-5- Eur:en~ dnd Future Oevelapmcoe of Ccnrumer Needs, Atti~~dc~ end SeRnents i, pew Smokers may well start on a low tar btand and stay with Itl Such smokers would not want 1 low tar that smoked like 1 middle tar, i, Low tar that smokes like middle tar Is most appropriate for middle tar smokers switching down due to concern over "hehlth'. 3. There II I flckle market segment of 'concerned' smokers who will try to switch down, generally find the product less satlsfactorp than their original middle tar product so keep trying different low tar propositions to find one thlt~s~s for them, this may never he achieved, i. high on the list of consumer needs is nicotine, which i believe to he the main motivator and sustainer 01 smoking behaviourl without nicotine in sufficient quantity to satisfy the needs of the smoker, the smoker can (a) give up altogether, (b) cut hack to a low purchase level, (c) keep switching brandsl 51 Irrespective of the "women'E movement" I believe that many males ad females see themselves as different with different ~~plratloall there are two distinct segments; with 1 masculine and fewllne Illgc~ further segmentation leads to other identifiable groups In the communityl sophisticated (or wanting a sophisticated image), working Class (or wanting working class image) Sporting (or with I sporting image) Adventurous, Reassuring, trldltioPI1ICPPsCrta~ltl, Romantic, centlc, Rough heel All of the above can he displaced bf a good quality low cost product, If the predict hit I neutral image, not offensive to anyone hut with sustained low costl BATCo document for Legal Services : Health Canada 21 May 1999 -6· 6~ Any consumer is going to make judgements about a tew product, probably ulthin the first few puffs on the first cigarette from the pack~ This judgement will reflect gualey and strength of taste, as well as Impact and irritation, First Impresalone are therefore very ilpor~aat~ A further judgement may be made at the end of the pack, which could relate to how long the pack lasted, and whether there is any residual taste, Irritation or lack of satlsfactlon~ The first few puffs need special attention, 7, Consumer attitudes may be segmented Into those who only believe health problems affect other people, "If r give up I can still be run over by a bus", "My father has smoked 10 a day for 60 yeats and Is still mowing the lavn"~ "If f give up I will put on weight", "Wlth all the polutloo around In the~atlposphere smoking can't make any different; etc, These herd core will probably be the main source of consumers who either do not worry, do not believe or deliberately wish to project a hard image, The warrledlconcerned smoker shows Little brand loyalty and is likely to give up anyuay, nle target market Is therefore, the hard core and those that can be recruited to join Itl Important aspects therefore are: Good value, low price Adequate quality Enough nicotine No after tastellrrltatlon Ho offensive image Easy to draw smoke~ BATCo document for Legal Services : Health Canada 21 May 1999 -7- Current and Future Product Trends, Needs and Opportunities i, As suggested earlier, high on the list of product repulremenea Is an adequate level of nicotine to sustain the smoking habit. Smokers have a nicotine threshold below which It is Ineffect~ve, (ln my case this Is a traditional product with no less than 1,2mg nicotine when measured by standard machine smoking.) Such nicotine thresholds will vary with different consumer segments, but for the majority of smokers who buy cigarettes and smoke them regularly levels of nlcOrlne below l,Omg standard delivery vlll be unsatisfactory. 2, Many studies of smokers indicate that a large number will compensate for reduced delivery by Increasing the amount of smoke taken from 8 cigarette with lower dellveryl it Is also true that most smokers will take less smoke from a cigarette with higher delivery than their usual brand. Clearly it is easier, (Ieaa effort) to take less smoke from a cigarette than to take more smoke. Thus a moderate delivery product can easily satisfy a smoker with a low smoke requlrcrPent, whereas It 18 much more difficult for a product with low delivery to satisfy a smoker with a high requirement far amoke. If the high rqulrement smoker smokes the low delivery product with high intensity then smoking becomes Intrusive on normal acthltp~ Smoking is usuary a passive behaviour' which accompanies other activities rather than being an active pursuit. 3, Following on from this theme, any feature of the cigarette design which is remarkably different from the smokere usual product will Stand out and draw the smokers attention away from what he is doing and onto the cigarettel The smoker pay then analyse the BATCo document for Legal Services : Health Canada 21 May 1999 · -8- cigarette crltlcarlp to sap Yhat the dlfierences are in caste, harshness, mechanics etc. Most smokers are therefore very eonsenatlve and not unhappy with their current product· 4. ~hanges in the product should be minimal as far as the smoker is eoacerned~ Thus any innovations should not be intrusive In tither appearance, feel or smoke pcrformance~ As a rule of thumb, changes of less than ZOI In delivery are not noticeable to the untrained consumer~ The tolerance bandwidth will however vary from aspect Ed aepect~ Changes in taste could be more obtrusive than changes In Impact level, 5. For economic and political reasons I expect to sec an Increase in the amount of expanded tobacco used In produets~ 6~ I would also expect longer filters and shorter tobacco rods. i, Smokers ulll be veaned gradually to expect fever puffs, but each puff will have mote preaence~ This II a uay to give satisfaction In amoke at overall lower delivery, whllst malntalnrng price, 8. Due to the "weaknese' of Virginia tobacco taste at lower delivery levels, I:expect to see'flrglnla produces fortified with stronger tasting tobaccos - I.e~ Modified Vltglnla Blends, and the Increasing use of flavour additives as and when sultabre enhancers are developed. 9. Because of the difficulties of satlafactory b delivery (sub 15olg) Virginia products, a trend to US and German blended style products will be established and Increase. 10~ Because the recession Is world wide, the developing countries will not begin to catch up hot fall further behind developed countries. Peeking lay change In developing countries to smaller packs, for BATCo document for Legal Services : Health Canada 21 May 1939 C·~·~el- ·9- Ipterdatlenal Broads or Individually wrapped cigarettes In say for sricir sales of domestic ptcduct~ pLsrfe sausage skins Il. elgarettes vlrh conpensaoble filters will be deveiopld· Such productl will have low dellvrrl when ap~ed under standard conditional but, being ~el~ellg sensitive, a smoker may readllly lake higher dell~lrl than the standard dcllveri, If he so vl~hes· 12. Seleer!~e filters will be developed for bpclfle ~arhrs and segments which remove specific delivery camponenre YhlCh do not nrttosamlnes acroleln, and affee~ smoke taste; eg· Heavy metals, Bcetaldehyde, 13. with an as~umtd reduction In the availability of advertising and Iromotlon, Lh, snamlarlon of the prp0ucl It all stagPa b~~PmP' of reunltY should be taken to cheek Ineteaslng Imposcance, Every oppo the visual impct oi pack designs far the parker segment and In the total marker context-Cash and Carrt. 1[W. Cases, 200'8 cartons or bundles and individual packs. With the loss of ability to s,sraln a brand image by advertising the product In the peck must be of even better quellrg than ever Seiore~ Ealeelally' from the and flavoar and good value point of vlev of physical, taste attributes when compared vlth cPmpetitlon· 14. With the Increasing use of Expanded Tcbacco a new problem starts to arise due [D the e!ulllbrlun moisture of DI~T. DIer both picks up and loses water more rapidly than normal tobarcP· 'Ihur a new style of packaging may be developed, which besldea prlvldlag a barrier to the gain or loss of moisture when staled acts as a self conditioning cabinet for an opened PdCkl It this can be made to work, then be last cigarette from the pack would smoke as well as the flnt· II would also hip to Increase the shelf life of traditional pr0duc'g· IV BATCo document for Legal Services : Health Canada 21 May 1999