Talent Forums Fall season 2018
By Borja Arino Bruna, Master in Management candidate, class of 2014.
The IE Career Fair was last month and hopefully I don’t have to tell you what it was about. For those of you that live under a rock the fair brought over 125 companies to campus looking for new blood. Most of you probably attended the fair with enthusiasm, and I don’t doubt that you had a chance to practice your elevator pitches. Personally, I decided to attend the Philip Morris International (PMI) and Japan Tobacco International (JTI) presentations to figure out how these companies compete and differentiate their products given they are not allowed to advertise.
PMI is the larger of the two companies, their flagship product being Marlboro cigarettes, one of the most renowned brands in the world. PMI is to JTI what Coca-Cola is to PepsiCo; the former´s flagship products is obviously dominating the market, but the latter´s need to diversify may pay off in the long run. When directly asked how PMI handles marketing and brand management, the presenter gave me a threefold answer: prize, quality, and taste. He also mentioned the importance of market research to anticipate customer needs. Along these lines, he mentioned PMI was working on a project called Next Generation Products (NGP). This was aimed at delivering something cigarette lovers can enjoy while benefiting from a less harmful product. We will see how this works out around 2016/2017. If anything, his answers show at PMI they don’t focus on advertising gimmicks, instead they strive for flavor and quality at the lowest prize they can deliver. Is the lack of advertising creating a market where companies have no room for error, having to constantly listen to the consumer?
To paraphrase the JTI presenter, when a consumer starts smoking a particular brand, it’s extremely difficult for them to change their preferences. According to him no other industry experiences such devoted brand loyalty. It sounds like getting a non-smoker to buy your pack of cigarettes would be essential. So how does JTI do it? Their Unique Selling Proposition (USP) is built around innovation and modernization. JTI is continually working on improving their product and their packaging. Different kinds of filters, menthol options, and diversifying across a wide range of products are JTI´s long term strategy. If this answer sounds extremely similar to the one PMI gave, it’s because it is.
Both companies are diversifying into other forms of tobacco consumption such as hookah tobacco and rolling tobacco. They are trying to hit the growing alternative market, which has risen partly due to changing tastes and partly due to taxes being concentrated on the traditional products. Also PMI may be up to something with their Next Generation Products, we’ll have to wait and see. It certainly seems like they both have a similar strategy: figuring out what consumers want and giving it to them. Ever increasing regulation and taxation and the current economic climate are pushing tobacco companies to continuously innovate. On top of that, the customer lifetime value of a smoker must be very high if we consider the unwavering brand loyalty and the fact that they will carry a pack of your cigarettes everywhere they go. It’s certainly comic that tobacco companies seem to be among those that care most for consumers.
About the author
MIM (Master in International Management) student with interpersonal and analytical skills and broad international experience currently contributing to the blog. Entered college at fifteen at the University of West Georgia and presented at first national conference in the US at only sixteen. Worked in research projects and presentations completed both individually and in teams, in the US and abroad. Graduated in the spring of 2013 with a B.S. in Economics and a B.A. in Psychology, Summa Cum Laude.
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