Philip Morris: Marlboro Friday Marlboro�s Competitive Position in early 1993 In early 1993 Marlboro�s competitive position was a relatively good one: it had considerable customer captivity, given the addictive nature of the product and the fact that it�s consumers tend to be very brand loyal; as a result of this, it could command a price premium on its products, which let them enjoy a profit of 55� per pack vs. 5� for discount brands; it enjoyed some economies of scale, derived from its high fixed cost that was advertising ($86 million vs. $36 million for the second highest advertising spending brand, Newport); it had high gross profit margins (above 76% of operating revenues); and relatively stable share (it has been above 20% for the last decade). However, this last point has been a source of concern, since they are losing some share to the discount brands (from a high of 26.2 in 1989 to 24.4 in 1992). The effect of discount brands gaining share was also seen in the decline of Marlboro�s sales and shipments. Marlboro�s Marketing Strategy Marlboro�s marketing strategy to da......

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