Marlboro

INTERNATIONAL MARKETING

MarlboroGlobal Marketing Strategy

Surgeon General‘s Warning: Smoking kills.

20 CLASS A CIGARETTES

Purpose of this presentation:

To provide a deeper understanding of Philip Morris‘ strategic efforts behind building Marlboro into a strategic efforts behind building Marlboro into a successful global brand by highlighting key strategicdecisions from the past as well as characteristics ofthe current global brand strategy.

AGENDA 1. Introduction2. Short Brand History3. Marlboro Goes Global4. Current Brand Strategy5. Global Marketing Mix5. Global Marketing Mix

ProductPromotionPricePlace

6. Conclusions

INTRODUCTION

� world‘s best-selling cigarette brand

(300 bill. units sold in 180 countries)

� world‘s most profitable non-durable

consumer good

� flagship brand of Philip Morris, the world‘s

largest cigarette manufacturer

INTRODUCTION

� 18th „Most Valuable Brand in the World“

(Interbrand ranking 2011, net value: 20 bill. $)

� most recognized and appealling brand image of the� most recognized and appealling brand image of the

20th century: Marlboro Man and Marlboro Country

� Marlboro Man – symbol of the true American spirit

and American way of life� marketing tool with

unprecedented success

SHORT BRAND HISTORY

� introduced in the 1920s in the U.S. by Philip Morris,

named after Maroborough Street in London

� different positioning before and after World War II

� 1955 Leo Burnett repositions the brand to appeal to

both male and female smokers – „The Tattooed Man“

image campaign, later „The Marlboro Cowboy“

� 1963 – extension with „The Marlboro Country“ theme

SHORT BRAND HISTORY

Marlboro in the 1920s and 1950s

SHORT BRAND HISTORY

Marlboro after the 1950s

SHORT BRAND HISTORY

� next decades global expansion and positioning as a

global brand� reasons

� by 1972 no. 1 tobacco brand in the world� by 1972 no. 1 tobacco brand in the world

� 1993 „Marlboro Friday“

� 1996 first tobacco product in the Marketing Hall of

Fame, together with Coca-Cola, Walt Disney, Nike, etc.

MARLBORO GOES GLOBAL

� global expansion: „a mixture of organic growth,

geographical expansion and acquisitions“

� 1950s – first sales organizations and production facilites

outside the U.S., 1955 – Philip Morris Overseasoutside the U.S., 1955 – Philip Morris Overseas

� today: production sites in 56 countries, sales subsidiaries

in 150 countries, sales in 180 countries

� licensing agreements, joint ventures with local

producers, privitazation of state-owned tobacco factories

MARLBORO GOES GLOBAL

� core strategic concept: „to sell a marketable version of the

American West or the American Dream“ to consumers worldwide

� find a global target segment and approach it through a � find a global target segment and approach it through a

standardized marketing and advertising approach: export of the

Marlboro Man and Marlboro Country theme

� highly successful approach but not in every market� example of

Hong Kong

MARLBORO GOES GLOBAL

Several decisive success factors:

� PMI‘s position as a strong U.S. corporation

� increased global popularity of Western movies� increased global popularity of Western movies

� effective global market research efforts to identify a

global consumer group with similar values and

attributes

� Marlboro as part of „the global mass culture“

CURRENT GLOBAL STRATEGY

Specific tobacco industry characteristics:

� high homogeneity of products, differentiation only

through branding and marketingthrough branding and marketing

� high concentration with 5 major players: PMI, BAT, JTI,

IT, RJ Reynolds

� many restrictions and regulations, public awareness

CURRENT GLOBAL STRATEGY

� target: global community of young adult smokers

� USP: high-quality American style cigarettes

� focus: growth segments of each market and new

opportunities for growth

� advantages: strong global brand image and high recognition

despite restrictions on advertising

CURRENT GLOBAL STRATEGY

� a superior, highly diversified product line

� a commitment to quality

� the use of global media channels and global events

� reasonable and affordable pricing

� constant product innovation

� an aggressive distribution strategy

� corporate social responsibility

CURRENT GLOBAL STRATEGY

� Marlboro has a tradition of being the

industry’s innovator

� examples: the flip-top box, cork looking � examples: the flip-top box, cork looking

filters, slow burning paper, slide packs, etc.

� Filter Plus Technology: a revolutionary,

flavor enhancing, four-chamber filter system

MARKETING MIX: PRODUCT

� high degree of standardization with carefully

selected adaptations to local preferences

� positioned worldwide as a high quality

product in the premium segment

� 2008 launch of the new Marlboro Brand

Architecture to broaden the target market

NEW BRAND ARCHITECTURE

Flavor Line

Gold Line

Fresh Line

Brand Architecture

� packaging upgrades (Marlboro Red Filter

Product Innovations

� Filter Plus Technology

MARKETING MIX: PRODUCT

Plus Slide Pack) and many line extensions for individual markets

� quality improvements

� appealling and sophisticated design –promotional function of packaging

� Marlboro Intense (shorter, rich-flavored cigarette)

� new menthol products (Crisp, Fresh and Ice Mint, mainly for the Asian market) and kretek or clover cigarettes

� predominantly standardized with some local

adaptations, strict ethical code

� shift from traditional channels to alternative ones

MARKETING MIX: PROMOTION

� shift from traditional channels to alternative ones

due to restrictions on tobacco advertising

� use of global media channels: Internet

� sponsorship of global events: Formula 1 Ferrari

Team, Ducati Motor Racing Team

� “switch-selling” and “buy one, get one for free”

activities performed by local sales force

� online promition: discounts, coupons, birthday

MARKETING MIX: PROMOTION

� online promition: discounts, coupons, birthday

gifts, concert tickets, competitions with prizes for

registered members

� Marlboro Club: uniting smokers who love Marlboro

cigarettes, maintain brand loyalty

� highly adapted , due to different taxation, income levels and

competitive situations, positioned as a premium brand in the

upper price segments across all markets

MARKETING MIX: PRICE

� however, affordable pricing strategy to attract smokers

� “sell-low strategy” � high disparities (6$ in U.S. versus 79

cents in Senegal for Marlboro Red) � critique

� due to large market share, Marlboro can “set” prices of the

industry (1993 worldwide price-cut to protect market share)

� highly adapted to local conditions , due to differently restricted

access to distribution channels across markets

� example: U.S. – supermarkets, convenience stores, gas stations,

MARKETING MIX: PLACEMENT

discount stores versus Austria – only in tobacco shops

� common characteristic: maximum distribution coverage and top

shelf space to emphasize brand superiority

� effective sales force, takes advantage of large market share,

builds strong relationships with retailers

CONCLUSIONS

Marlboro’s exceptional success as a global brand is the result of:

� a carefully planned and implemented global expansion strategy

� effective market research to identify a global consumer segment� effective market research to identify a global consumer segment

� a strong brand image to appeal to this global consumer group (Marlboro Man)

� an optimal mix between standardization and adaptation across markets

� past challenges like: health warning labels, marketing constraints, public

scandals, legal lawsuits, etc. were mastered successfully

CONCLUSIONS

� rapidly changing tobacco industry environment

� many future challenges like: increased taxes on cigarette sales,

introduction of plain packaging, ban on various ingredients, introduction of plain packaging, ban on various ingredients,

product display bans in retail stores

� Marlboro and Philip Morris need to find new and innovative ways to

address these challenges and maintain global market leadership

THANK YOU FOR YOUR ATTENTION!

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