CONFEREYEE OBJECTIVE O TO BRING KEY MIRKETING ANO PRODUET APPLlelffONS THINKERS TOGETHER 1N I SITUATION WHrCH IS SUFF1CIENTLY CREITIVE TO STIMUtATE GENUINELY IIYDVATIVE PRODUet )ASED PROJE~T IDEltl 1UT ) IUFFltlE~TLY STRIItTUNED TO tXA~IIE tHEIE ~DEAI A6AllfT REALlttlC tECHlleAL FEASI1ILITI AID ~IR~ETlltLITr eOllTIAIITt· O ClibPDF - I~~fastio.soni LIST OF PARTICIPANTS BOB BEXON IMPERIAl TOBACCO LIMITED, CANADA TED PARRACK · BROWN ·AND WI1LIAFISON, USA IAN ROSS : SUOMEN TUPAKKA, F~N1AND MIKE SCOTT I BIAlrl OK g EJ ENGLAND MAURICIO YURMSER TABACAIARIA, CANARY ISLES GEOFF BROOKS t ~ARKETING DEPARTMENT, MI1IBANK DAVID CREIGHTON PRODUCT APPLICATIONS GROUP, 6R s DC AOB FERRIS PRODUCT APPLICATIONS GROUP, GR s DC (CDNVENOR) EO1IN tREIG PROOUCT APPLICATIONS GROUP, GR & DC TAJ HIRJI PRODUCT APPLICATIONS GROUP, 6R 8 DC (0' .co cn· CI I:PUF -\:11I!::, fJsilo.;:om --~------ .sAcffcaonND AMI CONFERENCE STRUCTURE that are the distinguishing features of a commercially applicable product projectP It is generally accepted that, given any set of potentially applicable projects, decision makers are capable of prioretising such a set against the criterion of 'degree of commercial applicability', Ihat is less well understood is the nature of judgements taken into Iaccount hen making that prioretisafion, i 1 gpod ~llatruia di Lia prDYsm ope be seep ip IY cultures, bny RBtD culture generates a large portfolio of i a projects, each ct arhich exhibits a liie cycle running iron origination as d 'source' project generating information and fundamental understanding of principles, through to deployment as an 'applied' project erploitfng such information in product applications I The problem Ior RIO decision makers committed to the application of RltD innovations to the product lies in reliably distinguishing 'Ilpplisd' iron 'source' projects ed understanding the basis on which such distinctions are made, eaeDe have at'tempted to resolve some of these problems by developing a systematic approach to evaluating projects and isolating and deifning the judgements used in such evaluations, The method is called 'Strategic Project Selection' and was developed in late 1983, In this approach every discrete project within the RbD portfolio (70 projects in all) was subjected to a standardised examination of strategic objectives, anticipated constraints, criteria of aaeas, anticipated ;ppliotiaa9 etc, lolloling this, several of the projects thus described were used in iPtenfeare ~ith a snail group or selected decision makers ~lthinGRI~DC, The interviews followed an established psychological approach in which st~eeesoive pairing of projects us compared and contrasted, with a view to drawing out the implicit set of judgements which the interviewee is using to justify a mo're global judgement (i,e, that one project is perceived more comoercially applicable than another), Typically it is found that the judgement of commercial applicability for any one individual seems to rest on a structure of about 8 'sub judgements' on average, These personal judgement sets typically show quite a high degree of overlap within any team of decision makers, This i: establLbes a foundation of consensus for the next skge of the method, in which the interviewees are brought together in a group session where the individual judgement sets are reconciled to a commonly agreed and operationally defined set of judgements all of which are agreed to contribute to the overall perception of 'commercial applicability', The CRgDC judgemental set appears as Appendix I, illustrating the types of judgement which were isolated in this particular application, The judgements are isolated as bi-polar dimensions, which Peens that they can subsequently be used as scales against which projects can be ranked or scored, In the final stage of the method all the projects constituting the GPhpC project portfolio were sealed by the group against their Agreed set of judgemental criteria, This quantitative data was then analysed using the principal components method familiar to DBTB evaluations, This technique had the advantage of illustrating: a) The contribution of particular 'sub judgements' to the Overall perception of 'commercial applicability', b) The prioretisation of projects relative to this structure of judgement, and in ferPs of perceiped diiferencelsimilarity to one another, The utility of this technique within the eBbOC context has been in the identification of product applications projects, The coPfereice reported here represents an extension of the technique to support a Joint BSDIYarketing approach to: ClibPDF~ - · ·-· ·r, --~LL*iYYLi~C--C-)I~· ~____!__ bsnarrtion oi tPno~rtlts prod~t projsct progo~itionsl b) Idsatiiic~tion oi I jointl~ ~trccd set ol jpdgcrsat~l eritarf~ rsl~tinl to pcresitsd coaarci~l ~ppliclbflftl, c) I~rlutioP oi tbs Inao~rtits prapositioaa rgliost the eorsrei~l ~pplicrbilitf critari~, tbs conisrsnec rsprcssota ~ si2niiic~lt iPrthbr dtlp 1D tbl colitlbnt ta Icf tht ~o~t o~ oi thl OLD/l~rtlti~( iatcrircl, ~I p~rticallrlt in tsr~s oi pro~idinl Irrtating rslat~pa Ic~ds ior B~ projscf IctititJI lo DbtiOPt LPPrOlCh tO PPitiBt ·D/l~r~ati~( thillily o~ ths~yendr~tioa ~pd c~~l~ltloa oi projcca Icrds is to brfaC se~ected B~D lad Ylr~atfng prolcssionll~ tottther in di~ca~aioP, The con!srcnce r~s thtraiorl b~sld cp lir ipflloltiol~ll) ~~l~et,d Ylrtsfi~l ptoitsst6o~la ~nd lear le~bera oi GIDe Prodact Ipplic~tioos IroPp, 111 too oitcd ho~stsr, 'crs~ti~~tf' ~cssions iril tbroplh l~ct oi ~trpctpred apteo~a, thsrsiora eB1OC's sxperisaec ~ith 8tr~tegic Projtct 8claction ~~a incorpor~ted into tha ~trPefPre oi jhe three d~l eonisr~lca, CllbBB~apMf~R~~~~ n~an~ espMrvrlr Ta~ PPcsss this technique reco(nioea thet there ere three stntes to the process oi lenerlltinO project idblO: DItI I~raIrra COhSta[fCIIYg CBIPIQII SYStshItIC INILt9IS P~l~cpuxarrroa~(Pu ~11 Idlars to the cootribatioPs nhlch the dele(nfas seke to initirfe the process oi structured crsrtftitt, In this cese eaoh tndividueI made r iorsel, one hour presentntiol to the aanicrsnce dPrin( thb iirst d~~ The tiplins 118 dblilltd tb ~l~a~ suiiicient discussion tfre ior points ct OllriiiOltiOP only Lt this stage, the presentetions required considerrble pre-lrork end rlre used is r seens ol generntinl I nusber o~ concrete project tdc~s lor the aonleranca to slbaapuaatlt ~or~ rith, the instructions to the delegates, in preperfal their presentation, sere re iollors: "The these ol loat presentation sPlt he L PefBOIL1 interpretetiol oi: the current tob~ceo Pr~,tinl scenario, if's ~st constrnlnts, chdllenles end opportunities; b) I prediction al iuture serlret trends, dirsctionl, aonstretnts, end opportunities; c) I personnl tia~ oi the current end ipture ds~alopl sent ai cOnsUser needs, rtt!tudes, end segsentS; d) Views on current end iuture product trends, needs Pd DPPO~fPlfti)l~ the presentrtion should he structured in such n neJ es toend tlth tea iolll specilied product project prol posrls ~cc#p~Pisd eith reeooneble speciiicntioos ct product peresetere, consuser relevllnce, r~~t scenerlo md, id(~11l, t~rylt sessent lad camliaiti6~ etratesJl" O a~0f-rab~ocn -------- These formalpresentati_cns are reproduced in full within the volume which accompanies this report, CONSTR~CTIVE CRITIQUE (DAY _21 Balers to the subsequent process in which, after due time to 'incubate' the ideas presented in the papers, each contribution was rPoisited and constructively examined by the group for technical feasibility, marketing possibilities, and any re~inementslnlterations to the basic idea, This stage resulted in an agr~ed statement for every project proposition specifying the strategic objective, constraints applying to its achievement, the product specification, the technical ieadbilitg a4d the marketing strateggl SYSTEMATIC ANAtYSIS_CDAY 31 Refers to thd process of setting up a system of judgements which can be used to evaluate the final outcome of the first two stages, In this case individual delegates were interviewed during the evenings of the first two days of the conference to systematically draw out the types'oi personal judgement which they made when considering those aspects of projects which they felt contributed most to the probability that the project will succeed in commercial application, On Dag 3, these individual judgement sets rare consolidated through group discussion to a consensus set which was then used as a judgemental ~mme~ork against which the project ideas generated in pays 1 and 2 were evaluated, Eventual analysis was by principal components technique, t~ i CI~;F~--- - - I The conference is therefore designed both to generate project ideas, and to develop a system for their evaluation against a criterion of commercial applicabilitg~ The conference sfntcture is as iollo~s:l DAY ONE DAY TWO I · I DAY TEREE DATA ACQUISITION CDNSTBtTC~IVE: SYSTEMATIC CRITIQUE I I ILN~P~YSIS Personal present- Development o~ Agreement of a ations oi project strategic objectives I rS1 consensus set oi propositions, and consideration of judgements, feasibility, Scaling of project I I I · · I I I propositions against the judgel meat set, Analysis of results , on~ oNe (wa) Dn TR (BVi) INDIVID[IAI IM)IPII)UA~ INTERYIEWS INTERVIEWS 01 CI I:PDF ·\:11II::, f3siio.;:om ----~--- STROCTORBD CBEATIV;TY TIE OUTCOYE ·The Judgemental Set All delegates nere~subjeeted to a psychological interview conducted by the conference convenor either on the first or second evening of the conferences ~These interviews, based on pairffise comparison of project ideas, produced a total of g9 judgements [~n~average of 819 judgements per delegate, excluding the convenor and one delegate who had been interviewed on a previous occasion), To illustrate the diversity of judgements identified as relevant to commercial applicability, this list iof judgements is reproduced in full as Appendix II, i It should be re-emphasised that these judgements are 'bt- polar' that is, they represent dimensions with Ipgically opposite ends along which projects could be scaled or ranked !I to illustrate their relative positions, It is apparent from Appendix II that there exists a high degree of overlap across individual judgement sets, which contributed to the relative ease with which the group came to an Agreed consensus set of judgements on the final day of the conference, It is interesting to note that no fundamental differences in judgemental structure emerged between those delegates with a Yarketing, and those tith a Product A~plientians bbckgtaund~ The finally derived set of judgements was discussed to produce an agreed operational definition of what each term meant. This agreement an definition is most important since any lack of precision at this stage inevitably leads to 'bending' of the judgemental rules at later stages when particular projects are being evaluated, The judgemental set, with associated definitions, was finally agreed as: II High V low Behavloural Validation '3 measure of the evidence nhich exists to support a proposition, i,e, Evidence versus speculation, where high ~ specific observed consumer behaviour and lan · inferential speculation, a, large V Smal Target Market 'Tbe size of the target market expressed in equation terms as the number of potential markets X the projected size of each affected segment within those marketss' 3, short V long leed Time to Mnnuiacturabil~tg 'The fine required to design the product bad develop the necessary technology in anticipation of scale production, rbare short · ~ i gear, and long * ) 3 yeus,' I, Bla~ I sld to C~mmunic~ts 'Bbility to express the claim clearly within the constraints of the given market, 5, High V lqn External Risk 'The probability of provoking a significant attack from external groups which could undermine the ability of the company and industry to continue to operate profitably,' BI Positive V Negative Manufacturer Cost Impact '3 measure of the economic benefit to the manufacturer considering variable costs, fixed and sem~·-v~r~bble costs,, sad asset utilisation,' ,,I, 1, Bigb V_lov P~~e Bear Return on Investment 'Deiined by total otter development cost, by total marketing investment requirement, by variable margin yield derived from unit volume poteatfsll' SI Sigh V Log Commercial Ilppliubili~p (Uaster Construct) loOol it is interesting to compare this judgemental set rith the earlier set derived from inlhouse GR8aC activity under Strategic Project Seleetion~ This comparison is illustrated in Table i: T1~1,1 COIIPARISOI OP CRbDC IID JOIIIT RbDI~UI~tEnBC JmXI'EME~TAZ SETS CR~DC STRATEGIC PPROJCT SE1ECrTd R~DIEIARI(ETtNC STPDETURZI) CRWTIV'lTY Degree of TechnicallCoat Feasibility) long bnse V'IP~ineat ) lead Time to HenufacturabllSty of BrLaLthtounh Resuiremcfit Technology Push V Commercial Pull Degree of Coasaet Ilerevaace ) I fehaviourai validation of Evidenced Cart~intr of Success) Size of Creative Opportunitl lire of Target Market of Business ~mpact ( Positive P~Zrg~t~v~a~lf~Zur~p~~~ Contribution to Profit Ootimiaation J 5 Tear Return on investment fdv B Itinh Commercial. Commnnicahilitv I Ease of Communication of Canmercial APplicabilitf I Degree of~m~ Defenaive O Offensive lov V Bigh Clarity of Objective information V Produet Orientation of External Pisk 0. iV 0\ 03 Cj~ 0\ CI~PDF ·\:11II::, f3siio.;:om ----~----- 'It is notable that despite the difference in objectives for these exercises, the degree of correspondence in judgemental structures is fmprcsshe~ Degree of external risk is apparently the sole judgement unique to the joint RBDlhrketing exercise, ~b~lst the three judgements unlpue·to the GRbOe exercise reflect the more parochial emphasis 01 such an in-house approachl TEE PROJECT PROPOSITIONS The proceedings oi the caniereace generated 13 discrete, product based project propositions, the only propositions which were arrived at by more than one delegate being sidestream reduced cigarettes and slim cigarettes, The initial, uncritiqlled presentation$ are reproduced in the companion volume to this report, Each project proposition aras subjected to critique during the conference designed to produce an agreed specification of: i, STRATEGIC OBJECTIVE (The commercial aim of the project) a,,CONSTRAINTS (Applying to the achievement of the objective) 31 PRODUCT SPECIFICATION (Phgsical/subjective features of the product design) TPCBNICAL IIOX1 (Design options, and the technical feasibility of achieving the product specification) 5( YARgETINO 1011 (puality of strategy required to Ipar~et the product proposition) Q ' IV Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 .--~L---- -~~13- · -C·lilY*II~I ~ ~·_ · I-C d~l~Yli~- _L.· ~s 13 propsitlaP~ ~lts ~s iollo~~: 1, IOOI~f~ r~BOL/SPIeg PL~68PD P~m~l t, rBB 'UEIOB~IP' eIe~n~te S. ~BOEBB ~gl~lOPOC~ ZOIC~ CO~~ eIelP~gB II I~IIIDU~I BB~ bB~1 efel8~tg8 51 'B~~ gg LI~' CIG~~rBB t ~P~B~IB~P P~~rBt I, II~lft ORII~~ID CIGP~~IS II 0~~ 81~Y C~GIIBtP 91 IOISr BmPP 101 ~1 PLIV~B CIGIB~OBS 11( LQ eo eIola~rta 1P, BIQ tPUD~ TOBICCO CIGIB~TIS t3. L01 8~DgWPgl~llYk~OB~gO 180r~ PDDBQ eritilo~d spleiiic~tloao ai thess proposttiol~ rpps~r ip tbs Pltt I(C~IQP Oi thi8 ~)POft, C I I bB B ~P W Wf 3~t I~:~nl -- STRUCTUREO CREATIVITY PROJECT SPECIFICATIONS O N M · P Clit; PDF -!:)!::!!::!.f3 StlC.i: 0111 i, wnIrIm LIENTA(IL/SPICE KAVWRED PRODUCTS Stntegic Obfeet~Pe r· To develop a product which would ofter something extra to current and potential menthol smelters who require either menthol plug In overt modifier or a coolfnglspice alternative to menthol, Constraints : i, The spice aodiiier must be highly tobacco compatible, 2, There may be scarry over/build up eilect which would result in an undesirable a~tertastel 9, The concept msg be can~iaep to existing menthol markets or onlp be applicable to certain geographical regions, 4, Retention of ilavwr during shelf life and after peck opening Play be difficult to bchieo~e, .Roduct Specfiicatfoo: I normal king size tilter, full Ikvour 119 blended product rith a strong supporting blend, technical Her: hasfble using current technology unless flavour retention requires the use oi micro-encapsulation either distributed in the blend or incorporated an the cigarette paper, Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 - IY- -~FL-il~i~Y -~iai~ I~r~J to~: 11 ~plirc~,lts~l~a ta~ti~t ta trtel~sh tlpe ltd 1~~1 oi 1diili1y ~Piel, 1. ~~in~ pl~lit~ti~e ·rt to ,It~bli~h ~~liditl oi tba coPespf, t~ To be plitionsd ~p ~ irssh, cl~~~, bilh f~~ts C ~lfar~ltl~l to It~tbal, Ir~lh drelth ~llunno,'l~d locd ralfdul;~itart~srs thoPld bl alph~li~ad in eoa~rr aolP~ieltlol. 5~ rha pa~sfbflitl at Isl~ olial~fte I~dsstrl~~ th~n nonll sillr,ttto llJ be ~ ~pialoii prodpet pl~~. '· ClibPDF - v~~fastio.soni ) -C1-·- -- .~LI-·Ci~-;L~CC_ ~~ L- __~y~ O, ~TBE 'IYgLIOB~P' C~GIB~I Itr~g~~a ~,et~~c: ~o e~pft~ltss or fbe patapt~rl ior ~ cfllrstta ~hicb p~dPcs~ l,~s oi tb, Pnpls~s~at ritsr siisct~ oi smo~in( in tcns oi irrit~tioa, ~itsrt~~fs, dr~asss~ ~Ptt~liDtt : Ibilitt to ~~~e ~ p~dPct, PridPct ~pcciiici~iol: ~IPllr ~ad tlag sita, IroPnd 14~1, ~ro~nd 101g Bfiea~bls rcl~tits rbdPCtiDP 01 LitlrliilCtll ~inteolncl bi dssir~bll (t~lts Irti~l~ctlon) ch~rtettr- istlos dPrfn( a~~fn(, tac8nicll Bo~: I Qol~afsl dp~lf~~a~l/lo~ latsll~ol eool~nt ~ddftfoPt 1 Isr cool~nts - rdditltct · aPganol I dPallts Ifltsr~ I EltrPI Plc~ rrlrs I ~~lir~ lanar~tore I taat~l~tient blcodat rrfteti~( Bo~ positian ~s ~ positits, ~on 6~jof~ls ~lo~iag sxpsrianes I do aot eo~csntr~ts OP tb) pfOblll 1 do not ~tit~~tixa the Cpy)pt prodoet ~001 ~------ CllbPDF - vw~~~stlo.conl ------·--511 3, SBORTER LEWGTBIP&DDCED TOBAC~O CONTENT CIGARETTES Strategic Objective: To offer consumers value for money through our technical ability to provide the same tastelsatisiaction as conventical cigarettes with a considerable reduction in tobacco content," Iutp structures dll in mdst markets allba significant cast savings, being based to varying degrees on tobacco neigbtlsd valorem, )8ased on the fact that only a small proportion of tobacco 18 actually smoked, the rat being dissipated during the smoulder process. Constraints : Specific duty structures where applied will not allow for comparable cost savings, The product will be unconventional inappearance and it map be difficult to communicate the concept in a believable manner, qroduct Specification: Dse of specialist paper (Papprosal) to achieve slow burn rate thereby cutting down dissipation, Possible use of extra length holder, Possfdle ase oi 20 lov circumierencelextra length rather than say a5 small size cigarettes st same price as normal length cigarettes, 11111 Clil;PDF - ~!::l~:;f5t~lc.;:nli1 - -· -·~ -· 33*-· I*-~·Il··-31·~-C·· Technical how: Nothing nea suggested in the making technology ~ standard blends, Papers already available, Paeiragfag may re~ufre nea machinery dependent on tilter type used, YIarlteting how: Yarket as a nea, unconventional breakthrough I smoking on a really different product concept, pack design/adoertising should reflect this difference, Pricing could be based on more cigarettes for same price ) (a5 for 20 price) or even at a certain premium, Possibly ao cigarettes for lower price especially ii a slim sizelextra length concept is used, There is a spinloii benefit of low sidestream which could be the main marketing concept under appropriate market conditions, ~oOol CI I:PDF ·~lf- .--- - - 1, IISDIVIDUIL1IY BEET S68LM) CIGARETTES Qfntegic Objective: BI oiiering ciyareftes in peak smoking condition in up unit volume, to increase: a) TOtb~ tales through increasing price accessibility, b) larketshare thr0ugh a genuine product benei~t, C e) Profitability through I reduced variable cost " reduced PBSV costs control oi distribution up to the end user, eoostrraiots i, Innate conservatism of target smokers, i, Resistance of traders to loser margins an stick gales, 3, IPcn'uing accessability to young people, ,4, physical protection of the cigarette may be reduced, 51 Base of opening .. consumer acce'ptable? b, Visibility of individual stick 99, cost constraint of using clear films, I, Greater bulk - shipping costs, Product ~peciiicatiop: - standard Product xith hot foil dpe stamped brand idellti~icr continuous reel or board backed units ~ printed film or blister packs Oi [V. )1111 Q~ m CI I:PUF -\:11I!::, fJs -~-- - ~~~ __ ~ _~ __ Technical Bow - Idapt existing technology ior heat sealing on the maker thUs eliminating the packing unit. )Irrketing tfow: I pee the selling proposition oi "Pactory Sealed ~or Perfect quality" It should be ensnred the branding and value added image is enhanced by the new packaging, This could be achieved in a number oi ways: i i, dot ioil stamping df the bread identifier on each productlstick i i. alm~irs utl!ill prialld ea tbs iiip Inp 3, DPe oi dispensers in conjunction with reels of todividunllp arapped sticks 4,' Sell liquidating permanent packs as give-aways mith stick sales, loOol Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 __ __~_ ___ ___I_ 5, 'PRONT END LIFT' CIGABG~TES Strategic Objective: To improve the taste and flavour of the first few putts on cigarettes, i, It is assumed that sooters are most likely to make judgements about cigarette quality in the first few puffs, a, it is assumed that "need" for smoking satisfaction is highest when a cigarette is first lit, Constraints: People do not·smoke like machines, It is understood that they do in tact ts~o longer puffs to same extent at the bellPaiog oi I Elguette ~bich aill gipe ~a tiiactlve front end lift, Iny additional designed 'front end lift' should be modest to remain credible, 'People are unlikely to want to change their 'n6rmal' smoking patterns, Front end liit'fs likely to disturb normal smoking patterns, Smokers may have to learn hoa to smoke these products, Product Specification: Can be applied to all cigarettes, but likely to be less effective on low delivery products for established low delivery smokers, where such a product map lack credibility, ,,1,, ;5 ClibPDF - !::~r!.f3stlc.cnlii -- Technical now: Several ideas currently in It~D: 1( Balanced ventilation dedgas, 2, Codene design (tobaceo rods with constant deodtp but ~arlrble blend composition), 31 Structured cigarettes with high ilaoour tobacco at front end, 4, low eiiiciency blocking tilters such as HI~, CSP, 5, Partial blacking iilteis oi other designs, 6, Addition oi volatile Ilavoursl Uarlreting how: Use the general selling proposition e,g, "a better i~a~our product"; Do not stress "iront end Iftt" or anything technical, loDol .k Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 6, ~rPQBMI)LO I~UPS To onlre it dsJfsr ior slolars to rste vhst tha~ repuire iro~ s et(nrette, This eeens In liisct thst the itlter sill be eolpeollt~bls sud i~plt~s s hfyb t~ste to tlr r~tiol Conltrnlntn : milt ~re the sthicll i~llcltlona or such I detsloplantl people do buy II by predict expect to pet 81g. It is slee understood thlt people I~~e cigtrettes dlliersntlg under dtiioreat coaditiond oi atnss sud rsl~x~tion, so they oust he ~~~re It sole level thlt they cna ndjunt the delivery oi Indlvidull ei(~rattes ns sell se slokfng diiiOr)Pt numbers oi cilnrttfco, Ihould such I ha~sla~lt he the luhjact ol I elasr deolnrntion oi its Il~~tieltlt Ii such n dectllrdtion id not rde, bo# relr protected is Pur eolp)fltita Idvlutn(e irol the reaction oi apr colp~titarsl Should se lonltar co~~titlon product to see ii they sXrendI hive 'tl~stic dllilll'l Produot ~ tplcilicetiol: This concept is ~i~~d st lo; sud ultr~ lo~ products. Qre lust he arcrbised sith blend strenlth or I eredibilitl Ilp l111 belound, ~~~~~aoalliPllb~ or ultru las should shoe just sore thnp n pror~tL tners~se in dsll~s~ ior the f~cr,~ss fn ppii 10111, it II k deoirsbls fa telre these el~~lcl step vise r~thtr thee sbrupt de~llopc~t ol sn PItrl lol tlst m~,l 11~I1~11 ilndPr, "''R . ClibPDF - vwwfastio.coni --------~1, The concept oi a 14mg cigarette designed to smore like a l'l·18mg cigarette was also discllssed and endorsed. Technical hem: Not horn at Presentl bllt current 810 leads centre around: i, Optlmised combinations a~ conPentioaal material, a, velocttr sensitiPe tilters, Yarketi_ng Bow: · Ii the epentuP design is dsually coP~eotioaal, the proposition would be oi a better cigarette that helps you get what poa want more easily, · Ii the design is IIIPIL1IP. dfliirent the proposition sould be ior a lor tar product specially designed to produce sere enhanced taste and ~ldvour, ~oOol Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 'I, NICOTINE OPTIEIISED CIGARETTES -- Strat_es!c ObJectf res: Ycre ef~fcient ut~lis~tioo ct in situ nicotine in etgaettt smoke , Constraints : c i, Development of a reliable measurement system for free base nicotine, a· se require 4 better understanding of hoP to produce the effect oi increasing the ratio of iree base nicotine available from smoke, 3, DPknova effects then applied to Virginia blends, Product Speeiilcation: OS blended cigarettes In general, Technical Bor: i, Use of ammonia treated sheet material, a, use of di-smmonium phospate on blend on sheet, 31 Other 'basic' treatments ior the blend, i, The same effect is not achieved dth alkaline filters, Yl;ketia~ bor: ~· ''~u~fl ilavour br!nds:- utilise either no message or a reiniorced ikPour proposition, i, L1 delivery braids; use improved taste or special process tppe propositions, -aOp~ Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 -~ 8, ULTRA SLIM CIGARETTES Strategic objectives: I, f)S Market: To develop a nea, mainly iablelorieoted, 'stple' segments 21 International: To develop a nea, higher margin, loa price offering, Constraints : i, Physical product assembly, j a, consumer acceptance: a) Bandling b) Wouthieel c) Smoke quality d) Social acceptabil: j e) Male VS Female apC·lr Product Speeiiicatian/T~c~f.:aal E.'a: i, OS : 11 X 94 - 100mm, 20 ~ s:ioks, unique bbx a, int: rlr-lo 2 so 1 84, 20 sticks, STD 1o's box 3, Average puff #, tastelilavour profile 41 Packaging configuration) ii yilterl8od Assembly ) as appropriate Marketing Ion Proposition themes would depend on market context, but in the OS for example prime selling propositions would be as i cigarette for ielales and as a stylish product Puiaat. Secondary benefits with potential proposit~aa use aould be economy and 101 sidestream, lO0Oe "C3 Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111. rrYrrCr ~~ ·-iYQlrYLi4·~,l,~arrI,i ·;·-~-·-l\r-r~~ ·------- 91 DIST SNUFF Strategic Objective: To capitalise on the potential downtrend of the smolring habit as the only means of achieving nicotine satisfaction by participating in a parallel.product market which is free of social/health concerns, and with attractive profitability potential, constraints: Alleged irritation effects b) Potential criticism from the medical/dental profession, e) Technological know how is currently aanlexistent within the BAT group, Product Specification: loose·snuii in II to 2 ounce cans in oval form or 20 pouches in rectangular can, b) Starter lov tar, vith menthol and iull ilr~our ettensionsI Technical Rdw: To be developed based on currently existing industries in the PS, Sweden and Denmsrk, Yafetinp Bow: - open to iU11 Creative treatment The product category is free of sag advertising restrictions in most environments, ~oOo~ · C: 115P B'~ - !)r:!!::!.f3 st I c.;: n ill -- lo, ·m_u PIAVOIJR PBOD[ICT Strategic ObJeetive: To capitalist an a potential return to ioll ilaoour by r · offering a cigarette dth markedly superior smoking characteristics (Particularly, qualitatively) at pbpaiologieallg acceptable delivery levels, Constraints : 11 So empirical evidence of a consumer demand, 2, Variable cost implications, 91 Oneonveotional technology would be a long term development ii feasible at all, 41 Can the concept justify a price premiuml 51 Strength of existing lull ilavour brand images, Product ~Sqeeiiiclltioas: 80/84 2 24,8/2710 2 20mm 89 or SC OS or Va Blend PYINF 14 mis approx, Nic: 1,4 mgs Technical Boff: ~ Bleed andlor - IlnnlllarlSeml.annulbr construction Short term ~ Proat end lift - Aerosol dispersion (modtiied smoke long term iloe patterns) LIIII Clil;PDF7~~.f3stlc.;:niil ~ --· --- - ~ L; .rUe~·I~·IYLY·LII~YI*~ ~ti· lo~ - ~bt.CI ~ I~~L d b 1C1PY d~dw· I)~p~, 19~6~* )RhCt el~~, )rl~ daYt~d~L,· ~Ool 1( O O · ClibPDF - vwwfastio.coni -·---------------· 11, M]E CO CIGARETTES bfrstetia dbltetirsl: to andorstlnd hoI fo dssitl la~ eO/tsr rstio produOts sad osta them scooptablo to sloksrs is fhd stsat fhst thal Ire rcquirld iorlal(Ps t~lt CO. Cosstralats : 1) this 1s aP IPIL Ihlr(l should bl prspsrsd but should bl rc~ctf~e rrthsr tbm pro~~otf~cl Ihcn is fncrcssfll a~idsao thlt eousuosrs dol'f nalt pora product in~n~tioP -opl tien fo that lon CC cfglrattes choPld be mlrkethd co~s~tlll ·) 1) tips ior trlPlitiOD to thb son product shald Is~(ps t~bls CO be introdpced is sat rr~stl Irobt 'SPoCiiicstiDn: 1) 'Ibis ptojset is slrssdl tithiP eBIDC sod scta out Irineiprls oi ptodpcf consttpctioo rlthsr tbsn shy sialls pradoct spsoiifcntfon, 1) Depondsat open the stlls ol layPa tsblss it rl be n~osa~rt to da~slop r product is sotsrrl c~tcloriea ssd tllPfl thlt 1Q sri IOt 'tOP'. Toohnicai Ha: 1) Tbis is csssntlslll Pndeistoad. f8lra IsJ be s eoaillct oi iPtsrest Itnca CO Isr,l~ t,nd to rise ii biyhl! ~np~ndcd tobscco lavels ~rs used ior iin~noi~l rsssooa, Prot~dsd thst tbs Po~sr cencon, os should tsle tbs potlol noo snd onlg go to ~o~ CO i~ loread ~ CllbP~F - vww~~i~i~i~ - - · Ylarketi~gHor : 1( Ys~a no overt proposition to the consumer in the absence of CO league tables, II in the case oi the appearance o~ league tables, e~phaslse positive positioning pre and post this imposition , ·000- O rU C3 CO h) Clil;PDF -iri)r7:f3~j~tlW:~n~lil _ lal aIcH EXP14NDED TOBACCO CIGILI1RTES 1` slatla~ oascti·c: To marimise financial return by the use of lover amounts of tobacco, Thus lower tobacco purchases enable loner ~krebcusing and finance charges ~hi~e maintaining consumer attributes of the product, G Constraints; Ose of high levels oi expanded tobacco must not in any ~4P jeopardize product quality, a) it can be anticipated that there mag be adverse consumer reaction to some elements of the product, (elg, bura rate, firPness, draP characteristics, ash 0 stability), Product SDecilicatlan: II Currently under test proposal, eith the attempt being to match an existing brand off a live market as closely as possible, Product specification is similar to the existing brand in question, md level of iaclusion of expanded tobacco is at 801, 2, There are alternative blend/eonstruefionr/tar levels a9ailable( Technical Boar: i) This is a knova area and drh the possible exception of fast drying out in hot/dFI Ipsr~ets is ten documented, Yarketing Bon: 1) Since there is little mileage in telling the consumer that helshe is gptting less tobacco for hislher O money, this is a covert propcs~tion, · (,II( o~ Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 -------·---~---- - 'Y~u~~u·-- .·I it aay be posstble to turn this concept into a product I plus ~~ required t,e, dthiP an ultra elio "nee era I add a "pe tobacco blend techPologg" propositicP,technolag~" product poeftiooing, it say be possible to Positive spip-oiis ai tbs use ai high level ai inclusioa oi e~pmded to_bacco: 1) "Bastic" delivery products, 1) fioa CO products, 3) Beduced sldestre~ products, ~d)b ·n a n Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 13, 101 SIDESTBEILY SU6gSIMlglIOIUTED 1IBLU CIOARWBS strategic objective: to pre-emptlavoid potential volume decline irom smokers under pressure in social and 1ork environments by providing them with an offer which combines reassurance in social smoking ahilst delivering good taste and satisfaction, Constraints : Bisk oi government eoiorced extendahilitp to all breads, b) D~iiieulty in achieving equivalent taste satidlcfion to conventional products, c) Potential negative consumer reaction to pasaible non- tobacco tute or unusual visual/tactile characteristics of the product, d) Qsestionable real psychological pressure release ior smokers, non smokers reaction to the proposition Is unpredictable, Product Bpeciiication: a) Ylnimum actual reduction in sldestream smoke oi 50g required to achieve a visually perceivable effect, b) pee oi Eeusfa velvet paper or equivalent, c) It least aOI of expanded tobacco in bleed to maintain conventional puff Dumber expectations, d) Delivery levels open to market specifics, - ~_ . ~__ ~_ . o\ '`~lc~"' 'zs~ - - Technical How: Rrrtber development work required on papers and appropriate blends, considerably more development varlr required on sidestreu aroma ameliorants, Ylarketing how: Communication platform based on a sociability or 'smoker courtesy' loons with perceived lower sidestream smolte and pleasant aroma as the reinforcing elements, consumer targets would be socially concerned, pressured or 'dfssooant' smo~ers. ~oOo- BVbLOIITrOlS gp PROJE'CT PROPOSIT~QS The prefect sPecliicatlons pre subsecluentlp used by the conierence delegates as the basis lor ePaluatiag the projects against the commercial applicability judgements preplously outlined, The process involved taking each project singly and assigning it a score (bg group consensus) on each of the a judgemental dimensions, ~or this purpose each judgement IaS considered to be a 10 point Bale. Par example: t~on COYIIERCIAI I~ 1 I i I 1 _1_~ I I _I I IIGB MLUIIEBCIAI IPPLIIlBI1RY I a 3 1 i,,,,,, ~,,,,,,, The outcome of this process is I matrix of scores for projects I judgements. The matrix arrived at can be seen in Table a, visual inspection of the matrix indicates the types of evaluation being rclde about each project. I~or example, it can be inferred that the lo~ s~destreanlamalforated aroma product proposition is seen as baring high behsviouFa~ validation, large target Ipar~et long lead time to maauirctnrabi~ltfy, easy communicability, high external risk and'negative manufacturer cost impact, only modest return on investment, but relatively high commercial applicability. The first step to analysing the relationships in this data In a more systematic fashion is to establish correlations of the following ~tppes dthio the matrix: lI 8011 TO R01: in ehich case re are comparing the storing behaviour on any oae judgement (across all tpe projects), rith the scoring behaviour on any other judgement (Icross all the projects), ~P6F example, the correlation bet~een the iiFst tee data 1018 oi our matrix ~oald give us an estimate of the degree to ebich tha~ of those judgements ns similar or not i,e, lether judgements of degree of beharioural validation aere similar or different to .judsements of size of target market, ·m 7_ Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 TAB~ 2? PROJEQ EVALUATION OATA r acraI B rp gon IIfs Hg Tj xm I p cl nP Cn i ct ct 8 n9 O rr M 10 p n v W r P * fKI)IYU)(lbI~ BEAT h YI OI ~O Q YI O, + ·S~LLF~D ClCARETTES r FULL ftAVDUR PI~ODI)CT .F * 0 0 Q W 10 0 I 0 W 0 I H 01 O IX)W SIDESTREhnlb~at~ IdUSED ABO~A PtlDOI1C~ It r HOIST STUFF 0 IP O O IP \O 0 OI 0 DO 1 O N W I ULTRA SLM (AS A SEKIKEII PROPOSITIO1) 'I 0 lo O O) 0 N I ULTRA SIM (~C~ A U1W COST ORDPOSITION) 0 0 W I N Cn I D W )PBONT END LIPt' ClCARETTES 0 e P N W 0 PO OD I COWENSATbBLE PUTERS 0 lo 0 U r clllODI~IEI) ~IWF~HOIISPIQ P1AYOUBED PR[IDUCTS *o 0 a u 0 m (AIeOTI~E OPTPIISBD QChRETTES w to h 0 r SBOETEE tENC~IIBEDU&D TOBACCO CONTENT CIC, C~ '~EIIORATeD' N 'O VI I IF * N O CIChReTre h ~Y D Ip r PI 0 r 18SCB E~PCMIED TOBACCO CTChRETTES r c, ylV CO CrCAReTTES o 0 *I O 0 N N L L Plrlr Clr C g k d p B ba or i; t n E n E O N C3 co oc~ C: I i IrP B'F~lr~:f3 st I·cr;: n~lil I i. ~F~2IF~: ~~ul·I·r~·phll soortll ba~~~faor on anI ons projsot (larasa 111 jadlarata) afth fhe laerfnl bshllionr on mT other ProjsEt (ICrdll sil jdea~tl). Por ernoolo, fbe aorral~tioa b~ttlcP fh, i~st tr dntn colasl oi oar nntrlx alld Ilvs us II e~tirts oi the d,ln, to ehioh the prajsatl nndlr eolp~ri~on ~re jadtad to be rirflar or 4liiarsat lp ohnrnotsr 1,1. Istbsr i~di~idP~1 rrnp nld ioll ilnvolr prodtct profsafs esrl Ilta nn rll~ti~lll ~i~fl~r or diiiorsnt In a~tPral 1, Ror '10 ~IOI: in ehieh enSl m lre Ilti~tiD( the Itt(at to rhich plrtiealar proj~~o corralhfe, or load hl(h or lor, on p~rtif~l~r ju8(eoelt dtllenslons. Thin li~sl on n tlpe ai dc~eriptltl pmltlb oi ths nhtPrs oi the projeet. rhl fPtarprctltlap oi n aorrtl~tloa tstinate in IfrrighrIor·rd, 'd eatiaattd correlnticl bet~ca t~ sets ol ssorsa trprcassa 1h, ds(ral 41 oioilbrltl or diiierdace bstta,a thoo, I aorrslnfioo dnn inll Il~hon betnsen - i, tbraPtb 0, to ~1, I ~1 eorr6l~tial ildic~ts~ thlt the koiilea oi soorss pndsr cap~rl~oa Ira sxIetlt tbs oooo; r II aorrslrfion iodicdtsa thnt the proiilet oi soores rrs ,xnctll iattrstlt oppooits to ons nlother (n1 ~11111 high c~r,l~eio~, ons); obillt n aarrlllfioa ol O indic~ts~ 1 plrisatll r~lda roIntioashIp bct~,l~ tbs scsrsa. Cl,nrll in Icst cite~st~lals eorr~l~tsd r~l~tiooships aill irll sopooboro batrcen the oXtronoo oi ~t to -I, ~Ool ~s corr,l~tsd rslntiealbipe blt~etl thb lagr~~tl Itri~ad ud Isad in tbis eoPidrsncs aro presbnt~d no 'lnbIo 9: ClibPDF - vwwfastio.coni ~ ~IIPlt 3 CDIILEWTII B~TWEEN JIIDCP~I~TS g ii j 1 P r g I, P C 1~ q ;d II I ~tB~OWu, ~aD~ra I~l,o +,~ -,J ~,a a +,n TIlGET HIIIIl(BT 1 1~10 1 1,2 1 ·13 1,4 1,1 a +,f ~m I 1 +,f +,1 ~13 a CDE~UHTUmm I I 1 1+110 1,1 ~,3 +.2 I I 1. I +,Z -,I ~O~ IFAClllmC 1 I I I 1 l~r10 ~It ·,Z I I I I I I I~l,o CO~R~~ ~I~CILMLITI I I I I I ~hi~~ ilion~tfoP litcl ~nt~r,~tt~l llltlhts iPto the rel~tionsblp~ bet~sal judfslsotl, Pi~iol opt just Go oi tba toro lot~ble aorrel~ttops, re clp obserra t rslrtivell high oeldtita corrslttion (1,6) beGset 'bahrvioPrll rtlidrtian' tnd 'sxterDtl ris~' iodicrtia( thrt, it tbs jPdeawPts ol tbsts deleyltss, ~hcn bsh~~~o~rl ~~lid~tioP It high, slterarl risk tstds to be lot tld ties vsrst,. Is abslr~s t blab positipe corrslstlol (~,?) bltnaen 'politlva unolrotPtiPy cost imptot' tad 't6tpra oP investment' fldfcrtfnt thrt tbs dslst~t~~ expect I cla~s po~iti~~ rsltttontblp blGlso rmi~ctPring oott 1Pd rdtlfP OP ~Ptlltlllf, tt it oi ptrtlctlrr intsrrtt to sIrmils tbs cotr,lrtions oi jPdgrsnts to the Irjot jodtsrstt ot interest to os : eOPlEherAL PRIE~I~I~, rhase c6rral~tians iodictte tbs extent to ~Ya~ ~~iaEr Ilrrb ooltr!butr to ·il ·tnll O· plrceptiol: O ClibPDF - v~~fastio.soni -- DEGREE OP CORRELATION TO TEE: JIIOGEIENT COMMERCIAL ILPPI~CABIIITY JOOGEMENT BIBBIOURAL BILLZUATION ~,2 TARGET IAagF~ ~.5 LEAD TIME O COlllmNICGB~lrTP +,1 gXTBRNAL~ RISE 115 WSI~UII[IPAbVRING COST ( 1,2 TIIPBCT RG~URN ON INVESTMENT I ~11 This information indicates that for these delegates the most ponerful contributors to the judgement of potential commercial applicability of projects are size of target market (a positive relationship), and degree 61 external risk (a negative relationship), Degree of behaoiounl validation is also relatively positively related to commercial applicability, and, perhaps suprisingly, positive mdnuiacturing cost impact is relatively negatively related to commercial applicability (indicating the expectation that commercially applicable projects cost more in manufacturing terms), loao~ The Earrelltad rei~tionahips bet~eeo tbe projects developed during this conference are presented as Table 4: O IV - 0\ V1 ---- - - Clit; PDF -!::!!::!!::!, f3StlC, i: nill mriNNON*ri0nNinri D~PO~ld 03 Mn~ ·c';~;t ~iI~Yt~3 F! 13 h N H h 13 13 rJ ~ N * o~ ~Jmnbxa mrs n~·IN'~n, 1 II~a%f3I3 ~WBOZ?PIY ~*0~0 +tt~ t141 ~a mN~m~9n~N~ee la~taav3~3 nbas' I +I i *"*~~00h~b+ ~Kumn msIRllia ; i ; ; i I, YIN~(I~NnAO+ 1011~1~ OaZJIQM i 'a 13 ~bbOgn0 S~I aa~mvsawos ( +1 II ,1 3 ~~Nhhmqf ~nn a~Ha ~c~a ; ~ '?O ~·1019~O JsJ3N03 3303 no? :suns ;;;;;s ~~hhO JdpN03 TIYWY :SIIIS I ~ i ; +I O ~Ovl*0 66308 ~sraw ,I ; ; q nrig (?O f~SI~S3(IfS no? 11[Wdm1 3336 (a Sa~f~,~d~V3I3 6~6d~ '~:C~Z O a j SI mi I I hz I IooHI~ In a " Rlalci p10 u Ol~lY w c~ ol~ al& 'lelEn a ng BaOls 3 ~IL~ ti] I a PIO D1 w ,Id aIW *I*IP1 VIIPlIWIO Zlc~l~ all J · 'E211.91a* PIU ~ ~I(LIZ*~r112 ff~lul*l*lO · rl~lP "i~i" z~e ~ * a 2 rr g(C0 p .O N ~ Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 The perceived similarityldiiierence between any pair of projects can be derived from this information b0 reading the correlation st the appropriate roxlcolumn intersection of the two projects 1) lieh it is desired to eompul~ illustrating same of the more notable relationahipsl strong similarities (positioe correlations) in the commercial applicnbilltg characteristics of the following project pairs can be seen: COYPENSATABLE FILTERS LO1 SIDESTRBAI (+,e) StOOT CIGARE~TB SLIIIS - PB~A1B CONCEPT (c,B) NICE I3~PANDH) CIGMLETTB : SLIY(S - 101 COST CONCEPT (t,?) Correspondingly strong differences (negative correlations) in the commercial applicability characteristics of the !allodng project pairs can be seen: ELlNS - LOY COST CONCEPT : U)X SIOESTRpBY (·ls) FRONT END IIPE W)IST SNUFF SBOIM CICAILETTE CDYPISIITABIB FILTBBS (-18) CDUPENSATABIB FILTERS LIYS - PEYA1B CONCEPT (-Is) laOo~ The correlated relationships of projects to particular judgements are presented as Table 5I CI I:PCF-·· ~:·~::llasi 2.. oR _ IYY ~ ~RREtlTIONIOI ~DPbt r0 ~EHENTO x~'gr' a I~o f t r F 'PI r. O w I I r 111 s b f I b C I L I r e L I I t P r r 'P g 8 w· i I n + a I anl ~ cIc~aEms U~U * Y Y Y I ~ ~bB r U Y * U U ~ ~~Darr~ s I , · O * U O' U O 1 3 + I + ·Ilt slff · I I u r r w r u r. I I I + 1 I I aM: IE~I~ OIQ~ I I I C L Q u C C u + I I I I I StMS: ~V ~1 ~IQ~ r C O Y Y U + I ( ~OXI~T QB Lf~ I ( 101 I I * u O u * Y Y I I I I + ~QJ~~ rIUfILS ( I I U Y U I U O O ~llrtD MENTHLII ( I y u Y Y Y W C L I 1 ~MIJP I1~Q I , u * r U Y Y + + I I I.SBOIT CI~~ I 1 ) * I u y u U u c ~IORUEO CICILBE1TE Q U Y r r U U C j I n~ ~XPINDWI C1CAIlfin r Q W Y U n + I I I~~~ama r u w w r w u a ClibPDF - v~~fastio.soni gach column oi this table represents a descriptive pro~i~e oi the relevant project against the judgements on rhich it pas evaluated, For example, examination of the 'optimised nicotine' column indicates that this project tas perceived to have high behaofoural validation, a large target market, moderately long lead time to maunfacturabilitp, relatively difficult communicability, a high external risk, intermediate manufacturing cost impact, moderately high return on investment and overall, a high r commercial applicability, i useful rray of representing information comparing projects is to plot correlations from this Table on a profile diagram, For example, comparing 'IPodiiied mepthpl' aith the~'opt~mised nicotine' project: fie~DZGBEE OF eOBgZIATION r It O ~1 IXIW BEHaltOllBAI glON I~AVIOURII V~~DdRON VdLIDATION S~U~L UBCET I~LGE WLCET NLBKET ~U(ET ~F IEAD T~ IORT LECD TIME TO ~IMOUPACT~R- TO MCHUPA~IZTBI ~gUm ~n~ilr~ar DIFFlC(hT EBm CO~P1~IeABIlfTY COEWBIICABILtTY tOW EXTEBHAI BlTB E~EI~S~U, I1ISR Ufl( NECATZYe MANUI POSITIYE HANUI FIICPJBINC COST ~ ~AC~III~C M)ST ~be~' U]W BEIPI~ ON BIQ ~E~B~ ON ~YEST~NT I~nreST~tT UIW CD~P~RCI~U, BICII [XILB~BCWI P~IICABUII~ ILPOLICI~BI~T~ ·IC I oPTTMIEm NICOTf~E .~~,,~~~I~ODfmED ~t~Tt~OL O 03 Cfl C:lil;PDF;~::!~I:!~::!f.3,s~l~o,s.n,a;I -- -·-t ·-·-~Y~~I ____'~_~_~·IL·IIIL~yY1· II this mlcr, the Brrlnlths red eerirnesJes oi plrfiellrr projeets, rs )II1Ptld, y) grrphiorlII illlstrrted, lDotber seres oi reprloeltin( iaidrlatioa ai this sort is to re r11 oi these o0rrelrtioPs is 1 prieoipll colpolanfo rIr11s1s oi the tlPa iruillrr irP the D&ll tachniprc, the rdlrretrOe oi this rPPrDreh is thrt it prodraes I lin(lo r representation oi ~11 oi the relrtionships hotreen the jud(eseets sld the projeeto or one srp, Ir~ this eel oi prelentint the ielorartian se orn dilesrt the ollr~ll trends ? ~idln tho dotl, rhieh is ~~lalt to lehi,~e bt uh~~ tla i' lore dstsilcd eorrellltion tsblcsl Pripeip~l coSoaslts ullftio lrorls hi freatin( r11 oi the corrclrtioa drfr re~il~td so irr rl thoPlh it sere siDply 1 i collection oi Ilplrr Is~sPrsrlfa~(~blah in trot aorrelrtiols Llb). Thd ~t~tisticll Isthod prcduesl I 'klr lit' orl~nilltioa r11 these relies to prodnoe 1 tee direlsionrl rlprlaentrtioP, or mrP, oi the relrtiollshlPs betleen jPdlllePtl Ild prOjlCtll the positions oi Irojeets rrs detersined in this strtisticrI rp hi the Ip,Iisct ci aarrslrt~ont rllltinl thee in nrlePI delrlls oi Itrol(8 or xerkness to r11 other projaets rod r11 jPd(elePts os nrhich tbs project os c~~lP~tad, The Principal caponsnts rpallsls oi the drt~ irsl this IDlilrlDCI rPPeerl rs Iftnn 1. dn this rp, jndgeIlents rPPear II diDealioo 1i1eI ~itb positipe rnd ellrfire ends (11le the avrlPrtive series ehich they represent), the rPZle bltlllP roy tee disBPliOt lines ildiOlfll the delrll oi nl~tionlhip bst~~en these tlp,s oi jPdyaslt, the rrllsr the rntle, the sore aidllr the tlPes oi jPdlcltat, se a~l· see ior Inpla tilt size oi trr(et rrt,f red dalrce oi erternrl rislr rrl bilhll relrted judllments, vhersrl return on i~lss~nt rid sire ol tuy;t I~r~~t Ire r,l~ti~,ll unrelrted, ClibPDF -?~!fastlo.sonl - FIGURE 1 PRINEIPAL UW~POHMTS PLOT OF STRUCTURED tREAtIVITY RESULTS 'HIC;H COEIMMIQBILITI HIGH RETURN ON INVESTMENT HIGH BEHRYIOURAL YALIDATIOI j HIC31 COFP~ERCIAL POSITIVE MANUFACTURING APP1IU\BILIPI ,4 /\IMPACT HlGH EXTERNAL RISK / ~O UVIGE TARGET MARKET SHORT LEAO TIME (8 $2 (5 11 L~e 1EAD TIME SEYILL TARGET MARKET IOW EXTEPHAL RISK NE64T1YE IlplUFAC~UAIHG 1MJ COnERelAl COST IMPACT (9 ·APPLICABILITY LOW BEHAVIDURAL YALIDATION IOW RETURN CP( INVESTMENT 10W a]MMUN~CPgI1ITY i, INOIYIOUAILY blW\PPED CIGARETTES 8, · MMPENSAtAB1E FILTERS 2, FULL FLAVOUR PWIOUC[ 9. MODIFIED MENTHOL/SPICE PRODUCTS 3, LOW SIOES~REPMIP~EL~ORRTEO AROHP, lb, IICOTIIE OPTIMISED QGAAETIES 4, MOIST SNUFF .11, SHORTER ~NGTH/REDUCED TOsAeeO CONTENT · 5, U1TR4 SLI (F~E coleEPi, 12. 'P~1ELIORATID' CIGARETTE 6, ULTRA SLIM (L0w COST CMICEPTJ 13, HIGH EXPPNOEO TOBACCO CIGARETTES · I, 1FRONT Elo rIffl CIGARETTES 14, LOll tO CIGARETTES Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 ·Tbe perceived similarity or difference of projects (in terms of their commercial applicability characteristics) is given simply by the physical prolimitg of their points on the map, For example, se can see that las sidesrream and compensafbble filter projects are judged to batre,simllar commercial applications characteristics, Irhe~ebs modified menthol and Boist snuff projects are clearly perceived to have different characteristics, The predominant ieatuFes of any partieulu project trill be revealed by the extent to arhich it locates itself topard the ends of any particular judgement dimension or cluster of ditpeosionsl For example, sidcstream and compeosatbble jilter projects sha predominant features of large target market, high external risk and high commercial applicability, PRINCIPAL COUPOIPENTS INTERPRETATION Inspection of this plot structure indicates three zones of project classification into which projects tend to segregate themselvesl ZONF i "GLOBAI STRATEGIC PRdlBC~~S1 Characterised by: BIGH COUBBBOlAL APP~ICABILITP IICH BMBYIOURAI VALIDATION (EYIDENCE OF OONBdBFB HEED) WRGI TARGGf IVIIU[ET But pith associated: BIGB PT&ILNB1~ BJSI tONGgR IEBD TIIlE TO UIO~IPBCTtrBBBI~fTP a. Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 I Projects characferised in this rag us: loff srPssraEulev~tIoRs~Sn, Ilao~ COYpENSATAELE FILTERS NIC~INE OPT~MISGD CIG&llfiTgS BtbfP this project set, 'nicotine optidsed' cigarettes represents the least risk element and the highest perceived o~ptreill Ipplic~bilill (~ad it last erhibil the hiBepr loading an refilm on Investment), Thess projects should be regarded as risky but major in terms of the scope and size of markets afiected, Z6WE a "OPPORTUNISTIC PROJEC~S" Chbracterised by:. 1, IIIGB RETURN ON ~NVESF~ENT POSITIVE ~U~NIIPAC~flRING COST IPACT SBOlfF LEAD TIUE TO ~II~UPAerURIIBrLITY L01 EXTERNAL ILfSI[ But rith associated: SYALL TBRGF~ RARgET Projects chracterised in this rag are: IMIIYlDUWY 'IIRAPPED CIGARETTES YOIST SN(IPF ULTRA SIIUS (FEUBLE CONCEPT) nr;ru sum (Lon COST CONCEPT) SBORTXR IENGRI(BDDOCED TOBACCO CONTENT BIGfl EXPINDED TOBACCO CIGILBFFTES These projects could be regarded as uaproblelpatic, profitable, opportunistic developments likely to be restricted in scope to specific markets, Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 tas 3 '~I~Ia p~snal ~~r~etsri~sd hi: LD1 Bl~ron~ v~rnura ~1 ~OI ON fNYg3TpENT LQ COUalIQBIIIn projects cb~rlctcritsd in this esg srs: m~ nllvooa phoDocr 'IBONT EhD ~IR' CIG~~~P PDIPIP YIE~THOLIBPICI P~OQS Ths oost cbsrlcferistle iestPre oi none 3 projects is their OPrrlDt i10k oi bshrvioPrsl ~~lidrtlo~ i,s, thef sFs good idsss/prodpcta 16oti~Z lot r rstionslt in terms ol consoaer needs, rhs most agent rspPirslent prior to iurfhsr do~alop~onf oi thess projsofs IoPld he LPPrOPrlLtl consumer ~~ltdrtfan ,rsrcfsar on the COICBPtl~ ~t,oll IIC)DtlDP to thil brld cl~sliiio~tiol ai projeef nones is thb 'uDsliorstsd cigarette' concspt shich positions on the bssit oi high bsh~~ioPr~l ~~lid~tiop, 1~ sxtlra~~ risir snd high return on inpestlsnt, fbls idioslnerstic positioning I~ rlllsct the isct thrt this project r~~ prs~sntld ~tthfn the eontatt ol its thoroughgoing ~~lid~tion lithin the spscilic contert oi the ennsdlso rrtst (Ibb dslee~ts presentstions), Is s point al interpretation, it shopld he oresrl]r understood thlt tbit O1IIIII1CL1IOP iDtO IDP(I ii i ~llltit( (flrEile snd thst slthongh it is poe~ibls to gsasrrlfls sboPt the chrrsctsrittics ai ssch sons, it.ls ~P~111 tna thst psrtienlrr projacts ~ithip sroh none ei;ll Qtbibit sore or less oi eneh ot the isstass going to obsrsateriss thst none, CI bPDF - Y~d b~a~wn I:I ;d .~:·· · · "~ 9; ·, .. . ·· ~' · -~I- · ;4. -P ~ i ar fE i- · ·u. ·;r ·5 c ~:t'' ·· ;~" ,: 5*· · ;: ..~i ~": .· ,· Na- : ·I 3' c. ·~ '' " !~%*cr~ ·c·l!~a ,, .. ..,I 1 . · . "' · i ~jt~~,el~a,,, ~~;j~~~~ce r,.~·? 2~ ~f~~ -·e · - ·~. ~ :f'* i" idb4 gn~ ,~p· ..~ ·L·l~ .i""?'' 31 i··*: -;:· ;~Olk~XI~ ."P ~~;~!C~t7..a )i· h, ~~r~·· Fii ,j, Cr ~&. re · I c: r 2?~(~i~~t;· kW;CL*·4 ~·~; 5~ ,·~~· t; ~1~t F~ 6 ··u, - "$ ·· P' · r~ ··?~: ~a ·' ~e I ·. ,., *· L;h'~$:P·8 ·* ·t -.I ~-L~L: "~E 5~~: tlc~, ··i:a,. b~r~.iyy C ·; ~fs j : · · · ~.~~~". L~- :~r;,L· ·~ ··~~-".. ayr·:~: ~ ·t ·; '~· t ~y s ~ * ~;yp" ' ' C'IE ~ · I~~ · J .: I : ~· · · · · *~· . · .. s =·· " ~ ··· Pi ;pd:L · :~· " r· x*· ~· 3 ~i~# Y a; .~ ·· ~c;~u;~ · -- : -lb ,:.· · ju R~';k :i. " ~·· ,i . ~·"~ . .Bcr 3~1L J ·· kl:~'~· sr c-: ~r r · ~· ?:. '· ~6·~Y b* '"' C ~c· r~ · ·~~·r; , I ;·~~~···~ '· : ·O .i. F I?:·~~ '' ~~i"·:~~··· ~· -· ···~~: : :· ·~~~~· ·; ! :··. .~~. ·I· " · . · ~~·s··~ '' - ·* .;"" 0~ .. ~~4~·· " II. '' * ~?=~: 1 c· r ClibPDF - ~~~astio.soni - Lrltetipg and Product Ippllcatlons Proiaeaionala apparently s achieve hlllh lenIs ci synergy in creativity sessions etrnctuMd in S~Cb a ny as to produce disciplined ~ consideration oi the rrketing and techn~;l ieaaibility of project leds, bquiaona of the ludgements.used bJ YlrLeting and by kpkp prolees~oPala in distingplshinl co~ercilrlg applicable projects indicates only marginal dil~e~ences betleen these groups, O a. Yuketfng Proiaaaieaale are l~ell~ to be relatively more sensitive to rils involved in certain proje~t propositions dth regard to elternal backlash from Govefnmen'is'l and. Co~pet~tor sources, 1~ a. The structure oi jPdgements eoatribnting most cleull to perceived probahilitl of commercial application Includes considerations oi bebavioural validation (ePfdenes.o~ I~ consumer need), e~tern~l rIsL,,and size ct target marhet, The highest probability oi successful eo~ercirl~ppliatfoa ·. ·· .'~ri is associated iith high levels of all of these itt'ribPtsa,. ~·: · ::~:~ ··rr~ II The portfolio of projects generated in this conference can be classified in terms of: . ::: a) 10UUI ST8llfllC PROJBCnl" rd2·eseotiog gropositioas :1 rith the most universal relevance and hence potential . i sale of marlret, least marlret specificity, and most rfslr oi external, response, b) "OPPOBTOIIST~C PBdlBCIJ" representing Poproblaatic, prolitakle propositions ;hich are likely, bo4Per, to he restricted in scale to specific ppar~ets, .:1 c) "VBIIDll~tOW eBOJBCT81 representing veil elaborated product propositions in the absence of any btbb~faurbl validation (evidence of consumer need), Ruther development of validatfbp projects should pend ·rppropr~bte consumer validation exercises, 100/891`01 Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 I, TbL type of exercise ehoald not be confused dth detailed feasibility exercises, ~he intention is to provide approprkte leads ior a etlbaepusnt iadeeth ieuibflffl prognmme conducted by aesfsned Project Yaoagers, 8, hoject Selection aad Struetured~CrsatMtp eaercteee ~pparsntlg'oileF a relatively systematic and time effective ;O r~te to generating and evaloating project pmposftlope against the criterion of commercial Applicability, it is anticipated that tL exercise of such techniques dtbin bg Operating companies lould add 1 local nFlrtt perspective to ow current, less mlr~et specific level of Pnderstandtng, ·I'·: ·. ····"1. 0\ :~·· ' ' ·:::. CO I: .I U O O C: I i I; PDF -!::!!::!!::!.f3 StlC.i: 0111 ~C-~L r ' II~MI I I) iuii~uuwLu~ ~i~rs~ O O P ClibPDF - v?~fastio.soi~ i, IONG RANGE V IMMINENT The timescale bekeeo the current point in time and the point at rhich the project is complete (deiined as the point at rhich one could reasonably expect to make a viable product), B, DEFFtPSIBE V OFPENSIVB A Peasure of hoy are are reacting tp external pressure as contrasted airh how far ~e~are taking action,independent of external pressures, elgl; STRATEGIC STRATEGIC STBBTEIC STRdTEGfC INPoRmra ) PRODOC~ INPOI~ATTON ) PRODUCT BASED BASED BASED BASED DEFENSE DEFENSE ATTICg ~TTBCI[ CI TECHNOLOGY PUSB V COMMERCIAL PULL - - The distinction between projects which have origins within CIIBDC and msg be domlnatedby what Ire ~ do, and those which Lye targets emerging from cPmnercfal activity and map be dominated by considerations of what re should do, 01 LOPI V BIGH CONSUMER RELEVANCE The degree to which a project is informed by or directed by my nnderstanding of consumer aecdslrequirements~ E, LOY I BICB BREAgTRROOGB BEPOIREME~T The extent to which the perceived required technology is rvaflr~2al r, INPORYATION V PRODUCT ORIENTATION Activity aimed at producing information about the product as contrasted dth activity aimed at changing the product. I O ' O Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 GI LOT V HIGB TECI1QZCllk/COST PEBSIB1ZIITY ~ measure of likelihood of uptake in the operating (apeciiically manuiacturing) environment, i, LGSS P UOBE CREATIVE OPPORTUNITY The degree of scope or lack of constraint in terms of anticipated number of opportunities for nea products, II LOII V AIGB CLARITY OP OBJECI~TVE The degree of specification or quantification of parameters of the project within an agreed end target, JI LOV V BTQ CONERLIIAL COMMNICABIL1TY Ibilitg and/or'ireedom to put over the project outcome message free of constraints in terms of consumer comprehension and legislative barriers, i, IbR S BIGII CIIbENCED CERTAIRY OP SUeeESS 11 measure of the extent of prior commercial pathfinding Or precedent, L, LO1 V BIGH MAGHITUDEOFBDSINESS_E~A~~ On the assumption of project success - a measure of anticipated commercial value, Y~ LOI V BIGB CONTRIB[ITION TO PROFIT OPTIY(IS~TrOl The extent to which the project is seen to contribute to achieving optimisatlonlimprovement o~ profit from the current 'commercial scenario, N, W)lt V EIIGH COIELlCIAI APPLICABILITY O. (laster Construct) 03 0: . "1 i RPPEWD1X II ~Uwo·9·I~ 18 ilDb~U~n~ieVSBi~l~ O [V 03 u O O ct I:p~-L-~3--------- _ KNOWN MANUFACTURABILITY Y UNKNOWN MANUFACTURABI1IN REALISTIC SELLING PRICE Y UNKNOWN SELLING PRICE LOW DEVELOPMENT COST V HIGH DEVELOPMENT COST IMMEDIATE PRARICAL V LONG TERM (SPECULATIYE) I~PLEMENTAT ION i APPIItAB1E TO DEYE1OPED V APPLICABLE iO DEYELOPINC j( IIARKETS IAAKEIS UNIVERSAL APPEAL · V 1IMITED SEGMENT APPEAL CONTROYERSIAL V UNCONTROVERSIAL LOY CONCEPT COMMUNICABILITY V HIGH CONCEPT GOIMUNIGABI1ITY HIGH DEFINED CONSUMER V LOW L)EFINED CONSUMIR OPPORTUNITY OPPORTUNITY HIGH PROFIT CONtRIBUTIUN V~ LOW PROFIT CONTRIBUTION HIGH HEALTH REASSURANCE Y LOW HEALTH REASSURANQ PERtEIYED~GODD VALUE FOR V PERCEIVED POOR VALUE FOR MONE'l MONEY IIIER~ 2 HIGH PROFI~ POTENTIAL V IOW PROFIT POTENTIAL II~EBlaE Ml(a IELEVII[E V AITI[IPATEB ~AII~ BELBAICE tOlCIETE tOlSglEP IEEB r PEPCEIVO COISIIEI BEIEFIT EIIQEltE PIOIPTEB I SPECI1ATIOY PRD~PTED rl rouaala ~oalu·sla BE~AYB IE~AYD H~6H tONSUMER CO~MUNICABILITY V IOW CONSU~ER COMMUNICABIIITY IOY [OIPORITE KUDOS I H161 COIPORITE WUDOS 10Y SPII-OFF PII~Bllln r H16H SPII-OFF PBOBABILIn ClbPDF·~~i, 65~-~- IHT~VIEW 3 DEMANDING LEAST BEHAYIOUR V DEE1ANDING MOST BEHAYIOUR CHANGE CHANGE LARGE SCALE BUSINESS V SMALL SCALE BUSINESS IMPACT IMPACT HIGH POTENTIAL SPIN-OFF V /DY PDIENTIAl SPIH-OFF 1 V LOW PRECEDENT FOR SUCCESS HIGH PRECEDENT FOR SUCCESS i HIGH SMOKING t HEALTH Y LOW SMOKING g HEALTH RELEVANCE RELEYANCE MARKET PULL V TECHNOLOtV POSH HIGH CONSURER ORIENTATION Y LO~ CONSUMER ORIENTATfOH IOW PROFIT CONTRIBUTION Y HIGH PRDFIT CONTRIBUTION PRODtlCT ATTACK V STRAIEGIC DEFUJSE ct I:PT·C~I~ I#TERYIE~.II SHORT TERM FEASIBILITY V LONG TERn FEASIBILITY DEFINED CONSUMER NEED/ Y GENERIC %EEDIAMORPHOUS SEG11ENS TARGET ESTABLISHED BEHAVIOUR MODES V NEW BEHAVIOURAL HABIT WITHIN IASE TECHNOLOGY V DUTSIDE BASE TEtHNDIOGY ( RISX IIHIBISLIIOII Y RISKlOltRRHCL HIGH RETURN ON TDTAL ' V LOW RETURN ON TOTAL ASSET REQU1REMENT ASSET REQUIRMENT HIGH CONSUMER SALIENCE V LOW CONSUMER SALIENCE IOW CONSUMER COMMUNICABILITY Y HIGH CONSUMER COMMUNICABILITY 'POSITIVE PRECEDENT V NEGATIVE PREC~ENT UIW~PRO~IT OPTIIIS~IOI Y HlliH PROf~l~ OITIIISRTION Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 .--.- ILITERIIIEW S HIGH EYlgENCE OF IIARKET V LOW EVIDENCE OF MARKET OPPORTUNITY OPPORTUNITY MORALIETHICAL FREEDO1~ V ~ORAVETHICAl IIRITATIONS c IIIPROYEI1ENT ON ESTABL[SHEO V NEW OPPORTUNITY 6AP SITUATION LIMITED IMPACT V BROADER IMPACT (HARKET SPECIFIC) (GRIIUP RE1EYANT) i PROTECTION OF MARKET SHARE Y YOLURE BUILDING COHSU~ER BENEFIT Y ~ANUFACTURER BENEFIT I I - I~TEBVLUIL h COtlYENTIONAl TECHNOLOGY UNCONYENTrOPAL TECHNOLOGY SHORT DEYELOPMENT TIME Y 10NG DEYELOPI1EN'T TIME EYIDENCEISEHAV~DURAI FACT V SUPPOSITIOIIATTITUDINAL STANCE EASY TECHNICAL REALISAIION Y DIFFICULT TECHNICAL.REALISAT~ON LARGE PDTENTIAl MARKET V SRAL1 POTENTIAL MARKET BREADTH OF IMPACT ;( LIMITED SECnENT APPEAL HIGH CONTRIBUTION V LOW CONTftIB~TIDN ii COMMERC tAL DEMAND V SE/F JUSTIMING TECHNOLOGY HIGH CONSUMER RELEVANCE Y 10W CONSUMER RELEVANCE INCREMENTL Y tANNIBAIISIN6 CI I:PDF~:!J f3siio.;:om I HTERV I ULL HI6H CERIAINr( OF EVIDUIQ Y IOV CERTAIH'IY OF EVIDENCE OF A NEED OF A NEED LOW RISK V HIGH RISK POTENT IA1LY REDUCES INDUSTRY Y POTENTIALLY INCREASES INDUSTRY SIZE SIZE UNFIH I CAL Y ETHIW\L I' LOWER NET NEW SHARE t HIGHER NEI NEW SHARE Clil;PDF - !::!~!!::l~f3StlC.i:0111 JHTERV IEW 8 IDENTIFIABLE SEGMENT TARGET V UHIDENTIFIABLE SEGMENT TARGET FAMI1IAR Y A1~IEN PERCEIVED NEEDS g RTTITUDES Y CONCRETE NEEDS & BEHAYIOUR GENERA1ISED CONSUMER V SPBIFIC SEGMENT APPEAL CATCHrlENT· REMOTE COMMUNICATION Y 'SYMPATHETIC' COMMUNICATION LOW PROFIT OPTIRISATION V HIGH PROFIT OPTIMISATION ( LOW RATIO OF CONTRO1LEO RISK Y HTGH RATIO OF CONTROLLED RISK MANUFACTURER BENEFIT Y CONSUMER BENEFIT h, · Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111