Communication Audit for Philip Morris Marlboro - Report Example

Communication Audit Report - Philip Morris Marlboro Overview of Company Philip Morris Marlboro or Philips Morris International Inc. (PMI) is regarded as one of the world’s leading tobacco company, with operations in around 200 countries. Originally started in 1847 as a single shop on Bond Street in London, UK, selling tobacco products as well as ready-made cigarettes by Philip Morris, it has evolved into the world’s best selling cigarette company. Although, started as a British company, it crossed into US in 1919, when the original Philip Morris & Company was acquired by the American Shareholders and was incorporated in Virginia under the Philip Morris & Co., Ltd, Inc. (“Our History”, n. d). Then in early 1920s, it started launching many branded cigarettes, with one among them being Marlboro in 1924, which became Philip Morris’ most famous brand. Marlboro is the key brand which elevated the company’s sales, and helped it to expand operations worldwide. Originally launched as a cigarette brand for the women, by 1950s Philip Morris repositioned Marlboro as a men’s cigarette brand by coming up with an effective communication strategy. As Philip Morris expanded its operations throughout the world and at the same time got caught in various controversies necessitating a brand makeover, it organizationally restructured itself and renamed as Altria in 2003. (Myers, 2003). Altria is the parent company of Philip Morris USA, Philip Morris Capital Corporation, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Chateau Ste. Michelle Wine Estates and for some time Philip Morris International (PMI). Some time in the sense, PMI came out of Altria’s control in 2008 and has been functioning as an independent company since then. Although, headquartered in New York, United States, it does not sell its products in US, and instead cater throughout the world, with its sister company of Philip Morris USA focusing on the US market. Thus, the main flagship product of Marlboro is sold in US by Philip Morris USA, with PMI selling it around the world. The main target customer segment of PMI Marlboro is adult smokers throughout the world. Although, young smokers are not directly targeted by PMI Marlboro, they are also form the secondary customer base. After the organizational structure, PMI is run by an independent Board of Directors, with Harold Brown being the Director of the Philip Morris International Global Management Team and André Calantzopoulos being the Chief Executive Officer. Apart from these main men, PMI has separate regional heads for Europe, Asia, Latin America and Africa. As far as PMI Marlboro’s financial information is concerned, PMI Marlboro is going on the steady path. It has reported net revenues, excluding excise taxes, of $31.2 billion, which reflected constant currency growth of 1.9% versus 2012. (“Annual Report”, 2013). 2. Data Collection and Organization Marlboro as part of Philip Morris as well as PMI has been coming with varied communication strategies since its launch in early 1920s. These communication strategies has been evolving based on the situation and issues that prevailed or prevailing in its external as well as internal environment. More than the issues in the internal environment Marlboro was and still being maximally impacted by the issues in the external environment, leading to implementation of varied and at the same time strong communication strategies, which have resulted/resulting in mixed outcomes. Even the initial communication strategy of repositioning Marlboro as a men’s cigarette after originally launching it has a women’s cigarette was due to the negative health findings by research studies. When certain studies linked cigarette smoking to increased risk of lung cancer, Marlboro incorporated filter aspect in its cigarettes. Then, with the men showing interest in smoking these filter cigarettes, Marlboro repositioned itself and started focusing on the men by coming up reoriented communication strategy. In that direction, Philip Morris Marlboro sought the help of Chicago-based Leo Burnett agency, whose advertisers dropped Marlboros price point and women focused “Mild as May” slogan, and “staged a new campaign featuring icons of male autonomy: sun-cured men repairing cars, cleaning guns, cupping a flame in tattooed hands, or squinting into the distance over whirls of smoke.” (Yager, 2013). This communication strategy had a positive outcome, when one focuses on the sales figures. According to Yager (2013), the sales of Marlboro brand of cigarettes increased by 3,241 percent in 1955, the year the new ads rolled out. In the 1960s also, the same communication strategy of featuring masculine models and stereotypes was continued with effective outcomes. However, with the US Congress passing the Public Health Cigarette Smoking Act in 1970, all the tobacco companies including Philip Morris Marlboro were barred from featuring their ads in broadcast media. To overcome this ban, Marlboro adopted an alternative communication strategy of coming up with advertisements on billboards and other outdoor spaces. Under the slogan or tagline of “the” Marlboro Man, the company came up with striking and strategically positioned billboards, utilizing male models to portray rugged-looking cowboys smoking Marlboro cigarettes. Along with billboards, Philip Morris developed more-direct methods based communication strategy. “In the early 1970s, a Marlboro chuck wagon toured the state fair circuit, serving up sourdough biscuits and publicity.” (Yager, 2013). However, billboard based communication strategy also got impeded in US, when Master Settlement Agreement in the late 1990s as well as FDA’s strong role barred Marlboro and other companies from putting billboards, print ads as well as commercial spots. In addition, sponsorship of sporting and entertainment events by tobacco companies was also barred by US and other European countries. On the other hand, PMI continued to use this strategy in its international operations, as many European countries and other developing countries did not bar this key communication strategy. “Using billboards, print ads and commercial spots in countries throughout Europe and the developing world, the “Be Marlboro” campaign features an assortment of good-looking millennials engaged in an array of pleasurable pursuits -- from stage-diving at rock concerts to making out behind a brick wall.” (Zara, 2014). Although, Marlboro in European and developing countries followed the billboard based communication strategy, in US, Philip Morris USA shifted to more of “relationship marketing”. Under this communication strategy, Marlboro focused more on communicating directly with the target customers. “Where traditional marketing emphasized individual sales, this new model traded in human economics: investments in individual customers, through direct communication and rewards, could pay off in long-term loyalty and word-of-mouth promotion.” (Yager, 2013). At the same time, Marlboro continued to face opposition from various quarters due to its ill-effects on the smokers’ as well as others’ health, with many people filing and winning legal suits against it. After seriously considering and then rejecting the option to leave the tobacco business in the early 1990s, Marlboro under Philip Morris decided to engage the public including its prospective customers in an effective plus deliberate strategy of corporate as well as brand image enhancement. (Chapman, 2004). As part of this reoriented communication strategy, Marlboro came up with an image building campaign called ‘PM 21’ including ads to aggressively address and change the negative stereotypes among the public regarding the company, particularly regarding its harmful product of cigarette and how it is targets young people. The first ad campaign under this strategy came with the tagline of “Working to make a difference: the people of Philip Morris,” in 1999, and its intention is to humanize Marlboro by portraying it and the Philip Morris company as good players, who care for its customers, especially young people. “In the ads, Philip Morris was depicted as helping prevent the sale of cigarettes to minors, as well as providing charitable contributions to a number of community based organisations.” (Szczypka et al., 2007). Then, in June 2003, Philip Morris as well as Marlboro came up with number of ads, featuring the tagline, “www.philipmorrisusa.com”, “which directed viewers to the companys website for information on the health effects of smoking, quitting and ways to prevent youth smoking.” (Szczypka et al., 2007). These communication strategies had a positive outcome in the matter of public opinion regarding Marlboro. In a 2003 survey, “41% of the public thought that Philip Morris USA behave in a somewhat or much more responsible manner compared with other tobacco companies—up from 33% in February 2002.” (Szczypka et al., 2007). 3. Identify possible levels of practice When one focuses on the communication strategies carried out by Philip Morris Marlboro, it can be stated that it comes under the level 3 of Institutionalized, as the company qualitatively determined the “best” way to approach when it faces impediments from government based factors from its external environment. From 1950s, Marlboro has been facing obstacles due to the harmful nature of its products, and so it has incorporated a counter strategy of coming up with alternate communication strategies and brand enhancement strategies, as part of its routine or “organizational fabric”. That is, as discussed above, when restrictions were placed on Marlboro from carrying out traditional communication strategies, it adopted alternative strategies like relationship marketing and institutionalized it as part of its organizational functioning. On the same lines, when its brand image got deteriorated due to number of controversies and legal suits regarding its health impacts, Marlboro adopted brand enhancement strategy. (Hafez & Ling, 2005). As Marlboro cannot follow traditional strategies to correct the above situation, by following the strategy of accommodation, it came up with brand enhancement options. When some serious health issues surrounding smoking were revealed in the 1990 the Philip Morris group developed a strategy known as “Accommodation” in order to deflect people’s attention away from the health risks and to project a positive or even a neutral image of it. (Morton, n. d). 4. Assess Current Performance and Capacity From the above analysis, it can be assumed that although Marlboro has faced and is still facing challenging issues due to factors in its external environment, it is able to manage those issues by having a strong and importantly adaptable communication strategy. At the outset itself, Marlboro was launched as a cigarette brand for the women, but it repositioned itself and importantly came up with a strong communication strategy to appeal to a more prospective customer segment of men. Then, when restrictions were placed on it from using broadcast media for its communication strategies, Marlboro was able to adapt and utilized other advertising mediums like billboard. However, when those mediums were also removed from their control by government bodies, Marlboro evolved and adopted customer centric communication strategies like relationship marketing. (Drope & Drope, 2004). In addition, with more communication options like sponsoring of events, proxy advertisements, etc., are also being impeded, Marlboro have to evolve further and utilize more of the above mentioned relationship marketing. Then, importantly, when Marlboro faced criticism and negative brand image, it came up with a strong brand enhancement communication strategies, in order elevate its brand image or give a positive twist to its image. This strategy of coming up with positive spin-off is being carried out by Marlboro even now, particularly in its websites, as it provides information against smoking, its ill-effects, etc. “The PMI organisation have recently initiated a campaign to increase the awareness of health risks with smoking, their website is littered with references with measures to prevent smoking and to what extent they are going to prevent young people from smoking.” (Morton, n. d). 5. Identify areas of improvement, recommendations and conclusion The above analysis provided key inputs regarding how Marlboro has to continually come up with communication strategies, which provides a positive spin-off to its products and thereby enhance its brand image. As discussed above, with Marlboro manufacturing and selling products, which are harmful to its customers or users, they need to come up with balanced communication strategies, which directly as well as indirectly imply to its customers that although using its products could be harmful, it is also a cool thing to do. With cigarette smoking not being illegal in US and many other countries, Marlboro should continue to market or communicate about its product in a responsible way, so when the target customer of adults decide to smoke, Marlboro has to be the brand they have to choose. They can do that by expressing the negative impacts of smoking in its website, even while conducting adventure filled events with Marlboro pushed to the background. That is, Philip Morris or Altria or PMI has to conduct adventure filled events, without featuring Marlboro as the sponsor, but associating it subtly during the course of the events. This hands-off and abstract communication strategy approach can provide optimal results as it targets Marlboro’s customer base, within the precincts of the laws and regulations. References “Annual Report.” (2013). Philip Morris International. Retrieved from: http://investors.pmi.com/phoenix.zhtml?c=146476&p=irol-reportsannual Chapman, S. (2004). Advocacy in Action: Extreme Makeover Interrupt Us: Denormalizing Tobacco industry Corporate Schmoozing. Tobacco Control, 13, 445–447. Drope, J & Drope, J. (2004). The Development of Position on Environmental Tobacco Smoke for its Website. Retrieved from: http://www.who.int/tobacco/surveillance/ti_monitoring/ets_pm_.pdf Hafez, N., & Ling, P. (2005). How Philip Morris built Marlboro into a Global Brand for Young Adults: Implications for International Tobacco Control. Tobacco Control, 14, 262-271. Morton, T. (n. d.). Ethical and sustainable marketing strategies. Retrieved from: http://mahara.solent.ac.uk/artefact/file/download.php?file=3286&view=814 Myers, M. (2003). Philip Morris Changes its Name, but not its Harmful Practices. Tobacco Control, 11, 169–170. “Our History.” (n. d). Philip Morris International. Retrieved from: http://www.pmi.com/eng/about_us/pages/our_history.aspx Szczypka, G., Wakefield, M. A., Emery, S., Terry-McElrath, Y. M. & Chaloupka, F. J.(2007). Working to make an Image: An Analysis of Three Philip Morris Corporate Image Media Campaigns. Tobacco Control, 16(5), 344-350. Yager, S. (2013, Mar 15). Welcome to Marlboro Country: Philip Morris Stakes a Last Claim in the West. Retrieved from: http://www.theatlantic.com/national/archive/2013/03/welcome- to-marlboro-country-philip-morris-stakes-a-last-claim-in-the-west/274056/ Zara, C. (2014, Mar 20). Philip Morris International (PM) Wants Millennial Smokers, But Health Advocates Say Marlboro Ads Target Teenagers. Retrieved from: http://www.ibtimes.com/philip-morris-international-pm-wants-millennial-smokers-health-advocates-say-marlboro-ads-target Read More