Abstract
This outline from Philip Morris documents the company's corporate goals and "action points" for Italy in 1993. PM's goals include things like changing laws to benefit it, achieving restructuing of tax laws, promoting legislation of benefit to the company, recruiting third parties to hep the company "prevent further restrictions on public smoking," and developing smokers rights groups to oppose smoking restrictions.
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1993 ACTION POINTS - ITALY
1. BUDGET
i) Achieve budgeted volume (42.5 bio.), M.S. of 45.7%, price increases,
IFO ($383.3 mio.), or as modified in the RF.
2. PROTECT THE INDUSTRY
i) Establish all necessary argumentation, alliances, grass roots, lobbying
and media plans to resist and contest efforts to raise the tax burden on
cigarettes. Carry out background and preparatory work to bring
implementation plans to push-button stage.
ii) Ensure Italian opposition to any attempts to raise the Ecofin excise tax
minimum.
iii) Change the contraband law in the first half of 1993 to remove the threat
of sales suspensions for PM. Support moves to constrain contraband,
including disincentives to the selling of contraband, tax restructuring and
increasing access to points of sale.
iv) Achieve a restructuring of the excise tax to a specific tax component of
20%, as an implicit precondition to the renegotiation of our local
manufacturing contracts.
Ensure that the new VAT law wil( a) establish the VAT application point
at the exit of bonded warehouses, and b) provide for contract
manufacturing activities and supplies to be captured within the special,
single VAT provisions that apply to cigarettes.
vi) Ensure that magazzini be granted the status of bonded warehouses, and
that the application of the free circulation directive will enable
independent distribution to be established.
vii) Promote new legislation concerning the custody of tobacco to permit
private guards and insurance when the Finance Police are unavailable;
and achieve an increase in the state budget for this activity.
viii) Prepare a study that will persuade the authorities to increase the number
of points of sale, particularly Patentini that are open after working hours.
ix) Preserve rights for trademark licensing and sponsoring
3. PROTECT SMOKERS
i) Prevent further restrictions on public smoking. Develop and employ
allies - FIT, unions, FIPE (restaurants), SILB (discotheques), smoking
parliamentarians, and the Smoking Club.
ii) Develop Smokers' Rights Group(s) through the Zurich Club.
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4. RENEGOTIATE CONTRACTS
i) Replace the expiring licence contracts with contract manufacturing by
end June 1993. Negotiate volume and fee levels against tax
restructuring. Improve Monital's service commitment to production
planning and quality levels.
ii) Simultaneously replace the distribution contracts and obtain: sales data
transmission from depots, direct access to magazzini sales data,
emergency direct distribution option to magazzini, improved terms for
payment and incremental orders.
5. MARLBORO
i) lncrease direct contact programmes targeted against specific
competitors (Camel) and tailored to local needs, particularly
discotheques in the south. Achieve 72.6% of the International full
flavour and 10.8% of the International LTN segments.
ii) Maintain our competitive marketing edge for all brands, and in particular
Marlboro: expand sales under trademark licences, develop new
communications (e.g., broadcasting offshore events), cooperative
advertising, co-sponsoring with improved media coverage.
6. MARKET OPPORTUNITIES
i) Superslims: Exploit the new launches of Multifilter Ultralights 100's slim
and PM Superlights 100 Superslim into the ultralight and superlight
subsegments targeted against Rothmans to achieve a superslims
segment share of 20.3%. Evaluate a Merit line extension.
ii) Domestic segment: Develop local campaigns for Diana to attack MS
strongholds (Sardinia and Sicily), launch Diana Ultra, and build the
family to 11.8% of the domestic segment.
iii) LTN: Launch Diana Ultra, Merit Uno, and Multifilter Superlights and build
shares of 55.2% and 42.4% in the Superlight and the Ultralight
subsegment, respectively.
iv) Explore new brand concepts with R&D to exploit the fashion
consciousness of the Italian consumer.
v) Get ready for a price war.
7. COMPETITORS
i) Monital: Monitor privatisation process for early identification of
prospective shareholders. Advise on improvements to distribution
system to improve service without losing competitive advantages or
building a system able to withstand the loss of PM. Develop product
plans (with Planning) for attacking Monital volume.
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8. QUALITY/COST
i) Develop sound PIP's with measurable results that can be incorporated
into the RF 1993 and the OB 1994.
9. DISTRIBUTION/SALES
i) Expand the sales force as budgeted and strengthen the training function
through the development of District Supervisors.
ii) Implement area activity planning that coordinates Marketing and Sales
concentrating on zones of weakness. Exploit TMS. -
iii) Complete the contingency study for own, independent distribution.
10. INFORMATION SYSTEMS
i) Implement the final phase of TMS, providing monthly magazzini sales
analysis, sales force activity reporting, feedback on special, local
activities.
ii) Evaluate possible sales force automation.
11. HUMAN RESOURCES
i) Roll out STEPS and MAPS
ii) Ensure that sound succession plans are in place in all functions.
iii) Renew the INFO project for all employees.
03/15/93
