RJR Nabisco Inc. (Formerly R.J. Reynolds Industries, Inc.) and Consolidated Subsidiaries - Page 8

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               With respect to each cigarette product, all of the                     
          activities constituting Reynolds’ marketing strategy and                    
          implementation tactics are part of a coordinated effort to convey           
          the intended image and achieve the intended positioning for the             
          product.                                                                    
               E.  Graphic Designs                                                    
               Graphic designs are developed for the following components             
          of a cigarette product: cartons, packages, flags (messages                  
          temporarily applied to cartons or packages, e.g., “New!”),                  
          tipping (the printed wrap around the filter), cigarette papers              
          (which hold the tobacco), foils (the inner lining between the               
          cigarettes and soft-pack or box), and, for soft packs, a closure            
          seal (across the top of the package).  The graphic designs for a            
          product serve, among other things, to identify the product,                 
          convey information, and attract attention at the point of sale              
          when the retailer displays the pack.                                        
               F.  Advertising                                                        
               The advertising for a product serves to convey information,            
          project the image chosen for the positioning of the product, and            
          attract consumer attention.                                                 
               The advertising strategy for a product entails the                     
          development of the following components:                                    
               (1)  Creation of the advertising “campaign”, which, along              
               with other marketing efforts, projects the image or message            






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