Philip Morris International Essay Example

which is considered as a marvellous opportunity for Philip Morris.

This allows Philip Morris to gain access to a much greater market opportunity with extra flexibility and freedom on their product penetrating strategies into emerging countries and thus pursuing additional sales growth. With Philip Morris shielding themselves from the US legal and regulatory issues, they are now able to market new smoking concepts each targeted to different foreign markets easier. PMI has authorized the so-called “power to decide” to local managers allowing them to customize product assortments and communication strategies in particular regions. In another word, PMI has chosen to apply dual adaptation strategic.

This gave local managers more freedom in choices to pursue local sales growths. However, even though new spin-offs were able to be legalized under American laws and regulations, PMI’s target markets on the other hand have their own laws and regulations to protect themselves. For example, China is implying high import duties and rigorous quotas on foreign tobacco company such as PMI to limit the amount of imported cigarettes. Therefore, I would conclude that PMI spin-offs do have more freedom in pursuing sales growth in emerging marketing by shielding under US legal and regulatory issues but to a limited extend.

The case discussed PMI’s recent new product launches around the world. What is the major thrust of the innovations? Is PMI on the right track? Why or why not? PMI has so far made a very good job with innovation in the past few years considering the number of threats they have to deal with. Innovation is essential for multinational companies such as PMI because consumers in different

regions have different needs and wants. In order to increase market shares and sales in different countries, PMI needed to adapt their product strategy to a certain extent.

For example, PMI launched Malboro Black Menthol in Japan in order to fit the strong preference of smokers for menthol smokes. Moreover, the increasing rate of competitor make it necessary for Phillip Morris to innovate in order to maintain market share and keep brand awareness high in local areas. For instance, smokers in Japan are very conservative and very loyal to the brand they are using. In this case, Japanese smokers are very attached to Mild Seven, which makes it difficult for PMI to gain major market shares without differentiating their products from local competitors.

A form of differentiation is Malboro Intense which is a shorter cigarette and more flavor than a regular cigarettes. As a result of declining smoking rates in developed countries, PMI has been losing sales. To cope with this change, PMI launched a slate of new products throughout the global market. For example, Marlboro Mix 9 was introduced to appeal to the Southeast Asian market, which prefers sweet-smelling cigarettes with more tar and nicotine than the European market. Indonesia served as a launching pad to the marketing strategy.

Marlboro Filter Plus have also been recently launched as a form of innovation from PMI. With a unique multi-chamber filter, the original sliding pack and the number of choices of level of tar, Malboro Filter Plus has gained popularity among the premium cigarette market. To cope with smoking bans in mature markets like Australia, New Zealand, and UK, PMI has initiated the

Heatbar which aims at giving the smokers the feeling of smoking with 90% less smoke than a normal cigarette.

Another innovation that has kept PMI’s sales up is the “Tobacco Block System” (TBS), which is a kit for smokers who prefer roll-your-own tobacco and aims at enabling people to roll cigarettes in an easy and quick manner. PMI’s smartest market strategy may have been the joint venture deal with China National Tobacco Corporation (CNTC). As part of the deal, PMI’s product price would be less taxed as it would be manufactured and sold under license by CNTC. On the other hand, PMI would have to help selling Chinese brands to other markets.