PM History/2 - Legacy Tobacco Documents Library

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INSERT PM history/12
--THE MKTG MERLINS OF PHILIP MORRIS, Dun!s Review 4/68s They have
parlayec-their sel3~ng magic into-tFie ei industr 's fast t
JosIII part of the Loeb-Lehman-Rothsch ld ar stocracy by inj;ermarriage,
he has a "hue" huou e in J . .he's soft-s oken alw s his
fin~er on e-oulse ofthe mktplac , stopp ng by o c at w vending machine
operators or mgrs of cut-rate dig stores or small jobbers//PM's growth
rate of 5% a yr in sales in twice the industry avg as it hits 12 4a/ of
mkt xn~'67 . .adopting the Wee Willie Keeler Approach, as GW puts its
" eV~ can't hit the big boys head on . We just don't have the financial
resources, so we have to hit them where they ain't" . . .PM NOW #LY IN THE
INDUSTRY . . .its innovativeness seen most prominently in the flip-top box
& Mar3Uoro Man/Country approach/Parliament became its #2 brand for a
time, was #15 nationally now . . .B&H introduced in '66 & almost at once
became a hot item w/amusing adv approach//LAUNCHES OF NEW BRANDS, cost
about $8 million now, means a new brand has ABOUT 3 MOS TO MAKE IT or
perish##+++**~PM ALSO WAS CASH-SHORT UNTIL RECENTLY, as recently as '66
its tob . inventories came to 60% of its total assets . . .given th- ese limitat
ons, PM HAS BEEN G D, BY "A DEE~. CO, . NATION~,O~F.CAUT~O &~. . ~,,~ ~,~~n,,,x
vs . AT &aiuce°"~t~'b~~ea num~i"e`~r o~'~rar~4s'
vumpe3"`To'~s of Uromo money inc- en-E2~i waited to see w ic ones made it --
but as Jim Bowli , group vp-PMUSA, sez "We can't afford to nromote like
thev do . Inswe nrobablv have more mao 3ne on than an .y otFer
Go __.«#~#~
ey cos maybe 0, - , er//80% OF ADV BUDGET INTO -
NETWORK TV + onlv .2Q0_3a7:.asmsn. ..ixr~£iel.d/// M INTLs bloomin like no 0
else's an the dus$ry, account Xor about 1 o P s wor vo ume . . .
before '60, PM, like others, too short of management & money to try to
tap into foreign mkts . . .GW takes over this_fundtion i .+ •6n & things
haunen, quadrupled over next 6 yrs & up 15$ in '7 . . ."1pTE WENT INTO THE
INTL FIELD BECAUSE THE OTHER U .S . CO .S WEREN'T THERE . Now we have at
least a_5-vr lead on them"#~+'* . .Jos III concentrates on planning &
long-range probs almost exclusively while GW runs day-to-day//PLANNING
FOR DIVERSIFICATIONs Jos III has set 1975 as target date for PM nontobacco
volume to hit 25% of sales & 40% OF EARNINGS*+f#####(RKs haS) . . .
the complexities of other goods vs . cigs : GW concedes_that cigs ear~, .s
"a FAIRLY SIMP " in which customer uyTa a pred~.ctabl amt of
t e pro uct every day . BUT THE INDUSTRIAL MKT HAS A nSF'R . PACE TO ITs
slower lon~er lea_d times & ver Ti^i ica ital c~ostg per unit of output .
1-E-RR5d7S A~fS~TO THR T PR B1A-;M~i . Now. finally, our
industrial products are A SUCCESSFUL ATTEMPT AT DIVERSIFICATION"**~#~#*
must use . . .article is skevtical . noting only $3 million in '67 nrofits/
see THE ASR STORY~~'"'~'erratic at best, bought in-T60, it "carved out a
huge~f the consumer razor mkt when it introduced stainless steel
blades (Personna had single & dbl-edge + Gem, big w/rural customers),
got up to 22% mkt share -- BUT GILLETTE COUNTERATTACKED & drove ASR dow~ .
to 12°. &. ~alline fast . . .BURI7~TA LINE OF MEN'S TOILETR s mos~is-
appoint}ing to PM management, sales have barely stirred since '63 aequi-
sition//CLARK GUMs a small wonder since '64 purchase, sales up sixfold
& mkt share up from 1% "- o, . . . VERALL, DIVERSIFICATIONs "less than eno-
mously impressive" & 5EZ GWs "We'd S SOMETHING SPEC TACULA R .
But our diversi£ication has been disappointing . We would have pre£erred
more diversi3ication at this stage"#*#,**//THE S&H ISSUEs GW concedes that
2t is JOR PROBLEM FCR MANAGEMENTs
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A G OF OUR CON-
SUMED BY HAR MEN~ -- TIME THAT WE C ~"rmC m0 riD ~ Oim
B INESS"~~#~~3f~~#####*#~~#-z~#MUST USE but the co . £eels the "cancer
scare will not worsen & "No clearcut case vs . cig smkg has been made
despite million spent on research" . . ." LONGER THESE TESTS GO "
sez, "THE BETTER OUR CASE BECOMES"~-###~#*-,c R s the ima e bravado)
http://legacy.library.ucsf.edu/tid/fmw44c00/pdf