marlboros global brand strategy
DESCRIPTION
The purpose of this presentation is to provide a deeper understanding of Philip Morris‘ strategic efforts behind building Marlboro into a successful global brand. Key strategic decisions from the past as well as characteristics of the current global brand strategy are highlighted in this context.TRANSCRIPT
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Marlboro
INTERNATIONAL MARKETING
MarlboroGlobal Marketing Strategy
Surgeon General‘s Warning: Smoking kills.
20 CLASS A CIGARETTES
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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.
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AGENDA 1. Introduction2. Short Brand History3. Marlboro Goes Global4. Current Brand Strategy5. Global Marketing Mix5. Global Marketing Mix
ProductPromotionPricePlace
6. Conclusions
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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
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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
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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
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SHORT BRAND HISTORY
Marlboro in the 1920s and 1950s
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SHORT BRAND HISTORY
Marlboro after the 1950s
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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.
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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
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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
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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“
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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
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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
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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
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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
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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
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NEW BRAND ARCHITECTURE
Flavor Line
Gold Line
Fresh Line
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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
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� 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
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� “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
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� 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)
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� 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
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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
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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
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