Lorillard New Ideas

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AOIVISIONOFLOEWSTHEATRES,INC . •

2525 EAST MARKET STREET, GREENSBORO, NORTH CAROLINA 27401

June 8, 1979

TO :

FILE

SUBJECT : SEDGEFIELD IDEA SESSIONS June 6-7, 1979

The following paragraphswill summarize the discussions held at the joint sessions in which everyone participated . A later report will document the ideas and suggestions which were discussed within the individual groups but rejected for use in the general meeting . The subjects discussed fall generally into three areas : New Products Marketing Cost Savings Several of the suggestions arose from various groups and the discussions following the individual ideas will summarize the general feeling expressed by the various groups and my editorial comments .

S . T . Jbsies

STJ :BM

Attachments

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NEW PRODUCTS IDEAS 1 . Oriental Cigarettes The idea behind this product was fourfold : Advantages included pleasant room aroma, mild smoke, possibility of a longer burn time with lower delivery, and possibility of advertising this as a natural product . 2 . Flavored Cigarettes All of the suggestions for this product generally parallel our NFS and socially acceptable cigarette projects . 3 . Fruit Flavored Chewing Products Several avenues were explored in this area with the idea being directed toward younger chewers coming into the market . Many people felt that younger chewers would be attracted to products with less tobacco taste . For example, it was suggested that we investigate the possibility of borrowing switching study data from the company which produces "Life Savers" as a basis for determining which flavors enjoy the widest appeal . Another suggestion was that we manufacture a product in "bite size", individually wrapped sections, with different flavors . Another suggestion was to produce a chewing product in which bubble gum is incorporated . Another suggestion was to produce and market a chewing tobacco product in which the tobacco would be surrounded by a flavored sugar coating, similar to gum balls .

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Smokeless Tobacco Product

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Winery

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This was a suggestion for a new venture as it was felt that Lorillard currently has much of-the required technical expertise in house . 6.

Multi-Purpose Cigarette

This suggestion arose from several groups, all of which were related to giving the consumer a product in which he could adjust the tar delivery, for example, by increasing or decreasing the air dilution in the filter . Another suggestion in this area was to mix for example, four cigarettes with 10 mgs . tar delivery, and 16 cigarettes with 3 mgs . tar delivery, because many people feel that smokers in the ultra low-tar category occasionally prefer a stronger smoke . Several people suggested using a dual filter, the idea being one segment could be detached thereby increasing the tar delivery . 7 . Enrichment Technology There was general agreement that we should continue our basic research activity in this area . 8 . Chemical Treatment - Burn Retardance There was general agreement that additional "know how" in this area is required if we are to maximize the utilization and economics of puffed tobacco . 9 . Old Newport Many people felt that the reintroduction of the old Newport with the "hint of mint" including the old package and tipping

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would appeal to older smokers who left the brand ten years ago . 10 . Encapsulated Filter Flavors C

This was viewed as a means of incorporating non-traditional or unstable flavors in cigarettes ._ 11 . Kent III Menthol Several people noted that consumers had asked them if and when this product would be available . 12 . Premium Priced Cigar This suggestion arose from the fact that this is the only growing segment in the cigar industry . We would act as a distributor for this product and might perhaps couple it with C~.oreota}e_ ~smp-late advertising by using it, for example, with the name Pierre Lorillard . 13 . Soft Plug Chewing Tobacco Every group discussed this idea in some form . Advantages included attractive packaging, convenience of carrying, and possible sales in vending machines . 14 . Extruded Reconstituted Tobacco Products Possible advantages include the use of flavor substitutions in that extrusion methods generally do not require high temperatures . 15 . "Roll Your Own Cigarette" This suggestion was based on two factors : ; (1) Economy for the consumer ; and, (2) Possible greater utilization of by-products generated in cigarette manufacturing . 16 . 1 mg . Tar Product Requirements/advantages include low gas phase ; easy draw ; and high taste .

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Light Chewing Tobacco

This product would be light in color and taste and should l

appeal to the younger consumers . It was suggested that we should investigate the possibility of using puffed tobacco in a scrap chewing tobacco product . Another suggestion was to investigate tobacco extenders including for example, lettuce, kenaf and cellulose . .

New Type Chewing Products Ideas included chewing gum with added nicotine and either tobacco or other added flavors . Also discussed was a "chew stick" possibly manufactured from a low densitv wood with added nicotine .

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Kent Improvement Ideas were generally similar to those discussed at the PDC meeting recently .

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Enriched Cigarette with Beneficial Effects This would be a low-tar cigarette with added ingredients such as apetite suppressants, sleeping aids, aspirin, etc .

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Six-pack Carton This could be with either cigarettes or scrap chewing products with an economy motive .

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100 mm . Hardbox Cigarette

This would be a new product designed to appeal to female smokers . 23 .

Colored Cigarette Papers/printed Cellophane This idea arose in several forms including a mint green cigarette paper on a menthol brand .

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It was further suggested that the economics of this idea could be extended by designing labels of regional appeal and printing the brand name on the cello overwrap . This approach was also suggested as a means of producing a range of products with a common name and advertising budget but with varying tar levels . 24 . Economy Reinvestigate the use of a 30's pack or perhaps packages of less than 20 at a reduced selling price . Particular interest would be expected in high cost areas . 25 . New Small Cigar This product would utilize a flavored foam type chewable filter . 26 . Tobacco Free Cigarette Either tobacco substitute materials or cigarettes made from laminated, .papers with encapsulated flavors were suggested . 27 . Cigarettes with Demographic Appeal Areas include race, nationality, age, regional preference, etc . 28 . New Menthol Cigarette This product would incorporate a potent cooling agent different from menthol . 29 . Non-flammable Cigarette This product would utilize flavored filters and potentially generate income from consumers leaving the market . 30 . Ecology Suggestions for a self-extinguishing cigarette and for a

product

utilizing biodegradable filter and wrapping materials were expressed .

MARKETING/PACKAGING

C 1 . Chewina Tobacco Develop ad campaigns to appeal to other than blue collar workers . Areas discussed included leisure time activities such as fishing, golf, etc . 2 . Metalized Mylar Film Introducing a new scrap chewing or plug product utilizing this film which has several possibilities for increased eye appeal . 3 . Improved tear tape tab Discussion on this point brought out the fact that we now have the capability to print the point of tear tape detachment on our labels . Standardization of tear tape was also discussed . 4 . Old Gold It was suggested that perhaps we could revitalize Old Gold Filter by using the old 'gold label incorporating the coins and the "V" in the design . 5 . Unable to Purchase Developing means of taking advantage of "unable to purchase" complaints . 6 . True Building ad theme around "My TRUE Story" using light-hearted approaches such as "I met my husband in the bowling alley when I went to the machine to purchase my pack of TRUE's ."

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General Marketing Approach

Many people expressed an interest in developing campaigns which

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would broaden the appeal of our products on a national basis . Alternatively many people felt a regionalized approach to marketing including hiring ad agencies in various regions, for example, Nashville . .

Loews Employees A . Insert "price off" coupons in the paychecks of all Loews employees . B . Make sample 4's available to all Loews' employees . C . Make coupons available to all Lorillard employees for sampling in their circle of contact .

9 . Promotions A . Investigate possibility of imprinting promotional campaigns on cartons and packs in a manner similar to that used by cereal manufacturers . B . Test a campaign in which we offer to refund the purchase price of a product if a customer tries and dislikes the product . C . Use 1980 Olympics as the basis for a promotional campaign . This could take the form of announcing that we would make a contribution to the U . S . Olympics fund if the consumer would return, for example, a carton end panel .

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COST SAVINGS

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1 . 20's Pack Sampling Many people feel our current 4's pack sampling is both inefficient and uneconomical .

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2 . Foil Reolacement Purchasing showed samples of a gold printed paper with good color match to our labels which have gold colors . Annual savings of about $400,000 would result from its use throughout the factories . A sample product in which this printed paper was

used was recently

picked up in a Philip Morris test market area . 3.

Thin Reconstituted Leaf It was felt that this product would have greater

filling power

and physical strength than our current product . 4.

Encapsulated Menthol in Cigarette Paper

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High Speed Combiners

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High Speed Packers

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Primary Process Control This suggestion dealt mainly with increased automation . increased automation in cigarette, physical, mechanical

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leaf labs was discussed . 8.

Training

Extensive training in experimental design and data analysis was suggested . This should equip us to more efficiently design projects and utilize the data generated . 9.

Expanded Tobacco Increase levels of expanded tobacco in our products .

Investigate Ov

possibility of expanding both other tobacco types or the partial expansion of entire blends .

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Circumference Measurement Primary request was for an instrument to accurately measure the circumference of combined filter rods . Secondary consideration was more accurate measurement of filter rods made with porous plugwraps .

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Wrapping Material Preparation/Conditioning Longer Brand Runs

Ideas included inventory leveling and cold storage particularly for small volume brands . 13 .

Cigarette Paper Splice It was sugg.ested that cigarette paper splice tape would be .Qc :¢Qi imprinted with a message% ^ for example, yxe jacfe that would turn . .ac3 :e.. a negative consumerA into a positive consumer rase E+o+~•

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State Tax

It was suggested that we should investigate means of helping the jobbers in applying state tax stamps . ideas ranged from an : /

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~easy opening hot melt adhesive to giving the Pitney-Bowes operators premiums such as Kent umbrellas . 15 . Three Week Shutdown and 4-day work week After considerable discussion it was generally agreed that the negatives outweighed the positives on both of these suggestions in that extended vacations would reduce our capacity and the four day work week would be inconsistent with our third shift expansion .

16 .' Standardization There was general agreement that further efforts toward increased standardization of cigarette components would result in greater efficiency and economy .

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17 . Shrink-Wrap It was suggested that we investigate the possibility of palletizing/ shrink-wrapping shipments to U . S . Possessions, thereby eliminating carton overwraps .

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