Marlboro's Price Drop
-
Upload
ateev-gupta -
Category
Marketing
-
view
119 -
download
0
Transcript of Marlboro's Price Drop
![Page 1: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/1.jpg)
FRIDAY1993
Price Drop
![Page 2: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/2.jpg)
World’s largest selling brand of cigarettes
◈ Made by PHILIP MORRIS
Company
◈ Woman’s cigarette in 1924
◈ FILTERED - Protect the Lips
◈ "Mild as May”
![Page 3: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/3.jpg)
1950 REPOSITIONING - MEN’S CIGARETTE
SWITCHING TO FILTERED CIGARETTE??? –
WOMEN THING
![Page 4: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/4.jpg)
4
RE-MASCULINE: MARLBORO MAN• EMBODIMENT OF MEN
OF BRAVE PROFESSIONS
COWBOY
![Page 5: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/5.jpg)
BUILDING BRAND VALUE
• FORMULA ONE
• GRAND PRIX MOTORCYCLING
• WORLD RALLY CHAMPIONSHIP
Sponsor of motor racing since 1972
![Page 6: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/6.jpg)
6
• SLUGGISH ECONOMY
1993
![Page 7: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/7.jpg)
7
PRIVATE LABEL BRANDS :
• QUALITY PERCEPTION
• 80 CENTS - $1 DIFFERENCE FROM MARLBORO
![Page 8: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/8.jpg)
DISCOUNT BRANDS ASSOCIATING TO “VALUE”
MARLBORO’S MARKET SHARE
REDUCED TO 22%
![Page 9: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/9.jpg)
LOOSING MARKET SHARE
![Page 10: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/10.jpg)
10FAILED
![Page 11: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/11.jpg)
11
VARIANTS
FAILED
![Page 12: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/12.jpg)
12FAILED
![Page 13: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/13.jpg)
13
MARLBORO PRICE PER
PACK
TRIPLED !!!
OVER 1980-1992
![Page 14: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/14.jpg)
PRICEQ
UA
LITY- MARLBORO
- DISCOUNT CIGARETTES
PRICE BANDS• Range of acceptable prices
- MARLBORO
- DISCOUNT CIGARETTES
CURRENT PRICE PERCEPTION
![Page 15: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/15.jpg)
VALUE-BASED PRICING STRATEGYRIGHT BLEND OF…
…to meet Consumer NEEDS& Firm TARGETS
![Page 16: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/16.jpg)
16
LEGENDARY PRICE CUT – MARLBORO FRIDAY, 1993• REDUCTION BY 40-50 CENTS/PACK (20%)• EARNINGS DECREASE BY 40%• MARKET SHARE INCREASED BY 4% IN TEST MARKET
![Page 17: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/17.jpg)
17
BIGGEST MARKETING ICON – MARLBORO MAN FELL FROM HIS HORSE
WAS THAT THE DEATH OF BRAND?
STOOD STILL SINCE 1954
23% DECREASE IN STOCK PRICE
SHAREHOLDER LOST $5 BILLION
![Page 18: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/18.jpg)
18
LONG TERM RESULTSMARKET SHARE
• 9 MONTHS: 27%
YEARS LATER: 42%
• PRICED AT $5.7 A PACK
Vs
• AVERAGE $4.21 A PACK OF DISCOUNT BRAND
![Page 19: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/19.jpg)
19
LEARNINGS:STRONG BRANDS can command
But, NOT
1.
2.
3. INVESTMENTNeed to increase
![Page 20: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/20.jpg)
SUMMARY
![Page 21: Marlboro's Price Drop](https://reader035.fdocuments.in/reader035/viewer/2022062900/58ec8bda1a28ab5e3b8b46cf/html5/thumbnails/21.jpg)
DISCLAIMERThis deck was created by Ateev Gupta
(PGP31195), IIM Lucknow under Brand Management Course, taught by
Prof. Sameer Mathur.• B.Tech IIT
(BHU) Varanasi
• PGPM, IIM Lucknow
• Marketing Professor
- IIM Lucknow-McGill University
• Ph.D in Marketing-Carnegie
Mellon University