CPT. C. Sample 1. The product decision will be made based on results versus NOW, amongst a sample of 35-55 year olds, 70/30 female/male who are smokers of non-menthol and menthol Full Taste, Lights and Ultra products. King and 100's smokers should evaluate Kings and 100's products, respectively. 2. Additionally, the product should be tested versus current BARCLAY amongst the BARCLAY franchise. D. Timing All CPT results are requested by November 1989, so that a test market could begin during 2nd Quarter, 1990. VIII. Action Standard Minimum Preference parity versus key competition (Now) amongst target Ultra smokers. B. Desired Overall preference superiority versus key competition amongst target smokers with no attribute penalties. IX. Timing/Quantities/Capacity A. Key Timetable Dates 11/89 CPT results; implementation decision 2/90 Start manufacture for test market or national rollout 4/90 Test market start B. Quantities Required To be determined, based on test market or expansion plans. C. Equipment Capacity Manufacturing capacity is available for production of national qualities. X. Priority To be determined XI. CPDC Approved By: Date: 0110CCte