This case is a shortened version of “Philip Morris USA and Marlboro Friday (A)”. In July 1993, Philip Morris executives consider data gathered in the second quarter to U.S. tobacco sales. Three months earlier, the company had announced a 40-cent-per-pack promotion for Marlboro cigarettes, the number-one-selling cigarette in the world. On the day of the announcement, the 4th Philip Morris stock April fell $ 14.75, to $ 49.375, while the Dow Jones Industrial Average fell 68.63 points. On 4 June, the company has … Read more »

This case is a shortened version of “Philip Morris USA and Marlboro Friday (A)”. In July 1993, Philip Morris executives consider data gathered in the second quarter to U.S. tobacco sales. Three months earlier, the company had announced a 40-cent-per-pack promotion for Marlboro cigarettes, the number-one-selling cigarette in the world. On the day of the announcement, the 4th Philip Morris stock April fell $ 14.75, to $ 49.375, while the Dow Jones Industrial Average fell 68.63 points. On 4 June the Company announced an extension of funding by 8 August. After eight months of consecutive declines share, Marlboro’s share was recovered by three points. Philip Morris executives now face several important decisions: Should the Marlboro promotion beyond 8 August be extended? Should the promotion be replaced with a permanent reduction in the wholesale price? If the prices of other Philip Morris brands premium be reduced? Finally, the prices of the company’s discount brands should be changed in any way?
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from
Paul W. Farris,
Mark Parry,
Richard Johnson
Source: Darden School of Business
11 pages.
Publication Date: Sep 28, 2001. Prod #: UV2923-PDF-ENG
Philip Morris USA and Marlboro Friday (A) (Condensed) HBR case solution

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