Philip Morris USA's decision to slash the price of its No. 1 cigarette by nearly a quarter, and to turn the Marlboro Adventure Team into the world's biggest promotion, had reverberations throughout the marketing industry.
Several other big players followed suit, repricing their products. It was a huge price adjustment for branded package goods, which had been suffering from the inroads made by discount and private-label brands.
Implementation of the massive program fell into the hands of James Morgan, who in April 1993 replaced Larry Wexler as senior VP-marketing. Mr. Wexler, who became senior VP-planning and finance, had been in on the development of the plan along with President William Campbell.
With Mr. Morgan in the saddle, PM is estimated to have poured $325 million into advertising and products for the Adventure Team.
While the program is best known for its price cut and increase in advertising, it actually comprised a series of complex individual moves.
To get PM's discount, each retailer had to sign a contract agreeing to display signage, and then they were paid according to Marlboro sales, not purchases. The company set up a system to monitor the results and issue checks to retailers, while making sure Adventure Team catalogs and signage were displayed.
Mr. Morgan, 52, may have been about as prepared as you could be for the assignment. His stint as the marketing head of Philip Morris USA is actually his second, having been exec VP-marketing from 1978 to 1983. He left to become chairman-CEO for a then-booming Atari and, after his return in 1988, served three years as corporate VP-marketing planning for parent Philip Morris Cos.
The promotion's result: Philip Morris says the share of its most important brand has gone from a preprogram 22% to 27.8% as of April 1994.