Marlboro world’s leading cigarette brand
Table of content
Contents
Tobacco Industry ........................................................................................................................2
Introduction to Marlboro ...........................................................................................................2
Concept of product and its standing ..........................................................................................3
Advertisements ......................................................................................................................5
Sport Sponsorship ..................................................................................................................7
Consumer Profiling .....................................................................................................................7
Demographics .........................................................................................................................7
Environmental analysis...............................................................................................................8
PESTLE Analysis.......................................................................................................................8
Political factors ...................................................................................................................8
Economic factors ................................................................................................................9
Social factors.................................................................................................................... 10
Environmental factors ..................................................................................................... 11
Legal factors..................................................................................................................... 11
SWOT Analysis ......................................................................................................................... 12
Strengths ............................................................................................................................. 12
Weakness............................................................................................................................. 12
Opportunities ...................................................................................................................... 13
Threats ................................................................................................................................. 13
Tobacco Industry
The industry includes those persons and firms World Health Organization area unit
engaged within the growth, preparation purchasable, shipment, packaging, and
distribution of tobacco and tobacco-related product. it's a worldwide industry; tobacco
will grow in any heat, damp setting, which suggests it may be farmed on all continents
except Antarctic continent.
Tobacco, one in all the foremost wide used addictive substances within the world,
could be a plant native to the Americas and traditionally one in all the foremost
necessary crops fully grown by Yankee farmers. additional specifically, tobacco refers
to any of assorted plants of the Nicotiana (especially N. tabacum) native to tropical
America and wide cultivated for his or her leaves, that area unit dried and processed
in the main for smoking in pipes, cigarettes, and cigars; it's conjointly move kind
mastication tobacco or ground to form snuff or dipping tobacco, in addition as
different fewer common preparations. From 1617 to 1793 tobacco was the foremost
valuable staple export from land Yankee solid ground colonies and also the U.S. till
the Nineteen Sixties, the u. s. grew, factory-made and exported additional tobacco
than the other country.
Since 1964, conclusive medical proof of the deadly effects of tobacco consumption
has diode to a pointy decline in official support for producers and makers of tobacco,
though it contributes to the agricultural, fiscal, producing, and commerce sectors of
the economy. Policy and law limiting tobacco smoking has inflated globally, however
nearly half dozen trillion cigarettes area unit still made annually, representing a rise of
over 12-tone system since the year 2000. Tobacco is commonly heavily taxed to
achieve revenues for governments associate degreed as an incentive for individuals to
not smoke.
Some of the leading companies and their brands in the world are: •
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Philp Morris International Inc. – Marlboro
China National Tobacco Corp. – Yunyan
Japan Tobacco Inc. – Winston
British America Tobacco Plc. – Pall Mall
ITC Ltd – Gold Flake
Introduction to Marlboro
Marlboro is an American brand of cigarettes, currently owned and manufactured by
Philip Morris USA (a branch of Altria) within the United States, and by Philip Morris
International (now separate from Altria) outside the United States. Richmond,
Virginia, is the location of the largest Marlboro cigarette manufacturing plant.
Marlboro is the best-selling cigarette brand in the world since 1972. As of 2017,
Marlboro had 40% market share in the United States, more than the next seven brands
combined.
In 1846, British tobacconist Phillip Morris opened a shop on Bond Street, London,
UK, selling tobacco and rolled cigarettes. After 1873, his brother Leopold and widow
Margaret continued the business, growing it and opening a factory on Great
Marlborough Street, London. The company being called Phillip Morris Companies
Inc. at the time, the owners chose a simple name for the cigarette: Marlboro.
In India, Marlboro is manufactured and distributed under Godfrey Phillips. Godfrey
Phillips India is one of the largest FMCG companies in the country with many iconic
cigarette brands like Four Square, Red & White, and Cavanders to its name. Godfrey
Phillips India has expanded its product portfolio beyond cigarettes and tobacco and
entered India’s highly competitive chewing products, mouth freshener, confectionery
segment and retail.
Philip Morris International organized Marlboro products into three divisions—
Flavour line, which are original red full flavour cigarettes, Gold line are former lights,
and Fresh line comprises flavoured cigarettes. In India the brand is available in the
following variants: Marlboro Red, Marlboro Gold Original, Marlboro Gold Advance,
Marlboro Fuse Beyond, Marlboro Fine touch, Marlboro Clove Mix and the all-new
Marlboro Compact range.
Concept of product and its standing
The main selling point for Marlboro has always been how they targeted different
segments of consumers by understanding the needs and advertising. In 1924,
Marlboro was marketed as “America’s Luxury cigarette” and were mainly sold in
hotels and resorts. Afterwards, around 1930, it was starting to be advertised as a
women's cigarette, based on the slogan "Mild as May". The advertisement was
primarily based on how ladylike the filter cigarette was, in an attempt to appeal to the
mass market. As at that time many brands mainly focused on male population. The
cigarette brands left a lipstick mark on the end part of cigarettes. To this end, the filter
had a printed red band around it to hide lipstick stains, calling it "Beauty Tips to Keep
the Paper from Your Lips".
But this targeting didn’t help the brand with its market share. Shortly before the
World War II, the brand's sales stagnated at less than 1% of tobacco sales in the US
and was briefly withdrawn from the market. After the war, Camel, Lucky Strike, and
Chesterfield were the only common cigarettes.
On 11th January 1964, the US government officially declared that cigarettes cause
cancer which affected the tobacco market. It was considered that filter cigarettes less
harmful than unfiltered cigarettes which gave edge to Marlboro over most other
brands. But Marlboro was still considered as female cigarettes as it was still marketed
to women this made the men concerned about being seen smoking a cigarette
marketed to women. This made Philip Morris reposition Marlboro as men’s cigarettes.
Part of Marlboro's rise in market share was its ability to produce "milder, more
aromatic, sweeter, and less harsh" cigarettes by adding ammonia to the tobacco.
Marlboro has seen many ups and downs from 1900’s to current time
These changes have mainly dependent on the socio-political factors and how it
tackled the problems. The different methods they used to increase their share are
Advertisements
In the 1920’s, advertising was primarily targeted to female smokers as at that time the
cigarette ends were white or had no filters this cause to leave a lipstick mark on the
cigarettes. Marlboro introduced ladylike filters which had a printed red band around
the end to hid the lipstick stains, calling it "Beauty Tips to Keep the Paper from Your
Lips".
In 1950’s when the news of cigarettes causing cancer was released Marlboro
repositioned itself as the cigarettes had a filter which at that time was consider better
than unfiltered cigarettes. They targeted the people like that you should smoke
Marlboro as it is safer for you. A red and white package was designed appeal the male
customers. They started an advertisement campaign in which they used figures like
sea captains, weightlifters, war correspondents, construction workers etc. All these
figures represented a strong male smoking Marlboro cigarette. They also started a
series of cowboy advertisements.
After 1970 when US banned the cigarettes advertisements, when other brands were
finding it difficult to market their product, Marlboro came with a new category of
advertising the product known as lifestyle advertisements. They introduced Marlboro
country denoting smoking the Marlboro cigarettes, you are transfer to a land where
you are free from all the worries and tensions. The advertisement didn’t show
cigarette as a product but as a idea technically it couldn’t be banned this caused the
sales to sky rocket.
Sport Sponsorship
Marlboro has indulged in many sport sponsorships mainly sponsoring Indy car racing,
F1 racing, Superbike racings.
The first sponsorship was in 1972 season of Formula One team BRM. The first win
for a Marlboro-sponsored F1 car was achieved at the 1972 Monaco Grand Prix by
Jean-Pierre Beltoise driving for BRM.
Consumer Profiling
Marlboro has started to target the young audience in the recent times. Shifting their
focus to different flavours of cigarettes. Marlboro identified the similarity between the
young audience worldwide, it identified lifestyle and needs such as independence,
hedonism, freedom, and comfort. And created a worldwide advertisement.
Demographics
The maximum share of consumers was in the age group of 55-64 years. The reason
being the advertisements started in 1970’s. The advertisements were successful in
changing how you see smoking as. In 1970’s, Marlboro also started using ammonia in
the cigarettes this caused the cigarettes to be lot smother than many other brands and
also causing increase of addiction for cigarettes. This ultimately was the reason for the
brand loyalty of consumers.
After 1970, Marlboro became the 4th largest brand from having less than 1% market
share and has been enjoying the leading market share since then. In 2019, Yunyan
brand of China National Tobacco Corp took over Marlboro. Currently Marlboro
enjoys 3.3 market share followed by Winston and liqun.
Environmental analysis
PESTLE Analysis
Political factors
Political stability: High political stability provides stable and friendly business
surroundings with foreseeable market growth trends. However, once there's political
chaos, it deters the investors and harms the stakeholders' trust in economic and
ensuant structure performance. Currently, Marlboro. is gift in numerous countries,
every having own political tensions. Growing tensions and instabilities within the
international political surroundings will have an effect on the Gold trade growth and
limit the expansion opportunities on the market to Marlboro.
Changing policies: Frequent changes in government policies damage business
performance by increasing environmental uncertainty. it's vital for Marlboro. to check
these trends within the country's political situation as changes in government could
alter the government's priorities towards the event of various industries.
Protests/pressure groups and governance system: Marlboro. ought to rigorously
analyse the protests by pressure teams, social/environment activists and employee
unions per se protests play a vital role within the politics method. shut collaboration
with such teams might enhance the Marlboro’s ability to collaborate with community
and deliver the goods long-run company goals. Moreover, a well-developed
governance system with democratic political surroundings makes the business
surroundings easier for international business organizations like Marlboro.
Taxation, trade restrictions and intellectual property protection: Entering in countries
with high taxation level can directly influence the profit of Marlboro. High taxation
affects international trade and prevents exports. Marlboro. will enter in low taxation
markets and have the benefit of high profits which will be endowed in analysis and
development activities. The organization may study the business specific taxation
policies to know the host government's priorities and interest in developing industries.
Similarly, high trade restrictions will create the business setting additional advanced
by touching the exports and harming relationships with foreign trade partners.
Moreover, if the govt of the country into account isn't serious concerning protective
the property rights of business organizations, it'll deter the entrepreneurs from
investment in organizations thanks to high risk of ideas being taken. Hence, Marlboro.
ought to study however property rights are protected within the host country and
create the business methods consequently.
Economic factors
Economic/business cycle stage: The economic development of a rustic directly
influences structure performance. Growing economies supply wide-ranging growth
opportunities to the Marlboro. Similarly, it's necessary to grasp the business lifecycle
stage. getting into in mature industries may be tougher thanks to market saturation
than industries at the expansion stage. Moreover, the business performance of
Marlboro. is additionally influenced by the extent to that the host country government
has spent on core infrastructure development. A well-developed infrastructure
facilitates the business setting and will increase the expansion potential of the gold
business within the various country.
Inflation/employment/interest/exchange rates: The gross domestic product rate can
verify the Marlboro’s ability to pursue its semipermanent growth ways. High gross
domestic product conjointly signals the consumers’ ability to pay additional on
offered product. High state signals the provision of surplus labour at relatively lower
wages. in operation in such a market will lower the assembly price of Marlboro. The
organization ought to conjointly rigorously take into account the rate of interest and
its influence on borrowing ability and angle towards investment. The high rate of
interest can encourage the angle towards investment and increase growth
opportunities for Marlboro. Finally, the rate of exchange fluctuation may influence the
gain and international trade. The high fluctuation on native currency is a reason for
serious concern for Marlboro.
Labour market conditions: The demand and provide of labour confirm the wage rates
and provide of consummate personnel. Marlboro. should study and predict the labour
market conditions to grasp however it will attract proficient employees and leverage
their skills to boost business performance. once labour markets area unit versatile,
Marlboro. will cash in of upper labour productivity. Whereas, operational in rigid
labour markets could cause labour wage and alternative problems raised by powerful
labour unions. Marlboro. ought to conjointly rigorously analyse the supply of
consummate human capital as a shortage of consummate labour will have an effect on
business potency and create talent attraction and retention more difficult.
Economic structure: The business practices of the Marlboro. are influenced by the
prevailing economic structure. The economic and regulative atmosphere in a very
non-competitive or oligopolistic structure are going to be completely different from
the non-competitive competition and ideal competition.
Social factors
Demographic trends: Changes in demographic patterns like aging population,
migration trends and socio-economic variables have preponderant importance for
international business organizations like Marlboro. learning the demographic
characteristics will facilitate Marlboro. in selecting the proper market
segment/segments with high growth potential. The business and promoting methods
also are influenced by migration. it's vital for Marlboro. to know the people’s general
angle towards migration because it will influence firms’ ability to bring international
managers to host country.
Equality and power distance: The power distance inside any society shows the
acceptance of hierarchy and financial gain difference. Marlboro. should alter its
business management practices whereas coming into in markets with high or low
power distance. The growing difference in several countries is sterilisation the facility
structure, that has serious implications for international business organizations like
Marlboro.
Gender Roles: Marlboro. ought to study the historically appointed gender roles to
align its selling and communication practices consequently. selling and human
resource ways in a very ancient, patriarchal society with clearly distinguished gender
roles are completely different from societies with low gender stereotypes.
Societal norms and class distribution: Culture is taken into account a very important
variable by international promoting managers. every society has distinctive norms and
values that play a very important role in shaping shopper behaviour. Marlboro. ought
to develop native groups and develop native partnerships for understanding the social
group attitudes and norms to tailor promoting methods consistent with distinctive
cultural context. The observation of people stratification is additionally necessary for
Marlboro. giving luxury merchandise at premium costs to a market wherever the highend market is significantly little in range would require Marlboro. to adopt the niche
promoting methods. Similarly, market segmentation supported people is also
ineffective wherever people stratification is low.
Online shopping: The advent of social media and e-commerce has inspired on-line
searching behaviour among customers. Marlboro. has to perceive {the on-line the web
the net} searching behaviour by considering the people variations as younger
shoppers square measure a lot of inclined to buy online than older customers. The
growing use of mobile phones and social networking sites should be thought-about
once developing promoting and communication methods.
Environmental factors
Recycling and waste management: The growing environmental pollution let alone
technological advancement has compelled business organizations to adopt innovative
use and waste management practices. In some countries, use has nearly become a
business norm. Moreover, adopting economical waste management practices in
structure units that are placed in or close to urban areas is very crucial for Marlboro.
several countries have placed strict norms to safeguard their urban areas through
effective waste management.
Weather and climatic conditions: Changes in weather and weather conditions will
influence business potency. for example, extreme atmospheric condition will increase
the price of operations and compel the Marlboro. to create the worth chain additional
versatile. Such changes may influence the consumers' payment patterns, inflicting the
organization to revise its product and selling methods.
Attitude towards eco-friendly products: There is a growing trend towards the
employment of green/eco-friendly product. Marlboro. will take it as a chance and
adopt inexperienced business practices to win the trust of stakeholders. restrictive
bodies’ stress on guaranteeing compliance with environmental norms is neutering the
merchandise innovation priorities. It needs Marlboro. to prioritise and target selling
the eco-friendly nature of their product over customary worth propositions.
Environmental regulations to avoid resource depletion: Excessive resource depletion
by Marlboro. will draw the negative response from media, setting protection teams,
customers and therefore the general public. Marlboro. should study the precise
environmental laws of the country into account to grasp those resources (like water,
electricity etc.) square measure thought of rare or that species square measure
vulnerable whose excessive consumption will cause hassle for the organization.
Legal factors
Employee protection laws (discrimination and health and safety): Marlboro. should
follow the employee/labour health and safety laws as some countries have strict laws
to confirm labour safety. Providing a secure work setting for the force is that the
moral and obligation of Marlboro. Similarly, anti-discrimination laws (like equal
employment opportunity) additionally have to be compelled to be rigorously studied
once developing human resource practices as discriminatory suits against leader hurt
the structure image and have an effect on organizations’ ability to draw in and retain
the talent.
Consumer protection laws: The data protection has become a very important issue
thanks to consumers’ privacy and security considerations. Marlboro. ought to study
information protection laws to safeguard the client information. Moreover, there
square measure laws to line the most worth, guarantee a precise quality normal and
defend shoppers from dishonest promoting claims. Marlboro. should contemplate
these factors to confirm compliance with client protection laws.
Intellectual property laws: Intellectual property laws area unit designed to shield the
companies' patents and valuable ideas. Inability to shield property rights may result in
losing competitive advantage, which can weaken the positioning of Marlboro. against
alternative market players
SWOT Analysis
Strengths
Brand Value: Marlboro incorporates a walloping complete valuation at twenty one.9
billion bucks. because of this complete valuation, it's stratified twenty sixth within the
world’s prime one hundred brands list. It commands a healthy market share within the
U.S.A. In U.S.A. itself, its market share is a quarter mile of the overall smoke market
(2015 figures). in an exceedingly single year, quite 420 billion cigarettes of Marlboro
square measure sold worldwide.
Increasing international Value: wherever different brands may be facing issues across
the world because of economic problems, Marlboro has been rising steady. The graph
shows a gradual increase within the international complete worth of Marlboro from
2010 to 2016. it's reached the worth of $84.14 billion in 2016.
The barrier to new entrants: The high complete recall of Marlboro and the sales
worldwide suggests that most folks like Marlboro as their selection of a smoke
complete. this provides them the advantage to fancy and command high market share
thereby making a barrier to new entrants and cutting the competition.
Domestic Market: Marlboro cigarettes square measure factory-made within the
U.S.A. They even have a fastness of around a quarter mile market share within the
U.S.A. this provides them a healthy lead within the competition. This provides them
with a fastness within the market and commands client loyalty.
Strong promoting – Marlboro is understood for its promoting communications. at the
start it targeted primarily girls however slowly it expanded to men and soon
conquered the entire market. The Marlboro man, along with his robust chiselled
appearance and also the flavour focus is known across the planet.
Association with sports – a wise plan of action by Marlboro was that it absolutely was
associated at length with premium sports like Formula one athletics wherever the
entire covering of the Ferrari team was done by Marlboro. Similarly, it absolutely was
conjointly a robust participant in different athletics series like Nascar and bike
athletics.
Weakness
Growth Rate: the expansion rate of cigarettes as a product has been reducing year-onyear. the govt. has taken steps like steep tax will increase on fags and efforts to curb
sales of tobacco merchandise by creating larger pictorial warnings necessary on
cigarette packs. The government’s aim is to cut back tobacco use by two hundredth by
2020 and half-hour by 2025.According to the Euromonitor study, fag sales in India
narrowed at a compound annual rate of growth of two.2% in terms of retail volume
between 2010 and 2015.
Competitive Market: This trade already has too several well-established players. All
of them are endowed into creating their market share grow. the highest ten brands
during this trade are Marlboro, Davidoff, Parliament, Dunhill, Lucky Strike, Camel,
Pall Mall, Benson & Hedges, badge and Gold flake.
Future Costs: because it clearly seen within the costs of cigarettes increasing thanks to
increase in taxes and imposing rules thereon. this will inflate the costs of cigarettes
within the country and thereby may result in losses for the highest brands.
Opportunities
Global Markets: Marlboro will look at new markets or rising markets for growth and
increase in profits. Naturally, with its complete pull, the name of Marlboro is enough
to tug individuals towards this coffin nail complete.
New Products: they will return up with totally different flavours and target new client
base. they will conjointly invest in R&D and are available up with safer and additional
innovative merchandise. this might undoubtedly take up the revenues.
New Acquisitions: Marlboro is that the biggest player during this business thus it's a
considerable quantity of money flow and reserves as profits. they will purchase the
competition to manoeuvre towards because the strongest complete everywhere the
planet.
Threats
Growing Competition: High competition will produce a negative facet for the
premium whole like Marlboro. This would possibly result in less revenue and thereby
lower profits.
Government Rules and Regulations: With GST in image stricter laws and laws for
cigarettes and tobacco merchandise will build them even costlier. this will have a
negative impact on revenues and profits of Marlboro.
External Business Risks: there's a high quantity of risk concerned in such business
from the foreign also as domestic agents. Increasing health consciousness of the
general public will decrease the market share of roll of tobacco within the country. the
rise in merchandise like plant toxin patch and different addiction remover have
become very well-liked recently.
Future plans on improvement
Philip Morris international is planning to stop selling cigarettes in United Kingdom
within the next decade. They plan to sell smoke-free products in 2025
Philip Morris International is not abandoning products geared toward smokers entirely
despite its pledge. It's focusing more on developing tobacco heating systems, such as
electronic cigarettes that still create a nicotine-containing tobacco vapor.
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