"PROBLEM"
    FOR MUCH OF THE LAST 20 YEARS7
    THE POSITIVE NET EFFECT OF POPULATION
    GROWTH, USAGE GROWTH, INDUSTRY GROWTH,
    SHARE GROWTH, PRODUCTIVITY IMPROVEMENTS
    AND, THEREFORE, PROFIT GROWTH HAS
    CAMOUFLAGED THE REALITY THAT CANADIAN
    CIGARETTE SMOKERS ARE INCREASINGLY LESS
    ENCHANTED WITH BEING SMOKERS AND THE
    UNDERRIJIVA& 'rREND...; C.LEARLY SUGGEST THAT,
    DESPITE SHORT-TERM UPTURNS (EG. VIA
    "LIGHTS"), FEWER AND FEWER CANADIANS
    WILL SMOKE IN'THE FUTURE.
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    BATCo document for Legal Services : Health Canada 22 October 1999

    




    CURRENT SITUATION
    1. A PROJECTION OF CURRENT TRENDS
    AND A CONTINUATION OF CURRENT
    POLICIES BY I.T.L., THE INDUSTRY
    AND VARIOUS ANTI-SMOKING
    FORCES MAY, IN THE SHORT-TERM,
    SEVERELY JEOPARDIZE OUR PROFIT-
    MAKING POTENTIALAND, IN THE
    LONG-TERM, (3,0-50 YEARS),
    VIRTUALLY WIPE US OFF THE MAP.
    2. ALTHOUGH WE HAVE HISTORICALLY
    DONE THINGS WHICH HAVE HAD AN
    INFLUENCE ON THE SIZE OF THE
    TOTAL INDUSTRY, THESE EFFORTS
    HAVE NOT BEEN CO-O~DINATED,
    PLANNED AND FULLY INTEGRATED
    INTO OUR "NORMAL" ACTIVITIES.
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    3. SO-MIETHING'S GOT TO CHANGE.
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    BATCo document for Legal Services : Health Canada 22 October 1999

    




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    BATCo document for Legal Services : Health Canada 22 October 1999

    




    WORST CASE
    TODAY BY 1990 2020 OBJECTIVE
    ------- ----------  ---------
    1. 387. INCIDENCE 30%? 0 35%+ .
    2. USAGE 25/DAY MAX-25 0 MIN.25
    3. 75Z "DANGEROUS" 80z+ 100% MAX.60
    4. TPI > CPI TPI > CPI
    S. SOC. UNACCEPT. LESS
    6.  62 BLN/YEAR MAX.50 BLN. MIN.60 BLN.
    99% IN CANADA
    8. EXIST.COMMUNICATIONS LESS NONE
    9. SPONSORSHIPS NONE
    (:D987. CON. LEAF ? ? ?
    il. -.S. W. A. T. 13 MAX.10 MGS. NIA . 7-
    12 45,000 RETAIL LESS N/A ?
    11. VISIBLE MERCHANO. LESS N/A 184 LEVELS +
    CID"PASSIVE" (S&H,ETC) ? 7 ?
    15. 3 PROD.PLANTS 2? 0 7
    16. X EMPLOYEES LESS 10 LOWER BUT
    17. MAX $150MM., 0 $300MM
    18. PROFIT GROWTH -20%+ LOSS 0 GROWTH
    U9. TRADEMARKS
    .... ETC, ETC O-INVOLVES POLICIES
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    BATCo document for Legal Services : Health Canada 22 October 1999

    




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    BATCo document for Legal Services : Health Canada 22 October 1999

    




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    BATCo document for Legal Services : Health Canada 22 October 1999

    




    NEW MARKET DEVELOPMENT
    1 -GET PERSPECTIVE ON SIZE AND
    SHAPE OF THE PROBLE4.
    2.RECOMMEND MANDATE AND INITIAL
    APPROACH.
    3-ACHIEVE UNITY OR PURPOSE
    WITHIN I.T.L.
    4. SEEK COMMON VIEW WITH KEY B.A.T.
    5-ANALYZE INTERNATIONAL DATA ON
    KEY VARIABLES (USAGE, VOLUME,
    INCIDENCE, EFFECTS OF PRICE,
    S.W.A.T.'S, ATTITUDES, STARTING,
    ETC., ETC., ETC.).  f, fk
    6-DEVELOP PLAN TO FILL-IN.GkQS
    7.BY NOVAST, PRESENT INITIAL
    "PLAN" AND NEED FOR PEOPLE,
    $$ IN F86.
    8-DEVELOP AND TEST CONCEPTS FOR
    SEVERAL PROJECTS/PRODUCTS/
    SCENARIOS.
    9.DEVELOP EXECUTIONAL PLAN FOR
    3 - 10 YEARS.
    10.INTEGRATE INTO EXISTING
    ACTIVITIES NO LATER THAN F87.
    ON
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    BATCo document for Legal Services : Health Canada 22 October 1999

    




    NEW MARKET a8VEILOPMENT MANDATE
    IN-~THt'~`L (ONG TERM
    ------------
    ENSURE I.T.L.'S LONGER-TERM
    PROFITABILITY VIA THE APPLICATION
    OF MARKETING DISCIPLINES AND
    APPROACHES TO ACTIVITIES AND
    POLICIES NOT NECESSARILY RELATED
    TO SHORTER TERM MARKET SHARE
    GROWTH, AND
    IN THE SHORT TERM
    -'A.GqRESSIVELY WORK WITHIN EXISTING 9QVCAtS
    CONSTRAINTS, ETC. FOR
    CONTINUING CIGARETTE* MARKET
    SHARE GROWTH THROUGH CO-ORDINATED
    EFFORTS OF MARKETING COMMITTEE,
    MANAGEMENT COMMITTEE, R&D, OTHER
    KEY DISCIPLINES & KEY BAT PEOPLE.
    *TAILOR-MADE, CDN.TOBACCOS, CANADA
    cc.
    - BATCo document for Legal Services : Health Canada 22 October 1999