PM History/2 - Legacy Tobacco Documents Library

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PM history/17
' had to build mktg program almost from scratch//PM takes KEY STEP IN '73
+J BUILDING $200 MILLION PLANT to give it vitally needed capacity making
Merit burst possible (of 8 billion more cigs)//Landry got word that RJR
was readying its own new ultra-low brand, Now, so no time to dawdle,
retailers' display space highly limited & key sales go to whoever gets
there first . . .thus, need to su t the 1 000-man field force,
how they HIRED TEMPORARI , bR 3/NON-PIONEERING MODEs it's high-cost,
high-risk, so why do it?, so despite its agaressiveness in mktplace,
PM has left pioneering to RJR while making sure RJR doesn't get o0
b>_ a stregic a vant~e, says g37P~im Morgan . . .see what happened in
•7 w en P marls SARATOGA to compete w/MORE, got to mktplace the
same day w/o test-mktg the120mm . brand : More leads but Saratoga not far
behind in #2 . . .RJR grudgingly concedes PM did good job w/Merit while
noting that it created the category/Landry claims PM saw the mkt for
Merit a dozen yrs earlier but it took that long to get the formulization
right*'*'#'""*RK finds this ludicrous//Marlboro & Winstons agin , experts
see Merit & Vantage as moving up to top . . .Morgan sees low T/Ns, now at
13-15% of mkt moving to 35% in ten yrs//since •71 total of 105 new
brands tried w/AmerTob alone doing 26 vs . 15 for PM & RJR each ., .TABLE
ON TOP 20s N[arlboro now #1 by 2°~ billion over Winston, then it's Kool
trailing by 30 nillon, Sa1em, Pa1 Mall, ent, B&H, 15 Va Slims,
#17 Parliaments, #19 Merit
--JOS . F . Ci7TT.M nr III, top exec, Financial World 3-15-77s great IRONY
IN OPENING LINE, "I GUESS I'M SORT OF A PHYSICAL CULTIST,"###'*###adding
"Someone who's fit can do a better j.Q~ . And in a complicated world,
there s nothing better than an exposure to the outdoors"/he's tan, fit,
relaxed & JUST BACK FROM HIS 8TH TRIP TO EAST AFRICA, hunting trophies,
his secy sits anke two 7 ft ele hant t that belonged to rogue
elephant that J III shot at y s while charging (RK : shades of Al
Lyont) + "PEOPLE WHO HUNT ARE THE BEST CONSERVATIONISTS" (RK : this just
like People w o se 1 cigs are mos e -consclous he's avid golfer &
squashist as well as tennis . . .Miller Brewing moved past Pabst into #3
last yr/key was to "distinauis vr vro uct in the nublic min~C"-mt
~mportianz p1 oi ui=z, ne xeis oasic uatiz -- -casze 0 uni --
ut also PAC TATION "We resented Ma lb
to the nublic w/STRENGTH & DIGNITY" + flip-top~box & vir ~.ty of imagery/
"Our ads don=t jar peo le & make them feel uncomfortable, Oi s
verv nersonal thing'•/orldwide appeal of the-cowboy noted/Valim~s~a
totally diff. storys '•WE•VE OF WOMEN'S LIBERAT ., .
Merit emphasizes the taste MILLER'S PROGRESSet uala .t control a-
gressive merchandisin better s n a
arr-e_ _ 9__T__HE INDUSTRY AVERAQE*~*-#####*n'RKs key here is they
just couldn' keep spen ing a hat ratio & get profits where they
wanted them, artificial stimulation) . . .Mana ement st 1es short lines
oY communication + keeping good people M : co . w as in
put ln_,g _,.up the blrgA5i,Scala',s__ US :tq
i~s'paint°•ingsfrom Whitney, ete M"`_eri 'saYes' uo 43°.~ in •76 vs
for ;ndustry/Merits & Lites TWO HOTTEST SELLING BRANDS IPIePJJ!5 INDUSTRIES
& Lite as mod~"'sucdes"'s3"u~"riew` beer'°'Srarii~'"'I:n 26~Yi" `c'en~ . i 'EYery~'hing you"
always wan e . . .
slated by '80 + purchase_~pr,',r„V,,,Q_~- .227 milli,~o- BUTi'o'ffier `brewers are
a`Yso---exlsatid"i'fig soYNDUSTRY MAY A9ITU_P"EXCESS CAPACITY IN A YR
OR TWO" . . .Cullman concedes tFe ris
--IT'S MILLER VS . BUD IN BREWERS' WAR, NYT 8-7-77//see GeoW file
--PM OFFER_IS ACCEPTED BY 7-UP . NYT 5-16-78//see JFCIII file
_-ATSTT.TD MnDATC• VC(14 nL+ n- .n-*JS2 . !'!.. . .. .. . ..+..
drinks drinks + choosing Cullman's successor . . .JFCIII 66 & has declared this
J to be his last yr, .,still doing daring thines : he 5ust naid $515 milli DE
for 7-Up (IN CASH)//candidates to succeeds GeoWeissman, smart, self-
( ma eTc -, ex-PE, named pres in '67 but not up as PM ran into troubles in
''73= Clark Gum and Lightfoot Soap had to be sold, ASR was sick . . .so
Y•en-rFani¢i»v Anna_ fSenW matla vino nhaiv.man w/n»lv nnn-ria .inna t0
0nnana-F
ortin - .,,Ross Millhiser takes over as res - , ~
Yale-educated & to the manor b orn : of PM vol from cigs & 80 of its ~
. profits, RM "a MASTER OF MKT SEGMENTATION" as VaSlims shoots ahead, ~
gamble on Merit paying off . . .both GW & RM are K8/3rd candidate is John
A . Murphy3 i~s, Villanova & Columbia LS, pres of Millera he caught Busch ~
as leep w oc -type adv ., bought up heavily network prime spots on TV, ~
did Lite, introduced domestically brewed Lowenbrau//7-Up PROSP~ .`LSs
even tougher than the beer field . . .PM is good markete ,notes PepsiCo
boss n en , u soi't drinks are not beer . History shows there
aren't that many successful new products in soft drinks" . . .analyst
at Goldman Sachs expects PM TO BRING OUT ITS OWN COLA SOON
http://legacy.library.ucsf.edu/tid/fmw44c00/pdf