Philip Morris
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- Named Organization
- Aclu
- Act Up
- American Legislative Exchange Council
- Amoa
- Assist, Assist
- Bpaa
- Cato Inst
- Cpsc, Consumer Products Safety Commission
- Epa, Environmental Protection Agency
- Fac
- Family Course Consortium
- Franklin Associates
- Ftc, Federal Trade Commission
- Hhs, Dept of Health and Human Services
- Iaai
- Ibff
- Ida
- Jefferson Center
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- Nacs
- Nasfm
- Natl Assn of Legislative Fiscal Officers
- Natl Conference of State Legislatures
- Natl Consumer League
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- Nvfcf
- OSHA, Occupational Safety & Health Administration
- P+G
- Pfizer
- Reason Foundation
- Roper, Roper Org
- Stat
- Tax Foundation
- Wcbpa
- Wlf, Washington Legal Foundation
- PM, Philip Morris
- Document File
- 2024705917/2024705998/Presentation File Ets
- Litigation
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- Named Person
- Parrish, S.C.
- Area
- KEANE,DENISE/OFFICE
- Request
- Stmn/R1-004
- Stmn/R1-093
- Date Loaded
- 05 Jun 1998
- UCSF Legacy ID
- aak98e00
Document Images
RE C E lV E'D
iS,t ~
.,
GIOALS
(1)I Where do we have to be in the gear 2000?
StiR a viable profitable business.
(2) Where do we~ want to be in theiyear 2000?
Continue the income and share, growth rates objiectives~ of' the
Five-Year Plan through 1990s.
AS'SUIIl'P'TI'Om
Our strategg must be designed to maintain and create the political
conditions to attain our prianartg goal and h~ be desi#ed to
maintain th~~~el~polifilcaD conditions to attain our~ seco~ndarg~ goal.
THE ELEMEAT'S~ 11iECES~SAAY ' TO A~~ERCH~ TH'ES'E~~ G'~OALS~~ CA~I1
BE DIVIDED II1T'0 WHAT' W'EI IIIUST' HAVE' RI1D WHRT VVE
WM TO HAV'E
IIllust have.: Ifleans those vari'ablles essential to maintai'n~ing a
profitable viable business therebg meeting our
primarg goa1..
Want to have: ITleans those variiabIes essential to
~
maintaining a profitable vi~abl~etusine~ss,
with sustainiable double-di1r;it' incomie growth
and corresponding share growth therebg
meeting our seconidary goa1.
WHRT WE IIIUST HRVE TO! AT'TAI'lli PAI'IIlAAY GOAL
Cigarettes~11t W .Is ~~ ~todau ~ st~iTl a llegalp~~ro~dttct (~Le.,,,no
latv or regulation uJhilch would efIfectivelzd ban current
product, pricing or packaging.)
(2) 5inoxing a tolerated social activit'g -- i.e., smokers nott
exclLdedfrom empl'ogmenfi, obtaining insurance, etc.
(3) 40i0 bi'11ion cigarettes consunzed bg40 million adul'ts
annual'lg.
(0 RetaiS r.resience and suffic~ient distribution outlets to sus"talin.
wiftspread availabilit'U of product to consumers.
StabilitU ih, product liabillitg, litigation on the primartg issue
and ETS -- i.e., no perceived threat of si''gnificant or
escalating financiall losses in court cases.
WHRT WE 'W'~A'~11~T TU H'A~V'E" ~ T0~ AiTTRYll S'~~EcO~ItID~AEY~ GO~~AL,
The Must-Haves P1us:
Advertising to spread value-added "'nrn~ews" about the product.
(2) Tax rates equal toi a stable (or d'eclining) percentage of retail
product price.
(3) Sponsorship and promotions toi add value fio the product.
O) F''lexibilitg: to alter product attributes and packaging to add'i
value.
(5)i Smoking still a1lloRUed in, workplaces and ihdoor location%
open to the public.
~
~
N.
41
(6) Product liabilit-g liitigiation perceived~ to be no more a threat to ~
PPII than to Pfizer or P'GG. CA
~zl
~1
N
concESS~~~~~~~.ions
(iJ
Incremental, intermittent tax increases
(2') Ingredients~ disclosure/labeling using food labeliing as a
model,
(3) Ilew and/or additional u1arning labels (size and location are
main concern)
(4) Smoking bans in transient and common; are.as~ (critical
concern is preserving some accessible smoking area or
section)
(5)
Bans on sampling apart from a retail purchase or mail,
delivery
(61 Bans on vending machines
(7) Industrg, IIl'arket.ing coide Lvith privalte enif.orcemient bodg(as
in 60s and 7'0is )
(8) Yout~h no-smoking advertilsin gi in some ratio to brand ads
(9)
Licensing as enforcement mechanism to stop salies to minors
(~10~)~ In~dustrg'PIlarketing code mritteni int~o~ law
STHRTEGY PARAIIlET'ERS
Illust-haves anno be traded or lost
Want-to-haves~ m~au be traded on1g, to sa e a must-have,
otherulisetheU cannot be lost
Concessions maU be Lsed 0 protect t e mulst-haves~ and
tniant-t'o-haves
Ilo political magic bullets -- on:lyj a product breakthrough can
change the basic situation; i.e., smoking is considered
unhealth,g and "i:ude "".
AI11~ give~-u~pis~ should have a~ legisl~a~tivei or~ spec~~if~li~~c business~
~
purpose -- onlg lawr can destroig must-haves and uTant'-to-
haves.
Public~ opinion and med'ia coverage are onlgianportant iaaisof~ar
as theg alffect the government -- we will never be liked and
what we want is to be ignored.
11o "grand" compromise -- antis, are ure11-funded, enduring
businesses.
Y10'l=-S'0-G'RRI11D OOIIIPROMY'SE
1'ROP'OSRL: Trad'e advertising for explicit tort preemption.
EFF'E'0'pS: (l) Remove litigation threat
(2) Remove controversq caused bV
advertising
DEFE(11 Declining core busihess lowers multiple as
much as T~~itigatiion threat
Litigation threat is not signif'i~cant, jjust
new sw orthV
(3) Threat can be ef#ectivelUremoved bg
changing state laws
(4) Rdvertising is essential to secondarg goals
and surplus advertising dollars of
competitors would worsen mix
(5) Livelihoods of prof~essilonaI antis depend on
criticizinq the i'ndustrg -- theg will not go
aw ag
IIIiTERI1RT'I'OAifIL EZPE'RIEIlGI'~ "IADIGRTE'S":
tl l1 Consumers will pag much hiigher prices for cigarettes
(2) Advertising of cigarettes not linked to social
acceptability
But' U.S. mag be differEnt because:
.
..
Siociodemographics are different in Europe -- cigarettes
alwags a"luxury" due to post7war shiortage and number of
upscale smokers.
Conlmercial advertising in Europe is less central to
culture than in U.S~., --~~ ads~ in Europe~! are~ m~or~e a~ m~ark, o~~f
"illlegi'tiTn.ac,g" than "1'egitiinacg"..
In Europe, overall medial coverage of arcane risks is less
sensational an!d smoking among social elite is moree
widespread! making social aicceptabilit'g of smoking higher
and price elasticit'g of' cigarettes lower.
.
USA 28% 16% 84%
UK 20Po 16'070 8470
Stuitzerland' 22°'T 1?:d 8'370
Stueedan 277o ~ 2'7o '~ 7~9~'T
W~. Germa~rng
2I5°'T~
2"1 % .2
7~9?7
P ~i=~,ia^d 77 ~~5 0~ 31170 '~ 69'7~
Fran-au 3'10070 33°i~'. 6707o
Italu 29% 3370 67't~
Spain 3170 3 1 0,70 ' Gn'~ro
Ttirke!g 42'l 44070 56'7*'l
Greece 4370 457o 55' 07o ~
SOURCE: ROPER (19191 ) DATA FOR USA; P'AlI SURVEY (1989)
FOR EUR0'PERII COUTITRIES
~
CDLLEGEI~i1A~V'ERS~IT'Y~ G~RBDi1RT'ES
y IIDC'IDETTCE SMOKERS IIOIl-SmOKERS
COUII'T
K 'E'Y VU'LIlERRHILIT'IES RnnR'FFEC'T'ED RCTIVITIES
Charge of marketing and selling to gouth,
advertising and sponsorships
POS displags and promotions
sampling
vendiiagi machines
(2) Link of'heaith care cost to supposed social cost'~ of smokihff~
tax increases
employer policies against smokers and smoking
insurance rate di'#ferentials for smokers!
(3) Continued fiscal problems in Washington and the states
tax increases
Federal regulatorV bodies.
FTC: all marketing activities
EPH and OSHH: smoking bans
HHS: disclosure of ingredients, RSSI'S'T-tgpe program
Justice: antitrust, broadcast of brand events, Rico
CPSC et al: "fire safe'' product
(5) State ballott initiatives
N
~.
NI
large tax increases earmarked to antis {A
(6) Solid wast~e/environmmiental! movement
packaging bans
