Status Report on FAVOR - Advanced TobaccoProducts A,1, Heard FAVOR Is the name given by A,'T,P, to their smokeless Cigarette launched In the U,S, market In Austin (Texas) in September 1985, The product has a conventional efgarette·lfke appearance but Is shiny and hollow except for a special porous plug containing originally simply nicotine which In later versions Is supplemented with volatile flavourantsl In November lg85, C, Warren of Imperial tobacco, canada, and A,L, Heard representing BATCo,, visited A,T,P, A summary prepared at that time for the Tobacco Strategy Review Team is attached, Tn the intervening period, R,P, Ferrfs of the Sauthmpton RbD Centre has completed a 40 - person study of the acceptability of FAVOR among UIK, smokers, The main findings were: Background Thf s study Has designed to provide a preliminary view on potential market response to the FAVOR smokeless cigarette, Subsidiary objectives were to (a) indicate the type of consumer segment most responsive to the concept (b) to predict likely patterns of product usage and (c) to examine price elasticity of demand for FAVOR relative to conventional cigarettes, The research used a small population of. consumers segmented by age, sex, delivery level of own brand and degree of coping difficulty In dealing with restricted smoking situations, (Thfs latter segnentat~on was based on responses to the question 'when put in a position where you are not allowed to smoke, how dlfffeult do you find it to cope without your clgarettesl' )I Consmner response to Concept and product was measured using a combination of qualitative group discussion, questionnaires and personal diaries, A master questionnaire collected comparable information from three stages of Increasing product.exposure: (a) following concept presentation and one stick trial (b) after a four hour period of use as an exclusive substitute for conventional cigarettes and (el after a four day extended use trial, Results In ov~alt terms, response to both concept and product was positive, sustained throughout initial trial and four hour usage, and only showing a decay after four day trial, The product used throughout the exercise (FAVOR REGULAR) was eventually compared In sensky evaluation to a limited number of experimental alternatives, These results Indicate clearly that the fall off In positive attitudes II attrlButabte to produet shortcomings which are capable of Improvement, Clit; PDF -!::!!::!!::!.f3 StlC.i: 0111 ·2· A likelihood of purchase measure shoved fully 85r of respondents were potentially Interested in FAVOR (were it available in the U,K, ) following onpshot trial, ~hls measure deeays to 75t at four hour exposure and 50~ after four day usage, A more realistic measure of consumer demand was provided by a trade-off exercise at the close of the study, Ar part of their remuneration, consumers were invited to allocate tokens against guantlfles of either conventional cigarettes or FAVOR REGULAR (Rve tokens per consumer, each taken being worth either one pack canventlonal or one pack FAVOR, it should be noted that a standard pack of FAVOR Includes six sticks, which are claied to be equivalent to a pack of annty conventional dganttes)~ Average token allocation was 4,3 to conventional and ,7 to FAVOR REGULAR, FAVOR demand strengthened further when experimental alternatives were considered: I -I I Conventfanal FAVOR I I ) I Conventional v FAVOR MENTHOL 312 118 I ~I · I 1 I Conventional v FAVOR 533 2,9 2,1 Hkellhood of purchase and token allocation measures all indicate greater FAVOR responsiveness for males, lower delivery smokers and those who have less copinglabstlnence difficulty when required to refrain from smoking, The loner responsiveness of females is apparently a function of social embarrassment associated with FAVOR use (female responsiveness Is actually higher than males prior to faur day trial and direct measures shaw far higher unease during public use for the females), This social embarrassment response US clearly condltlaned by the current absence of any advertising and public awareness of FAVOR, it may be expected that female responsiveness to FAVOR would re-assert and probably be greater than male~tesponsfveness following more general social promotion of the product, Further indication of the positive consumer response to FAYOR Is given In the and of session finding that 351 of consumers felt FAVOR would achieve some degree of success if launched in the UIK, FAVOR was seen prfmarlly far use supplementary to conventional cfgarettrs by the end of the exercise 72% of respondents still considered the product appropriate in such a context (Interestlngly, 352 of the sample also considered FAVOR potentially appropriate as a total substitute for conventional cigarettes, males and low coping eonce~i~lliid~vlduals being over· represented In .this group), Expected future users of FAVOR were seen by the participants to be law tar, lower consumptlan smakers, females Clil;Pi~F-\r~l:!lf3stlc.;:nlil ' - ·3· and socially reserved, Situations in which FAVOR use was expected to be most appropriate were no·Enotlng theatres, restaurants and other peoples' ears and homes, Prior to any opportunity for social exposure, consumers anticipated social reaction to be predominantly Interest and approval, with lan tar smokers most likely to expect this reaction and females being more likely to ~ expect amusement and ridicule, Subsequent measures after four day usage showed that Interest and approval was In fact the experienced majority reaction within the home, but amusement and ridicule was the main public reaction (pereelved especially keenly by females and low tar smokers), Nevertheless, at the close of the exercise, 65[1 of total sample felt at ease using FAVOR in public (85X of males, 45~ of females, 901C of middle tar and 40t of low tar smokers), principal advantages of FAVOR were absence of smoke, debris and nll~ Shortcomings were largely sensory: tobacco taste levels too low, draw effort and irritancy toa high, satisfaetian levels law and visual/tactile quality insufficiently natural, Group discussion and sampling of experimental products confirmed that all these features were seen to be capable of significant fnprovenentl Finally, it was generally agreed that the equation of six FAVOR sticks to twenty conventional cigarettes was a credible claim, with 44~ of the total sample reporting a decrease In conventional cigarette consumption during the extended FAVOR trial, In the general context of consumer evaluations of radically innovative product propasftfons, the results of this exercise indicate a significantly positive respansel Information on progress of the FAVOR launch is as yet sketchy, but B1W have offered to set up a monitoring service for the future, A,f,p, claim the product Is selling well · they budgeted to deliver 500,000 packs of FAVOR In January but needed to supply over 900,0001 They believe that FAVOR has at least ~ share of sales In its launch regions · Austin, Dallas/Forth Worth, Houston, Their own telephone research among 1500 FAVOR users suggest three categories: 1; Smokers of 4 · 5 packs FAVOR per week who also smoke 2 · 3 clgslday, 2. A Hgher oroportfon of pwple who use FAYOR, only In lunco~sfDrtablt . situations' l,e, where conventional dgarette sloking is not welcomed · allegedly accounting for 25-501 of their consumpt~on~ 31 Those whq try 2 · 3 peeks and putt, largely due to irritations, Clit; PBF -!::!!::!!::!, t3stlc.;: nill ··- ·4· Forward plan The UIK, findings on FAVOR will be presented to ~nperlal Tobacco, Canada, who will also share their findings with us, A strategy for approaching AITIP, will be developed before a joint meeting with that company In which we expect to exchange market research findings, clear toxicological issues and establish ideas of how the BAT Group Ray proceed In relation to this company, The potential cost of acquiring Interests will be explored In order that a Group position paper may be presented to B~TCol Board hopefully hy the end of Febfuary~ the position In relation to the UISI market as presented In November was that A,T,P, intended to "go It alone", Recently, we have heard that (;erald Mazur, the prime Investor, has stood dorm as Chairman, but still holds his sharesl The new Chairman, Irl 3acobsen, may have different views, These will be explored, O .. .... ~.