I I %.O I I I %.O I a I I I %.A a & I $ I %-# 9 0-% 8 I @., a -
CBI CONFERENCE, SEPTEMBER 1989
"The commercial opportunity for innovation arises
not simply from the availability of new technology,
but also out of changes in the shape of society and
in the circumstances of consumers. it
"Qualitative research techniques enable the
refinement of our initial hypothesis through
dialogue with the consumer."'
"We do not look to consumers for creativity but for
criticism. Analysis of such dialogue enables us to
plan the process by which innovation is made
understandable and persuasive to its target market."
"it is all too easy to presume that consumers will
respond like scientists, and to believe that the witty
presentation of novel features is all that is required. to
"Experience demonstrates that the meticulous
engineering of the market positioning of such
innovation is as important as the care devoted to the
product's physical design. In its absence invention
becomes simply a sort of circus trick - a technically
clever and often vivid demonstration of virtuosity,
serving no useful purpose."
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BATCo document for Province of British Columbia 19 April 1999

CONCERN BY WHOM ATTRIBUTED TO?
TAR
Public Nicotine (less often)
Health Perceptions TAR
co
Regulators Other Noxa
Nicotine
Nicotine (predominantly)
Addiction Perceptions Smoking Gestures Per Se
Social Perceptions:
ublic Smoke
Health (ETS)
Regulators Smoke Components
Nuisance (ETS) Public Irritants, odour-
forming components
Nuisance (debris) Public Buts, Ash
else,,
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BATCO document for Province of British Columbia 19 April 1999

Candmims Of The--aemier
-(And Favor) Expej ft
1. NECESSITATE COMPLETELY NEW TECHNOLOGY.
2. LEAD TO RADICAUY DIFFERENT PRODUCTS THAT DO NOT
MEET CONSUMER BASIC REQUIREMENTS FOR A CIGARETTE.
3. LEAD TO PRODUCTS THAT RISK DEFINITION OF NOT
BEING A CIGARETTE.
4. DRAW TOO MUCH MEDIA REGULATORY REACTION AT AN
EARLY STAGE.
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BATCo document for Province of British Columbia 19 April 1999

SUMMARY OF PAST EXPERIENCE
1. 'FOLLOW REGULATORY DIRECTIONS AND SEEK
REGULATORY SUPPORT.
2. GO FOR A WORTHWHILE BUT STEPWISE IMPROVEMENT.
3. AVOID OVERTLY TECHNOLOGICAL PRODUCTS.
4. RECOGNISE THAT NO COMPROMISE ON CURRENT STANDARDS,
ON ACCEPTABILITY OF SMOKE WILL BE TOLERATED BY
CONSUMERS.
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BATCo document for Province of British Columbia 19 April 1999

RJR QUOTATIONS ON "PREMIER"
SEPTEMBER 1989
"Our commitment to product development is
..Substantial, and we intend to continue developing
new technologies that will better meet consumer
demands and we will fully address the issues raised
in the test markets."
"The best thing we learned was that smokers are,
indeed, interested in new products that address the
social pressures that smokers face on a daily basis. to,
"Our test showed that smokers showed a great deal
of interest in such attributes of Premier as its virtual
elimination of sidestream smoke, its elimination of
loose ash, and its mainstream smoke that dissipates
quickly when exhaled."
"The worst thing we learned was that some fervent
anti-smokers are willing to go to any lengths and use
any means to discredit new, technologically based
alternatives that address the desires and emerging
desires of today's smokers - this even when the new
products go far in addressing the very criticisms
these anti-smokers have made about cigarettes
currently on the market."
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BATCO document for Province of British Columbia 19 April 1999

A POSSIBLE STRATEGY FOR
ALTERNATIVE PRODUCTS
W ASSUMPTIONS
1. A PRODUCT OFFERING A RESPONSE TO THE PERCEIVED NEGATIVE
ASPECTS OF SMOKING (S & H, SOCIAL ETC.) WILL SIGNIFICANTLY
ALTER THE DECLINE IN CIGARETTE PRODUCTION.
2. A PRODUCT OFFERING THE CHARACTERISTICS OF PREMIER (NO TAR,
NO BIOLOGICAL ACTIVITY, NO SIDESTREAM) IS NEEDED BUT THE
TECHNOLOGICAL APPROACHES AVAILABLE ARE UNACCEPTABLE.
3. A PRODUCT OFFERING A SOLUTION TO THE ADDICTION ISSUE
WOULD ALSO OFFER A POTENTIAL MARKET BUT NO VAUD
APPROACH HAS BEEN IDENTIFIED.
4. OVER THE NEXT TEN YEARS IT MAY BE THAT NEW TECHNOLOGY
EMERGES ENABLING TRADITIONAL POSITIVE CHARACTERISTICS TO
BE RETAINED IN A PREMIER TYPE PRODUCT.
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BATCo document for Province of British Columbia i9 April 1999

(11) PROPOSED STRATEGY
(i) FOLLOW PRODUCT MODIFICATION DIRECTIONS IMPLIED IN
REGULATORY PUBLICATIONS AND REFLECTING CONSUMER
ATTITUDES DETERMINED BY RESEARCH.
(4) INVOLVE SELECTED REGULATORY BODIES IN OUR IDEAS FOR
PRODUCT MODIFICATION AND IN PROGRESS.
(iii) ESTABLISH A PLAN TO PROMOTE THE POSITIVE ASPECTS OF
NICOTINE AND TO CHALLENGE ANY NEGATIVE
PERCEPTION (INCLUDING ADDICTION).
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BATCO document for Province of British Columbia i9 April 1999

PROPOSED
(CONT.)
(iy) SPECIFICALLY, WE CAN EXPECT TO ACHIEVE:
(a) TAR REDUCTION AT NORMAL NICOTINE.
(b) TAR QUALITY IMPROVEMENT (AND REDUCTION IN
BIOLOGICAL ACTIVITY).
(c) REDUCTION OF 'OTHER NOW.
(d) REDUCTION OF SIDESTREAM YIELD AND IRRITATION.
(6) REDUCTION OF CO.
ALTHOUGH WORKING WITHIN TRADITIONAL FORMATS OF
CIGARETTE CONSTRUCTION AND SMOKING STYLES.
(v) TARGET REDUCTIONS FOR THESE PARAMETERS SHOULD BE
AGREED AGAINST SET TIMESCALES.
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BATCO document for province of British Columbia 19 April 1999

PR,- PO ED
-STRATEGY (CONT-)
(vi) NICOTINE REDUCTION PER SE SHOULD 8E DISCOUNTED AS A
MAJOR ROUTE FOR DEVELOPMENT.
(IF -NEXT- SHOWS THAT A SMALL SEGMENT OF THE MARKET WILL
SETTLE FOR SUCH A PRODUCT, WE HAVE A TECHNOLOGICAL BASE TO
COMPETE - BUT THE OPPORTUNITY WILL BE SMALL)
(vii) AIM TO INTRODUCE MODIFIED PRODUCTS IN STAGES:
(a) TO PREVENT UNACCEPTABLY ABRUPT CHANGES IN TASTE, ETC.,
CHARACTER.
(b) TO PREVENT FOCUSSING MEDIA INTEREST HIGHLY ON SUCH
MODIFICATIONS.
(c) TO ALLOW MARKET RESPONSE TO BE CLEARLY ASSESSED
-SO OFTEN CONCEPT RESPONSE IS NOT MATCHED BY
PRODUCT RESPONSE.
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BATCo document for Province of British Columbia 19 April 1999

PROPOSED L7JL
(viiij SINCE NO COMPROMISE ON TASTE, ETC., WILL BE MADE BY THE
CONSUMER, ANY PRODUCT MODIFICATION SHOULD MEET
ACCEPTABLE STANDARDS WITHOUT ANY DISCLOSURE OF SO
Fall CALLED TECHNICAL BENEFITS!
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BATCO document for Province of British Columbia 19 April 1999

0
0
Strategic Product Innovation Sc
C hernatic
1.04
ction 7.
-500
90
Typical - 80
Delivery 0.89
70
M, Levels
(mg) 0
0 8.4
0
-700
U
90
95
co
co
co
i9ag 2000
8 S 0 1 0 0

0
0
m
0
PROJECT DAY
MARKETING BRIEF
CD
0
0
0 PROJECT DAY WILL EXPLORE POTENTIAL ALTERNATIVES
cr TO CONVENTIONAL CIGARETTES THAT CREDIBLY OFFER
> THE ELEMENTS OF TRADITIONAL TOBACCO PLEASURE
la
WITH A GREATER LEVEL OF "SAFE-TY",
9 9 9 0 1 0