Can\Pal page 50 C) ~N~VATI~ me sjcr thnst of innovation and deveIoplent that will take place in F'83 will be a canplate revamping of our sunray ~- formation into an integrated whole which will see us through the 90's, The C,M,A, and Monthly Monitor have served us well, but they no longer suit the current ~ynamics of the market nor take a~m- tags of today's larsl of infonation processing technology (information processing cars the areas of data collection through to Eqltcr reporting ad analysis). project Brand ID Id various other studies leading up to that project, plus nunerous opinions in and mt of Research have identified the draw backs of our current survev tools, An overall approach to overcome these flaws, tht is not cost prohibitive, will be tackled and resolved ~ F'8f, mis undertaking is a major one and involves the formulation of a critical oath which will lid us i rctiq our e~~t, The lrain focus Of this restructuring is titled Project Survey, which basically calls for a ~~1V tllspls sunray BPtCo document for PFSFC 1 March 1999 Page jl supplemented by an annual randerm in-home interview. Ihe monthly survey will replace the C.M,A, with a shortened ccanputer assisted questior~iire concentrating on switching. Inage data will be collected in the annual in-hc~ne survey whic~ will also probe on issues which require, or am better delt with, using a visual stimulus. Tracking cur- rently being done in the C,M,A, over the telephone is ~· responsive in providing proper easures of new brand or ad performance, and will be removed and replaced with a more appropriate methodology. In slmmary then, the focus of the Research Group for F'Bj is on three major projects: Survey, Image, and Track. There are n~nerous secondary projects to these three but all have implications on one anodher, Tney are currently scheduled and managed independently, In April, a master plan will, be developed to indicate the critical points and implications each has on the other, The following is a description of each of these projects. BatCa document far PFSFC 1 March 1999 Pqe 32 1) Pr~rt $ney ~e C,Y,A, is currently conducted ming a qwrs sanpls of urban rmokers collected m,nthly using a tslsphone atbC ology and typed qasti~ta vith nunsrous skip patsns and 'JQB's, Various inadequacies eXlst bcclac of such a 1Ct~lO~: · a brand identification problem due to the inability through the restricted ms of words to idatib the proper brand; - length of ~esti~ire as it is weighted down ~ tracking, ~ge statements ad various other questions is drivingdown the c~lction rate and qglig of response and a the same time dr~~ uo colt; - bscause of time restrictions and the type of scaling used, image data is currently inadequate; and · lack of random Iql~g nethodology imposes restrictions on the Eorm of analysis that can take place, Project Survey will initially be a feasibility study on the me of a computer assisted questionnaire ahinfltcrd to a urban sample ~ch probes primarily a dwnograpkics, usual brand, BatCo document kr PFSFC 1 March 1999 Page 33 and previous bra~d, A computer assisted questionnaire can make better we of deep probes for proper brand identification by allowing detailed question blocks for everi brand on the market. Wlilt in editing can occur to help reduce coding and secondary editing. Flaw of questionnaires will be flawless and less ti~· cons~nning thus reducing length of questionnaire, thus reducing cost and increasing quality of response. As a means to secure the right supplier for this proposed design, we will be considering a proposal to be submitted by Adcco~ before the end of F'B? as well as e~plore what other suppliers have to offer. BatCo document far PFSFC 1 March 1999 Page 34 2) Project I~e Project Image is an i~nbrella project, Its ultimate goal is to develop and i~lement a c~nnprehensive, quantitative instnanenr to measure and interpret conssners' attitudes and beliefs towards cigarettes, Phase i of tkis project was the develo~ment of a consmer smoking vocabulary, Constructs, dimensions, and their meanings, as employed by smokers, was eval- uated. Phase II of this project was a refinement of · our cigarette typology, the relative positioning of brands on image dimensions, as well as further assess- ment of methodological considerations. Phase ill of this project will be a large ad hoc research project designed to give relative positionings of relevant brands on image dimensions; i~ order to provide a comprehensive description of brand irages in the Canadian cigarette market, X pilot stud~ on 40 brands and 10 dimensions will be undertaken, Areas such as: switching, Snaking ~ health, price sensitivity and "ideal" needs and wants will be collected at the same time, Ihe use of aatltivariate analysis will help ~cover the cenplex relationships that exist and help in our la~derstandi~f of the marketplace, BatCo document for PFSFC 1 March 1999 Page 35 3) ProjectTrack There is a need to set up and i~le~nent a systerm incorporating a set of be~hnarks (criteria, standards) that can be utilized to track new cigarette brands both own and appositirm. We presently track new brands with various tools: -retail audits; -C.W,A, ·a~anness, purchase, trial; and - focus groups, The system that will be set up q or Ray not differ Eram our present system, Present teals will be evaluated and possible additionalialtemate tools will be looked into, 8enckrks will be set up utilizing a combination of our historical data (i,e, a~areness at time intervals of first generation, second generation, etc.) and possibly same external consultation. ~o money has been set aside for such consultation, however. 4) C,M,A, Reporting Currently, we are reporting C.M~A~ cons~cr data based on crossed tabulation of key variables for market analysis. It is difficult far users to identify when trends occur. Also, our information is sometimes not very meaningful to most, in certain areas such BatCo document for PFSFC 1 March 1999 Page 36 as iragerl, tracking, ete, hence, they usually rely cn market research to hand cut cwnprehensive s~mmary and analysis, In order to respond more adequately to our users, we n~st rake full advantage of system flexibility, ~I~s, in F'83 we will ~ndertake the neeessarj steps to do so by vaUdacing, testing, and inpllementing m3difications to our survey reporting system, The presentation of the infonation will be in response to various identified needs such as target group switching, imagery for non·wers of a product, media target groups, etc, The project will be broken into phases that will see separate examinations of the different canponents of the infonrs,tion, I~lementarion of new approaches will most probably be staged depending an the above, 5) Cordeall Project Cordcall is to establish a means of measure of consumer data ~at does not generate a bias resulting from consumer mwnory, Currently ~der investigation is the iapllementation of a diary panel study of m~okers to monitorat different times of t~ year, coasrnption levels of cigarettes, product defects, and purchasing be~viot, phase I currently ~n~der progress, which is a test-study BatCa document far PFSFC 1 March 1999 Rp 37 dtYI·dobll~ ~(b ,,~, availlble by d~l~ nn. $·~dr~ vKIsnrnt d the an, we dd prcad with two waves of diaries. 6) PluslMinus ycr nak delves into the areas of our market Yd we p predict accurately. ~ Cdfi,, of interest is young ~~as between the ages of ii and i9, ~ be things tht we do ct bave, besides 9uantitative incidence and branded inbmion, m tL causal factors bt create these relmca. In 1978, e~~n~g research uJ done on this issue. Sdaat m db study, switohiul ha shows tht the ~ re fellowing their elders with regards to al~~ a lower tar products, k the pal stream ~ de baby boom diminishes and market potential ·tl~ we should ban Phntd what tL~ PYI end quitting Yr- ion are today, Have the attitudes Id b~~on changed in de pot three to mar pnl ire we ~I- ding to their needs? How do they perceive current ldVertising trends! L purpose of project P~~JNS h tD tpdate I portraits of starters and gdttm, BetCo document for PFSFC 1 March 1999 Page 58 explore starters' smoking history, attitudes and behaviors, explore causal factors leading to quitting and ultirately provide better predictors. A t~u~-pmnged approach will be taken on this proj· ect, one involving quantitative desk research on starters and quitters rmffng the young as well as qualitative work on the youth, both smokers and nrm·smckers , 7) Smobi~ g Wealth We are currently gathering information twice a year on smokers' perceptions of rmoking and health, 'Ihe method of obtaining this information ~s been con· stant since the early 70's, Among the latest results, one can find little change over time on the issues. M3nso, our actual reans of collecting the data may not reflect the concerns that exist today, such as social envimr~Rent pressure, prices, quality of prod· wt, CO issue, etc, Project image will e~q~lore this issue initially with the use of the cansonanceldisso- nance approach employed by B,A,T, The structure of our questions appear weak and could benefit frln a redesi~, The purpose of doing a anoking and health review is to better define and bring up·to-date BatCo document for PFSFC 1 March 1999 I Page 19 91·[hodolagy (i.l. e~ in t~nl vith nality Md Pertinent to the concerns preaches to Of aka], possible ap- resolving these issues are: r) 9ualitati Ye work on rmakers a~o~a~d a paint tB when certain issler are rmre relevant ; 4 ~RILlt( relative Itl(T~ij~ Di d~ie~nt items Of ermcem i,smokers' mind; and 3) ~d~ign Ihm ~ sdopt~d i,, the BO'r ipr ab~ concern, B]~es~n~o~2~ A pmject to be Mdertaken by Marketing Researdi in resprmse to infonration needs involves prwlding better regional infonaation; a respemse to the establblpnent of regirmal ~na~'kefinp aFalysb, n,t"'not iniorolltion fonsdrded t, regions is not meeting their market analysis needs, Th, Sf'ategy for establishiig ~hat regional infer, mation needs are, involves having the four A~R' s participate b" "1 orientation progran in Research th, first two weeks of Ibrch. They will be putting together a positicn piper b" their infonaatian ped~. This paper will be presented BatCo document for PFSFC 1 March 1999 Page 40 on the last day of ihe orientation airer having been exposed to all the data that exists in Research, ~rkering Research will th~ use this as a brief frcrm which work can pmceed to better satisfying regional infannatian needs, 9] Enhancement of Current Analytical Tediniques Using Exis~i?g Data It is our concern in Research that the existing data we have has not been milked to the extent that it can be in providing an interpretation of the market, With the cana~uri~g capacity that we currently ~ve and the advance- ment ii analytical tedmiques currently being practiced by outside suppliers, there is certainly room for $rovement. In the types of analysis performed by Ft~rketing Research, we have set an objective for ourselves that over the course of the year and prior to the annual planning update, we will incorporate new fox of analytical techniques currently in use today to better explain the market. One of these tedmiques will be mltivariate analysis Id~ich Peter Illeh has assumed responsibility for. BatCo document far PFSFC 1 March 1999 Page 41 of In~atim k(am~ of todaY'S rc~qor, the abilitY to ~~te hformatim is Pt aur door atl. h it I~ '' Y k ·do L1 d Iq i- imi· on ii, ~~ ad and analyld in ~~ Irh. ~a EL· bt mncY i It LLL, ~ Monthly Monitor, I,~ d,~ studies, Aa' sales, labi exPendiiures, at, should be rsdily available for cross rlgsiJ, A o. dne project by by h,L ~,~ dn sd t'~ ~ integration of dL hbnda II PurPoaos of mlp~. L initial stnll of tYI Pdct requires 1 position paper on how informaticn P b' ~tBti dba ~bPU)m ~Pu~ part of this project wil! b, the elimination of ~ed~a~mdant infbnration, BPtCo document kr PFSFC 1 Merch 1999 RI It 11] Rice Sensitivity Historically, tL ~a,,tntte larket has net Je~ltd on price, Recently, loblaws in Ontario L~~d I no-name I~t i hi roar xlth 4- P"rent success, is the rdst ~p for such a colt! With de pennents nis~ tass on to- i""" products continuously Id I worsening econaic clitq is there I lcasurable level of price Ili- tivity i the Canadian n~~l ~ Lt has caused 8 '~ pl~te~ in ~ decline of the fine E~ 'abtl ~ is incidence in llyO ~ tailorllade colitd Up? Our cart anbnts do not Pmnit US to reCOrd accllratelY dMAs in the rrarket PJ a result of price if there pTt q tPig place. b day may soon cane, if it ~·lt alrcadl:, ~ cigarette delnand will be significantly sensitive to price and pan of a CQm' p~4 decision will he price. Project Barker dll exptore de concept gr lew-priced cigarettes for m, while Project Ma Sensitivity, de one diJcurred here, dll hePeiully give os hdlL ~d shifts i attitude ad behavior as a result of price and Illo us to monitor its Ppitll a a mgoil basis, BatCo document for PFSFC 1 Mereh 1999 Page 43 ~ow-level Incidence Currently, a are faced with increasingly high research costs, I~ese costs increase exponentially when the product's inciderre le~l drops. we must find research techniques re give us answers without prohibitive costs with regards to prod~rt incidence. We, therefore, will undertake to find the rmst appropriate research tech- niques for low incidence tobacco products. This project canes as a follow-up to Project Brand ii), in which it was fo~n~d to be cast prohibitive or too in~actical to ia~lane~t the proposedmethodclogies, 7his project is not in response to conslnner confusion towards new br;ind data, but rather on reliability in representativity a~ our survey method for quantitative approaches. 13) Proj ect Product This project has two overall objectives: 1) assessment of our current product-testing sethodology with the ultimate goal being an improvement in the i~stnrment in teas of time, cost, and information supplied; and BatCa document for PFSFC 1 March 1999 Page 44 2) integration of smoker taste and sensory perceptions to better develop our Imdmtanding of attitudes, images, and market se~entation, . i A meeting has been scheduled in late F'82 with Prom~ct 4 Packaging and R i D along with Lrtin Ol~nan to discuss issws in this area, Hopefully, a result of this session will be to set new directions in the area of product mea- surement and testing, 14] ~xp~anded Industry Exchange The expanded industry exchange is an exchange of sales data by the rranuiacturers which measure campanylbrm~ ~erfonaance in a previously defined submarket. 'Ihe s~b~arkets have been isolated with the submission of "clusters" (grwps of whole- salesj, As expanded sales data becomes available, regions will be approaching ;lexarch far direction on how to use and analyze this information, It is our role to Imderstand the co~asition of the information and how it can be used in analysis, BatCo document for PFSFC 1 March 1999 page 45 1Z) Price ~udits As the federal and provincial govenrments continue to increase taxes on cigarettes, it has become essential that we gain a better insight into price variance in Canada, Presently, the instnnnents ke use tomeasure retail prices of cigarettes do not optimally reflect price differences and their impact on sales, ~he initial step in developing a test to measure price more effectively will be an analysis of all existing vehicles, At the co~letion of this stage, proposals kill be ~ade to ia~rbve our means of tracking and measuring retail cigarette prices. 16) Retail Audits There is a need to grove our ability in measuring brand perfonrance at retail, Retail audits will be studied this year, At the present time, our sophistication is to a level of conducting mini audits in selected markets for specific br;md tracking. BatCa document for PFSFC 1 March 1999 Page 46 'The reliability of these san~les and their representativity is questionabl.e. A position paper cm the subject will be pur forekard by Research recamnending that such information should be purchased by a supplier. H3wever, before designing any approach, a clearer definition of information needs is required. Are we concerned with only a measure of gross inventories to adjust sales or should we be looking into the future at sto~e se~nentation, retail ~nage~nent 3 retail inventory controll 17) Trade inventory Analysis Trade inventory analysis will be an in-house Inwstigatirm of tobacco andassociated products inventories. 'Ihe abjec· tive is to Ireanue the influences of economic conditiens on lnventorj levels at various paints in tine, while inp~roving our power to prediet trade reactions to c2~nging econermie conditions. This project will be done in conjunction with retail audits, 18] Sales Farce Activities Sales force activities interact with virPally every other phase of the ~rketing system, Each year, millions of dollars are spend in support of field activities, either ,h~ BatCa document for PFSFC 1 March 1999 Page 47 directly, or indirectly, Yet, our only measurement of the execution of the meld activity (or strategy) depends largely upon intuition, The objective of this project is to develop a statistical measurement which will assess the execution of field activ- ities, 19) Distribution Network In 1950, ITI serviced 3,700 direct aecMmtr;. By 1981, this figure had dropped to 685, The total nlanber of retail cutlets selling tobacco in 1981 was 43,'146, although if present trends continue, we esthte that only t19000 retailers will sell to- bacco by the end of the BO's, This project will explore the danges which have been taking place at the wholesale and retail level, i,e, why are distributors closing? wherel are there new'lrinds" of distributors opening? ~nat are the ramifications of the changing retail envinment? will we need more salesmen? fewer? etc, While there are few distributors, these fewer are controlling greater amolmts of merchandise, and are in a pcsitirn to ulti· n~itely exert a tremendous influence an what manufacturers might BatCa document for PFSFC 1 March 1999 Page 48 do in the marketp~ace, As a result, we ~rmst be auare of any '"pawer s~j~ft" frmn the Irandacturer to the distributor in order to develop strategies to prese~ve the present balance between ramdacturer and disrributar, 20) PTa~ct Pre~Test At the present time, rmrh of the advertising research which is conducted utilizes a qualitative methodology, Focus groups are employed to assess different creatives and to evaluate new eancepts~ Tnis does provide general direction, and will remain useful in discriminating amonllst n~ero~ concepts and creatives~ However, this methodology is inadequate in terms of deter- mining the i~act of an advertisement, particularly when cqaed to industry non~, Further, qualitative research Kill never be able to furnish ans~rs to various questions which exist, Ilmong these are: - the me of black borders on d~aurier advertising; - red on red far d~snuier light; - is the low ssaenesj of the Peter Jackson Extra ti~t crmq~aign a result of the creative?; - can black and white deliver the same message as color?; BatCo document for PFSFC 1 March 1999 -+'tac~tbi mil ,,,,, '' a p~ hf 1 PCI PI advmissbg ~ average d~ tb ~r * adverttr; ~gs ~e~Ning t~ ~I (~ ~ide ~ dl; ~ L R~ ~ ~~ L red hd~ d LS Ca, ~d P~dl~ d ~; ate, L· i ·Zh g~ ~I·d i, I y: " b Gcld a~ eycave~Fnt ~I ~id t ca~$ ~a"dinp h LI eldL ~' erl,t ht b~ P ~iL answen O ni g·,, d ten. ~, ~d~l ctp, Blsld ~·b~ ~lb~~bt ly 0 att~ Atcr ~9 hn lyt ,d ~Ma~rria lipht ~1~~ L ~g dl L ~ rql~ ~,~ IOa ~I ,1~ JpBI ~ Ilrel$ be callactpd L tb ~ls ~tO. bre B Iro~ ~d t 'CC'~, ~c~nte .I,, ,i ~iha, of d~C laod~Un , k,Ud a b annual ra~l ~ ~, i~~ ·1 *1 Yba. ~~ ·6· ~ta~blh, ~d~10 I~ib Ba~o document for PFSFC 1 MI~C 1999 Page SO possible volatility of the marker to price, necessitate a more frequent measure, An agreement ~s been establishrd with sepson b Hedges and Canadian Facts ~ich vill allow w access to an in- cidence measure far 11 mrhs of the pr. The final m?tbo$lagieal design of project S~ey ~id Project In~Bg~ n~ ~u~( a o~ in Bir arrangmpnl ba*irr, and the issue of how best to measure inridsnce in the cigarette market in terms of accuracy and cost will be closely examined, tt] Proiect library Ihe developnent Oi,research librari var sPnething that "i to be ccmpleted in ilB~. Ho~ever, (h~ to tie m· plam~Ed for conplecity and siie of the project, we do M' expen this to be cnpleted Mtii rtP~time in F'83. As a review, the librari is to provide a continuiq of infointatinn that was previcR~ily lacking in Research. A~rt all research projects will involve, in their early stages, a review of past research inrP the area in puestirm, i\ research iibrari will greatly facilitate this type of research, BatCo document for PFSFC 1 March 1999