abhishreshthaa
Abhijeet S
Marlboro (US: /ˈmɑrbᵊroʊ/[2] UK: /ˈmɑːlb(ə)rə/ or UK: /ˈmɔːlb(ə)rə/[3]) is the largest selling brand of cigarettes in the world. It is made by Philip Morris USA (a branch of Altria) within the US, and by Philip Morris International (now separate from Altria) outside the US. It is famous for its billboard advertisements and magazine ads of the Marlboro Man.
At the time of the brand's development, Winston Churchill was in the news. At that time, it was being reported that Churchill was related to the Duke of Marlborough. While the company liked the "Marlborough" name, it was shortened to "Marlboro" for aesthetic reasons.[1]
The standard product marketing mix includes four parts: product,
placement, price and promotion. The right balance of all four parts
of the marketing mix ensures that the marketing plan for any one
product will be productive and enduring. Philip Morris USA’s marketing
mix for their Marlboro brand tobacco products is an excellent example
of how a perfectly implemented marketing mix can effectively create
demand for a product, and help it to endure the test of changing
social influences. Although the marketing mix for this product line is
not perfect, it is one of the better marketing mixes in existence.
This paper will analyze the Marlboro brand, placement of the
products, pricing of the products, and promotion techniques as
implemented by Philip Morris USA in relation to their Marlboro
product line. Marlboro brand cigarettes were developed by
Philip Morris USA in 1902. By 1983, the company had grown to
become the largest tobacco company in the country. The year
2002 marked the one hundred year anniversary of the company.
(Wikipedia, 2008, Para. 1) The Marlboro brand is available at
most convenience stores, and requires relatively little effort to
obtain. Marlboro product items are considered to be a premium
product within the smoking community.
Most Marlboro product users remain relatively loyal to the brand.
Other, more value-minded, consumers prefer to buy the cheaper
brands. Because of this mix of consumer attitudes, the product is
considered to be both a convenience and shopping product.
The Marlboro line has great product depth. Product items within
the line offer different tastes and potencies in order to satisfy a
number of different consumer tastes. Marlboro reds have a more
robust flavor.
They are the stronger of the product items within the line. The more
preferred product item is the Marlboro lights, which are a medium
flavored brand item. The Marlboro ultra lights appeal to consumers
who prefer a lighter tobacco taste.
The basic positioning of Marlboro is as a high quality brand of
cigarette that satisfies both male and female adult (age 18 and
older) tobacco user's needs. Marlboro is positioned as a
conservative and slightly more distinctive brand. Originally, in
1924, the brand targeted women with the slogan “Mild as May”.
During World War II the brand faltered and was temporarily
removed from the market, but returned soon after. In answer to
the first study linking smoking to cancer in the fifties, Philip Morris
added a filter to their cigarettes. (Wikipedia, 2008, Para. 1-3)
The Marlboro brand re-emerged with an improved product,
new target market (namely men), and quickly increased market
shares.
In the early 1960’s, the “Marlboro Country” campaign was born.
This campaign is what the Marlboro brand is famous for (Wikipedia,
2008). The ads depicted a rough and tough range cowboy smoking
the Marlboro brand. Philip Morris used to primarily target adult
male smokers with its famed "Marlboro Man", who gave the product
a more masculine feel.
Today, the target market includes both male and female brand-loyal
adult tobacco users (age 18 and older) who like the Marlboro brand
name enough to pay a slightly higher price for it.
A secondary target would be adult smokers (18 years and older)
who purchase tobacco products based on price and promotion.
Marlboro is a more expensive brand, but is not the highest priced
brand. Philip Morris USA promotions sometimes cause it to become
a mid-priced product line compared to other brands.
These secondary target smokers are likely to choose Marlboro if a
promotion is available that allows the price of a Marlboro brand
product item to be seen as a value over other brands.
Overall, Marlboro is positioned so that the target market sees
the brand as a higher quality brand name tobacco product. Some
brand-loyal consumers within the target market of adult smokers
are willing to pay regular price for a Marlboro line product item.
Other adult smokers are less willing to buy the product unless
promotions, such as coupons or temporary price reductions,
are available due to various reasons (including budget restrictions).
As far as pricing, Marlboro products can be both elastic and inelastic
depending on the individual consumer’s attitude toward the product.
Loyal customers view the Marlboro brand to be relatively inelastic.
Most of these customers will not accept a substitute, and will only
reluctantly accept a substitute. Other value-minded consumers view
the brand to be elastic.
For these consumers, there are many cheaper substitutes.
Philip Morris USA, offers several other brands of tobacco products
that are cheaper. This is an attempt to please this particular
type of consumer if they wish to buy a cheaper product.
So, Philip Morris USA provides a cheaper product item within their
line in order to maintain market share with these consumers.
The price range for this brand varies by geographical location.
I live in North-Western Missouri, and the price in my area right
now is $3.29 a pack. During promotional periods, the psychological
pricing is at $3.09 a pack in order to compete with Camel Brand.
In southern states prices tend to be higher; averaging approximately
$5.00 a pack. (Suzanne Creamer, personal communication, January 2,
2008) Camel is one of Marlboro's strongest competitors. This brand
is priced just under Marlboro, and is viewed as having the same quality.
These two brands constantly try to out-price each other during
promotional periods. They have been known to engage in price wars
from time to time. (Vicki Mick, Phillips Station, Personal Communication,
December 23, 2007).
Tobacco products are relatively perishable and have a shelf life of
only eight months.
Because retailers cannot store these products forever, they must
work with Philip Morris USA to maintain continuous replacement
through high volume sales of the product. To do this, demand
must be created for the target market through promotion.
Because governmental and social regulations prohibit tobacco
companies from publicly marketing their products, Philip Morris
USA relies heavily on in-store advertisements, in-store promotions
and mail coupon promotions.
Visual store advertisements are usually placed near the checkout
counter where the customer must go to ask for, and purchase,
the cigarettes. These displays depict the Marlboro logo and any
current promotional pricing. The in-store promotions include
two-for-one product deals or special pricing for buying more
than one pack of cigarettes at a time. Potential and existing
customers are pulled to the Marlboro brand by Philip Morris USA's
use of mail promotions such as coupons and invitations to enter
into the company's annual sweepstakes.
The coupons offer dollars off the regular prices of cartons
(box of 10 packs) and individual packs of Marlboro brand cigarettes.
They also offer an annual sweepstakes in which smokers over the
age of twenty one compete to win prizes and vacation trips that are
funded by Philip Morris USA. Prizes for these sweepstakes in the
past have included: land in Montana in the value of $300,000, a
trip to the Marlboro ranch, and various large monetary prizes.
Many consumers compete in this competition each year. All Marlboro
promotions are integrated to maintain and gain product loyalty,
thus producing more profit potential for the product.
The future looks bright for the Marlboro brand. The duration of the
mature stage of this product’s life cycle is proof of the strength and
flexibility of the implemented marketing mix.
However, future changes might be necessary in order for the brand
to gain a competitive edge over its main competitors. For example,
Philip Morris USA might need to consider introducing special flavored
or limited edition cigarettes that will directly compete with R.J. Reynolds’
Camel “Special Blend” line. This line includes limited edition flavors like
vanilla, mint, etc. (R.J. Reynolds Tobacco Company, 2008) R.J.
Reynolds produces tobacco products that are priced just under those
of Philip Morris USA’s products, and are ranked just under theirs as well.
Philip Morris USA might need to consider this price difference when they
introduce any new product line. A more aggressive approach toward
offering a more continuous price promotion cycle might also be to
their benefit.
Although there is no such thing as a perfect marketing mix,
Philip Morris USA has worked very hard through the years to make
the marketing mix for their Marlboro brand as productive as possible.
The product, price, placement and promotion of the Marlboro product
items are integrated to promote Marlboro’s reputation of being a
premium tobacco product. All marketing efforts are targeted toward
reaching the primary and secondary target markets of the brand.
This brand has maintained market share despite governmental
regulation and social acceptance changes throughout its one
hundred and six years of selling tobacco products.
One thing that Philip Morris has proved is their willingness to
adjust their marketing approach in order to create a brand that
will endure the test of time. This brand should be viewed as the
perfect example of how to implement a marketing mix that works.
At the time of the brand's development, Winston Churchill was in the news. At that time, it was being reported that Churchill was related to the Duke of Marlborough. While the company liked the "Marlborough" name, it was shortened to "Marlboro" for aesthetic reasons.[1]
The standard product marketing mix includes four parts: product,
placement, price and promotion. The right balance of all four parts
of the marketing mix ensures that the marketing plan for any one
product will be productive and enduring. Philip Morris USA’s marketing
mix for their Marlboro brand tobacco products is an excellent example
of how a perfectly implemented marketing mix can effectively create
demand for a product, and help it to endure the test of changing
social influences. Although the marketing mix for this product line is
not perfect, it is one of the better marketing mixes in existence.
This paper will analyze the Marlboro brand, placement of the
products, pricing of the products, and promotion techniques as
implemented by Philip Morris USA in relation to their Marlboro
product line. Marlboro brand cigarettes were developed by
Philip Morris USA in 1902. By 1983, the company had grown to
become the largest tobacco company in the country. The year
2002 marked the one hundred year anniversary of the company.
(Wikipedia, 2008, Para. 1) The Marlboro brand is available at
most convenience stores, and requires relatively little effort to
obtain. Marlboro product items are considered to be a premium
product within the smoking community.
Most Marlboro product users remain relatively loyal to the brand.
Other, more value-minded, consumers prefer to buy the cheaper
brands. Because of this mix of consumer attitudes, the product is
considered to be both a convenience and shopping product.
The Marlboro line has great product depth. Product items within
the line offer different tastes and potencies in order to satisfy a
number of different consumer tastes. Marlboro reds have a more
robust flavor.
They are the stronger of the product items within the line. The more
preferred product item is the Marlboro lights, which are a medium
flavored brand item. The Marlboro ultra lights appeal to consumers
who prefer a lighter tobacco taste.
The basic positioning of Marlboro is as a high quality brand of
cigarette that satisfies both male and female adult (age 18 and
older) tobacco user's needs. Marlboro is positioned as a
conservative and slightly more distinctive brand. Originally, in
1924, the brand targeted women with the slogan “Mild as May”.
During World War II the brand faltered and was temporarily
removed from the market, but returned soon after. In answer to
the first study linking smoking to cancer in the fifties, Philip Morris
added a filter to their cigarettes. (Wikipedia, 2008, Para. 1-3)
The Marlboro brand re-emerged with an improved product,
new target market (namely men), and quickly increased market
shares.
In the early 1960’s, the “Marlboro Country” campaign was born.
This campaign is what the Marlboro brand is famous for (Wikipedia,
2008). The ads depicted a rough and tough range cowboy smoking
the Marlboro brand. Philip Morris used to primarily target adult
male smokers with its famed "Marlboro Man", who gave the product
a more masculine feel.
Today, the target market includes both male and female brand-loyal
adult tobacco users (age 18 and older) who like the Marlboro brand
name enough to pay a slightly higher price for it.
A secondary target would be adult smokers (18 years and older)
who purchase tobacco products based on price and promotion.
Marlboro is a more expensive brand, but is not the highest priced
brand. Philip Morris USA promotions sometimes cause it to become
a mid-priced product line compared to other brands.
These secondary target smokers are likely to choose Marlboro if a
promotion is available that allows the price of a Marlboro brand
product item to be seen as a value over other brands.
Overall, Marlboro is positioned so that the target market sees
the brand as a higher quality brand name tobacco product. Some
brand-loyal consumers within the target market of adult smokers
are willing to pay regular price for a Marlboro line product item.
Other adult smokers are less willing to buy the product unless
promotions, such as coupons or temporary price reductions,
are available due to various reasons (including budget restrictions).
As far as pricing, Marlboro products can be both elastic and inelastic
depending on the individual consumer’s attitude toward the product.
Loyal customers view the Marlboro brand to be relatively inelastic.
Most of these customers will not accept a substitute, and will only
reluctantly accept a substitute. Other value-minded consumers view
the brand to be elastic.
For these consumers, there are many cheaper substitutes.
Philip Morris USA, offers several other brands of tobacco products
that are cheaper. This is an attempt to please this particular
type of consumer if they wish to buy a cheaper product.
So, Philip Morris USA provides a cheaper product item within their
line in order to maintain market share with these consumers.
The price range for this brand varies by geographical location.
I live in North-Western Missouri, and the price in my area right
now is $3.29 a pack. During promotional periods, the psychological
pricing is at $3.09 a pack in order to compete with Camel Brand.
In southern states prices tend to be higher; averaging approximately
$5.00 a pack. (Suzanne Creamer, personal communication, January 2,
2008) Camel is one of Marlboro's strongest competitors. This brand
is priced just under Marlboro, and is viewed as having the same quality.
These two brands constantly try to out-price each other during
promotional periods. They have been known to engage in price wars
from time to time. (Vicki Mick, Phillips Station, Personal Communication,
December 23, 2007).
Tobacco products are relatively perishable and have a shelf life of
only eight months.
Because retailers cannot store these products forever, they must
work with Philip Morris USA to maintain continuous replacement
through high volume sales of the product. To do this, demand
must be created for the target market through promotion.
Because governmental and social regulations prohibit tobacco
companies from publicly marketing their products, Philip Morris
USA relies heavily on in-store advertisements, in-store promotions
and mail coupon promotions.
Visual store advertisements are usually placed near the checkout
counter where the customer must go to ask for, and purchase,
the cigarettes. These displays depict the Marlboro logo and any
current promotional pricing. The in-store promotions include
two-for-one product deals or special pricing for buying more
than one pack of cigarettes at a time. Potential and existing
customers are pulled to the Marlboro brand by Philip Morris USA's
use of mail promotions such as coupons and invitations to enter
into the company's annual sweepstakes.
The coupons offer dollars off the regular prices of cartons
(box of 10 packs) and individual packs of Marlboro brand cigarettes.
They also offer an annual sweepstakes in which smokers over the
age of twenty one compete to win prizes and vacation trips that are
funded by Philip Morris USA. Prizes for these sweepstakes in the
past have included: land in Montana in the value of $300,000, a
trip to the Marlboro ranch, and various large monetary prizes.
Many consumers compete in this competition each year. All Marlboro
promotions are integrated to maintain and gain product loyalty,
thus producing more profit potential for the product.
The future looks bright for the Marlboro brand. The duration of the
mature stage of this product’s life cycle is proof of the strength and
flexibility of the implemented marketing mix.
However, future changes might be necessary in order for the brand
to gain a competitive edge over its main competitors. For example,
Philip Morris USA might need to consider introducing special flavored
or limited edition cigarettes that will directly compete with R.J. Reynolds’
Camel “Special Blend” line. This line includes limited edition flavors like
vanilla, mint, etc. (R.J. Reynolds Tobacco Company, 2008) R.J.
Reynolds produces tobacco products that are priced just under those
of Philip Morris USA’s products, and are ranked just under theirs as well.
Philip Morris USA might need to consider this price difference when they
introduce any new product line. A more aggressive approach toward
offering a more continuous price promotion cycle might also be to
their benefit.
Although there is no such thing as a perfect marketing mix,
Philip Morris USA has worked very hard through the years to make
the marketing mix for their Marlboro brand as productive as possible.
The product, price, placement and promotion of the Marlboro product
items are integrated to promote Marlboro’s reputation of being a
premium tobacco product. All marketing efforts are targeted toward
reaching the primary and secondary target markets of the brand.
This brand has maintained market share despite governmental
regulation and social acceptance changes throughout its one
hundred and six years of selling tobacco products.
One thing that Philip Morris has proved is their willingness to
adjust their marketing approach in order to create a brand that
will endure the test of time. This brand should be viewed as the
perfect example of how to implement a marketing mix that works.