Business Notes DEFENSE CONTRACTORS

"I love the smell of napalm in the morning," declared Lieut. Colonel Kilgore in the epic Apocalypse Now. Any deskbound battle buff who shares that sentiment will find a sensory treat in the current issue of Armed Forces Journal International, a Washington-based monthly. BEI Defense Systems, a Fort Worth-based arms manufacturer (1988 sales: $51 million), has come up with a novel twist on the aromatic advertisements that fill consumer magazines. When scratched, the latest ads for its Hydra-70, a relatively inexpensive rocket ($400 to $800), emit the odor of burnt cordite, an explosive substance in such weapons. The ad's tag line: "The Smell of Victory."

George Coutoumanos, marketing chief for BEI, says he devised the ad to lure readers away from pictures of glamorous products like aircraft carriers and jet fighters. Says he: "I just have a little rocket. I tried to think of a way to get people to read about it."