CIGARETTE ADVERTISING AND PROMOTION POLICY GENERAL STA 7TMENT Cigarette smoking is an adult custom. Children should not smoke. The Law prohibiting the sale of cigarettes to minors should be strictly enforced- BATCo advertises and promotes its products only to adult smokers. BATCo supports the enactment and enforcement of legislation in the UK, and in its overseas markets, prohibiting the sale of cigarettes to minors. BATCo's policy on the advertising and promotion of cigarettes, which is designed to reinforce its beliefs, is currentlv under reNiew. It will be released for publication in the Manual of Opmting Procedures, follo-Aing its approval by the BATCo Board. 0 (-n rIQ Operaring Procedures December 1992 Section 2vii) Pige I (J-$ BATCo document for Legal Services : Health Canada 18 October 1999 MARKETING SUPPORT SERVICES Background and Organisation One of the responsibilities of BATUKE's current Marketing Department in Woking is to receive requests from the Area Teams forvarious kinds of marketing support, and to meet those requests writhin time and budgetary constraints. The forms of support provided include: - 1. Below-the-Line Activities Sampling Concepts & Support - Brand Brochures/ Portfolios - Trade Information items - Exhibition/Displays - Seasonal Materials Uniforms (Sales team/Hostess) Launch Programmes Promotions (Consumer & Trade) Sponsorships In-Store Furniture Outdoor Furniture - Incentive Items (Consumer & Trade) - Point of Sale Material 2. Above-the-Line and Other Activities Brand Graphics Manuals Packaging Standards Manuals Provision of A-T-L Materials Packaging Designs & Amendments TARGETS Manual Initial arrangements have been made to continue this support for the RBLIs in the manner described below. These arrangements are to be reviewed after sbc months. Ln C:) CD Nj Operating Procedure December 1992 Section 2viii) Page I Q^: LF1 BATCo document for Legal Services : Health Canada 18 October 1999 i. A Marketing Services Unit (MSU) will be formed within the Trade Marketing SerN ices Department of the Marketing Division. The NISU will be responsible for providing B-T-L Merchandising Services, (artwork, materials, and distribution), to the RBLIs for all Category I and 11 international brands, primarily in export markets. ii. The International Brand Groups (IBGs) will design and procur consumer promotions at the request of RBUs for all Category I international brands. iii With assistance of the MSU, RBUswill be responsible for designing, procuring and implementing consumer promotions for all Category 11 international brands. iv. The IBGs will provide the international creative subjects, graphics and guidelines for 10 all.A.TL media activities for all international brands. v The RBUs and Operating Companies "I translate these ATL Guidelines, with their agency afficiates, to meet local market requirements. I vi. 7he MSU and/or the IBG will ensure that marketing support projects accepted by the Marketing Division will be actioned within agreed time and budget parameters, within the framework of BATCo brand strategies and legal policies. vii. RBLIs will be the central control and communication point for all regional merchandising activities planned and requested b,,v their respective regions. (-,U1 regional communication will be via RB Lls). 2. Regional Business Units 1. The RBUs will maintain the relevant regional merchandising activity portfolio, as agreed and approved for inclusion in Company Plan. 2. Project Brief Forms (PBF) should be completed to "trigger" marketing support activities as agreed in the plan (see below). 3. Upon receipt into the RBUs the following PBF detail should be checked against Plan: - i) activity planned and agreed ii) budget allocated corresponds to budget planned Operadng Procedure December 1992 Sec-tion Zvdill Page 2 BATCo document for Legal Services : Health Canada 18 October 1999 iii) budget available in media/merch system 4-. PBFs should be completed fully with adequate information to enable immediate action from the MSU andf or lBG. 5. RBU approval to action to be appended. 6. Any queries or discrepancies arising from the PBF should be addressed within the RBU (by management decision or referral to field/arca initiator), prior to submission to the MSU or IBG. 7. Upon completion or validation of the PBF, the project should be logged into the PROJECT DIRECTORY SYSTEM (PDS), by RBU staff. The PDS will automaticafly allocate a PROJECT NUMBER which must be written on the PBF. (This reference remains unique to the project for its fife span - action and filing, and must be referred to in any communication by all involved parties). 8. The PBF is a 3 part self-carbonating document. Upon completion of all steps 3 - 7 above, the copies should be distributed as follows: - Original (white) MSU OR IBG 2nd Copy (Blue) RBU FILE COPY 3rd Copy (Yellow) INMATOR's COPY ALL 3 COPIES TO BE PRESENTED TO MSU OR IBG PRIOR TO RE LEVANT ALLOCATION. 3. Management Services Unit and International Brand Groups Catego~E I Brands: - 'Me IBG's will undertake all project briefs relating to consumer promotions, as follows., - Benson & Hedges Family - Paula BWr/.Mike Nightingale. State Express Family - Nikki Edcnborough. (-n CD C2) Operating Procedure December 1992 Section 2viii.) PaZe 3 (21 BATCo document for Legal Services : Health Canada 18 October 1999 CateggE~E 11 Brands - Promotion Acti%ity.- The RBU will be responsible for project leadership, with the resources of MSU in support. The MSU will maintain the PDS for these projects. neMSU will undertake all other B.T.L. projects. Area responsibility will be allocated as follows :- Sandra Barcky - MSU Manager (Global responsibility) Selina Page-Dudley - M S Assistant, Europe. W. Hein. Stephanie Padgett - M. S Assistant, Levant, Africa. Op. Cos. Alison Thurston - M S Assistant, Far East. Middle East. If there is any doubt whether a project is to be handled by the IBG or th-,.MSU, the M S U Manager should be consulted. 0 Procedures 1. All completed PBFs from the RBU's should be routed through the MSU Manager. In the absence of the MSU Manager, PBFs can be handed direct to tine executive responsible as above. 2. On receipt of the PBF, the MSU/IBG will check the information given for understanding and accuracy. Requested time frames and budgetarv feasibility -Aill be assessed and agmcd with RBU resource. Acceptance of the brief by the MSU/1BG will be by the relevant Manager's signature on all 3 copies. 3. Any queries or points for clarification will be referred back to the RBU's for settlement, prior to any action by the MSU/IBG. 4.. Once accepted by the MSU or IBP, the original PBF will be retained by the designated MSUABG resource. The blue and yellow copies %%Ill be returned to the RBU for distribution accordingly. S. The MSU/IBG will determine and brief the sourcing agent (e.g. Procurement Dept or external agencies /suppliers). Operl=g Procedwre December 19921 Se,-:on page U-1 _E:t_ co BATCo document for Legal Services : Health Canada 18 October 1999 6. For briefs accepted into the MSU, that team will be responsible for the maintenance of the Project Directory System (status field and planners log) from acceptance of brief. For briefs accepted by lBG, the RBU resource will be responsible for maintaining the PDS for the particular project. Communication direct with IBG will be crucial to the maintenance of the project status. 7. All merchandising orders raised, will be collated within the appropriate project file bv the MSUABG, with copies passed to RBU's at time of production. 8. Upon completion of the project, MSU will "Archive" the project in the PDS and pass the complete file to the RBU for Axea filing purposes. 9. For pT0jCCtS undertaken by 113G, the RBU will "Archive" within the PDS and obtain all relevant documentation from IBG for file purposes. 4. THE PROJECT BRIEF FOILM - (SEE APPENDIX 1) The project Brief Form (PBF) must be completed for all work to be undertaken bv 1BG and Trade Marketing Services Unit (MSU). Objective: To monitor -aa=!Lraerchandising activities, ensuring: - i) planned activities are actioned. ii) non-planncd acti-i ities are approved and plan amended. iii) budgetary control is effected. iv) commitment accounting procedures aree implemented. V) requested actions/acd-vities are effectively implemented to meet agreed time and budgetary consm-aints. vi) action/status can be recorded on the Projects Directory System which maintains communication to all relevant parties. Note- The PBF format was designed for BATUKE Central Marketing use. The form will be redesigned to suit the new organisational structure and requirements. CD Operating Proztdure December 1992 Section 2viii) Fige 3 13ATCo document for Legal Services : Health Canada 18 October 1999 MARKETING COMMITTEE STRUCTURES The existing Committee structures Within Marketing are: - B.klCg BATUKE I. Product Development Group The Marketing Planning Group Chairman: J. Rembiszewski Chairman: A.D.G. Pereira Long term development of Resolution of marketing/brand international brands. issues in export markets. Quarterlv meetings Monthly meetings 2. Additive/Materials Guidance Panel Product Development Team Chairman; G. Smith (lainnan: A.D.G. Pereira Guidance on use of materials in Initiation and development of new cigarette construction. products. Meetings as necessary Monthly meetings Within the re-, ised organisation, the number of marketing committees will be reduced within the following structure. 2.1 Marketing and Product Str2tegy Group The existing BATCo Product Development Group and the BATLIKE Marketing Planning Group will be subsumed into a new Marketing and Product Strategy Group,,%ith a revised membership as shown below. The Group will be concerned essentially with the long term development of international brands and of the related marketing strategries. The terms of reference of the M PSG will be: i. to identi~- product opportunitf es ii. to ensure the application of improvements arising from technological advances to the revision of I. B. standards iii. to plan forward I.B. strategy in the light of market changes U1 CD r1j Operatmg December 1992 Sec:ion 2ix) Page I U! U-1 L11 LTI BATCo document for Legal Services : Health Canada 18 October 1999 Marketing and Noduct Strategv Group (Continued) iv. to ensure the co-ordinated implementation of agreed international brand strategies V. to review control procedures vi. to advise RBUs and the BATCo Board on the allocation of communications resources between brands vii. to review the work of the Product Development Team (see below) viii. to review proposals for the launch or repositioning of Category I and 11 international brands The composition of the NiNG will be: The Marketing Director 3 x International Brand ',tanagers 3 x Regional Marketing Nianagers The Senior Regional Export Manager Product Development Manager (Marketing) The Regional Finance Controller (Europe) as Head of Marketing Finance. The Secretary of the MPSG will be the Head of Marketing Intelligence and Staff Development. The MPSG will meet twice a Year. The primary purpose of the March/April meeting will be to review overall marketing strategy, and to review proposals put forward by the RBUs for the launch or repositioning of category I and 11 International Brands, as concepts to be developed in the Regional Five Year Plans. The prfinary purpose of the Septcraber/October meeting will be to approve the Statement of Marketing Strategy to be included in the BATCo five year plan. The work of the MPSG will be closely inter-related with stages of the Corporate Planning Cycle so that international brand strategies, as set out in the Marketing Division Plan and the individual Brand Plans~ will be consistent with the Regional Plans. The International Brand Control Procedures, which are set out in Section 2i of the Manual, are intended to follow and reinforce the work of the MPSG, not to U1 replace it. Operating Procedures Decem6er 1992 Seczion 21ix) Page 2 BATCo document for Legal Services : Health Canada 18 October 1999 The International Brand Control procedures, which are set out in Section 2i or the Manual, are intended to follow and reinforce the work of the N1 PSG, not to replace it. 2.2 Product Development Team The Product Development Team will act as a sub-committee of the MPSG. Its role within the new structure will be primarily tacticaL it %%ill focus operationally on: Projects ref=ed to it by the IMPSG ii. Review of proposed changes to the packaging and blends of international brands. W. Reviews of the level and content of product development projects requested by operating companies on R&D. (All such requests must be signed off by the RBU Marketing Manager before action is taken by R&D). iv. - Specification and performance of the IB product range from Southamp and offshore manufacturing units including: commercially acceptable conformance to group standards including any necessary development to achieve this maintenance of specifications and performance resolution of technical issues and operational issues arising from the development of new specifications or changes to existing specifications. V. Development of specifications to extend the range of tactical products (mainly for CAT 11/111 brands) in response to RBU needs Vi. Review of the outcome of PQRS and IMASQ quality testing in operating companies. vii. Provision of product development advice to Operating Companies U1 CD Operat-mg Procedures December 1992 Section 2ix) Page 3 J-'J BATCo document for Legal Services: Health Canada 18 October 1999 iv. Provision of technical information on BATCo competitive brands to the RBUs. The Product Development Team will meet monthly. Its composition will be: The Marketing Director (in the Chair) or in his absence the Regional Marketing Manager (Asia-Pacific). Product Development Manager (Marketing) Head of R&D Head of Product Development Section BTC The Head of a Brand Group (initially SESSS) Senior Blender Production Planning Manager Materials Development Manager Southampton Plant Manager Southampton Finance Controller - Secretary Brand Managers and Regional Marketing Managers will be co-oped to meetings, as necessary. The Marketing and Product Strategy Group and the Product Development Team will need to establish a close working relationship in order: i. to avoid situations where an RBU requires the launch of Cat I brand on a shorr lead time and for commercial or overational reasons the standard specifications cannot be used ii. to ensure that technological advances are built into BATCo standards and operational developments iii. to ensure optimal deplo~rnent of resources in project work, whether originating from Marketing Depw-tment, the RBUs, or the operating companies 1LJ1 CD C:) Operating Procedures December 1992 Section lix) Page 4 Lr, Ln Lrl (.;4 BATCo document for Legal Services : Health Canada 18 October 1999 2.3 The Sales Co-ordination Committee The co-ordination of all export sales world.-wide, and in particular the monitoring of supply routes and the review of pricing structures, is the responsibility of the Senior Regional Export Manager. Issues, such as the acceptance of orders from new customers or competing priorities, will be resolved in consultation with the Regional Export Managers, the Regional Directors and, in the case of disputes, with the Marketing Director. When necessarv, the Senior Regional Export Manager may call ad hoc meetings of the four Regional Export Managers and the Head of Customer Scr%ices in order to resolve sales planning issues and to co-ordinate the flow of product to key markets. 2.4. The Additive / Materials Guidance Panel will remain unchaniZed and will continue to meet as necessary and as requested. (-n C~) c::) r~j U-1 Operating Procect;res December 1992 Section 2jx) Page 3 U. I (jr-1 (-n BATCo document for Legal Services : Health Canada 18 October 1999