PM History/2 - Legacy Tobacco Documents Library

PM history/14
WOMEN SALESPEOPLE NOW -- "and not just gals who go in & arrange retail
displays," men are more attentive to female salesperson//REAPPRAISING
ADV EXPENDITURESs w/o TV, Landry observes, you wind un w sm
co rner' oT f the-consumer's mind via print ads, etc . "YOU ARE NO LONGER
AS V I O , AU , ETERGENTS, & OTHER PRODUCTS HE WILL SEE ON
ITV" . .,PAINFUL PROOF OF THIS . intro of Marlboro Li ts in f ' some
Ir20 mos after TV ban & despite hvy spen ing onl 2 . oY Ne g . test mkt
were aware of the new product vs 8 e Va Slims
v(as i.ntrndVced w/TV,splash~ ..in .,'. 8 .ADV,RATIQS : 80 per carton for strong
, branda ; 12¢ for weaker'ones,"t4-28¢ for nevi'ones . . .MARLBORO SUCCESSs the
whole thrust is "to re9nf'a+-ce the image,•" which is why it never slowed
1'/I
after the TV ban, mL3s the ads translated easily from TV to print vs .
RJR WENT WRONG W/W_INSTONSs it kept changing its ad theme, 3X in last
2fyrs, losing whatever image & vitality they had . . .MARLBORO PROMOS= a
5-trailer Marlboro Chuct&wagon carayB.n serving authentic Western dishes
(2,000 a day a state & regional fairs -- was this free?), Marlboro
Country Store w/14 items of clothing from coffee cups to sheepskin coats//
Va Slims Amer Women's Opinion Poll thru Louis Harris . . .JFCIII currently
chairman of USOpen Tennis championships & ranked Ai -60 astern LTA//
PACKAGINGs one of PM's biggest promo tools, 'S PHS . NO HAT
PROBABLY NO CONSUMER PRODUCT IS BOUGHT MORE OFTEN THAN PACK OF CIGS or
displayed more often, 20X a day for avg smoker, when you & other people
will see it, "So this is one of the biggest pluses going for us . . .VERY
CLOSE INVENTORY CONTROL, keeping tabs on daily shipments for each brand,
also using 100-jobber sample to project nat'l sales trends to within one
or two percentage pts of accuracy -- "And Mr . Cullman ads & watches
those numbers . He keeps them right there in the top l re
, older,
eft-hand drawer of
his desk," & if there's anything in there he doesn't like he gets right
~~ on the horn/most analysts-giv . F' ITT h ;gh marks £or shrewd . ef'f'ective
mana ement-acfministrat but some say his eye too much )n the trees
& no enou on the forest//concern of TOO MUCH DEPENDENCY ON MAR'r .nORn
w/its concentration among vounger . urban smokers vs . RJR, which is Southern-
ase grew c7osest to rural mkts in S-outh & West cl o ser to
. lower-income, blue-collar mkts . . .PM and L&M both cater to more
affluent & white-collar//DIVERSIFICATIONS : none has set the world afire
yet . . .realizati n ASR would never make an serious inroads vs .
T?f'
. . Gillette Schin then„tried t e surg~ .c - ospital supply business &
uc
'i v, .i s, ., . .,. + .+ ~ .+ ..+ 11!nr cn ... :i 1 : .... 4 ..- na.n - flc,,, ..+ + .. U .. ....
V. llup w/J&J technology & others, so they dropped out fast~##~#~#CLARK GUMe
~') .the mk roved too sms11," says GeoW, "& we discovered that our pro-
fits in chocolates depen e more on the cocoa crop than our mktg expertise
. AND WE SIMPLY DID NOT WANT TO BECO RAD S^//many
claimed the buyout prlce on Miller Brewing of 200 million was too
high (was equal to about 1 yr's operating revs), £3~rst~yr's mkt share
slipped from 4 .5% to 4 though volume edged up but profits tumbled to
near zero, tR4 ; higher m£g & packaging costs + hvy new adv outlays/need
to re osition the roduct entirely as the old "Champagne of Bottled
eers pi c~pe e e occasional drinker, but fact is that 20%
of beer-quaffers co sumer O of the s uff . . . ULLMAN WAXES PHILOSOPHICAL
ON DIVERSIFICATION : "I don't think anyone in biz can adequately £orecast
what will happen when you buy a biz and try to expand its size,
improve its mkt share, and increase its profitability . Some work out .
Some don't. The challenge is to uickl reco ize th se that w'
work out so vou can concen ra e r ere have the best
hance 'to get ahead"*###~ he considers PM's forei es as a
/filters now= O of industry & 97 of PM's
sales new $80 mill on p ant rising in Richmond that will eventually
produce 25% of all cigs consumed in US . . .TABLEs RJR mkt share is 31 .4
vs . PM 20 .0, Marlboros 15 billion behind Winstons for '72 vs . 22 .6 yr
before
--THE TOP 100, Forbes 5-1 - 2 (out of sequence) : PM has more than
i quadrupled earnings since -/z;!5 &-its 5vr avg return on eguit.v oY 21%
1111 was hiahest in the industry
--LEADER OF' THE PACK : MARLBORO NOW 19ORLD•S BESTSELLING CIG, Barron's
10-29-73 by John C Maxwell Jr . . . Rothmans Group of Canada recently bought
700,000 shares of L&M to gain some 10% interest + bonds-preferred/PM's ~
Australian & Swiss operations doing beautifully p~
j --THE TWO-TIER MKT SiILL LIVES, or Wh Does Wal1 St Give
PM a 19__ V
p/E & RJR a 7? . Fbrbes 3-1- 4 : Marlboro ~~~ rand r sing ca . 15% ~a
a yr vs . mkt ris- -e- o'-ca:_1has almost overtaken Winstons . . .yet ~
Wall St seems to have forgotten all about PM's "failures in shaving C7\
products, candy, hospital supplies and (to date) beer as INSTITUTIONAL ~
~
http://legacy.library.ucsf.edu/tid/fmw44c00/pdf