Case study: Marlboro

- Hemanth.s

Section-L

Abstract:

• The case discusses the marketing strategies of Philip Morris USA (Philip Morris), a leading
tobacco company in the US, for its popular cigarette brand, Marlboro. It shows how the
company used the image of a cowboy to successfully establish the brand Marlboro in the minds
of consumers. The case also discusses the various marketing strategies adopted by Philip Morris
before and after the implementation of the Master Settlement Agreement (MSA) which
imposed severe restrictions on marketing of tobacco products in the US. It shows how the
marketing strategies adopted by Philip Morris over the years have helped it in retaining
Marlboro as a top selling brand since its re-launch in the early 1950s.

Introduction:

• Marlboro is one of the most popular brands in the tobacco industry. The name was taken from a
street in London where the factory is located. The story behind the success of this brand that
once called “for ladies” and went viral after the marketing revolution taken place will now be
revealed.

• Marlboro is the world‘s best-selling cigarette brand (300 bill. units sold in 180 countries)

• The world‘s most profitable non-durable consumer good flagship brand of Philip Morris, the
world‘s largest cigarette manufacturer.

• 18th on “Most Valuable Brand in the World” (Inter-brand ranking 2011, net value: 20bill. $)
most recognized and appealing 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.
Brand history:

• The brand was established in 1924 by Phillip Morris and Co. (now Altria). Marlboro built its
image as feminine brand and apparently because it’s safer due to filter and light cigarette.

• “Mild as May” was first designed as a white and solid box that appealing to women.

• Then the brand faced trouble but managed to rejuvenate itself with a clever advertising
gimmick. The ivory tip of the filter was changed to red in order to hide the lipstick stains.

• However during the World War II, the brand again faltered and had to be taken off the market.
There was a lot competition going on in this period. Some of the brands were the market-driven
such as Camel, Lucky Strike or Chesterfields.

SWOT Analysis:

Strengths Weakness

Brand value Competitive market

Large market share Growth rate

Various flavors

Opportunities Threats

Global markets Growing competition

New products Government rules & policies

New acquisition External business risks

Problem statement:

• The main problem facing the company is how to market its products amidst aggressive
campaigns against consumption of tobacco supported by legislations against the products
consumption. The World Health Organization (WHO) and U.S. Centers for Disease Control and
Prevention (CDC) are among the leaders in the campaign against tobacco consumption; they
have enacted restrictions to hinder and control marketing and advertising tobacco.

• Following are the specific problems that the company is facing:

I. How can the company advertise and sell its products without negative effects of anti-tobacco
campaigns?

II. How can the company sell and market its products to people of majority age without influencing
the desire of taking tobacco on people of the age of minority?

III. Which tools can the company use to give back to the community after “killing” its people?

IV. What is the best way to enlarge their market and remain an accepted company in the
community?

Solution:

• The 'Marlboro Country 'Campaign:

During the 1960s, Philip Morris started the 'Marlboro Country 'campaign. These ads appeared
frequently in print and TV commercials.
In these ads, the Marlboro man invited consumers to Marlboro country for a free and
unstressed life.
The slogans for these ads included "Settle Back. You get a lot to like here in Marlboro Country,"
"Come to where the flavor is, Come to Marlboro Country," etc.

• Increasing Retail Presence:

Despite the severe restrictions, the US Federal Trade Commission (FTC) found that the
advertising expenditure of the tobacco companies increased to $ 8.24 billion in 1999, a 22.3
percent increase when compared to $6.73 billion spent in 1998. Post MSA, the only medium
available to tobacco companies for advertisements is the print medium.
 • Building Customer Loyalty:

By 2001, Philip Morris began laying emphasis on relationship marketing. For Philip Morris,
building customer loyalty now became the new mantra for ensuring the success of the hugely
popular Marlboro. The company held special parties to which only customers of Philip Morris
products were allowed.

Conclusion and Recommendation:

• Marlboro is an international cigarette company that has been in the business for over a century;
marketing in the tobacco industry is challenging because of restrictions put by national and
international anti-tobacco campaigns. Restrictions in the industry have limited the advertising
campaigns enacted by Marlboro however, the company is using the limited allowed tools of
advertising, and they include magazines, social networks and mail advertising.

• Despite the successful campaigns, in 2009, the company recorded an 8% decline in sales;
however, the sales were at their pick 2010 only in India. The best marketing approach in India
that the company can adopt is one that targets adult smokers and persuade them switch to its
products, instead of targeting non-smokers. To target effectively the existing smokers, the
company should embark on corporate social responsibilities programs and creating good
smokers-company relationship.