Proiect DAY OBJECTTVE PROJECT DAY WILL EXPLORE POTENTIAL ALTERNATIVES TO CONVENTIONAL CIGARETTES THAT CREDIBLY OFFER THE ELEMENTS OF TRADITIONAL TOBACCO PLEASURE WITH A GREATER LEVEL OF "SAFETY". The first wave of consumer research assessed 5 potential concept areas directed at improving the perception of cigarette safety amongst smokers. This assessment isolated one concept predicated on "extensive tobacco treatment" as a universally credible and desirable approach to alleviating smokers health concerns. It's broad acceptance was based on the perception to be a new approach which retained the desirable benefits and smoking characteristics of current products with an agreeable trade-off in taste and satisfaction. This wave of research also confirmed the consumer liability that is inherent in RJR's new Premier. This competitive offering was perceived to be too technically advanced and artificial in comparison to the simple agricultural basis of normal cigarettes. Smokers were also concerned about the taste of Premier. BATCO CONFIDENTIAL- CATEGORY 1: MINNESOTA ToSACco LITIGATION BATCo document for Province of British Columbia 2 November 1999 The failure of Premier is a reflection of the untenable position associated with its development orientation. It seems quite clear t-at the focus of RJR's as well as scme of BAT's international efforts is directed toward the development of an ultimate, absolute solution. While this goa-* is a laudable one, it sidesteps practical consumer needs and reality by emphasizing scientific curiosity and development ahead of consumers. The result is a radical, technologically advanced smoking device that does not retain the familiar cigarette benefits sought by consumers. Our approach to DAY recognizes the above and plans greater emphasis on evolvina modifications that retain the positive character -4s tics of smoking. With this perspective, we envisage that Project DA'--- may result in a series of successive new product introductions through time. Each entry will either represent the latest development and technical capability in the se.;.ect--ve elimination of smoke component categories or respond to new external conditions of a health oriented nature. An example of the latter is the potential emergence of CO as a problem - opportunity that may ar4se following the declaration of this ingredient an cigarette packages. This would be a DAY ition. ':.cwever, giv - -.-. In, I propas en the possible J ed4acy of this situation, it will be dealt with under a separate paper - LOCO. Our progress in the technical explorat--on s--de of D,.'--' is prcceeding satisfactor-41y. A var-4e-:--.- o--- e=lciatory orccesses U1 BATCO CONFIDENTIAL- CATEGORY 1: MINNESOTA TOBACCO LITIIGATION BATCO document for Province of BritiSh C01UMbia 2 Novernber 1999 are being examined for precursor removal and the eventual reduction of biological activity. Assuming that we are successful wic- the tobacco treatment component of the program, the second laraest hurdle will evolve around the re-introduction of conventional tobacco taste - a central component of cigarette smoke that is also stripped away by tobacco treatment. Based an the current timetable, we are probably two years away from the commercial application of this process. The priority remains relatively high. We envisage a capital Investment decision to be made in 1991 following brand concept cevelopment and a possible test market in 1992. This timing falls outside of the current development timetable. AC/jc February 24th, 1989 C, BATCO CONFIDENTIAL- CATEGORY 1: MINNEsoTA TOBACCO LITIGAT10N BATCo document for Province of BritiSh Columbia 2 November 1999