01 - MO. BATCo document for Legal Services : Health Canada 20 October 1999 Restricted k 5 ~-T International UK. Brands Key Issues and Action Plan 1990 d International gran Management B.A.T (U-1C and Export) Limited 74" 's. 1-9.1-11,60 NO-, FN1% CD FA' ~~ ~r ri M.- Aii i M January.1990 N) BATCo document for Legal Services : Health Canada 20 October 1999 1WTJa3x)=CN About this time last year, we sent you the first of our Key Issues and Action Plan documents and as promised then - we are making this an annual event! Although this implies neat and well-ordered 12 month cycles, life is never that simple! Indeed, International Brand Management by its very nature, must take a mediLzn to long term strategic view of the development of the Group's key trademarks but at the same time we must not lose sight of the pressures on you - the Operating Companies - to achieve short term profit objectives. This document follows a similar pattern to last year (but hopefully more lively in style and format) and includes the following:- Section I : Identifies the priorities upon which IBM will be focusing in 1990 and highlights key new 7.00 projects. Section 2 : Simmarises the key issues for each major brand and the various activities which we have planned for 1990. This includes a sub-section on Category II brands which will come more to the fore in our plans for this year. Section 3 : In this section we reproduce a selection of press advertising material which we have recently developed for the key Category I brands. Section 4 : Discusses briefly the technique of Brand Mapping and some uses we have made of it in Section 5 : Gives a broad review of the International Brand Market, a summary of some individual brand performances and a fleeting glance in the crystal ball! C:) C) U1 BATCo document for Legal Services : Health Canada 20 October 1999 1. K9Y FOCUS IN 1990 1 IBM's broad approach to the key issues facing us in 1990 can again be described under two headings:- - Navigation - Innovation 1.1 Navizati 1) CategorY I IntermtionAl Brands: IBM will work with user markets to keep all our Category I international BATCo trademarks on course to ensure that the potential of each is maximised and no opportunities missed. For the major Category I trademarks, BENSON & HEDCES, 555 and JPS, this means seeking to grow in existing markets, and being introduced into new markets. Strategic use of line extensions will be critical to ensure continual growth for all these trademarks. We now have two new Category I trademarks - WE=NSTER and BAII-~- ~IKNSILMI - a heavily modified Virginia product - was successfully launched in Middle East markets in January 1989 and post launch research indicated we were reaching our target - younger Arab men smokers of US brands. A Taiwan launch is planned for 1990 and other potential markets include Hong Hong, Japan, Korea and Italy. PIEW BALMAIN - a heavily modified Virginia product - was introduced to the duty f ree Trade in Europe in October and its launch into the duty free - ets is scheduled for March/April 1990 with further extension planned for 1991 (e.g. Middle East, Taiwan). The brand is positioned as a premium priced, "designer" brand in understated packaging. _c::b C) C) rQ C:) BATCo document for Legal Services : Health Canada 20 October 1999 21 Categor*--, Il Intez=tjonal Brands: 0 IBM will seek to make a more positive contribution Arw*-% towards the navigation of some of the Group's Category Il trademarks, principally GOLD LEAF and EMBASSY, as well as examining the opportunities for some dormant trademarks (Project r;F-7 ING). 1.2 Innovation I 7-i IBM will continue to identify new brand opportunities to 'produce a nucleus of new brands to meet tomorrow's consumer needs. Key among these projects are the following:- Project Calendar DU MAURIER, with a 5mg heavily modified Virginia product and Actron technology will be launched in the Middle East in 1990, based on the claim "TASTE THRMUH TECHNOLOGY", aimed at 25+ Arab men with smoking and health concern. Target competitive brands are MARLBORO LIGHTS, MERIT, CARLTON and PHILIP MORRIS SUPERLIGHTS. Project Restrel A brand that rebels against old values and repl. them with new ones, aimed at 18-25 year, male, full flavour smokers. We will be bringing this project to launch readiness by end 1991. "Kestrel" was one of the seven new brand concepts which we developed and researched in 1988/9. At this stage, we are progressing only one of the seven, but there were plenty of positive indicators within the other six which could form the basis for future brand developments. Project Galactic Will explore the potential of the Benson & Hedges trademark allied to an American blend with a view to completing the full brand package by September 1990. (See Section 2.1 - B&H Key Issues and Action Plan). Project Fusion A new brand exploiting the State Express tradesaark with the full brand package ready by end 1990. (See Section 2.3). CD r\) CD N) kp BATCo document for Legal Services : Health Canada 20 October 1999 Project Flicker A new free standing full flavour menthol brand for West African markets initially. Target competitive brand is ST. MORITZ. Project Caravan/Echelon The development of LIBEMY has proceeded during 1989; it is a free-standing KS brand targetted at the low price segment of markets and available in either Virginia or US blended form. Development and research will (=tinue in 1990 based not only on the trademark LIBEM but with alternative trademarks for wbere the LIBERN brand name is not available due to prior competitive registration. Launch readiness is planned for mid 1990 and potential markets include Ghana, Liberia and Sierra Leone. ProJect Gelding To explore the potential of dormant Category II trademarks such as ARDATH/LAMBERT & BUTLER to seek to establish a vibrant new option for user markets where existing Category II marks i;i~ve aged. 40 C) N) C:) N) Ln BATCo document for Legal Services: Health Canada 20 October 1999 1.3 Blend Develowents 7be development of modified Virginia and LIS blends will be critical to achieving the - IBM objective of gaining an increasing share of the international brand segment for BATSo trademarks. IBM will continue to develop new light (Project Perspex) and heavily modified (Project Argosy) Virginia blends for use as required as well as continuing development of BATCo's own high quality US blends for specific markets (e.g. JPS Llal-17S - Turkey). 1.4 Product Quali Finally, we feel it is appropriate to repeat our message about product quality in relation to all the brands which we manage. The highest quality standards - and this applies equally to product, packaging, coamunications and all 'forms of brand presentation - are crucial to maintaining and increasing our business in the highly competitive environment in which all of us operate these days. We would re-emphasise once more, that all product, packaging or communication changes relating to 19 international brands, must be subject to the approval of IBM, Woking. For all matters relating to brand camunications, graphic design etc. the approval of the International Brand Manager concerned should be sought. On technical issues conoerning product deliveries, product design and blend, correspondence with Tony Cousins is requested. Additionally, the formal BATCo procedure using the Brand Modification Form should be followed. 0, CD CD r~J CD r\j (-n BATCo document for Legal Services: Health Canada 20 October 1999 C- 2. KEY ISSUES AND ACTIM PLANS 2.1 BEM9W & HE= rM7 1) rositioning Statements Brmnd/Smoker Persorjality:- * A distinguished/sophisticated international brand, symbolic of success, achievement and accomplishment. * For the status conscious smoker, overtly seeking to make an impression but in a refined/tasteful/ discerning manner. * A timeless brand that offers prestige, urbanity, style without excessive ostentation/pamposity. 0 User Izagery:- '25-30 male/female AB, Urban. An achiever confident, aspiring, younger, urban professionals, with an international outlook. 2) Rev Issues for 1990 - To accelerate the progress already made in Europe, increasing the focus in 1990 on the markets of Greece, Belgium and Holland. - To introduce the brand where possible into new markets e.g. Korea in February 1990. - To continue to expand the B&H brand range in order to have available viable offers in gro;--th segments and to seek the widest possible distribution for these. (See Brand Range section). - To continue to develop the international advertising theme with materials uhicb are flexible enough to meet differing market needs, while remaining true to the single positioning of "Discover Gold". - Project Perspex - to continue with developing a light modified Virginia blend for BHSF for launch initially in key European markets such as France, Spain, Italy (where straight Virginia is less acceptable) in fourth quarter 1990, and in the longer term to extend more widely as appropriate. CD C) r\) C) PQ BATCo document for Legal Services : Health Canada 20 October 1999 Project Galactic - To develop a US blend allied to an appropriate branded offer for launch readiness in September 1990. Initially for those markets where currently US blend products dominate, where this sector is growing at the expense of the Virginia segment and where existing versions of the B&H trademark are either not available or show only limited potential. 3) Action Plan for 1990 Advertisi International media support will continue for BHSF in press, inflight (press and video) and airport advertising. Press coverage will be concentrated in Europe (60%) and Africa (25%). a) Airports Advertising continues for MW and the change to the new watch subject will be completed in early 1990. A new subject will be developed for BHSM and use will be extended beyond France as the current Mild IN's sites will be replaced by the new EHSM subject. b) Print Further subjects will be developed within the international advertising campaign for BHSF which will reflect the style and taste of users in a somewhat unorthodox and modem way but at the same time flattering their intelligence and making them feel in the know. Simplified executions of the "Discover Gold" theme will continue to be developed for user markets -where a less 1. subtle" visual is more appropriate (these subjects are identified as the "Hospitality" campaign). A new International "family" campaign will be produced for SPECIAL M1LD and ULTRA MILD. Advertising campaigns will also be produced for B&H GOLDEN MILD and B&H INTERNATICKAL IOD's. A new subject will be developed for M11D 100's for use in Duty Free media. However, there will be no IBM media support for this kwand. JOITTEM C) Film 0M Video and cinema advertising will continue for BHSF with "Loft" being featured on in-flight and in the European domestic markets. A new film will be developed during 1990 and will be available for use during the 4th quarter. "Catch the Flavour" will continue to be utilized in C> French West Africa and Nigeria. C:) r\3 C) BATCo document for Legal Services : Health Canada 20 October 1999 Sponsorshi - To complete the Golden Greats of Tennis video. - To conclude a deal transferring distribution and sale of the Golden Greats videos to a third party. Trademark Diversification BENSW & RE= FASUON WPANY To start the pilot retailing operation for the Benson Hedges Fashion Company. To extend distribution of the knitwear range, both within countries where it is already sold and into France where it has yet to be introduced. To widen the range to include silk mixtures from ItALly. To stage the Benson & Hedges Trophy (Mixed golf). BEN-50V & LM= MSIC CCWAAY To stage three music festivals in Holland, Guernsey and Greece. To source music products, records, tapes and CDs under the B&H name for availabilityin Europe and West Africa. BENSW A ILMUE5 TR40M CXWANY To restrict availability of this activity to those markets where there is both long term interest and the other 71-0 activities are inappropriate. Product Project Perspex - Three modified Virginia blends for BHSF have been researched with a blend based on Virginia and Burley, emerging as the preferred option. A brand placement test is planned for March 1990. Project Galactic - A US type blend for B&H will be developed and consumer tested in key markets during the first/second quarters 1990. Project Tangerine - An ultra mild menthol blend will be developed and consumer tested in F~rance during the first half of 1990. J~- CD CD Ni CD rIII) Ln CD BATCo document for Legal Services : Health Canada 20 October 1999 Brand Rang P71 1)--! ve Versions - B&H SPECIAL FILTER - B&H 100's - Following test market, full distribution achieved in Germany in March 1989. Scheduled for launch in Korea in early 1990. - B&H GOLDEN MILD - Launched in New Zealand in the second quarter of 1988 (now with 2.5% share) and scheduled for launch in Germany in March 1990. - B&H SPECIAL MILD - B&H ULTRA ?91D - Launched in France, Sept. 1988. Back up Versions B&H EXTRA KILD - Planned for introduction in New Zealand in 1991. B&H ULTRA MILD MENTHOL - Scheduled for launch in France in January 1991. B&H LURM MILD M:ELD 100'S Below the Line We will be planning the introduction of a new, more modern graphic device into all BHSF merchandising materials. We are at present examining different interpretations of a device %.,-- are calling the "Dynamic Curve" and early in 1990 we will be seeking the views of key operating companies. Packaging 400 ri r, With the development in the printing industry of more sophisticated techniques for the assessment and "measurement" of colours (e.g. spectrophotometers), we are plarming to introduce a new format for packaging standards v,&ich will define more accurately colour tolerances, surface finishes, colour progressives etc. Initially for use with BHSF, JPS and 555 KS, they will subsequently be applied to other Category I and Category II brands. U-1 BATCo document for Legal Services : Health Canada 20 October 1999 2. 2 JPS 13 1) Positioning Statement JPS will appeal to smokers who want to demonstrate independence and that they are self-confident individuals who make their own decisions. They live in a contemporary, active, urban world, and their career is important to them. However, success symbols are understated and more refined, and they like to think of themselves as more intelligent and sophisticated than "the mass". The distinctive pack and unconventional advertising are assertive, but stylish for the 1990's. NIM 2) Target Consumers Fiji 20 to 30, mainly male, ABC1, Urban. Educated, fashionable, fun-loving and relatively individualistic. Enjoy a casual, contemporary and outgoing lifestyle, and whilst they may well have a relatively individual style and appearance, this would, where appropriate, be tempered by their desire to be perceived as stylish and attractive by their peers. 3) Key Issues for 1990 - To complete the introduction of the new matt black packaging design by March 1990 within BATLXE and by end 1990 for all other Operating Companies. - To develop the following new variants: * Lights 100mm US blend for Turkey * Lights King Size US blend for the Middle Past * Full Flavour King Size US blend for the Caribbean X Deluxe King Size or 100's US blend, charcoal filter for Japan - To use the new "Matisse" advertising campaign in key markets: * Japan * Turkey * Europe - Duty Free - To further develop TMD activities. J>- CD CD P.) CD N) ui rl%j CD BATCo document for Legal Services : Health Canada 20 October 1999 4) Action Plan for 1990 Advertisiniz - All JPS' advertising sites at international airports w. feature the new "Matisse" campaign. - No intermational press support for 1990. Packagi - All brand versions should be available in the new matt black style in BA7LIX markets by March 1990 and in all other markets by the year end. - A new format for Packaging Standards .-ill be developed and will be made available to Associated Companies early in 1990 (see also under B&H). Trade Mark Diversification - All licenced products will be in new logo livery by June 1990. - The Whisky Plan will generate World Investment Cor~any an income in excess of 110D,000 in 1990. - Royalty income from licenced products will be stimulated by design co-ordination bi-annually. - Efforts will be made to widen the distribution of JPS licenced products to maximise income. Below the Line A Merchandising Graphics Manual is under developnent and will be made available to user markets by end February 1990. -0:- C) r11j (Yi N) BATCo document for Legal Services : Health Canada 20 October 1999 Apo~k 2.3 555 1) Positioning Statement One of' BAT's most enduring international brands, 555 is a traditional brand that can be counted on to deliver a quality product quietly, and is appropriate to every occasion. it can be smoked everyday without appearing ostentatious, but also at the most important moments 555 can be offered with confidence. The brand's tradition of being a "famous" international brand for many years helps support this wide A ptability. These factors reassure the 555 smoker that he is demonstrating good judgement in his choice of brand. 2) Target Consumers 555 appeals to the better educated, mature, well-travelled, self-assured, respected and discerning management class and is synonymous with traditional (British) quality standards and international success, in all aspects of masculine lifestyle - business, personal and sporting. 3) Kev Issues for 1990 - To continue to develop the new international advertising campaign using the "Watermark" background. - To concentrate IBM support in the following key markets: a) China b) Taiwan c) The Middle East - To review the current product/pack specifications of SESM with a view to optimising the offer. - To reinforce the brand family by extending distribution of variants Special Mild and 100's, and to extend the trademark by developing brands under the STATE EXPRESS name (Project Fusion). - To introduce the brand family in recently liberalized Far East markets as follows: - SE100 Duty Free - all Far East (South) markets by Ist quarter 1990. - SE300 in Burma by 1st quarter 1990. - SE100 Thailand by Ist quarter 1990. - To revitalize the brand in existing African and Far Eastern markets e.g. Ghana, Indonesia, Hong Kong and Singapore. J:u - To determine an appropriate route for 555 in the TMD area. C) C> - A new format for Packaging Standards will be developed and rQ will be made available to Associated Ccmpanies (see also under B&H). BATCo document for Legal Services : Health Canada 20 October 1999 4) Action Plan for 1990 Advertisi - The second pool of press subjects following the "Watermark" campaign are being developed and will be available to user markets: - Breakfast (see Section 3) - Businessman's Studv (see Section 3) - Bridge - Piano - Fishing 101M ow - Video film and radio mterial are under development. An increase in the international media budget will be reflected in a wider coverage in international press and in-flight nmga!rine as follows: - L~ng media quality i.e. more CBC positioning. - Presence in business and management related media (target consumers). - Media weighting will be increased in the Far East by 70% and in Africa by 15%. Spomorshi Expendi ture will again be focused on televisually effective sports - table tennis (location to be decided), 1-d-inton (Indonesia) and snooker (China). Trademark Diversification Qualitative concept research has provided leads in a number of potential 7M product areas which are seen as being compatible with 555 imagery. Further work is required to refine the product list and to determine which routes to pursue - the favoured options to date are luggage and small personal leather accessories. Below the Line To produce new Packaging Standards and make it available to Associated Companies. CD CD r1l.) CD N) Ln BATCo document for Legal Services : Health Canada 20 October 1999 Z. 4 WB57X[AZ5= @ , , Rev Issues To accelerate the brand progress already made in the Middle East. To launch the brand in'Taiwan in March 1990. To consider a brand launch in Korea later in 1990, contingent upon the success or othezvise of IWEST~' 7----R in Taiwan. - -To further develop the "System and Beyond" theme advertising approach. - To determine brand potential through research in Europe and other Far East markets. 2) Action Plan-for 1990 Advertising To work up further executions of the "System and Beyond" advertising campaign, for research pre-testing both in the Middle East and Far East. Packajz To check out via research the acceptability of a red tear strip for the 20's peak. on=% 2.5 PlEWBUX417f 1) Key Issues To launch the brand in key European Airport duty-free shops in March/April 1990. - To extend distribution to key Middle East, Far East airport shops later in the year. - To consider the future domestic market potential for Pierre Bel-in, likely current candidates being the Middle East, Far East and France. 2) Action Plan Advertis An advertising approach will be developed in early 1990, focusing upon the understated luxury of the brand presentation. C) CD rQ CD N) UI BATCo document for Legal Services : Health Canada 20 October 1999 2.6 CATBawy 11 Dnwmna"L BRANE6 HISAO.! Category II brands within the IBM portfolio include such major trademarks as GOLD LEAF, L%SASSY and CAPSTAN. All told, there are thirty-plus brands which come within this definition and they accounted for over 25 billion sales Group wide in 1988t (excluding E-MASSY (RED) in Pakistan and India). That is over forty per cent of all BAT's UK international brand sales. In 1990, it-is IBM's intention to beccme much more actively involved in operating companies' marketing activities in relation to these brands. The priority brands that we have designated for 1990 include GDLD LEAF, LMBASSY, CAPSTAN and GOLD RAKE. We will also be examining the potential for some of our long established but little used trademarks e.g. Lambert-& Butler and Ardath (Project M.- ING). We look forward to co-operating with user markets in the further growth and development of these brands/trademarks and bringing to bear whatever IBM resources you feel would make a contribution to your marketing activites. For example we would propose that: - We help you in the development of line extensions. - We undertake jointly funded research projects. - We develop below the line merrlwmdising packages for you. - We could assist you in the development of above the line materials. Visits to key Category II markets are planned to discuss such issues with you. J~…- CD CD INI) CD r\J (.n r~J (-n BATCo document for Legal Services : Health Canada 20 October 1999 Disco,,ersold Disccvergold 0\ BATCo document for Legal Services : Health Canada 20 October 1999 400202527 C4 C m CO) 'ra 7 -j-- -I ILI 42 C E 0 v 0 Szan;s".~trt for 9wi, ANTIM '~7- F AN -E:i 0, C) 0Rr-- ox, ~*n stancs V.;, fc~ zaste Stands out fir taste N) 00 BATCo document for Legal Services : Health Canada 20 October 1999 4. BRAND MAPPING This section explains briefly the tecl-mique and uses of Brand Mapping which although not new to reswL-ch and marketing has - with the advent of personal computers and more advanced software - moved from the specialist research agency area, into the more readily accessible in-Company functions of marketing and market research. Brand Mapping is a method used in research to compare both own and competitive product positionings or statements. It may relate to either product imagery, smoker profile or product chiaracteristics. 7he end result is a literal map showing the differences and similarities between products which can be used for brand positioning or repositioning, gap analysis and assessing the effectiveness of marketing strategies upon brand performance. The objective of mapping techniques should be to provide a deeper understanding of product positioning in both relative and absolute terms. This positioning should, and can, be established across product groups such as Mild, Full-Flavour, Virginia and US blended products or across consumer parameters such as brand imagery, user im ry, and product attributes. 7be mapping technique can simulate ideal positionings, and track movement in any of the key attribute parameters over time. The programme currently adopted by BAT (UKAE) uses a standard statistical m9thod called principal components analysis which is applied to product or attribute tables generated from quantitative research either through ad-hoc studies or specifically commissioned projects. The scores obtained from respondents through these research programmes, or from internal product evaluation amongst brand mawers or product developers, can be taken as absolutes or averages and input directly into the software for analysis and mapping. 7he final maps can be used to indicate preferred product positionings and provide diagnostic data with regard to current positioning. Furthermore it can, when used correctly, provide a firmer base from which to brief the product developers. This is because all attributes for each brand are ranked on an absolute score. Finally it can also provide intelligence and simulation for strategic product development and product/positioning gap analysis. The essence of adopting brand mapping is to introduce the discipline of assessing brands internally in more consumer oriented terminology. In addition it will provide a practical method of tracking brand movements in response to siven stimuli and assessing the marketing effectiveness of 4~h. strategies against given objectives. This will in turn help CD to reduce the levels of subjectivity in favour of achieving C) more objective levels of brand performance assessment in N3 brand image, user image and product attribute research both C) at national and international levels. r*11) Cn BATCo document for Legal Services : Health Canada 20 October 1999 Todate BAT (UK&E) have made sigriificant use of this prognamme in method justification and are developing the areas in ;~hich it can be utilised away from the pure image mapping stages of consumer research. Three exercises have been conducted during the course of 1989 which involved post-launch research, product development, and internal brand assessment and positioning during the course of a product gap review and anal~rsis- It is anticipated that these areas will be further extended during the course of 1990. Some of the expected uses are: - Psychographic and demographic brand and segment mapping - Product, attribute mapping in product tests - Brand image and user profile mapping studies - Segment mapping for Full flavour vs Mild vs; Ultra Mild, price bands, Menthol vs Non-I'Senthol and Brand Categories. 0 It is difficult to explain fully the methodology and benefits that can be obtained through brand mapping but should you require any further information on any aspect please do not hesitate to let us know. 0 CZ) C:) BATCo document for Legal Services: Health Canada 20 October 1999 5. IM INTEEMTICNAL CIGARETTE MAEMT * CNer the last few years, total world cigarette sales have declined by about half a percent per annum. Generally the developed countries have suffered a decline of I to Z% per annum while sales in the developing countries are growing at about 1% p.a. Growth has been most marked in the Far East, but in 1989 there are signs of renewed growth in Latin America and the Indian Sub-Continent while the trend in Africa is uncertain. Billi Forrcast 1986 1987 1988 1989 1989-94 Developed 1613 1598 1571 1542 - 1.0 Developing 1265 1269 1282 IZ97 + 0.8 World Total 2878 ii 677 E F53 FS- 3-9 - 0.1 0 Against this background, International Brands have been growing at about 5% p.a. and gradually increasing their share of world volume. This growth has come entirely from the U.S. segment with the U.K. segment virtually static. International Filter Brands - Billions 1986 1987 1988 1989(E) U.S. Brands 264 299 319 340 U.K. Brands 121 122 122 119 Total 385 i-21 i~il- i 5-9 7be growth of U.S. International brands is accounted for mainly by Europe and the Far East. U.K. International brands are growing rapidly in parts of the Far East but declining in others, have declined slightly in West Africa in 1989 (but are now recovering) and are holding fairly steady elsewhere. Although UK International brands do not enjoy the growth prospects of U.S. brands on a global basis, they remain a key segment in many markets and are likely to offer further growth potential in both existing and new markets. * Sourve:- lhe main source is "Intezmtja,2&1 Bxmds 1988" prepared b-r PILrketing Intelligence Department Millbiu*, Phy 1989. -> CD CD r1~1J CD rl%j (.n L-4 BATCo document for Legal Services : Health Canada 20 October 1999 " In the Middle East, West Africa and South America the growth fiz.0, of M, International Brands is likely to be limited because of downtrading to lower priced brands, but in Western Europe, excise changes will reduce the price differential between International and local brands to the benefit of the former. The growth of imports, U.K. and U.S. , into the monopoly markets of the Far East will continue. Within the Inter-national U.K. segment, "full flavour" brands will continue to dominate with the mild segment growing in developed countries but remaining of little significance in the less developed markets of Asia and Africa. "Extra Length" will continue to be a growth segment within the International sector. Among individual brands MARUDOW continues to dominate with sales of 163 billion (outside the U.S.A.) -in 1988 against 29 billion for the next two brands - WINSTON and ROTHMANS. MARLBORD is particularly strong in Europe, the Middle East, some Latin American markets (Mexico, Argentina, Bra il) and parts of the Far East (China, Hong Kong, Philippines) though showing signs of weakening in other Far East markets. U71N~'s volume is largely achieved in a small number of markets particularly Spain and the Canary Islands. CAMEL is more widely progressive, particularly in West European markets. KERr volume has increased sharply in the last two years because of its success in the Far East. MARLBORO LICHTS continues to grow in West Europe and the Middle East in particular. LARK, PARLIAMEN7 and PHILIP M3MS LIGHTS are progressive but in a small number of markets. Sales of MERIT are fairly static. LUCKY STRIKE FILTER has grown strongly in recent years mainly because of Spain and exports to Lebanon and Japan. FCMMANS is the leading U.K. International Brand. It has lost considerable ground in the Midle East and is declining in most other markets. BENSON & HEDGES is BAT's largest selling International mark (1988 volumes). Sales have declined in recent years, with volume declining in major markets such as Malaysia, Australia and West Africa. The brand remains strong in Duty Free, is showing signs of recovery in Malaysia and West Africa and is progressive in the export trade in the Far East. STUYVESANT volume is fairly static. Sales exe mainly in West Europe (83% in 1988) with South Africa and Zambia as its only growth markets. Growth in Malaysia boosted the total volume of DLNHILL K.S. in 1986/7 but growth slowed down in 1988. DLNHILL DrITRKATIONAL is generally in decline. 4-- C) CD * Note: Comments an competitive brands aLre based on 1988 date r\J C:) r11J Lrl LIJ rQ BATCo document for Legal Services : Health Canada 20 October 1999 Ar-9,1-ft 555 FIL-1='R ~aNGS has been RAT's strongest grow'ng U.K. brand FANI in recent years because of its success in a number of Far M UR ~- 149~- East markets, particularly China, Taiwan and, more recently, Indo-China. GOLD 11'~AF volume has fluctuated from year to year. A small decline in 1988 has been followed by a 11% increase in 1989 due in particular to growth in the Middle East but also in Bangladesh, Pakistan and Nigeria. JPS is still achieving some growth in South Africa and is steady in Japan, but elsewhere the brand is declining in both Virginia and U.S. versions. EMBASSY's strength is mainly in certain African markets, Barbados and UK Duty Free. The mild version is progressive in the few markets where it has been introduced. SILE CLT is widely available but volume is generally small except in the European I)uty Free Trade i6ere its sales are progressive. Other Mild U.K. brands (Rothmans, B&H) are growing slowly, but in a small number of markets only (e.g. France, South Africa). CARTIER volume is still small but it is progressing slowly (particularly the Vendome version) in a small number of markets in West Europe, Kiddle Fast and Far Past. The new extra slim brands (CAPRI, VOME, WEMMINSTER) have achieved modest sales in a few European, Middle East and Far East markets but the recent launch of FINESSE (CAPRI) in Korea has achieved more sizable voltimes. The top international brand sellers are shown in the table on the next page; the figures are based on 1988 worldwide sales excluding the U.K. and US dcmestic markets. C) CD L14 BATCo document for Legal Services : Health Canada 20 October 1999 E-8,911-i IgrERNATIONAL I_LTERBRANDS Sales bv ~Fami1v 1988 (Billions) 1. Marlboro 162.7 2. Winston 28.9 3 Rothmans 28.6 27.5 4. Peter Stuyvesant 5. Camel 26.3 6. Benson & Hedges 20.5 7. Kent 17.3 a. Dunhill 14.9 9. Lark 12.8 10. Philip Morris Lights 10.3 11. Lucky Strike 8.7 12. Viceroy 7.8 13. Craven 7.8 14. Gold Leaf 7.1 15. State Express 555 7.0 16. Chesterfield 6.7 17. Salem/Reyno 6.6 18. Merit 6.6 19. L&M 6.1 20. More/M/Time 5.9 21. Parliament 4.9 22. JPS 3.6 23. Barclay 3.0 24. Pall Mall 2.5 25. Silk Cut 1.9 26. Cartier 1.4 27. Kool 1.4 28. St. Moritz 1.4 29. Capri 0.8 30. Vogue/Superslims 0.5 =AL: 441.4 I 9, j~:- CD C) r~J un BATCo document for Legal Services : Health Canada 20 October 1999