Part I: The Successful Brand Phillip Morris U.S.A. is the number one cigarette producer in the nation, with its total market share at just over 50%. They currently manufacture the number one brand of cigarettes, Marlboro. Out of all the brands of cigarettes produced Marlboro's market share exceeds it's competitors by a landslide at 35.4% while the number 2 competitor, Doral (RJ Reynolds), is at 6.3%.
Marlboro entered the market as an unknown brand in 1902, Marlboro steadily increased it's sales, and was named the "top selling brand in the U.S. and an all-time-best seller in the world," in 1975. Then, in 1989, it took hold of almost one-forth of all cigarette sales, and today it remains the world's most profitable brand of non durable goods, surpassing even Coca-Cola! Customer loyalty and high brand equity have contributed greatly to the success of the Marlboro brand. Last year alone approximately 400 million cartons of Marlboro cigarettes were sold to it's 7 million loyal adult smokers.
Reasons why Marlboro is successful 1. Item sale and giveaway is prevalent in each of the three markets, playing a different role in each. The US market relies upon the Country Store as an "interrupter" in its advertising scheme and through this participation, the consumers are invited to participate in Marlboro Country. Items are sold at cost or below, and the existence of these sales does not involve profit reliance.
2. A dependence on sporting events was also prevalent in each of the markets, with a noted emphasis on motor sports, horse-related sports and the Marlboro Adventure Team. Marlboro is associated with event promotion and sponsorship, with athlete support, and with providing press information related to sporting internationally.
3. The Marlboro man is timeless. The cowboy campaigns focused on freedom, masculinity, escapism, and the American dream of independence. Marlboro Man was set up to symbolize ideal masculinity. The cowboy represents a real man to all the workers stuck in a suffocating cubicle. Correspondingly, Marlboro Country permeates the attractive values of the cowboy, namely adventure, independence, freedom, and heroism. When a people see the inviting landscape of Marlboro Country and the rugged cowboy, they are being exposed to a number of powerful messages. Looking at the open grassy fields, the viewer sees escape from the pressures, stresses, and the mundane routine of life.
Recommendations With the growing pressures of underage smoking, health risks, lawsuits, and price increases maintaining overall success in the cigarette industry is complicated. In order to maintain and enhance the success of Marlboro they will need to advertise their position with these pressing issues. The public needs to be told over and over again that Marlboro is not trying to recruit 13-year-old smokers. They should run an advertisement with a pregnant woman telling her not to smoke while pregnant and list the reasons why. They should also sponsor cancer research.
Part II: The "Not-So-Successful Brand" R.J. Reynolds Tobacco is the second largest cigarette company in the nation making up approximately 23% of the market and manufactures the second largest cigarette brand, Doral. Though Doral is the second largest, it is very far behind the number one brand, Marlboro. Doral's Market share is 27% less than Marlboro. Though Doral may be successful, the competition is twice as successful.
Doral achieved the number-two spot in the industry by redefining the meaning of both "value brand" and "relationship marketing" in the cigarette category. Doral builds brand value on more than price: it offers smokers a premium-quality product at a good price and provides its customers with many unique programs, resulting in the highest customer loyalty of any value brand. More than 3 million adult smokers bought more than 130 million cartons of Doral in 2001.
Reasons why Doral is "not-so-successful" 1. Value brand cigarettes tend to burn faster than premium priced cigarettes. The consumer is paying less for the product, but the length of time the cigarette can be enjoyed is noticeably shorter than that of Marlboro, for example.
2. Consumers view the value brand cigarette as a lower quality cigarette that doesn't taste the same as a premium cigarette. Just like everything in our culture brands carry a certain financial "status". Value cigarettes are for poor people and Premium cigarettes are for rich people. Therefore, the value brand just isn't as good.
3. Older adults (above 40) are the main consumers of Doral brand cigarettes. The name Doral is associated with an older person who hasn't aged gracefully, has a raspy voice, and all the tell tale signs of a long-term habitual smoker. Basically, they don't look like the Elle McPherson's and Val Kilmer's of the world. The thought chunk associated with Doral is, "smoke Doral, look ugly".
Recommendations In order to enhance Doral's level of success they need to undergo a complete makeover. They need to start by redesigning their packaging while incorporating a young and appealing image to reach out to other smokers. If the company refrains from advertising price consumers will not think of Doral as cheap and not good. They should advertise like the premium price brands, like they are the best. And finally, redesign the makeup of the rolling paper making it longer lasting.