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Q INNOVATION
The major thrust of innovation and development that will take
place in F'83 will be a complete revamping of our survey in-
formation into an integrated whole which will see us through
the BOIS.
The C.-M.A. and Monthly Monitor have served us well, but they no
longer suit the current dynamics of the market nor take advan-
tage of today's level of information processing technology
(information processing covers the areas of data collection
through to computer reporting and analysis).
Project Brand ID and various other studies leading up to that
project, plus numerous opinions in and out of Research have
identified the draw backs of our current survey tools. An
overall approach to overcome these flaws, that is not cost
prohibitive, will be tackled and resolved in F'83.
This undertaking is a major one and involves the formulation
of a critical path which will aid us in meeting our commitment.
The main focus of this restructuring is titled Project Survey,
which basically calls for a monthly telephone survey
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supplemented by an annual randan in-home interview. The
monthly survey will replace the C.M.A. with a shortened
computer assisted questionnaire concentrating on switching.
Image data will be collected in the annual in-home survey
which will also probe on issues which require, or are
better delt with, using a visual stimulus. Tracking cur-
rently being done in the C.M.A. over the telephone is un-
responsive in providing proper measures of new brand or ad
performance, and will be removed and replaced with a more
appropriate methodology.
In summary then, the focus of the Research Group for F183
is on three major projects: Survey, Image, and Track.
There are numerous secondary projects to these three but all
have implications on one another. They 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.
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1) Project Survey
The C. M. A. is currently conducted using a quota sample of
urban makers collected monthly using a telephone method-
ology and typed questionnaire with numerous skip patterns
and VQ131 s.
Various inadequacies exist because of such a methodology:
- a brand identification problem due to the inability
through the restricted use of words to identify the
proper brand;
- length of questionnaire as it is weighted down by
tracking, image statements and various other questions is
driving down the completion -rate and quality of response
and at the same time driving up cost;
- because of time restrictions and the type of scaling
used, image data is currently inadequate; and
- lack of random sampling methodology imposes restrictions
on the form of analysis that can take place.
Project Survey will initially be a feasibility study on the
use of a computer assisted questionnaire administered to a
urban sample which probes primarily on demographics, usual brand,
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and previous brand.
A computer assisted questionnaire can make better
use of deep probes for proper brand identification
by allowing detailed question blocks for every
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brand on the market.
Built in editing can occur to help reduce coding and
secondary editing.
Flow of questionnaires will be flawless and less time-
consuming 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 Adcom before the end of F'82 as well
as explore what other suppliers have to offer.
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2) Project Image
Project Image is an umbrella project. Its ultimate
goal is to develop and implement a comprehensive,
quantitative inq-lrument to measure and interpret
consumers attitudes and beliefs towards cigarettes.
Phase I of this project was the development of a
consumer 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 III of
this project will be a large ad hoc research project
designed to give relative positionings of relevant
brands on image dimensions; in order to provide a
comprehensive description of brand images in the
Canadian cigarette market. A pilot study on 40 brands
and 10 dimensions will be undertaken. Areas such as:
switching, smoking & health, price sensitivity and "ideal"
needs and wants will be collected at the same time. The
use of multivariate analysis will help uncover the complex
relationships that exist and help in our understanding of
the marketplace.
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3) Project Track
There is a need to set up and implement a system incorporating
a set of benchmarks (criteria, standards) that can be utilized
to track new cigarette brands both own and opposition. We
presently track new brands with various tools:
- retail audits;
- C. Ili. A. - awareness, purchase, trial; and
- focus groups.
The system that will be set up my or may not differ from our
present system. Present tools will be evaluated and possible
additional/alternate tools will be looked into. Benchmarks
will be set up utilizing a combination of our historical data
(i.e. awareness at time intervals of first generation, second
generation, etc.) and possibly some external consultation. No
money has been set aside for such consultation, however.
4) C. M. A. Reporting
Currently, we are reporting C. M. A. consumer data based on crossed
tabulation of key variables for market analysis. It is difficult
for users to identify when trends occur. Also, our information
is sometimes not very meaningful to most, in certain areas such
BATCo document for Province of British Columbia 14 April 1999

Page 36
as imagery, tracking, etc. Hence, they usually rely
on market research to hand out comprehensive summary
and analysis. In order to respond more adequately
to our users, we must take full advantage of system
flexibility. Thus, in F183 we will undertake the
necessary steps to do so by validating, testing, and
implementing modifications to our survey reporting
system. The presentation of the information will be
in response to various identified needs such as target
group switching, imagery for non-users of a product,
media target groups, etc. The project will be broken
into phases that will see separate e-avunations of the
different components of the information. Implementation
of new approaches will most probably be staged depending
an the above.
5) Cordcall
Project Cordcall is to establish a means of measure of
consumer data that does not generate a bias resulting
from consumer memory. Currently under investigation is
the implementation of a diary panel study of smokers to
monitor at different times of the year, consumption levels
of cigarettes, product defects, and purchasing behavior.
Phase I currently under progress, which is a test-stud),
13ATCO document for Province of British Columbia 14 April 1999

Page 37
of this methodology, should have results available by
mid-March 1982. Upon positive assessment of the test,
we would proceed with two waves of diaries.
6) Plus/Minus
Project Plus/Mlnu-s delves into the areas of our market
which we cannot predict accurately. The specific area
of interest is young smokers between the ages of 15 and
19. Among the things that we do not have, besides
quantitative incidence and branded information, are the
causal factors that create these responses. In 1978,
exploratory research was done on this issue. Subsequent
to this study, switching data shows that the young are
following their elders with regards to starting on lower
tar products. As the youth stream from the baby boom
diminishes and market potential matures, we should
better understand what their smoking and quitting behav-
iors are today. Have these attitudes and behaviors
changed in the past three to four years? Are we respon-
ding to their Deeds? How do they perceive current
advertising trends? The purpose of project Plus/Minus
is to update our portraits of starters and quitters,
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explore starters' smoking history, attitudes and
behaviors, explore causal factors leading to
quitting and ultimately provide better predictors.
A two-pronged approach will be taken on this praj -
ect, one involving quantitative desk research on
starters and quitters among the young as well as
qualitative work on the youth, both smokers and
non-smokers.
7) Smoking & Health
We are currently gathering information twice a year
on smokers' perceptions of smoking and health. The
method of obtaining this information has been con-
stant since the early 70's. Among the latest results,
one can find little change over time on the issues.
Moreso, our actual means of collecting the data may
not reflect the concerns that exist today, such as
social environment pressure, prices, quality of prod-
uct, CO issue, etc. Project Image will explore this
issue initially with the use of the consonance/disso-
nance approach employed by B.A.T. rile structure of
our questions appear weak and could benefit from a
redesign. The purpose of doing a smoking and health
-review is to better define and bring up-to-date
BATCo document for Province of British Columbia 14 April 1999

Page 39
our methodology (i.e. more in tune with reality and
pertinent to the concerns of smokers). Possible ap-
proaches to resolving these issues are:
1) qualitative work on smokers around a point time
when certain issues are more relevant;
2) evaluate relative strengths of different items
of concern in smokers' mind; and
3) redesign the VQB adopted for the 80's for smokers'
concern.
8) Regional Information
A project to be undertaken by Marketing Research in
response to information needs involves providing better
regional information; a response to the establishment of
regional marketing analysis. The current information
forwarded to regions is not meeting their market analysis
needs. The strategy for establishing what regional infor-
mation needs are, involves having the four RIA's participate
on an orientation program in Research the first two weeks
of March. They will be putting together a position paper
on their information needs. This paper will be presented
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on the last day of the orientation after having
been exposed to all the data that exists in
Research. Marketing Research will then use this
as a brief from which work can proceed to better
satisfying regional information needs.
9) Enhancement of Current Analytical Techniques Using
Existing 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
computing capacity that we currently have and the advance-
ment in analytical techniques currently being practiced by
outside suppliers, there is certainly room for improvement.
In the types of analysis performed by Marketing 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 forms of analytical techniques currently
in use today to better explain the market. One of these
techniques will be multivariate analysis wh Peter Illich
has assumed responsibility for.
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10) Integration of Information
As a result of today's technology, the ability to
integrate information is at our door step. As it
stands now, we have various forms of survey in-
formation on line being used and analyzed in iso-
lation. Data such as that collected in the C.M.A.,
the Monthly Monitor, massive switching studies,
P14B, sales, advertising expenditures, etc. , should
be readily available for cross analysis. A com-
mittee project headed by Carole Brohmn will work
towards the integration of this information for
purposes of analysis. The initial stage of this
project requires a position paper on how infor=tion
can be integrated either internally or externally.
Part of this project will be the elimination of
redundant information.
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11) Price Sensitivity
Historically, the Canadian cigarette market has not
segmented on price. Recently, Loblaws in Ontario
introduced a no-name product in its stores with ap-
parent success. Is the market ripe for such a
concept? With the governments raising taxes on to-
bacco products continuously and a worsening economic
climate, is there a measurable level of price sensi-
tivity in the Canadian market? What has caused the
sudden plateauing in the decline of the fine cut
market? Why is incidence in RYO and tailor-made
combined up? Our current measurements do not permit
us to record accurately shifts in the market as a
result of price if there are any taking place. The
day may soon come, if it hasn't already, when cigarette
demand will be significantly sensitive to price and
part of a consumers' purchasing decision will be price.
Project Barker will explore the concept for low-priced
cigarettes for ITL, while Project Price Sensitivity,
the one discussed here, will hopefully give us insight
into shifts in attitude and behavior as a result of
price and allow us to monitor its magnitude on an
ongoing basis.
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12) Low-Level Incidence
Currently, we are faced with increasingly high research
costs. These costs increase exponentially when the
product's incidence level drops. We must find research
techniques to give us answers without prohibitive costs
with regards to product incidence. We, therefore, will
undertake to find the most appropriate research tech-
niques for low incidence tobacco products. This project
comes as a follow-up to Project Brand ID, in which it
was found to be cost prohibitive or too impractical to
implement the proposed methodologies. This project is
not in response to consumer confusion towards new brand
data, but rather on reliability in representativity of
our survey method for quantitative approaches.
13) Project Product
This project has two overall objectives:
1) assessment of our current product-testing methodology
with the ultimate goal being an improvement in the
instrument in terms of time, cost, and information
supplied; and
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2) integration of smoker taste and sensory perceptions
to better develop our understanding of attitudes,
images, and market segmentation.
A meeting hag been scheduled in late F'82 with Product
& Packaging and R & D along with Martin Oldman to discuss
issues in this area. Hopefully, a result of this session
will be to set new directions in the area of product ma-
surement and testing.
14) Expanded Industry Exchange
The expanded industry exchange is an exchange of sales data
by the manufacturers which measure company/brand performance
in a previously defined submarket. The submrkets have been
isolated with the submission of "clusters" (groups of whole-
sales).
As expanded sales data becomes available, regions will be
approaching Research for direction on how to use and analyze
this information. It is our role to understand the composition
of the information and how it can be used in analysis.
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15) Price Audits
As the federal and provincial governments continue to
increase taxes on cigarettes, it has become essential
that we gain a better insight into price variance in
Canada. Presently, the instrments ue use to measure
retail prices of cigarettes do not optimally -reflect
price differences and their impact on sales.
The initial step in developing a test to measure
rice more effectively will be an analysis of all
p
existing vehicles. At the completion of this stage,
proposals will be made to improve,our means of tracking
and measuring retail cigarette prices.
16) Reta@.'Ll Audits
There is a need to improve our ability in measuring brand
performance 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 brand tracking.
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The reliability of these samples and their representativity
is questionable. A position paper on the subject will be
put foreward by Research recommending that such information
should be purchased by a supplier. However, before designing
any approach, a clearer definition of information needs
is -required. Are we conce-med with only a measure of gross
inventories to adjust sales or should we be looking into the
future at store segmentation, retail management and retail
inventory control?
17) Trade Inventory Analysis
Trade inventory analysis will be an in-house investigation
of tobacco and associated products inventories. The objec-
tive is to measure the influences of economic conditions on
inventory levels at various points in time, while improving
our power to predict trade reactions to changing economic
conditions. This project will be done in conjunction with
retail audits.
18) Sales Force Activities
Sales force activities interact with virtually every other
phase of the marketing system. Each year, millions of
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directly, or indirectly. Yet, our only measurement of
the execution of the field 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, ITL serviced 3,700 direct accounts. By 1981, this
figure had dropped to 685. The total number of retail outlets
selling tobacco in 1981 was 43,746, although if present trends
continue, we estimate that only 21,000 retailers will sell to-
bacco by the end of the 8 This project will explore the
changes which have been taking place at the wholesale and retail
level, i.e. why are distributors closing? where? are there
new "kinds" of distributors opening? what are the ramifications
of the changing retail environment will we need more salesmen?
fewer? etc.
While there are few distributors, these fewer are controlling
greater amounts of merchandise, and are in a position to ulti-
mately exert a tremendous influence on what manufacturers might
BATCo document for Province of British Columbia 14 April 1999

?age 48
do in the marketplace. As a result, we mist be aware of
any "power shift" from the manufacturer to the distributor
in order to develop strategies to preserve the Dresent
balance between manufacturer and distributor.
20) Proj,6ct 'Pre-.-Test
At the present time, much of the advertising research
which is conducted utilizes a qualitative methodology. Focus
groups are employed to assess different creatives and to
evaluate new concepts. This does provide general direction,
and will remain useful in discriminating amongst numerous
concepts and creatives.
However, this methodology is inadequate in terms of deter-
mining the impact of an advertisement, particularly when
compared to industry norms. Further, qualitative research
will never be able to furnish answers to various questions
which exist. Among these are:
- the use of black borders on duMaurier advertising;
- red on red for duMaurier Light;
- is the low awareness of the Peter Jackson Extra Light
campaign a result of the creative?;
- can black and white deliver the same message as color?;
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- what is more effective in tems of cost; half a page,
full page, or double page advertisements?;
- average viewing time for an advertisement;
- average viewing time for each specific ad element;
- the percentage of respondents who read headline and body
copy, both partially and fully;
- etc.
There is an American firm, Telcom Research Inc., a leader
in the field of eye-movement tracking, which is currently
expanding in the Canadian market. They suggest that they
can provide answers to all these areas of concern. As an
initial step, Research intends to commission a pilot study
an existing Peter Jackson Er= Light and duMaurier Light
creatives. The results will then be compared to various
norms which, although scanty, have already been collected
in the Canadian Industry.
21) Project Incidence
There is growing need for a continuous, accurate measure of
incidence of smoking. Historically, we have relied an tw
annual readings from the spring and fall Monitors. However,
various factors in the market, particularly price and the
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possible volatility of the market to price, necessitate
a more frequent measure.
An agreement has been established with Benson & Hedges
and Canadian Facts which will allow us access to an in-
cidence measure for 11 months of the year. The final
methodological design of Project Survey and Project
Image may cause a change in this arrangement however,
and the issue of how best to measure incidence in the
cigarette market in terms of accuracy and cost will be
closely examined.
22) Project Library
The development of a research library was something that
was to be completed in FE. However, due to the un-
planned for complexity and size of the project, we do
not expect this to be completed until sometime in F'83.
As a review, the library is to provide a continuity of
information that was previously lacking in Research.
Almost all research projects will involve, in their
early stages, a review of past research into the area
in question. A research library will greatly facilitate
this type of research.
BATCo document for Province of British Columbia 14 April 1999