Tuesday, August 22, 2017

The New Brand Strategy at Philip Morris

 

Philip Morris Companies, Inc., (New York, New York), the makers of Marlboro cigarettes, Kraft foods, Nabisco snacks, and Miller beer, have, after 150 years, announced that they intend to change their corporate name from “Philip Morris” to Altria Group, Inc.

Chairman and CEO, Mr. Geoffrey C. Bible indicates that the change is being undertaken for two reasons:

1) The need for clarity and to separate the identity of the parent company from the tobacco company which operates under the same name.

2) As the result of evolution. With the acquisition of Nabisco and the public offering of Kraft, they aren’t the same family of companies they once were, and so they need to change their name to more accurately reflect themselves.

Philip Morris Companies have spent over $200 million in corporate-image advertising over the last two years, designed to improve the image of “Philip Morris.” Philip Morris explains that, while their corporate image scores have improved as a consequence of this advertising, “Philip Morris” is still, nevertheless, viewed as a tobacco company.

Philip Morris Companies insist that their intent is not, per se, to distance themselves from tobacco, but to delimit those tobacco associations to “Philip Morris” the tobacco company, while the Altria Group, Inc. as a house of brands, adopts a new name and identity adequate to include each of the brands presently owned, and to encompass their future plans. As Mr. Bible indicates, the business has changed to become more than just a tobacco company.

The significance of the new name, “Altria,” according to Mr. Bible, is derived from the Latin word “altus,” which means “high,” and reflects “the corporation’s desire for its family of companies to always ‘reach higher’ in striving to achieve greater financial strength and growth through operational excellence, consumer brand expertise, and a growing understanding of corporate responsibility.”

Shareholders will have the opportunity to approve the new name during April of 2002.

Many industry watchers consider this an attempt by the now Philip Morris Companies to distance themselves from the negative associations surrounding “tobacco,” and thus to slip out from underneath their ignoble reputation and activities. Others suggest it is a precursor to spinning “Philip Morris” entirely out of the house-of-brands corporate brand portfolio.

Whether they spin “Philip Morris” out of their portfolio or not, if they can make the new name work, it could, as well, be seen as good brand management under a house-of-brands strategy.

Copyright © 2001  KLM, Inc. All Rights Reserved.

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