Philip Morris Ethical Issues

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  • Topic: Altria Group, Tobacco, Philip Morris USA
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BUSI 385

Philip Morris International Inc.
Cigarettes an Ethical Dilemma
For a Prosperous Company

By
Matthew Murray

Table of Contents
Company Overview
Company Success and Campaigns
Tobacco Regulation and Effect on the Company
An Ethical Look on an “Evil” Company
Philip Morris and Positive Ethical Behavior
Company Views and the Utilitarian Approach
The Fact of the Matter for Philip Morris
In Conclusion
References

Company Overview
The Philip Morris founded a cigarette company in 1847 London. They specialized in hand-rolled cigarettes and were very much a small, family ran business. In 1902 the company moved to New York City and had a new demographic in a new country. The company remained small and was actively only the sixth largest tobacco company in the United States. With the famous “Marlboro Man” advertising campaign the company gained popularity and in 1983 Philip Morris was the largest cigarette company in the United States.

From there, the company began to expand into other businesses expanding on its international market. Philip Morris acquired Miller Brewing Company in 1970 and General Foods in 1985. The same year Philip Morris Companies was incorporated as a publicly traded company. Philip Morris continued their expansion with the takeover of Kraft in 1988 and the merger between South African Breweries with Miller Brewing in 2002. Philip Morris Companies changed its name to Altria Group Inc. in 2003 and spun off Kraft Foods in 2007. (4) They then gained the international business of Philip Morris as a separate company and acquired U.S. Smokeless Tobacco Company. The holding company owns Philip Morris USA, U.S. Smokeless Tobacco Company, Philip Morris Capital Corp and Nu Mark, a new company that produces Nicotine Lozenges. Company Success and Campaigns

Today Philip Morris is still top in the cigarette market. The company’s cigarette brands have about half of the cigarette market in the United States. The other Philip Morris brands include Parliament, Virginia Slims, Merit, Cambridge, and Basic. The majority of the company success comes from their genius advertising in the 1950's. (4) Widely regarded as one of the most successful marketing campaigns of all time the “Marlboro Man” helped Philip Morris bring itself to the top of the industry. Marlboro used the image of a rugged cowboy enjoying a cigarette on horseback quickly adapt men into enjoying their brand. Released in 1955 the success of the advertisement was incredible. In 1954 Marlboro sales accounted for $154 million in cigarette sold. From there the campaign expanded into other professions including sports stars, racing drivers, and other “manly-men” to boost bran recognition. (6) The campaign continued through 1999 and is still widely recognized in today's pop-culture. A lot of Philip Morris’s success can be attributed to the fact that their product is addictive. Having customers with a physical dependency to their product makes customer loyalty an easy thing especially when demand is high. Tobacco Regulation and its Effect on the Company

While Philip Morris enjoyed uncontested financial success throughout the latter half of the 20th century it appears trouble is coming. Through the 60's smoking was a lifestyle in the United States. It was associated with a life of glamor and practically had everyone smoking. By 1963 American adults were smoking an average of 12 cigarettes per day. In 1963 the Surgeon General released the linking of cigarette smoking and cancer. Since then the tobacco industry has only become more regulated. A year later the Cigarette Labeling and Advertising Act was passed which required all cigarettes sold to carry the Surgeon General’s warning. As research into the negative effects of smoking grew stronger the regulations and bans began. In 1990 smoking was banned on buses and domestic flights the first movement in the prohibition of smoking and its dangers to others. With these...
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