marlboro's price drop
TRANSCRIPT
FRIDAY1993
Price Drop
World’s largest selling brand of cigarettes
◈ Made by PHILIP MORRIS
Company
◈ Woman’s cigarette in 1924
◈ FILTERED - Protect the Lips
◈ "Mild as May”
1950 REPOSITIONING - MEN’S CIGARETTE
SWITCHING TO FILTERED CIGARETTE??? –
WOMEN THING
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RE-MASCULINE: MARLBORO MAN• EMBODIMENT OF MEN
OF BRAVE PROFESSIONS
COWBOY
BUILDING BRAND VALUE
• FORMULA ONE
• GRAND PRIX MOTORCYCLING
• WORLD RALLY CHAMPIONSHIP
Sponsor of motor racing since 1972
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• SLUGGISH ECONOMY
1993
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PRIVATE LABEL BRANDS :
• QUALITY PERCEPTION
• 80 CENTS - $1 DIFFERENCE FROM MARLBORO
DISCOUNT BRANDS ASSOCIATING TO “VALUE”
MARLBORO’S MARKET SHARE
REDUCED TO 22%
LOOSING MARKET SHARE
10FAILED
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VARIANTS
FAILED
12FAILED
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MARLBORO PRICE PER
PACK
TRIPLED !!!
OVER 1980-1992
PRICEQ
UA
LITY- MARLBORO
- DISCOUNT CIGARETTES
PRICE BANDS• Range of acceptable prices
- MARLBORO
- DISCOUNT CIGARETTES
CURRENT PRICE PERCEPTION
VALUE-BASED PRICING STRATEGYRIGHT BLEND OF…
…to meet Consumer NEEDS& Firm TARGETS
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LEGENDARY PRICE CUT – MARLBORO FRIDAY, 1993• REDUCTION BY 40-50 CENTS/PACK (20%)• EARNINGS DECREASE BY 40%• MARKET SHARE INCREASED BY 4% IN TEST MARKET
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BIGGEST MARKETING ICON – MARLBORO MAN FELL FROM HIS HORSE
WAS THAT THE DEATH OF BRAND?
STOOD STILL SINCE 1954
23% DECREASE IN STOCK PRICE
SHAREHOLDER LOST $5 BILLION
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LONG TERM RESULTSMARKET SHARE
• 9 MONTHS: 27%
YEARS LATER: 42%
• PRICED AT $5.7 A PACK
Vs
• AVERAGE $4.21 A PACK OF DISCOUNT BRAND
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LEARNINGS:STRONG BRANDS can command
But, NOT
1.
2.
3. INVESTMENTNeed to increase
SUMMARY
DISCLAIMERThis deck was created by Ateev Gupta
(PGP31195), IIM Lucknow under Brand Management Course, taught by
Prof. Sameer Mathur.• B.Tech IIT
(BHU) Varanasi
• PGPM, IIM Lucknow
• Marketing Professor
- IIM Lucknow-McGill University
• Ph.D in Marketing-Carnegie
Mellon University