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/bctid1395217394

So 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?

12 comments:

Bobby Dragicevich said...

Phillip Morris is not behaving in a socially responsible manner by creating these products. The only reason they created the heatbar is so that people will be able to smoke in public places, in turn the company will sell more cigarettes in the long run due to fewer smoking bans and the requirement of their product to be used in the public arena. Social responsibility is only a meaningful term when used in a unselfish context. Phillip Morris, is out to make money off of an addiction that takes a lot of time and a lot of money to give up, two things that many people can't afford. They are serving themselves. Yes, it does help the average smoker in other countries with the development of these new products; however, it helps them to continue a deadly habit while they benefit from it. Phillip Morris should be able to put as much tar and nicotine in their cigarettes that the nation they are selling in allows them. People make a choice to smoke cigarettes and if they want double tar and double nicotine then Phillip Morris is just providing a product that feeds a demand.

Peter Sparacino said...

Although i do not smoke i think it is pretty ingenious for Phillip Morris to introduce these products into the market. Like she said, people buy 831 billion cigarettes a year in throughout the world. If they already have these many people addicted to it why not introduce a cigarette that has two times the tar and nicotine, it will just make a person more of an addict which they will need to supplement the urge so they will buy more. Also, it is a hypocrisy to introduce the ‘heat bar’ because this could become the argument of “healthy smoking”. In conclusion Phillip Morris is behaving socially responsible because this is what the consumers will want if they want to smoke safe or smoke a highly intense cigarette, the whole company od Phillip Morris understands what they are doing they are trying to become the big dog in an already competitive market. But why not just smoke a cigar?

Unknown said...

I do believe that Philip Morris is behaving in a socially responsible manner. The reason why I believe what he is doing is right is because as a smoker, this does seem like it is the right thing to do. With his product it benefits both the smokers and the non smokers. A good example of this would be the Heatbar! If you do think about it, both the non smokers and the smokers benefit out of it (smokers get to smoke without really hurting non smokers). Also, the tobacco block is an ingenious idea to promote his sales which I think there is nothing wrong doing in making a product such as that. All it does is help those who smoke save up some money! I mean the high government taxes on a cigarette box aren’t really helping smokers quit except take away more money from them! Lastly, yeah I do think it is ok to put twice as much tar and nicotine level in cigarettes if people in other countries think it is ok for these cigarettes to be sold in their own countries. I stand by my opinion because I am a smoker and I do not see what the real problems are with these products. It’s really not changing anything and as far as I see it, Philip Morris is doing what is best for his company and for his customers.

-Manish Zachariah

MartinJoyce said...

Phillip Morris, by its very nature, is incapable of behaving in a socially responsible manner. I would make use of a land-mine metaphor, but there is some merit to the argument for use of land-mines in some wartime situations: cigarettes are always just poison.

Cigarettes, beyond a shadow of all doubt, cause cancer. Perhaps it could be argued that PM is serving the interest of its stockholders and employees (by turning a profit), but the fact remains that they are knowingly selling toxic substances to the consumer. Not all smokers get cancer, and not all that do die from it; still, playing Russian roulette with the lives of your customers, no matter where they live, is about as far from any definition of "responsible" as you are capable of getting.

MartinJoyce said...
This comment has been removed by the author.
Cleopatra Coward said...

Let me start by saying that CSR literally is a concept that means, managers of organisations should take the interests of its society at heart by taking on responsibilities to sustain a long term relationship to the society (employees, shareholders, community and the environment) in all aspects of the organisation’s operation. There is an emerging theory called sustainability which typically speaks to the idea that companies who are acting socially responsible will compete with their rivals trying to outperform by focusing on the world’s social problems and sees them as an opportunity to make more profit and help the world at the same time.

Phillip Morris International sells approximately 831 billion cigarettes annually which mean that their main aim is to make profits, for example, by lowering the tax rate on the tobacco rolling machine in Germany. This would be just acting socially responsible in mediocrity. Due to global issues arising and the fierce competition in the cigarette market they are fighting to gain market share in less developed countries, which is like a lion preying on a baby. They manufacture this product yet knowing that it causes great harm to consumers and non consumers. There is nothing good about smoking; smoking is the cause for at least 100,000 person’s death annually (causes lung cancer, premature babies, bronchial diseases, heart attacks, etc.). People who smoke just do it because it is a bad habit, for no valid reason. Most college students smoke because it’s either due to belongingness (wanting to fit in with their peers), to reduce stress or calm nerves or just think it is “cool”.

Personally, I hate the scent of smoking. This puts me at risk of getting all or some of these ailments listed above. What if I was an asthmatic patient? Children whose parent (s) smokes are also at risk. If we think about the entire aspect of acting socially responsible which includes the “greenhouse”, the environment is also adversely affected with the emission of carbon dioxide and methane, two main gases found in cigarettes. Nicotine has been proven to increase an individual’s blood pressure, it places additional pressure on ones heart causing it to work twice as hard, this can lead to a severe heart attack or blood vessels being broken which can also result in death. Therefore, increasing the amount of tar and nicotine would be a crazy idea, all that would happen is that more cases of deaths and the increase of global warming and an epidemic of diseases (for example tuberculosis) putting a dent in the government’s purse. Even though the demand exists, companies who make these harmful products are only contributing to ones own way of dying while making a profit (when you go into a store to purchase cigarettes, there is always a sign that says “smoking is hazardous”).

Finally, to date over 11 million persons have quitted their smoking habits and there is no disadvantage attributed to quitting.

Mel said...

Although I'm not a smoker in this situation but Philip Morris is not behaving socially responsible manner because all he is trying to do his improving his company. that is all what he is doing for the people who are smoking everyday. Including that device he created when u put an empty a cigarette on the side and the tobacco comes out. that is cool. but you have to have patience for that. I don't think they should double the nicotine and tar anywhere because so many people are dying from lung cancer and cancer because they where smoker. And if people double the the nicotine it makes them to smoke a lot. My opinion to smoking i know its bad. People had been saying that to my face for so many year now. but even if you don't smoke, and you enhale it, you still can get lung cancer or die from it. As what people say. I don't know if that is true or not.

Zac said...

In my opinion Philip Morris is not behaving socially responsible manner. Mel, person who wrote before me said that he wants to increase his company’s profit. I agree with this opinion. The tobacco’s market is huge and so profitable. Everybody wants to do something to be more originally and popular than opponents product. But everything what is connected with tobacco market is little bit immoral. Because a tobacco’s company create a “the best” habit to decrease a stress. This is many smokers opinion, but also this habit is the ones of the best way to get a lung cancer or die from it. But Philip Morris cannot be responsible manner because everybody knows that cigarettes can kill us and that can be cause of sickness for example: lung cancer. Every smoker take a behaving responsible for his habits.

Anonymous said...

It is incredible that even after all of the lawsuits, smoking restrictions now in effect and all of the campaigns to try to make the public stop smoking there are still people smoking. What is even more mind blowing is that there are people that had never smoked before picking up this deathly habit even with all the information out there of why smoking is bad. It is undoubtedly that Phillip Morris is scared to lose the clientele and is trying to do whatever it takes to appeal to a different market. Girls usually tend to hate the smell of smoke but for some reason believe smoking will attract more guys, so what better solution than to make cigarettes that have a fruity taste and smell to them. The only way that Phillip Morris could in some way redeem themselves by making sure that it is very clear to the market that the new cigarettes they are producing will have twice the tar and nicotine than normal cigarettes. The people that are smoking are people that want to and are not being forced to so in a way Phillip Morris can not be held responsible for the markets decision, they are just trying to make some money even if it is at other’s expense and health.

Anonymous said...

philip morris is socially irresponsible for introducing the product with twice the tar and nicotine of a conventional U.S. cigarette. there are two issues that are at hand here, one is of marketing their product to a younger consumer and the other is introducing a product with twice the tar and nicotine. for the issue of a younger consumer base i would have to agree with PMI. when i say younger base i mean 40 years and younger. since smoking has the side effect of death it is only logical that they find "young" smokers. some may say no way is that logical but PMI doesn't make their money on the teenager who tried smoking in high school, they make it on the people who use tobacco for a lifetime. since they make their Billions off of these people, it may completely turn me off of smoking for good. because the loyalty of the consumer to the company costs most their lives it is disturbing that big tobacco would introduce products that are even more detrimental to the consumer. this act shows not only that PMI is solely interested in turning a profit but also to gain that profit at the expense of their consumers health. now, if they had a product like a completely additive free cigarette; that would do wonders for the public perception of big tobacco. but since they decided to go in the completely opposite direction, i believe that more of their customers will falter in
their support.

please excuse spelling and grammar, the original version was lost due to user error.

Lou Vicelli said...

I dont think that he is behaving in a socially responsible manner. The company is doing it to create more sales for the company by trying to create less smoking bans. I do beleive that it is a good idea for those places that arent on a smoking ban even if that contradicts what i am saying. they are trying to surve the customers with this. If they want to but cigarettes thats is there call and if people want to buy them then let them. There company wants to make money and if this will help them make money and people will buy them then let them sell them.

Eva Kristova said...

I personally think that Philip Morris does not behave in a socially responsible manner at all. To put out cigarettes that have twice the tar and nicotine levels of conventional U.S. cigarettes is not only immoral but it should be illegal, I believe.
There is no such thing as a healthy smoking or smoking in healthier way.
Smoking in general is an awful habit that should not be being justified, supported or spread. In fact companies and also governments of all countries should participate in eliminating the number of smokers if they want to act in social responsible way.