PM History/2 - Legacy Tobacco Documents Library

PM history/16
of cigmen to revamp, mkt share up From 4~ .1 to 8 .6%, can't keep up w/
demand . . .BUTa such growth is expens ve to generate & cap . needed to sustain
it, so fart25O million in mostl borrowed funds to more than
double Miller capacity & build its own can-ma ing plants//finally sales
reaping profit gain, up from $6 million in '74 to $29 million in '75//
THE COMMON LINK BET . CIGS & BEERs both low-priced pleasurable products
ma e£rom agricultural commo a.ties processed & packaged on high-speed
machinery, advertised the same way & sold to many of the same customers
thru similar distribution channels . . .ADV . IMAGEs before PM, main Miller
emblem was jazz trumpeter Al Hirt, "absolutely the wrong image," says
QeQy . who switched acct to McCann-Erickson which came up w/Zi~.,,,ra wq,r lt~
'~_ a, .rd . ~p,~.,yt~}},~_r „a_, beer as ~ye reward -- NOT ORIGINAL BUT "MILLER fl'YY~^
IS ON TARGET, hammered`hiome w/same consistency & intensity~ the
Marlboro Man was used . . .then the 7 oz bottle thought to be a packaging
innovation//TRYING SAME STRATEGY IN BEER AS IN CIGS= PM brings out sister
brands Miller Malt Miller Ale & popular-priced Milwaukee Extra, but
none of e three ma e na ionwide despite some regional success/but
IS RM= LITE LID WINNER/bought name from failing
Mea;sterbrau, s ent o s reformulatin & mkt-testing, INTRODUCED IN
JAN ,~contains 2 ca,,1 oxa.e.s,.of xeg„~b,Q;~.r
.um sales//due .,~& price slightly above prem3 to
PM!s huge cash flow, Miller is more formidable contender than some other
#4 might be, big expansion plans ahead . . .more stress could be placed
on Miller as Marlboro's growth in sales slowed to 6,°U in •75, a worry
in view o£ its . share o£ PM's cig vo ume, so antage the low-tar
leader after 6 yrs but Merit answering the challenge after its into
previous Dec -- BUT : too early to say what long-term effects of low-tars
might be= could reverse trend down for per-capita consumption &^THEY
IGHT EVE SMOKERS TO GIVE UP CI "
--PM WILL STAY IN NY, NYT 8-2 -7 see JFCIII file
--PHILIP MORRISs THE HOT HAND IN CIGS . BW 12-6-76s Key stuff about
how John Landry unveil~~.s Merit plan 1 mos ago to the PM products
comm ., more than usual tension intent5.on to distribute nationally w/o
us g + O million in adv-promo i.n PirsT -yr . . MARLBORO
HAD NOW JUMPED INTO #1 SPOT NATIONALLY -- still, they could see that
overall mkt was headed to lower T/N brands (vs . Marlboro as "full-flavored
standard) needed strong contender in this field/Cullman waves it
,ahead. one of best decisions in ~Jast 15 yrst hottest brand debut since
Winston 20 yrs earlier----ori te, Sales o£ .ISion place it among
top 20 & will be in making money in '77//yr by yr PM is be inni to
I dominate alon w RJR : the two taking larger & larger s are of a static
mkt low-tar is wave of the future . . .for 15 yrs~ industry "has fought
antismkg forces at almost every turn .'. .BU IT QUIETLY HAS MnvED TO COM-
PLY W/SOME OF THEIR SUGGESTIONS," push to low tars urged by experts in
healt field like GIO GORI, NCI VIROLOGIST, see his quote & MUST USE :
"Since public persists . . .THE ONLY COURSE OF ACTION THAT REMAINS IS TO
DEVELOP LESS HAZARDOUS CIGS"#~*#~*~~~~perfect as pro-industry
philosophy/he notes big drop in T/Ns over past 20 yrs . . .ADV OF LOW T/Nss
rests heavily on text, Vantage says "Think" while Merit stresses the
tastep neither do awin in li£est le ads . . .whereas £or the "full-flavor"
brands, cos s ick to glamous ero-worship as PM discovers that nearly
35% of its customers are in the 18-24 age bracket//PM responding to
critics most of them at RJR, who sa "• e-bran co . up to
2 .2 o m vs a . ., 3 at 16 .5 worldwide PM #2 to BAT . . .
KEYS TO PM SUCCESSs it's NOT AN INNOVATOR h ioneered in no brand,
i wais a nt for com etition to esta a a e orv k& then movea
to capitalize on mistthees of others . . .now has 5 brands in top 20 by
is strategy/S TEST MKTG prefers taste-te
& can thus better shield results & p ans from compet3. ors ENCOURAGES
~10
ITS R&D TO OFFER IDEAS . . .RJR passed AT in '55///PM TARGETS '89 AS
"OUTSIDE YR THAT WE'LL PASS REYNOLDS," sense that it was coming & only v
a matter o im~e . .~JR chairman Hobbs sna s back have no inte ~
of' vi.eldin lea in '83 or any other time, tL 3'"'#'tt' *"n"#"K"**'~USE the ~
ba~tle for 1 is clearly on & other cos losing ground to the titans ., . p~
until recently, TWO DISTTN Tr .Y DIFF . MANAGEMENT PHILOSOPHIESs RJR had p~
hu e 2 000 s e o ce & elied d-nose3-s esmans ' to move ~
e goods . gave li.ttle ought to well-rounded m g program & left this
mostly to its adv agency, WM ESTY CO ., for 30 yrs, they dreamt up "I'D
WALK A MILE FOR A CAMEL" while the co . concentrated on manufacturing
& pushing the brands into retail outlets/all of which worked so long
as TV adv was available -- BUT : probs after that, NOTING HOW THE FAMOUS
WINSTON JINGLE COULD NOT BE TRANSFERRED EFFECTIVELY TO PRINT & brand's
leadership began to wane . . .Hobbs concedes too much left to agency, RJR
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