Marlboro cigarette is a brand owned by the Altria Group in USA and by Philip Morris International outside USA. The brand emerged at England in 1847 and targeted women. Later in 1920, it emerged in US markets targeting predominantly female smokers. During 1950’s it targeted the health conscious people by introducing filtered cigarette and also started targeting men. The brand is famous for its advertisements like ‘Marlboro man’, slogans like ‘Mild as May’ and for sponsoring various motor-sports events. During 1972 it became one of the most popular brands in the world (Marlboro Cigarettes). In 2012, Marlboro brand was ranked 53 amongst the top 500 global firms of the world with a brand value of $15,171 million and an enterprise value of $180,739 million (Marlboro, 2011). Executive Summary
The company plans to launch a new reformed cigarette in the markets of Singapore where they already enjoy a market share of 50%. The product will be called ‘Marlboro Switch’. This cigarette will contain less harmful ingredients which will reduce odor and smoke. It will give a distinct experience to smokers by providing them three distinct flavors. Along with this it will give the smokers leisure of enjoying two flavors in one cigarette by pressing a switch and changing the flavor. The product will be sold in an attractive and convenient packaging which will have a slot for keeping the lighter. It will give the consumers luxury of carrying the lighter along with the packaging thereby making the product unique, stylish and have less harmful effects. The company wants to release this product by the year end and gain a competitive edge over their competitors. The product will not be overpriced but will be competitive with other brands. By providing less harmful cigarette it will target the health conscious people and thereby tend to increase its market share by 10% by 2015.
This analysis was done to understand the company’s position in the industry with respect to other existing industries in its sector. The analysis was conducted by using the Porter’s five forces framework. Threat of Substitute Products:
In Singapore market our closest competitors like Dunhill and Winston have ‘Switch’ available with only one flavor Ice-blast and Menthol respectively. Our company has decided to come up with three distinct flavors which are not available in any other brand. Dunhill’s Switch cigarette has a higher cost than our product and is limited to one flavor. Winston brand provides ‘Switch’ with also one flavor at slightly lesser cost. However, both these brands are more harmful than our cigarettes. So in our product consumers get more variety of flavors at reasonable cost along with a lighter slot in the packaging. It also has less harmful contents, thus, making it is superior to other products in the market. All these factors will make the consumers to stick with our product and not switch to other brands. Therefore the threat of substitutes for our product is low and so market will be more attractive and profit oriented. Threat of New Entrants:
Singapore markets have strong brands available in the markets like Dunhill (BAT) which has 30% market share and Japan Tobacco international (Winston) which has 20% market share. In spite of the strong brands certain smaller brands have gained entry like 235 by Natuzzi Trading Pte Ltd, which can pose a threat to us (Euromonitor, 2011). The presence of strong brands will make it not easy for any new company to enter the market but will definitely hamper their growth because it will not be easy for smaller companies to gain brand awareness due to existing loyalty for major brands. Government regulations of Singapore are another significant factor because it has banned advertisements, promotion and sponsorship. By implementation of Tobacco (Control of Advertisements and Sale) Act new entrants will find it very difficult to compete with the strong brands (tobaccocontrollaws,...