1. Title of PPT Karen Enthoven Karthik Rajaraman Ben Thompson Emma Weston
Ethics and Marketing
23-Nov-18
Becoming Responsible: The Case of Philip Morris
Becoming Responsible: The Case of Phillip Morris
Karen Enthoven
Karthik Rajaraman
Ben Thompson
Emma Weston
© Software AG, 2003

2. Outline Philip Morris – The Case Ethical Issues Raised
Title of PPT
23-Nov-18
Outline
Philip Morris – The Case
Ethical Issues Raised
Advertising Issues
Ethical Issues in Marketing
Q&A
Industry regulations and laws are simply rules and do not provide solutions to all ethical dilemmas, particularly when one considers the creative multimedia strategies possible when a product is marketed. Currently regulations restrict the marketing of cigarettes. Restrictions of products exist for health and paternalistic reasons, which get more severe each year. We advocate that regulations should also restrict the marketing message promoted by the “mother-brand” senior to the tobacco brand eg Philip Morris and Malboro. Even with comprehensive rules in place, companies develop sophisticated and subtle marketing techniques to achieve effective branding. In the book, ‘The Tipping Point’, there has been enormous saving of expensive television and other advertising spend by tobacco companies, directly impacting the bottom line.
23/11/2018
© Software AG, 2003

3. Philip Morris – The Case
Title of PPT
23-Nov-18
Philip Morris – The Case
Maker of the World’s Best Selling Cigarette “Marlboro”
Increased Diversification (Kraft Foods, Miller Brewing)
Repositioning to meet changing social climate
From Tobacco Giant to World’s largest Packaged Goods Company
New Mission Statement:
“To be the most responsible, effective and respected developer, manufacturer and marketer of consumer products, especially products intended for adults”
New Tagline
“Working to make a difference. The people of Philip Morris”
The Ugly Truth
Marlboro kills 75,000 Americans per year
2/3 of $80Bn USD revenue still comes from Tobacco
Philip Morris is a leading international provider of a diverse range of consumer goods. Their brands include Marlboro cigarettes, Kraft foods, Miller Breweries.
A recent trend has seen companies becoming more socially and community responsible. Increasingly it is expected by all stakeholders that prominent companies have a corporate social responsibility policy and even include this in their financial reporting by way of “Triple Bottom Line” reporting. These changes indicate an increased importance of perception, in particular marketing angle, portrayed by a company.
Philip Morris recognize these market expectations and the need to reposition themselves in the new international community. Instead of being seen as a tobacco giant their marketing will position them as the worlds largest packaged goods company with the tag line “Working to make a difference. The people of Philip Morris”. However two thirds of the $80b revenue comes from tobacco sales. This raises the ethical question of whether or not this can be classified as promotion of “self-interest” to actively compete in a new environment, or is there a degree of Philip Morris misleading and indoctrinating the public.
23/11/2018
© Software AG, 2003

4. Ethical Issues Raised Shareholder Responsibility
Title of PPT
23-Nov-18
Ethical Issues Raised
Shareholder Responsibility
Self interest - meeting shareholder needs
Moving with the times
Right to compete and effectively represent products
Stakeholder Responsibility
Accurate information
Proper representation
Responsible Advertising
23/11/2018
© Software AG, 2003

5. Advertising Issues Current Situation Ideal Situation Legal framework
Title of PPT
23-Nov-18
Advertising Issues
Current Situation
Legal framework
Ethical dilemma - Protection vs Freedom
Easy to circumvent (Marlboro Country)
Ideal Situation
Ethical behaviour
Onus is on Tobacco companies
Relatively undeveloped
Promotion of individual products
23/11/2018
© Software AG, 2003

6. Ethical Issues in Marketing
Title of PPT
23-Nov-18
Ethical Issues in Marketing
Ethics and the relationship between marketing manager and their customers
Representing the official company position vs the Truth
Advertising conventions – stretching the truth
What happens when you are found out?
Role of a Code of Ethics
Good but can be circumvented
Can tobacco companies be trusted ?
May just be lip service
Advent of “Green Marketing”
Green does not necessarily mean ethical
For the first question above, Philip Morris is the ideal case in point of how ethics can intrude into the relationship between marketer and customer. Firstly, there is a tension between towing the company line, representing the official position (eg social makeover for Philip Morris) and the truth, they are a tobacco company who don’t want to feel guilty for being one and want you to like them anyway. In some ways the mission statement to institutional investors presented earlier is at least closer to the truth, but this is not the picture they aim to present to the real or potential consumer.
Advertising conventions – everyone does it (eg puffery, stretching the truth), it’s expected, so we will too
What happens when you are found out? Should we take the Kantian position that telling the truth is more rational and always better in the end? If found out, there could be a high level of distrust between consumer and marketer, like has happened with the cigarette companies hiding the truth about the harmful effects of nicotine and tobacco for such a long time.
Code of Ethics – this can be a good start, but it really just represents another set of restrictions or regulations that sophisticated companies will get around, further the concept of self-regulation in this area may not sit well for consumers and market watchers, ie should tobacco companies be able to set their own rules? Can they be trusted to be draft, train and implement such a code with true and objective rigour? Once a Code of Ethics is in place it could be seen as de facto best practice even though it may not in fact be this.
Green Marketing – Environmentally friendly marketing does not mean ethical.
23/11/2018
© Software AG, 2003

7. Questions
23/11/2018