Philip Morris

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Philip Morris

Philip Morris is the largest cigarette maker in the world. The company has historical roots dating to 1847, when a London tobacconist and entrepreneur, Philip Morris, Esq. recruited expert hand rollers of cigarettes from Russia, Turkey, and Egypt. Present cigarette manufacturing methods have little resemblance to those early days when an experienced roller would turn out 2,500 a day. Today, a single cigarette machine in the primary Philip Morris manufacturing plant in Richmond, Virginia, can produce more than 4,000 cigarettes a minute, or two billion a year. That plant alone, one of more than fifty Philip Morris cigarette manufacturing facilities in the world, produces more than 245 billion cigarettes a year.

In 1919, the company was taken over by its American shareholders, and its headquarters moved to the United States. In the 1930s company president Reuben Ellis hired the Milton Biow advertising agency, which created a popular radio advertising campaign featuring a bellhop, Johnny Roventini ("Little Johnny"), and the slogan "Call for Philip Morris." The success of Philip Morris during the twentieth century was brought about by the marketing of a single brand, Marlboro, which was introduced in the late 1920s as a woman's cigarette, with advertising slogans such as "Mild as May" and "Red tips for your pretty lips." In the 1950s, under the direction of marketing expert George Weissman, Marlboro achieved enormous appeal when the company emboldened the package design with a medallion-like chevron and revamped the advertising image to one of rugged cowboys and the wide open spaces, television commercials for which were accompanied by the theme song from the film, The Magnificent Seven.

At the same time, doubtless in response to the growing scientific evidence that cigarette smoking caused lung cancer and other serious health problems, Philip Morris added a filter to Marlboro (and its other brands). Today more than 98 percent of those who smoke buy filtered cigarettes, which confer no health protection over other brands. Joseph Cullman was president of Philip Morris from 1957 to 1978 when Marlboro's popularity skyrocketed. During his tenure the Marlboro box, filter, and leaf mix were developed, and by 1976 Marlboro was the largest-selling cigarette in the United States. Today, Marlboro is the topselling cigarette in the world.

In the 1960s Philip Morris sponsored many of the most successful television programs including Perry Mason, The Dobie Gillis Show, Rawhide, CBS News with Walter Cronkite, and National Football League telecasts. When cigarette ads were banned from television in 1971, Philip Morris created and sponsored sporting events such as the Marlboro Grand Prix auto race, the Marlboro Cup thoroughbred race, and the Virginia Slims Women's Tennis Circuit, the televising of which successfully circumvented the broadcast ban on cigarette advertising. Weissman, who ascended to the chairmanship in 1978, stepped up Philip Morris' sponsorship of fine arts, and the company's logo began appearing in association with operas, ballets, and art exhibitions.

Phililp Morris was the first cigarette manufacturer to recognize the need to shape its identity through diversification. In 1957 it purchased a producer of flexible packaging. It acquired the Miller Brewing Company in 1969 and the 7-Up Bottling Company in 1976 (both since sold). Moving aggressively into consumer packaged goods, Philip Morris acquired General Foods in 1985 and Kraft Foods in 1988 by means of hostile takeovers. Such diversification enabled Philip Morris to regain clout with television networks, which were covetous of the enormous outlay of advertising dollars for the company's many food products. By 1990, in an effort to further downplay its identity as primarily a cigarette manufacturer, Philip Morris had dropped the word tobacco from its name. In 2002 the company renamed itself Altria, diminishing the profile, on paper at least, of the domestic and international Philip Morris cigarette manufacturing divisions. Despite diversification, the company continues to earn half its profits from cigarette sales. During the 1990s, profit from the Marlboro brand alone exceeded the combined profit of the 3,000 Kraft and General Foods products.

Today, Marlboro accounts for nearly 40 percent of all cigarettes sold in the United States, and Philip Morris' market share of total U.S. cigarette sales is nearly 50 percent. Marlboro is the largest-selling cigarette in the world. Perhaps the biggest threat the company faces is what it describes in its 2001 annual report as "management of our litigation challenges," namely, lawsuits brought by state attorneys general, the U.S. Department of Justice, and numerous personal injury attorneys representing persons claiming to have been made ill by smoking. Although the Master Settlement Agreement negotiated with the major tobacco companies by the state attorneys general in 1998, as well as other cash settlements, resulted in a major financial outlay, the good news for the company was that it resulted in a legitimizing financial relationship with the states and provided a measure of stability for shareholders well past the year 2020. Altria has also admitted to the harmfulness of smoking on its corporate website, while also increasing its contributions to charity. Lone among the cigarette companies, it has campaigned for regulation by the Food and Drug Administration, a strategy that could result in greater security for the company by inhibiting the marketing campaigns of competing cigarette manufacturers.

▌ ALAN BLUM
▌ LORI JACOBI

BIBLIOGRAPHY

Altria Group, Inc. 2002 Annual Report. New York: Altria Group Inc. 2003.

Blum, Alan. "The Marlboro Grand Prix: Circumvention of the Television Ban on Tobacco Advertising." New England Journal of Medicine 324 (1991): 913-917.

Kluger, R. Ashes to Ashes: America's Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris. New York: Vintage Books, 1997.

Philip Morris Companies Inc. Annual Report, 1985. New York: Philip Morris Companies, Inc., 1986.

"PM's Art Programs Tour the World." Philip Morris News 17, no. 7 (November 1976).

White, Larry. Merchants of Death: The American Tobacco Industry. New York: Beech Tree Books, 1988.

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