Marlboro

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.

With a view to improving the brand’s image, Philip Morris Inc. (Philip Morris) (Altria was then known as Philip Morris Inc.) hired the advertising agency, Leo Burnett Company to promote the brand Marlboro. Initially, the ad agency introduced the ‘tattooed man’ campaign which helped in repositioning Marlboro as a product targeted at men.

During the 1960s, the ads began featuring cowboys, popularly known as ‘the Marlboro man’. These ads went on to become a huge success in the US. By the end of 1960s, Marlboro became one of top selling brands in the US cigarette market. In 1970, Marlboro was ranked third among the top selling brands in the US with sales of $ 51.37 billion.

During the 1970s, the ‘Marlboro Country’ campaign was introduced. It helped strengthen the brand’s image in the US. In 1972, Philip Morris brought out Marlboro Lights in addition to the regular Marlboro. Over the years, the company offered various line extensions of Marlboro.

By 1979, Marlboro became the top selling brand in the US. Marlboro’s sales in the year 1979 accounted for $ 103.6 billion. Marlboro continued its successful innings through out the 1980s. In 1991 and 1992, Marlboro was ranked as the most ‘valuable brand’ in the world consecutively for two years by Financial World . At this time, the ad campaign featuring the Marlboro man was considered as one of the most successful ad campaigns in the history of the US.

In 1998, the US government implemented the Master Settlement Agreement which imposed severe restrictions on the advertising and promotion of tobacco products in the US. This meant that Philip Morris could not freely advertise for its products as before. In spite of these restrictions, Marlboro continued to be a leading brand in the US market.

A funny thing happened to Marlboro cigarettes when the government said it could no longer use mass media to market its products — its ad spending went down and its profits went up, as reported by Nanette Byrnes in Business Week (10/31/05). “Philip Morris does not disclose how much it spends promoting the brand, but the company says it has been spending less on marketing in general each year.” And yet marlboro cigarettes success appears to be its “growing database of 26 million smokers to whom it sends everything from birthday coupons to the chance to attend events,” such as rock concerts starring the likes of Lenny Kravitz and John Mellencamp. What Marlboro has built is not so much a brand as it is “an exclusive club for its devotees, who wouldn’t miss an opportunity for a discount and often feel victimized by social pressure and no-smoking laws.” marlboro is able to lavish attention on its fan base — up to and including “special trips to a ranch it owns in Montana, where vacationers are showered with gifts, eat five-course meals, drink for free and enjoy massages, snowmobiling, horseback riding and the like, all on the company tab.” Not only does this cost Marlboro a heck of a lot less than mass media advertising, it also builds a kind of loyalty that television, radio and print just can’t buy. "I’d never smoke another brand of cigarette," says Michael Thompson, 30, who smokes a pack a day. Oh, the irony: "… By forcing Marlboro to go viral, be aggressive in retail stores, and be more creative in its media plan," anti-smoking advocates "put the company on a successful path now being followed by every marketer from General Motors and Audi to AXE deodorant." Except that Marlboro is better at it than they are. According to Merrill Lynch analyst Christine Farkas, Marlboro’s operating profits will "reach 28 percent next year, from 26 percent in 2004, as net income grows to an estimated $11.4 billion on $66.3 billion in sales in the U.S. and abroad. That’s twice the current operating margin of well-run companies like General Electric and Exxon-Mobil and also well beyond Procter & Gamble’s 19 percent margin this year " (*cough, cough*).

A funny thing happened to Marlboro cigarettes when the government said it could no longer use mass media to market its products — its ad spending went down and its profits went up, as reported by Nanette Byrnes in Business Week (10/31/05). “Philip Morris does not disclose how much it spends promoting the brand, but the company says it has been spending less on marketing in general each year.” And yet Marlboro, “now owns more than 40 percent of the market, up more than 2.5 percentage points in as many years,” and its profits are “possibly more than $200 million a year.” The heart and lungs of marlboro success appears to be its “growing database of 26 million smokers to whom it sends everything from birthday coupons to the chance to attend events,” such as rock concerts starring the likes of Lenny Kravitz and John Mellencamp. What marlboro cigarettes has built is not so much a brand as it is “an exclusive club for its devotees, who wouldn’t miss an opportunity for a discount and often feel victimized by social pressure and no-smoking laws.” is able to lavish attention on its fan base — up to and including “special trips to a ranch it owns in Montana, where vacationers are showered with gifts, eat five-course meals, drink for free and enjoy massages, snowmobiling, horseback riding and the like, all on the company tab.” Not only does this cost Marlboro a heck of a lot less than mass media advertising, it also builds a kind of loyalty that television, radio and print just can’t buy. "I’d never smoke another brand of cigarette," says Michael Thompson, 30, who smokes a pack a day. Oh, the irony: "… By forcing Marlboro to go viral, be aggressive in retail stores, and be more creative in its media plan," anti-smoking advocates "put the company on a successful path now being followed by every marketer from General Motors and Audi to AXE deodorant." Except that Marlboro is better at it than they are. According to Merrill Lynch analyst Christine Farkas, Marlboro’s operating profits will "reach 28 percent next year, from 26 percent in 2004, as net income grows to an estimated $11.4 billion on $66.3 billion in sales in the U.S. and abroad. That’s twice the current operating margin of well-run companies like General Electric and Exxon-Mobil and also well beyond Procter & Gamble’s 19 percent margin this year " (*cough, cough*).

Somewhere, there exists an America inhabited solely by characters from product advertising campaigns. Imagine Mr. Clean taking up residence in our country’s kitchens, resting his bald pate in the broom closet and renting out cabinet space to the Jolly Green Giant, who rumbles off to tend the farmlands with the dawn. In such a landscape, a single character would surely dominate the American West. The California Raisins might occupy the Hollywood hills, but from the Rocky Mountains to the Mississippi, no one could lasso customers like the marlboro Man. While he may not be one of the most beloved characters, the Marlboro Man — shady past and all — was a fixture of our culture for decades. When it came to selling cigarettes, the cowboy got the job done. For Morning Edition, NPR’s Kathleen Schalch reports on the origins of the icon that helped to transform from the lowliest of brands in Philip Morris’ stable of cigarettes into the company’s prize money winner. In the 1920s, Marlboro was first advertised as a premium cigarette for women, a milder version of the smokes well dressed men might puff on after dinner. But the brand never took hold, and by the 1950s concerns over the connection between smoking and cancer drove many smokers to filtered brands. Philip Morris didn’t have a filtered cigarette, so it scrapped the old campaign in favor of re-launching marlboro as the company’s filtered alternative. After deciding to introduce filters to the brand, Marlboro executives still had the brand’s feminine image to deal with. As Schalch reports, it didn’t help that filtered cigarettes were considered softer versions of the real thing, cigarettes for sissies. For help, Marlboro turned to Leo Burnett’s advertising company. In a 1972 documentary, Burnett recalled the brainstorming session in which they stumbled upon their icon. "I said, ‘What’s the most masculine symbol you can think of?’ And right off the top of his head one of these writers spoke up and said a cowboy. And I said, ‘That’s for sure.’"

The first marlboro men weren’t limited to cowboys. They were all sorts of rugged individuals who smoked their cigarettes while performing equally manly tasks, from fixing their cars to fishing or hunting. The rather abrupt advertising about-face sparked a similar turn in sales. By 1957, Marlboro’s sales were skyrocketing. Unfortunately for Philip Morris, however, 1957 also brought with it one of the first rounds of negative publicity. A study published in Reader’s Digest linked smoking with cancer. In response, Marlboro once again turned to show its softer side. But this time it made sure to do so in a way that might retain the masculine appeal the company had worked so hard to cultivate, while calming the nerves of anxious smokers. Instead of focusing on the mysterious tattooed Man, it turned the camera to sultry singer Julie London, who would share a smoke with her lucky male companion in between verses of the dreamy new "Settle Back With a Marlboro" theme. These commercials, paired with print ads that showed apparently wealthy men relaxing for a smoke, lasted for a while. But as American politics became more complicated in the 1960s, Jack Landry, the Marlboro brand manager at Philip Morris, saw an opening into which the cowboy fit like a glove. "In a world that was becoming increasingly complex and frustrating for the ordinary man," Landry explained, "the cowboy represented an antithesis — a man whose environment was simplistic and relatively pressure free. He was his own man in a world he owned."

television advertisements in the ’60s reflected the idea of freedom in wide-open spaces, especially once the theme from the movie The Magnificent Seven was added to the scenes of cowboys leading their herds through dusty canyons of "Marlboro Country" or charging off to rein in a stray colt. Part of the success of the campaign might be attributable to the fact that Marlboro cigarettes forged some credibility by using real cowboys in some of the ads instead of actors just playing the part. The image took hold with enough force that even through a ban on televised tobacco advertisements that began in 1971, the Marlboro Man survived unharmed. Instead of riding off into the sunset, the image turned up in print ads and on billboards all over the country. While a government ban couldn’t kill the Marlboro Man, the instrument that ended up doing the trick was the product itself. Two Marlboro men, Wayne McLaren and David McLean, died of lung cancer, but not before McLaren could testify in favor of anti-smoking legislation.