Global sales manager Phillip Morris PDF

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Ensayo de ventas globales. ...

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Programme Title Bachelor of Business (International) Level 8

Stage , Semester 1 Month Year April 2020

Continuous Assessment number 2

Module Title:

Global Sales Management

Module Code:

BB4J PT/FT

Assessment Type: Individual Assignment No. 2 Weighting:

60%

Maximal Possible Mark: 100 marks Submission Date: TBC/End April 2020

Student Name: Fernando Jardon (22027)

1. Introduction Philip Morris is the largest tobacco company in the world, integrated into the Altria Group and made up of two specific companies for its operations in the United States and the rest of the world. In 2006, its sales represented almost 15% of the world cigarette market. Philip Morris International is the world's leading tobacco company and has a diverse team of 73,500 people from all over the world. It is a company that is committed to acting as a good employer and as a socially responsible company. Phillip Morris strives to be socially and environmentally responsible. Phillip Morris fights with dedication against the illegal tobacco trade. And proudly supporting the communities where tobacco comes from and where its employees work and live. Six of the top 15 international brands, spanning 180 markets, are from Phillip Morris, including Marlboro, the number one in the world. It has 38 production plants in 32 different countries. More than 150 million adult smokers worldwide choose their products, and for those who choose to continue smoking, Phillip Morris will continue to offer the highest quality products. But something important is that its vision of the future of adult smokers does not end here.

Mission, principles and corporate philosophy The Philip Morris company mission is guided by four strategies: a) Invest in good employees: motivate, invest and retain the most prepared workers since they are the ones who shape the company. b) Align with society: participate in the resolution of social concerns such as addiction and help those who want to quit smoking. c) Satisfy adult consumers: constantly trying to be creative to produce better products that help meet the increasingly demanding needs of consumers. d) Valuing shareholders: executing good business plans creating sustainable growth for the company. The company follows a philosophy of conscience with society and the product that is sold and for this reason they consider themselves as a company concerned with the well-being of society.

They follow a fundamental principle: if the community thrives, the company will also. So they work with farmers to develop good agricultural practices, follow a set of environmental principles to improve the way factories use resources, and support social initiatives and efforts to help those in need around the world.

2. History The history of what is now a global company dates back to 1847, when Philip Morris opened a small store on Bond Street (London) that sold ready-made tobacco and cigarettes. Upon Mr Morris's death, his wife Margaret and brother Leopold took over the business. In 1881 the company became a limited company and Leopold Morris partnered with Joseph Grunebaum to create Philip Morris & Company and Grunebaum, Ltd. This company was dissolved in 1885 and the company became known as Philip Morris & Co., Ltd. Eventually, the founding family ceded control of the company in 1894 and was acquired by William Curtis Thomson and his family. Under Thomson's direction, the company was named King Edward VII's tobacco company; in 1902 the company opened its doors to the New York market thanks to Gustav Eckmeyer. The property was split 50% between the British parent and the American partners. Eckmeyer had been the only Philip Morris agent in the United States to import and sell cigarettes made in England since 1872. 1919 was a very important year for the company. That year he witnessed the introduction of the Philip Morris Diadem logo, the acquisition of the Philip Morris Company in the United States by a new company owned by American shareholders, and its establishment in Virginia under the name of Philip Morris & Co., Ltd., Inc. By the end of the following decade, the company had begun manufacturing cigarettes at its Richmond, Virginia, factory; in 1924 the one that would become his most famous brand was presented: Marlboro. By the mid-1950s, business had become an essential part of American culture; Soon after, Philip Morris International launched into the manufacturing and marketing of its products worldwide. Philip Morris International has to his credit 150 different brands and some 1,900 variants, among which are:

Marlboro • L&M • Chesterfield • Bond Street • Philip Morris • Parliament • To Mild (Indonesia) • Lark • Morven Gold (Pakistan) • Next • Dji Sam Soe (Indonesia) • Diana (Italy) • Optima (Russia) • Sampoerna • Hijau (Indonesia) • Muratti • Virginia Slims • Merit • Red & White • Apollo-Soyuz (Russia) • Delicates (Mexico) • Boston (Colombia) • Multifilter • Longbeach

• SG • Peter Jackson • Best and Classic (Serbia) • f6 (Germany) • Assos (Greece) • Petra (Czech Republic and Slovakia) • Interval (France) • Petterøes (Norway)

3 What sales structures / methods and routes to market are in place? (Hypothesise if information is unavailable). The Sales department ensures that the products are distributed, available and sold in the appropriate places. Sales works closely with the Marketing department. Marketing: The core of its activity is to develop and implement sales and commerce to maximize the availability, visibility and merchandising of brands at the point of sale. This means creating strong relationships with wholesalers and retailers. The general distribution channels for tobacco can be diverse depending on the type of company. Depending on the ownership of the channel, one can speak of: 1.- An own and direct channel, when the tobacco company delivers the tobacco directly to the customer (practically non-existent in the tobacco sector) 2.- An external or external channel, when the tobacco company transfers the distribution of the product to other different companies. This channel is formed by a series of distribution companies that allow the transfer of the product, they are the so-called intermediaries, which differ between

wholesalers and retailers, the former are those who buy from producers or others like them and later sell to other intermediaries and the latter are those who sell the product to the final consumer. Therefore there may be: 1) Long channel (2 stages or more): Producer Wholesale Retail Consumer 2) Short channel (1 stage). Producer Retail Consume In particular at Philip Morris International, as well as in its subsidiaries, they make use of a long external channel, where wholesalers take part in the distribution phase. Philip Morris delegates the power to distribute its production to an external company and this company distributes cigarettes to retailers and consumption points such as Bars, Hotels, and meeting centers, these companies have all the means to get it to the final consumer in the optimal way. For example, in the Philip Morris International subsidiary in Spain, it has just renewed a contract with a European logistics company (the first comprehensive logistics operator in Spain and Portugal and one of the main ones in southern Europe) for the next 5 years, until 2025. This Logistics company will be responsible for providing the complete distribution service, including the transportation of the products from the Phillip Morris factories in Holland, Portugal, Poland and Germany. Therefore, a Logistics company is in charge of the collection of the product, its international transport, planning and firm supply, the management of stocks and orders, grouping, packaging, distribution, collection and billing, as well as post-sale services to the consumer. In summary, this sales model is very convenient for Phillip Morris, since practically they are the factory and through distribution contracts, another company carries all the weight of the warehouse, sale, collection, human resources, distribution and the entire logistics operation.

4- Evaluation of the role of technology in the success and growth of the organization (see above). The Research and Development department helps Philip Morris International achieve its goals by developing new products and supporting the continuous manufacture of current products. The company conducts basic research in new technologies to develop a new generation of products, including those that have the potential to reduce the damage they cause. Create less harmful alternatives than cigarettes Cigarette smoke contains nicotine, a natural component of tobacco, and many harmful chemicals. These toxins (and not nicotine) are the leading cause of tobacco-related illnesses. Phillip Morris continues to develop alternative products to cigarettes that do not contain nicotine and offer a taste that satisfies adult smokers, but without smoke. Phillip Morris' new projects research department has focused on two ways of doing it, and both eliminate tobacco combustion. The first is to heat the tobacco to generate a vapor containing nicotine, while reducing the levels of harmful chemicals in the vapor. The other is to produce a vapor that contains nicotine without tobacco and this is just the beginning. Non-combustion tobacco products Through research and development, Phillip Morris has managed to create two innovative products: IQOS and TEEPS. Each one heats the tobacco differently. Thanks to the most sophisticated electronics, IQOS heats just below 350 0C a blend of tobacco specifically prepared to be heated, without combustion, fire, ash or smoke. This generates a nicotine-containing vapor, releasing the true flavor of heated tobacco. Since there is no combustion, the levels of harmful chemicals are significantly reduced compared to cigarette smoke. This is what makes IQOS a truly smoke-free product for adult smokers, to which millions of adult smokers have already migrated. The IQOS heating system works with three main components: a heating tobacco unit, a device and a charger. The consumer simply inserts the heating tobacco unit into the device, where an electronic heating foil heats it. Right after, you can vacuum the tobacco unit for heating. Once finished, the consumer takes the tobacco unit out of the device and can safely dispose of it in the trash can. When necessary, you can recharge the device by inserting it into the charger.

Similar to IQOS, TEEPS heats tobacco to release its true flavor. But TEEPS uses an alternative heat source to extract the flavors and nicotine from tobacco leaves: a carbon tip heats up tobacco, and both its appearance and experience is similar to that of a cigarette, without being. The carbon heat source at the end of the TEEPS device turns on. Heat is transferred to a uniquely processed pressed tobacco block. The consumer takes several puffs of the TEEPS device to inhale the nicotinecontaining vapor until the experience is complete. TEEPS 'patented design prevents tobacco from burning. Products without Tobacco Phillip Morris is also developing two product platforms that contain nicotine but not tobacco, and both use nicotine extracted from tobacco leaves. These tobacco-free products produce a vapor that contains nicotine in different ways: -A product platform heats a liquid that contains nicotine and flavorings through an electric heating system to generate a vapor. This platform includes electronic cigarette products such as Nicocig and Vivid, available in the United Kingdom, and Solaris in Spain and Israel. -It also includes MESH, a new new generation steam electronic product. MESH heating technology uses a metal mesh with small holes to heat sealed liquid filled cartridges containing nicotine and flavor to generate steam. MESH can also heat the liquid solution from the traps and has a system that detects when there is little liquid left to ensure the continuity and quality of the steam generated and inhaled. These improvements respond to the concerns of adults who use these steam products regarding quality, safety, continuity and origin. A pilot test of MESH was launched in November 2016 with four flavor offerings in the UK and was a complete success. The other product platform has been developed based on the technology they acquired in the search for new offers for customers. The products in this category emulate the feeling and ritual of smoking, only without tobacco or combustion. Unlike electronic cigarettes, STEEM generates a vapor that contains nicotine in the form of a nicotine salt. When the consumer puffs, a chemical reaction occurs between nicotine (a weak base) and a weak organic acid that produces a vapor containing nicotine salt.

6. Challenges the company have faced and / or are likely to face entering a new market? (e.g. legislative, political, cultural, economic etc.)

Legislative Challenge: Tobacco regulation, which involves regulation in public spaces, global tobacco control (WHO Framework Convention) and general legislation against tobacco trade. In this regard, Phillip Morris has tried to be effective and strict, collaborating with governments, health authorities and other tobacco companies to agree on rules and regulations; as well as supporting regulation in public settings. On the other hand, Phillip Morris believes that international covenants (WHO) are necessary, in order to prevent illegal trade (smuggling, illicit manufacturing, counterfeiting of cigars that results not only in image damage but also in serious risk to consumer health. Another way in Phillip Morris's policy is communication by creating responsible marketing, accepting the possible restrictions and even the prohibitions of each government where he participates, and for this Phillip Morris supports that it be done through rigid legislation which will be effective, through Despite not sharing the same ideas as the WHO in relation to the topic discussed.

Phillip Morris marketing obeys three basic principles: a) Do not advertise cigarettes to minors. b) Health warnings together with the consequences of tobacco; and c) Respect for cultures and traditions. Another fact that this company tries to fight is that of child labor, since it is a global problem, and unfortunately, some of the main tobacco-growing countries may encounter this problem, and therefore it supports all kinds of initiatives aimed at to solve the issue. Demographic Challenge: Cigarette smoking and disease in smokers: The company is aware of the overwhelming medical and scientific consensus that cigarette smoking causes smoking and that cigarette smoking is addictive. Although this directly affects the company's sales, Phillip Morris supports every action for those who want to quit smoking. This includes supporting legislation that requires cigarette manufacturers to put health warnings on packages and in advertising. Phillip Morris allows the government and health authorities of each country to determine the text of such warning messages on the packages of their products. Phillip Morris has a very big challenge because his social responsibility goes completely against his sales and profits. Measures known to be effective in reducing smoking, such as increased cigarette taxes, a complete ban on advertising,

high-quality tobacco ads, packaging design and information control, restrictions on public smoking, and support for give up smoking. To a great extent Phillip Morris supports the way to reduce the damage to health caused by tobacco proposed by the World Health Organization to effectively prevent minors and non-smokers from starting to smoke, we strongly support measures to prevent tobacco use tobacco by minors with tobacco product marketing prohibitions targeting minors, restrictions aimed at reducing children's exposure to tobacco advertising, and control of all tobacco marketing. Phillip Morris is obliged by some governments to combat smoking in pregnant women, and to create campaigns with information such as the following: Women smokers have an increased risk of suffering and delayed conception, infertility, complications in the pregnancy, childbirth premature, miscarriage and stillbirth. Babies born to women who smoke during pregnancy have a lower mean weight at birth than babies born to women who did not smoke. The risks of sudden infant death syndrome (SIDS) increase among babies born to women who smoked during pregnancy reduces the risk of these adverse consequences. In pregnant women, tobacco increases the chances that babies will develop poor lung development, asthma, and respiratory infections. In addition, Phillip Morris must work in unity with numerous organizations to prevent tobacco use among minors by developing educational programs for children: Children who smoke can develop a tobacco addiction, are likely to continue smoking when they grow up, and they are at risk for lung cancer and other serious illnesses in the future. No one wants children to smoke. The question is how to get them to stop smoking. Parents have a great influence on children, so they can instill in them a healthy lifestyle and make them see the importance of not smoking. Adult smokers should keep their cigarettes out of the reach of children and avoid smoking in front of them. Phillip Morris knows how difficult it is to be the manufacturer of such a harmful product and in his social responsibility plan he obeys any availability of the governments of the world and agrees that they criminalize the sale of cigarettes to children and apply the respective sanctions to people and establishments that sell tobacco to minors with fines and, in particular cases, punish with the loss of the right to sell any tobacco-related product.

Over the years, Phillip Morris has supported initiatives to prevent tobacco use by minors in various ways, and will continue to do so in the future. Clear example of this is that for years there is not a single commercial advertising their products in any mass media.

7. Conclusion Almost everyone knows the harm that work has, but this is still a huge industry, but the Phillip Morris company has launched an anti-tobacco campaign that directly attacks the product it is selling. Since 2018 Phillip Morris has been selling electronic cigarettes worldwide and has found that this new business model has been well received by consumers, and at the same time Phillip Morris is also more aggressive with his anti-smoking campaign giving advice to people to stop smoking and with a clear goal; Phillip Morris is directing his consumers to the electronic cigarette market and in this way he is getting his clients to quit tobacco. After many years fighting with the laws and the damages of his products, Phillip Morris has changed sides, now he is substituting tobacco for steam, an alternative that seems healthier and will give him more freedom to continue with his business. Phillip Morris does it again, found a gap in the market, a gap where customers were concerned about their health and has offered them a solution. Phillip Morris has also found a trend among smokers and has been able to take advantage of it. The trend of steam smoking. And at the right time this company offers consumers an alternative with the firm Phillip Morris. Phillip Morris is a company more than 100 years old, but that does not prevent it from being a company at the forefront. Phillip Morris will undoubtedly continue to lead the smoking market by fighting smoking.

8. Reference

Framework Convention Alliance (FCA). How big was the global illicit tobacco trade problem in 2006? (Factsheet). Washington, DC: FCA; 2008. Available from: http://www.fctc.org/dmdocuments/fca-2007-cop-illicit-trade- how-big-in-2006-en.pdf

World Health Organization. Report on the World Tobacco Epidemic, 2008: The MPOWER package. Geneva; WHO; 2008. p 7. Available from: www. who.int/tobacco/mpower/en/.

European Union. Press Release: Contraband and counterfeit cigarettes: frequently asked questions. 2007 Dec 14. Brussels.

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