Sunday, February 24, 2008

Pursuing developing markets

The following quotes were taken from an article in the January 29th Wall Street Journal titled "Philip Morris Readies Aggressive Global Push". The article talks about their pursuit of "product innovation" particularly in developing markets.

Among the new products in test phase is a hand-held electronic smoking device called the Heatbar, which emits less smoke than a regular cigarette. Another is Marlboro Wides -- an extra-thick cigarette whose package flips open from one side. To appeal to customers in some emerging markets, the company is making sweet-smelling cigarettes that contain tobacco, cloves and flavoring -- with twice the tar and nicotine levels of a conventional U.S. cigarette.While smoking rates in developed countries have slowly declined, they have shot up dramatically in some developing counties, where PMI is a major player. These include Pakistan (up 42% since 2001), Ukraine (up 36%) and Argentina (up 18%).

Here is a link talking about their new product innovation:http://link.brightcove.com/services/link/bcpid452319854/bctid1395217394So the question becomes...is Philip Morris behaving in a socially responsibile manner by creating these products? If so, why? If not, why not? Who are the stakeholders that they are serving with this strategy? Which stakeholders may not be happy with their strategy? Is it ok to put out cigarettes that have twice the tar and nicotine levels of conventional U.S. cigarettes in the developing world even if the people in the developing world prefer the higher levels of nicotine?

8 comments:

Janet H. said...

Is PMI being responsible. I have to say Yes & No to this.
Yes - they have some products out there that are less harmful & they are trying to come up with better ones. 1 of their programs is to exceed their consumer expectations by providing smoking pleasure and Reduced Harm. But this statement of theirs also says While there is No Safe Cigarette they are actively searching for ways to Reduce the Health Risks for those who smoke.
No - they came out with a product that has twice the amount of harmful ingredients and it goes against their Reduce Harm Program.
But they are giving the consumers what they what.
A man I once knew told me as he was growing up they used to smoke what ever they could roll. Cornhusks,weeds,hay,straw.
The people they are making happy consumers,stockholders,owners. The unhappy ones is the society against smoking.
What about other harmful things we inhale. What about other products that we inhale & not think twice on. Cleaning supplies & other chemicals,air pollution,abestos, paper dust.

Unknown said...

I agree with Janet because it is their job to sell cigarettes to us. We hope to enjoy and hope for it to be less harmful. But I believe it is okay for them to sell cigarettes with double the ingredients. The third world countries that receive them might have a higher tolerance to some of the chemicals in cigarettes than we do. So with that in mind, the quality of the cigarettes should meet or beat the quality that these consumers are looking for in their smoking enjoyment. In turn they hope to make more profit in other countries and improve their company. Which would make all the share holders more money and more company growth. Non-smokers and others alike might not like it but it is for other countries to decide and truthfully consumer to decide if they will allow it or not.

ernie said...

Well I don't think anyone of the stakeholders would arque with Phillip Morris pushing these new products. The company is doing what all of it's stakeholders should want out of a company they are apart of. The customers will let the company know if they want these new products. All to often people focus on companies like Phillip Morris as bad and accusing them of focusing on certain groups, people, countries, etc. These companies are doing good for themselves and their stakeholders. I myself am a non-smoker but I think that each person should be held responsible for their own actions. On every pack of cigarettes it tells you the facts, they are harmful, they increase the risk of cancer. What do people want this comapny to do? If after reading the warning on the pack of cigarettes people continue to light up, that the customers fault. Phillip Morris knows that their product is harmful but so many people don't care. It will be interesting to see if the state wide smoking law will have an effect on this company. I think it is time for people(customers) to stand up for their actions not the companies that sell the products. Yes, harmful or not it's up to us the customers to deside what we want to put in our bodies.

adam harlow said...

I truly believe that if someone wants to smoke cigarettes and put their health at risk, they have the individual right to make that decision. As a former smoker, I too made the decision to smoke despite all of the information available against cigarettes. Thus the issue becomes, is it ethically wrong for big tobacco to continue to actively market a product that has been shown to kill not only smokers but second hand smokers as well? I believe that the furtherance of a habit that kills so many, through active marketing is wrong, but on the other side smoking is not illegal and Phillip Morris also has to compete against other companies. Therefore, I believe that active marketing should be constantly curbed by activists and the federal government, but in theory should still be allowed at some extent because of the realistic pressures put on the business aspect of Phillip Morris.

Dulce said...

Well I agree that if you like to smoke that is fine, but do it away from the people that does not like the smell. If smoke was not bad then why this year we are having all those places not allowing smoking even though people who smokes is not going no more. I like the idea of the first machine that kind of refill for the consumer but like the lady from wall street said "people is too lazy and even if it saves them money they wont do it"

Anonymous said...

Concerning the new products they are making i believe that yes Phillip Morris is acting in a socially responsible way. They are trying to make a product that is seen as bad less evil for the people who have to deal with it and they are making it more cost effective for those who do smoke. When it comes to the double nicotine and tar i feel that if the people of those countries prefer it then that's their decision and it's not fair to punish the cigarette companies for it. Until cigarettes are made illegal i think that it is up to the consumer what will sell or not because they are making the decision to smoke.

kimhadaway said...

Yes, I do see the point of them adding to their pot of gold by producing supposedly new products. But as far as the twice that nicotine our these people in others countries aware of the dangers or are they not inform as we are hear. Just because we have these regulations and rules that companies responsibly have to follow does not mean in other countries that products are put out responsibly there. I would hope that products that we send to others countries that as a companies we provide all the information to those consumers, also. Most of these people are dying from the simplest things that we take for granted here in the United States like food, clean water, medicine for example. So are they acting responsible and in the best interest of the consumer. Why do they not diversify in to other areas of growth instead of just tobacco. Besides, the best seller of their products is if I saw them smoking those double the tar and nicotine cigarettes. If they could stand and do that, please. No way!!!!!

Unknown said...

Well they are a business. They have to do what it takes to help their company succeed, and continue to keep stakeholders smoking and buying their product. I think that it's sad that it will take twice the nicotine to make this happen! Do they realize that this can increase the deaths of their so-called "loyal" customers? Yes, the addiction will increase, but so will the number of cancer patients. With this increase I think it would only open the eyes of more smokers to realize that it's only getting worse. This, in turn, will raise the amount of people who quit, which will in the end hurt Philip Morris.