At Philip Morris USA, our marketing goal is to find ways to effectively, responsibly and profitably connect our brands with adult cigarette smokers. We hope adult cigarette smokers will choose our brands.
U.S. cigarette volume declined about eight percent in 2009 and we expect industry volume to continue to decline. The cigarette industry is competitive, so we at PM USA focus on creating and maintaining brand loyalty among adult cigarette smokers. We want adult cigarette smokers of our brands to purchase our brands consistently. Likewise, we want adult cigarette smokers of competitor brands to switch to our brands. While we want to
grow our market share within the cigarette industry, we do not want adults to start smoking nor do we want kids to start smoking.
We design our marketing programs to enhance brand awareness, recognition and loyalty among adult cigarette smokers. We continue to communicate directly with adult cigarette smokers about our brands through direct mail, at retail stores and by providing unique promotions and experiences.
We believe society expects tobacco companies to help
prevent kids from smoking cigarettes or using other tobacco products. As the largest tobacco manufacturer in the U.S., we believe we have an important role to play in this effort.
Our primary channels for cigarette brand marketing are:
- at retail, where we present our brands to adult cigarette smokers making their final brand selection at the point of purchase; and
- direct mail, where we communicate to qualified adult cigarette smokers who have asked to receive communication from PM USA and its cigarette brands.
We also market to adult cigarette smokers by:
- offering line extensions of our brands;
- strengthening the relationship between adult cigarette smokers and their selected brand through unique promotions and experiences;
- providing retailer incentives to effectively and responsibly merchandise our brands; and
- working with retailers to help ensure that our brands are in stock.
In November 1998, the nation’s leading cigarette manufacturers, including PM USA, signed the Master Settlement Agreement (MSA) with the Attorneys General of 46 states, five U.S. territories and the District of Columbia. Prior to entering the MSA, PM USA, along with other leading cigarette manufacturers, had already reached agreements with Florida, Minnesota, Mississippi and Texas. These agreements, combined with the MSA, are collectively referred to as the state tobacco settlement agreements.
The tobacco settlement agreements fundamentally changed the way cigarettes are advertised, promoted and sold in the U.S.; affect every aspect of our marketing practices; and place limitations on our marketing activities.
