In 1954, the US Tobacco company Philip Morris started to develop its sales activities overseas by choosing an accessible market not so far from USA by creating an affiliate society in Australia. In 1955, PM Overseas was born and was established as an international division. Today, Philip Morris International is the leader on the traded tobacco industry thanks to its Marlboro brand, which is well-known worldwide.
Philip Morris International is the world's leading international tobacco company and the fourth most profitable international consumer goods company. Over the years, they have demonstrated strong performance through organic growth and new market entries, and by acquiring and integrating companies. Their strong infrastructure, strategic focus, resources, employees and brands position them to succeed today and in the future.
In 2008, PMI had net revenues excluding excise taxes, worth $25.7 billion, up $2.9 billion or 12.7% versus 2007 and up $1.3 billion or 5.6% on an organic basis, excluding acquisitions and currency, representing the high end of their long-term, constant currency target growth rate of between 4% and 6%.
The operating companies' income grew an impressive $1.5 billion or 16.7% and $O.9 billion or 9.9% on an organic basis.
[...] Three traditional entry modes for PMI 14 III. THE DIFFERENTIAL STRATEGY FOR THE FRENCH AND THE CHINESE MARKETS 16 A. Macro environmental analysis 16 B. STP process 17 C. Porter industry analysis 23 D. The mix analysis 26 E. The entry mode in the French market and the Chinese market 30 BIBLIOBRAPHY 32 INTRODUCTION OF THE COMPANY 1 Formal presentation 1 Short history of Philip Morris International In 1954 the US Tobacco company Philip Morris started to develop its sales activities overseas by choosing an accessible market not so far from USA by creating an affiliate society in Australia. [...]
[...] To understand which machine PMI use, it is necessary to know how they operate from seed to pack. After harvesting and curing, tobacco leaf is transported to manufacturing sites all over the world. The tobacco is allowed to age for up to three years in controlled environments to enhance its flavor Marketing and communication Philip Morris has to respect the legislation about the communication. Brands of Tobacco are not allowed to do advertising for their cigarettes. However Fillip Morris uses another strategy to keep a convenient positioning. [...]
[...] However, Philip Morris International has been able to find a specific positioning on which its marketing is based on, that is to say quality of PMI's cigarettes. The particularity of the Chinese market is that it has been held by a monopoly for several years and has recently opened to foreign investors. As Chinese tobacco suffers bad quality of local producers, foreign brands appears for Chinese consumers as premium brands even though the quality is less good than in western countries A global positioning depending on brands Philip Morris International holds several brands with each one a specific positioning in order to cover as segments as it is possible. [...]
[...] • China The number of Chinese smokers is over 0.35 billion, more than the total population of America. The sharp growth of China''s Cigarette Industry makes up the most important part of national economy. In 2008, the total domestic cigarette sales volumes were 2180.5 billion, increasing by of 2124.35 in Legal environment • France Two crucial laws called respectively the Veille Law (1976) and the Evin Law (1991): - Smoking in places used for a public use (including local stations and means of transport), except in places specifically reserved for smokers, and these places are defined by decree - Propaganda or publicity, direct or indirect, of tobacco and products (including all sporting events in France, and it applies to television broadcasts of events abroad, forcing chains to take all measures to hide these ads) - Any free distribution - Any transaction related to tobacco sponsorship - The sale of tobacco to minors under 16 years And the decree of 2006 aimed to ban smoking in public places. [...]
[...] Philip Morris adapts its products thanks to its consumers (surveys to improve cigarette's quality and taste) to make a tasty product in adequacy to the market's needs. Some products like Philip Morris cigarettes and Marlboro are sold everywhere but the Basic brand is just present on the French market because PMI had to answer to an unsatisfied need of middle quality and low price cigarettes. Considering the different opportunities offered by the different markets, Philip Morris chooses to adapt its products to the different markets to keep and develop its strong market share Price FRANCE CHINA High range of prices: from the In China, Marlboro represents an Basic which gets the lowest price expensive brand in comparison to to the expensive Benson & Hedges Chinese product but with the deal which represents a superior quality between PMI and CTNC, the price product. [...]
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