FOREWORD Background It has been a number of years since any intensive research has been undertaken on the menthol market. Activity in other segments of the cigarette market has meant, in effect, that the 2 Cameo entries have been largely ignored and virtually unsupported. Perhaps partly because of this, the menthol sector is experiencing marginal declines annually, and certainly (at less than 7% of the market) has not enjoyed the rapid growth experienced by U.S. menthols (now approaching a share of 30%). Cameo and Cameo Extra Mild neglect the lower end of the T & N scale. At 17 and 11 milligrams of tar respectively, they have nothing to offer the 3 to 4 to 5 milligram menthol smoker or, indeed, the regular 3 to 5 milligram smoker to whom a menthol presents an increasingly attractive alternative. Cameo could simply spawn a third entry in the lighter sector. It could be recognizably a Cameo, obviously flighter% with the Cameo imprint clearly in evidence and all that this signals---both positive and negative. It could elect to remain with 2 brands, but to flighten' CEM both technically and perceptually. It could "sponsor" a totally new brand- Brand X by Cameo, in effect. Or ITL could launch a different light menthol totally unrelated to Cameo. A further dimension to the flavoured segment could be added by intro- ducing other flavour notes: spearmint, for instance. Before pursuing any of these avenues too far, it was decided "to review the entire menthol market in some detail. What ore current perceptions cr% CC) Cr% BATCo document for Province of British Columbia 19 April 1999 and attitudes? From a consumer's point of view, where are the 2 Cameos today? How do they relate to competitive brands2 What is the wmeaningu of menthol? What is its role? This volume reviews the results of the first phase of this undertaking. Objectives The essential objective is to investigate what amounts to all aspects of the menthol market-first on a qualitative basis, later on a broader quantitative basis. A detaiied listing of the specific topics to be addressed can be found in the several briefing and review documents put together by ITL as background for this research. They will not be repeated here. (A copy of the "Discussion Outline" in the Appendix itemizes these same topics and questions.) Methodology In total, 7 group discussions were conducted-3 in London, 4 in Saskatoon. The groups were screened to m t the criteria set out below: London Monday, Males 18-34 years June 21 6:00 p.m. Potential and occasional users c0 2 BATCo document for Province of British Columbia 19 April 1999 Monday, June 21 8: 00 P.M. Tuesday, June 22 9:30 a.m. Mixed males/females 25-50 years Over 11 mg. (12+) menthol smokers Users Females 25-50 years Mixed T/N menthols smokers - emphasis under 12 mg. Users Scskotoon Wednesday, June 23 6: 00 p.m. Wednesday, June 23 8 P.M. Thursday, June 24 9: 30 a. m. Thursday, June 24 1: 30 p.m. Males I B-50 Mixed T/N smokers Users Females 25 & under 11 mg. menthol smokers only Users Females Under 25 years Potential and Occasional users Females 25-50 years Potential and occasional users With some (inevitable) exceptions, the criteria were met reasonably well. Most groups consisted of 7 to 10 participants, but one of the London sessions, a morning one, proceeded with only 3 respondents. ' (Ironically, it proved to be one of the more productive discussions.) As part of the procedure, respondents were given the opportunity toward the end of each discussion of smoking a spearmint-flavoured cigarette. 3-- C:) r*Q CYIII co E3 ATCo document for Province of British Columbia 19 April 1999 As mentioned earlier, a copy of the discussion outline appears as an Appendix to this report. Coloured photos of 2 prototype brands are included as well (Cameo Super Ught and Cameo Avanti). The Findings The findings are presented in the following pages under two main headings: 1. A Brief Overview 2. The Findings in Detail The reader is reminded that 7 group discussions does not constitute a quantitative study. These findings should be viewed as directional only: essentially hypotheses or insights which require validation in a larger investigation. July 12th, 1982 THE CREATIVE RESEARCH GROUP Study No. 609-82Q Umited 4 - C=:> rl-) c0 01- ----j co c::) BATCo document for Province of BritiSh Columbia 19 April 1999 A BRIEF OVERVIEW NJ ON Co Co 13 ATCo document for Province of British Columbia 19 April 1999 A BRIEF OVERVIEW Menthol Conversion to menthol seems to be circumstantial rather than deliberate: borrowing a friend's menthol, trying a package during a cold and staying with it afterwards. Rarely do people make a specific 'a priori decision to switch to a menthol cigarette. Once having made the commitment, however, it seems to be an unusually strong one. -Even when they try, as they sometimes do, they typically are not oble to revert to a non-menthol brand. It is the cooling effect which constitutes the major attraction, this and the concomitant reduction in both harshness and tobacco taste. The actual menthol flavour, while pleasant, is not itself a signifi- cant reward. At a deeper level of consciousness, there seems little doubt that smoking menthols functions also as a guilt-reducir Since it successfully alters the total smoking expi its own kind of "filter', as it were, it manages i measure to subtly disguise the sin. Some smokers go further, ascribing medicinal p mentholation. Current menthol users are either happy with their present levels of mentholation, or would welcome a heightened impact. Non-menthol smokers express mild interest in a very lightly mentholated product. C:> N.) CN cc C711%, S - co BATCo document for Province of British Columbia 19 April 1999 A BRIEF OVERVIEW Menthol Conversion to menthol seems to be circumstantial rather than deliberate: borrowing a friend's menthol, trying a package during a cold and staying with it afterwards. Rarely do people make a specific "a priori decision to switch to a menthol cigarette. Once having made the commitment, however, it seems to be an unusually strong one. 'Even when they try, as they sometimes do, they typically are not obie to revert to a non-menthol brand. It is the cooling effect which constitutes the major attraction, this and the concomitant reduction in both harshness and tobacco taste. The actual menthol flavour, while pleasant, is not itself a signifi- cant reward. At a deeper level of consciousness, there seems little doubt that smoking menthols functions also as a guilt-reducing mechanism. Since it successfully alters the total smoking experience, providing its own kind of "filter", as it were, it manages in some small measure to subtly disguise the sin. Some smokers go further, ascribing medicinal properties to the mentholation. Current menthol users are either happy with their present levels of mentholation, or would welcome a heightened impact. Non-menthol smokers express mild interest in a very lightly mentholated product. ON co ON S - co NJ BATCo document for Province of British Columbia 19 April 1999 The Cameo Family This research confirms that Cameo and CEM. whatever their former merits, are currently perceived as part of the uestablishmentu- behind the times, that is. This image is generated largely by 'the packaging, considered to be unimaginative, dull, and old-fashioned. It also makes a distinctly feminine statement. Cameo itself is known to be a "strong" menthol cigarette. But because the segment is a whole tends to be perceived as "milderu (than regulars), Cameo is actually thought of a lower in T & N than is, in fact, the case. The same is true of Cameo Extra Mild. Thus, to introduce a new, still lighter Cameo would seem im- practical. And to further 'tighten" CEM would seem risky. Moreover, any new Cameo, or for that matter, any Cameo-sponsored brand is not an attractive prospect to the non-Cameo smoker. Cameo Avonti & Cameo Super Light Both of these prototypes illustrate clearly the constraining in- fluence of the Cameo name t lease insofar as broadening the menthol market is concerned. Cameo Avanti, however, provides useful insight into what ran be accomplished potentially'with a dramatically different packag e. Although this particular execution is not without its problems, the concept of a radical departure Is well worth pursuing--but not with a Cameo affiliation. 6 - N) CN CO ON 1-4 CO LOJ BATCo document for Province of British Columbia 19 April 1999 Other Flavours Flavours other than menthol generate polite interest, in concept. An actual spearmint product, however, achieves wide support, some of it quite enthusiastic. Flavour alternatives, Including spearmint, should be pursued further. 7 - C=> r-1.) C71- co C711 Z-4 00 13 ATCO document for Province of British Columbia 19 April 1999