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Case Details |
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Case Code: MKTG369
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| Case Length: 15 Pages |
| Period: 2014-2017 |
| Pub Date: 2018 |
| Teaching Note: Not Available |
| Price:Rs.400 |
| Organization : Philip Morris International |
Industry : Tobacco
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| Countries : US; Global |
| Themes: Strategic Marketing Management/ Ansoff’s Matrix |
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Philip Morris International: Planning for a Smoke Free Future |
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Decades of scientific research proved that smoking caused many kinds of cancer, heart disease, and respiratory illnesses which could be fatal. In the US, 15% of the adult population smoked. While, smoking was the leading cause of preventable death in the US, it killed 480,000 people each year and cut down life expectancy by 10 years. In the UK, 19% of adults smoked.. |
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| PMI started facing the flak, when in 1999 the US government brought a lawsuit alleging that leading cigarette companies had been conspiring to lie about the dangers of cigarettes for decades. However, the company refused to acknowledge the fact that smoking was in fact a serious addiction, and therefore difficult to get rid of.... |
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| In 2015, PMI sold 850 billion cigarettes, generating net revenue of US$74 billion. While defending the company in smoking-related health problems, Calantzopoulos stated, “I don’t think Philip Morris invented cigarettes. For us, it’s to offer our consumers the best product we can in a category that we all know is addictive and causes harm. Once we have the alternative, as we have today, we offer them the alternative and we will do everything we can to convince [people] to switch to these products,” |
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| In 2016, between the months of April and October, the market share of iQOS in Japan increased from 1.6% to 4.9%. PMI launched iQOS during FY 2015 in Japan to reach 60% of the adult smoking population, and the national roll-out was finished at the beginning of the second quarter of FY 2016. Given the phenomenal growth of iQOS in Japan, PMI expected to become a growth company for the first time in many years (Refer to Exhibit VI for Market Share Growth of iQOS in Japan). . |
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Exhibit I: The Brand Portfolio of PMI
Exhibit II: Financial Highlights of PMI (2011-2016)
Exhibit III: Trend in Global Cigarette Market (2000-2015)
Exhibit IV: A Snapshot of iQOS
Exhibit V: PMI’s RRP Portfolio
Exhibit VI: Market Share Growth of iQOS in Japan
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