Marlboro Marketing Strategy - Case Study Example

Marlboro Marketing Strategy Marlboro Marketing Strategy Introduction             A marketing strategy is the entire framework a company adopts in order to effectively and efficiently makes sales of its products. It consists of numerous interrelated parts that works together to attain marketing demands. When developing a marketing strategy, a company must observe various situations prevailing in the industry. Some of the marketing elements that are imperative to this formulation include conducting research, market segmentation, target marketing, product differentiation, branding, packaging and pricing. The main intent for conducting strategic marketing to enhance sales, hence, maximizing profit and revenue in general. It is a sure way of attaining competitive advantage. Many companies adopt the concept of four P’s when laying down marketing strategies: product, pricing, place and promotion (Bedbury, 2001). Situation analysis before initiating the strategy is indispensable when constructing the structure of the strategy in order to understand industry demands, and appropriate steps to undertake in the process. Marlboro is one of the products of Philip Morris USA that have attained global success through utilization of effective marketing strategies (Levinson & Levinson, 2007). Target Marketing A company must identify its target market before developing a secure marketing strategy. The strategy should conform to the characteristics and needs of the current market, which should be defined and not extensively diversified. Philip Morris came up with a perfect strategy for his product, Marlboro. Marlboro is the world’s most selling cigarette, produced by Philip Morris in the United States and Philip Morris International for the companies that manufacture the product outside the United States of America. Cigarettes are a product whose sales are strongly determined by lifestyle. The cowboy image the product adopted immensely influenced its target market. The primary target market, as depicted by the ‘cowboy’ image Marlboro acquired suggested that its primary target market is comprised of, but not limited to young adult men. In other words, the product was intended for adults who ever cared to smoke. However, males were targeted by the brand than females. The product did well in the United States, which is the most treasured target market in terms of geography. Since the brand adopted the Global Marketing Mix, it has expanded its geographical target market to many nations including England, Australia, France, Canada and even to Asian markets (Levinson & Levinson, 2007). Another aspect Marlboro utilized in the strategic marketing of the product was studying the psychographic or behavioral trends of the industry to build a name for the brand. the brand targeted youths and other young men who had developed some characteristic lifestyle image. In the global marketing of tobacco, lifestyle values play a central and significant role. People want to associate their usage of the product with attributes of some group of people. For instance, the cowboy were considered as individuals who exhibited some awesome survival skills and lived a brave life. Giving the product the cowboy image, therefore, insinuates that Marlboro intended to instill into the minds of young adults that using the product would make the project such qualities. This strategy obviously worked and young men joined into the use of tobacco. The product was marketed under the four P’s model of Global Marketing Mix. Product Characteristics of the Product Marlboro is a cigarette product. Cigarettes products are addictive and do not require much of advertisement. However, given the many competitors in the industry, proper marketing is significant to ensure that Marlboro maintains its competitive advantage (Bedbury, 2001). This would also protect the company against new entrants and enhance growth of the customer base. Marlboro began its sales in the U.S but is today produced in 56 countries, and sales made in 180 countries worldwide (Great Speculations, 2011). The product has developed. It has been repositioned as a male cigarette and its designed has changed. It has today made of high quality filter and it has decreased its size though it is rich in flavor. Branding and Packaging The Marlboro’s design is one of the key reasons behind its excellence in the global market. it has a red and white package. The packaging upgrades entail a slide pack and a red filter, which gives it a sophisticated and appealing design. It introduces menthol products with fresh, crisp and ice mint attributes, mainly produced for the Asian market. it also have clover and kretek cigarettes.   Competitive Advantage Product - Product The cigarette industry is a very competitive comprising of many companies in the race to financial superiority. Marlboro, however, has attained competitive advantage over other companies in the industry. It controls the greatest share in the market. the company boasts high capital returns, which has funded its market operations. Besides, it is international and has superior market positions in the nations it operates. The market superiority Marlboro enjoys emanates from the fact that it has majored in product quality. It produces products of various flavors that suits the different tastes and preferences of its target market (Proctor, 2012). This product differentiation enables it to maximize sales within the target market. Market segmentation includes European, African, American and Asian markets. Customers from these regions differ in tastes and preferences, but are catered for by the different flavors it offers. The packaging of products has also helped attain competitive advantage. The products are good-looking in a manner that insinuates high quality. Sizing is another tool that the company has applied to gain customers. Cigarette consumers tend to prefer small sized cigarettes to bulky ones. Marlboro resized its products to these favorable sizes to meet customer demands. In the packet, health concerns are addressed, which help in the development of customer trust. Marlboro today enjoys 42.6% market share in the entire U.S tobacco industry. Marlboro also produces electronic smokeless varieties of the product, which many people find convenient (Proctor, 2012). Due to its successes, the company, Philip Morris U.S.A can support the company to strengthen its competitive advantage further. The company has had challenges in the past but with proper strategic marketing, it has been able to restore and retain its glory. Marlboro is currently consumed worldwide, which gives it competitive advantage over local companies due to extensive experience and advantages associated with exposure to the global market. Placement One of the marketing mix concepts companies utilize to make sales and attain competitive advantage is placement. Products need to be distributed to the areas of consumption; where consumption is bound to take place. It is highly adaptive to local conditions. It has differently prohibited access to distribution channels across all the markets. Some of the distribution channels Marlboro utilizes include convenient stores, supermarkets, discount stores and supermarkets. Marlboro has sufficient infrastructure for logistics that include vessels for transportation and storage stores where the goods are kept as they await allocation. It has also established strong relationship with the retailers. Marlboro has attractive physical facilities in its locations of production, which project the quality of the product. It has specific distribution spots where the management stores and handles the products before they are delivered to specific retailers. Their instruments for logistics, including vehicles, are attractive and add to the glory of the brand name. Competitive Advantage - Place The sufficient availability of logistics, storage and sales facilities enhances Marlboro’s competitive advantage. Through effective distribution and handling of the products across all the countries of its operations ensures that the company makes utmost sales. It also means that the company can access all its customers everywhere across the globe at any moment of need, given the storage stores that are located in all the nations it supplies. Most of the sales occur in the United States, hence, it has the greatest number of convenient stores (McDonald et al, 2007). In some areas, the company has installed vendor machines, which dispenses the products at customer convenience. Promotion             Promotion, as applied in marketing, refers to strategies aimed at enhancing awareness among consumers in the identified or targeted market. It involves expanding awareness among consumers on the brand. In essence, the marketing strategy involves communicating to the public with an intent to attain positive influence that would increase sales of the product or service. Promotion strategies provide information that is vital in helping consumers make decisions to buy a particular product. A promotional plan outlines the place, time and most suitable strategy to apply in making the product or service known to consumers. Besides increasing sales, promotion can be an invaluable strategy to strengthen the position of a product in the market (Perreault, Cannon & McCarthy, 2012). It may be useful when launching a new product in the market. It is a vital strategy that helps establish brand image in the market. Promotion is also an effective measure to counter market competition presented by rivalling brands or businesses in the market. Every promotional strategy has an objective. It is fundamental to use the most viable promotional tool for specific target markets. In addition, promotion should adhere to marketing strategies of differentiation and product positioning in the target market. The various methods of promotion include personal selling and advertising. Sales promotion and internet marketing are equally viable in attaining market dominance. An organization may use promotion to gain a competitive advantage through such strategies as promotional campaigns.             The American tobacco industry presents serious competition. Marlboro’s leading position in America’s tobacco industry is highly contributed to its exceptional promotional strategies. Marlboro’s promotional strategy is standardized based on diverse targets set for regional markets or local markets in the 180 countries. There are strategies aimed at attracting consumers in the mass market. During the 1920s, Marlboro’s promotional strategy targeted the mass audience, especially women, through the slogan “Mild As May.” In the 1960s, Marlboro’s promotional strategy targeted the male market using the picture of a masculine cowboy, a boxer, and seaman. That appealed to men as the targeted audience of the advert. Marlboro has promotional campaigns through sponsorship of various events that appeal to the public. Currently, Marlboro is renowned to be a product consumed by both men and women. It sponsors motor racing through brands such as Ferrari, McLaren, and BRM (Cheverton, 2000). In addition, Marlboro is a sponsor of motorcycle races such as the Ducati’s team of racers. Marlboro’s innovative appeal is among its key promotional strategies. It innovated the Flip Top Box for packaging. It also invented papers that burn slowly for its cigarettes. That promotes the cigarettes because consumers find the innovations to be appealing.             Besides innovation, Marlboro is renowned for other promotional strategies such as switch selling and the one free cigarette for everyone bought. Furthermore, the marketing strategies have shifted from the conventional channels and the sales team has adopted alternatives in response to applicable restrictions to tobacco advertising. Marlboro uses global media platforms for advertisements. The internet is instrumental in promoting the cigarette brand to a wide population of consumers. There are offers and discounts to encourage mass purchase (Grewel & Levy, 2010). Besides, there is the use of other online promotional strategies including concert tickets, prizes offered during competitions and coupons that serve to encourage sales. Through the Marlboro club, loyal consumers have a forum to unite hence promoting the product. There are other events sponsored by that serve to promote loyalty among consumers including parties that serve to promote purchases. Price             Among the fundamental aspects of marketing mix for products is pricing because of its contribution in enhancing profitability of the business. Decisions regarding the price of a product determine the direct customer value and the extent of returns that the retail firm gains from the sale of is products. As a marketing mix, a sales firm must ensure the best pricing strategies and tactics. It should take into consideration vital factors such as consumers’ sensitivity to price variations. Furthermore, it should involve possible strategies to effect price reductions. The strategy should justify the rationale used to determine the price. In designing the price of a product, considerations should be based on competitive advantages (Cheverton, 2000).             Marlboro has a robust pricing strategy as part of its marketing mix. It has affordable prices to attract customers. Low pricing strategy is effective in reducing competition with rival brands in the American tobacco industry. Philip Morris USA’s decision to keep the price of Marlboro low is to maintain its market share of consumers in the tobacco industry, in both America and other countries of operations. The price is even lower when the company has promotions for Marlboro product. Reduced prices during promotional periods are important to expand market dominance for the product through increased sales. Among the greatest competitors of Marlboro is Camel. It has a relatively lower price compared to Marlboro but nearly the same market dominance. The price wars between Camel and Marlboro necessitates Philip Morris USA to adopt a strong pricing strategy. Among the most remarkable pricing strategies ever adopted by Marlboro was in 1993 (Ryan, 1993). The move was aimed at countering competition with other products including Winston and Chesterfield. The CEO announced a reduction in the price of Marlboro is an attempt to increase its sales. The decision was made after Marlboro had been demanding premium prices for its products compared to its competitors. It involved offering high discounts than its rivals in the market. In 2003, there was the launch of relatively lower priced Marlboro in India. Again, the move was aimed at enhancing competitiveness in the market for Marlboro. Conclusions and Recommendations             The 4Ps of marketing mix for a product are highly effective. They serve as fundamental tools to grant competitive advantage to a company, against its rivals, to sell its products. Being among the greatest companies in America’s tobacco industry, Philip Morris USA should apply the 4 P’s of marketing. First, the product positioning is important to ensure the best consumers get the product at the right place (Grewel & Levy, 2010). A succinct examination of the price helps in achieving competitor piecing and ensuring high returns for the company. Every aspect that the product’s pricing involves should by subject to considerations in designing the marketing strategy. It is also imperative to ensure the product fits the market demand in terms of value that will match their preference. Promotions are fundamental strategies to ensure consumers have knowledge of the product (Strydom,2004). Internet marketing is a contemporary platform to promoting a product (Perreault, Cannon & McCarthy, 2014). The last marketing mix strategy is placement. It is important to ensure the right placement of the product in the market.             Philip Morris USA has applied the 4Ps of marketing mix in enhancing the sales of Marlboro cigarette. Its promotional strategies have been effective in creating consumer awareness in across the U.S. and other major markets for Marlboro cigarette. The company, Philip Morris USA, has tactical pricing strategies for Marlboro that serve to withstand competition from other products such as Camel. The placement of its product in diverse regions and in different convenience stores in America is an effective strategy to improve sales (Cheverton, 2000). Finally, the product is of high quality that attracts customers in the market and maintains market dominance. As a recommendation, Philip Morris USA should engage in more   promotions for the product. It should conduct market research for its Marlboro product to assess the viability of expanding to other global markets. Furthermore, the company should consider legal restrictions in relation to cigarette manufacturing and quality standards. The company should enhance its internet marketing strategies for Marlboro product. That will serve to increase consumer awareness and sales for the product. References Bedbury, S. (2001). A new brand world: 8 principles for achieving brand leadership in the 21st century. New York: Penguin. Cheverton, P. (2000). Key marketing skills: A complete action kit of professional marketing concepts, tools and methods. London: Kogan Page. Great Speculations. (2011). Marlboro Is Still The Man At Altria. Forbes. Retrieved April 28, 2015 from http://www.forbes.com/sites/greatspeculations/2011/08/01/marlboro-is-still-the-man-at-altria/ Grewel, D., Levy, M. (2010). Marketing,2nd edition. New York, NY:  Mc-Graw Hill. Levinson, J. C., Levinson, J., & Levinson, A. (2007). Guerrilla marketing: Easy and inexpensive strategies for making big profits from your small business. Boston, MA: Houghton Mifflin. McDonald, M., Ward, K., & Smith, B. D. (2007). Marketing due diligence: Reconnecting strategy to share price. Oxford: Butterworth-Heinemann. Perreault, W., Cannon, J., McCarthy, J. (2014).Basic Marketing, A Marketing Strategy Planning Approach, 19th edition. New York, NY:  Mc-Graw Hill. Perreault, W., Cannon, J., McCarthy, J.(2012).Basic Marketing, A Marketing Strategy Planning Approach, 18th edition. New York, NY: Mc-Graw Hill. Proctor, R. N. (2012). Golden Holocaust: Origins of the Cigarette Catastrophe and the Case for Abolition. Berkeley: University of California Press. Ryan, N. (1993, April 03). Marlboro Sets Off Cigarette Price War. Chicago Tribune. Retrieved April 28, 2015 from http://articles.chicagotribune.com/1993-04-03/news/9304030209_1_discount-cigarettes-philip-morris-cos-tobacco-industry Strydom, J. (2004). Introduction to marketing. Cape Town, South Africa: Juta. Read More