Marlboro Friday
Encyclopedia
Marlboro Friday refers to April 2, 1993, when Philip Morris
announced a 20% price cut to their Marlboro cigarettes to fight back against generic competitors, which were increasingly eating into their market share.
As a result, Philip Morris's stock fell 26%, and the share value of other branded consumer product companies, including Coca-Cola
and RJR Nabisco
, fell as well. The broad index fell 1.98% that day.
Fortune magazine deemed Marlboro Friday "the day the Marlboro Man fell off his horse." for Philip Morris Investors interpreted the price slash as an admission of defeat from the Marlboro brand, that Philip Morris could no longer justify its higher price tag and now had to compete with generic brand
s.
Since the Marlboro man
was an image that stood since 1954, it was considered one of the biggest marketing icons, investors reasoned that to see the Marlboro icon give in to a price war, the marketing itself must be ineffective. As a result of plummeting stock value in major American brands, 1993 marked a slight decrease in U.S. ad expenditures.
It was the only decrease to occur since 1970. At the time, this event was regarded as signifying "the death of a brand
" and the advent of a "value-minded" consumer generation who pay more attention to the real value of products and not the brand names. This view soon proved to be incorrect, with the rest of the decade's economy being dominated by brands and driven by high-budget marketing campaigns.
Philip Morris
- Philip/Phillip Morris :*Altria Group, conglomerate company previously known as Philip Morris Companies Inc., named after the 19th century tobacconist**Philip Morris USA, tobacco company wholly owned by Altria Group...
announced a 20% price cut to their Marlboro cigarettes to fight back against generic competitors, which were increasingly eating into their market share.
As a result, Philip Morris's stock fell 26%, and the share value of other branded consumer product companies, including Coca-Cola
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
and RJR Nabisco
RJR Nabisco
RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
, fell as well. The broad index fell 1.98% that day.
Fortune magazine deemed Marlboro Friday "the day the Marlboro Man fell off his horse." for Philip Morris Investors interpreted the price slash as an admission of defeat from the Marlboro brand, that Philip Morris could no longer justify its higher price tag and now had to compete with generic brand
Generic brand
Generic brands of consumer products are distinguished by the absence of a brand name. It is often inaccurate to describe these products as "lacking a brand name", as they usually are branded, albeit with either the brand of the store in which they are sold or a lesser-known brand name which may...
s.
Since the Marlboro man
Marlboro Man
The Marlboro Man is a figure used in tobacco advertising campaign for Marlboro cigarettes. In the United States, where the campaign originated, it was used from 1954 to 1999. The Marlboro Man was first conceived by Leo Burnett in 1954. The image involves a rugged cowboy or cowboys, in nature with...
was an image that stood since 1954, it was considered one of the biggest marketing icons, investors reasoned that to see the Marlboro icon give in to a price war, the marketing itself must be ineffective. As a result of plummeting stock value in major American brands, 1993 marked a slight decrease in U.S. ad expenditures.
It was the only decrease to occur since 1970. At the time, this event was regarded as signifying "the death of a brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
" and the advent of a "value-minded" consumer generation who pay more attention to the real value of products and not the brand names. This view soon proved to be incorrect, with the rest of the decade's economy being dominated by brands and driven by high-budget marketing campaigns.