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Philip Morris International Marketing

To deliver a smoke-free future by transforming the tobacco industry through innovative alternatives that improve lives of adult smokers worldwide

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To deliver a smoke-free future by transforming the tobacco industry through innovative alternatives that improve lives of adult smokers worldwide

Strengths

  • BRAND: IQOS established as premium global smoke-free leader
  • INNOVATION: Strong R&D capabilities with 1,800+ scientists & engineers
  • CONVERSION: 18.3M users converted to smoke-free products globally
  • DISTRIBUTION: Vast global retail footprint spanning 180+ markets
  • FINANCIAL: $9.95B smoke-free net revenue in 2023 (36% of total)

Weaknesses

  • PERCEPTION: Persistent negative tobacco industry stigma limiting reach
  • FRAGMENTATION: Inconsistent smoke-free product availability globally
  • EDUCATION: Complex consumer education needs on new product categories
  • REGULATORY: Varying regulations create uncertain marketing landscapes
  • COMPETITION: Limited presence in vaping compared to heated tobacco

Opportunities

  • EXPANSION: 1B+ adult smokers globally represent conversion potential
  • DIGITAL: Personalized digital engagement to improve conversion rates
  • PARTNERSHIPS: Healthcare collaborations to validate harm reduction
  • MARKETS: Emerging markets with growing health consciousness
  • SUSTAINABILITY: Eco-friendly initiatives to improve brand perception

Threats

  • REGULATION: Increasing marketing restrictions in key markets
  • COMPETITION: Rising smoke-free alternatives from agile startups
  • PERCEPTION: Anti-tobacco sentiment affecting all nicotine products
  • LITIGATION: Ongoing legal challenges on harm reduction claims
  • TECHNOLOGY: Rapid innovation cycles requiring constant adaptation

Key Priorities

  • CONVERSION: Accelerate smoker conversion to smoke-free products
  • EDUCATION: Develop clear scientific communication strategies
  • DIGITAL: Transform customer experience through digital channels
  • PERCEPTION: Rebrand as a science-based harm reduction leader
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To deliver a smoke-free future by transforming the tobacco industry through innovative alternatives that improve lives of adult smokers worldwide

CONVERT

Accelerate smoker transition to smoke-free future

  • ACQUISITION: Convert 1.2M new adult smokers to IQOS by quarter-end with 85% retention rate
  • JOURNEY: Implement AI-powered conversion journey in top 15 markets reducing conversion time by 30%
  • EXPERIENCE: Launch redesigned IQOS onboarding experience with 40% higher completion rate
  • ECOSYSTEM: Expand IQOS ecosystem with 2 new complementary products driving 25% higher LTV
EDUCATE

Clarify scientific evidence of reduced harm

  • CONTENT: Create science education hub reaching 10M adult smokers with 3M+ engagement actions
  • SIMPLIFICATION: Redesign scientific messaging reducing complexity by 40% while maintaining accuracy
  • INFLUENCERS: Partner with 150 healthcare professionals as science advocates in key markets
  • MEASUREMENT: Implement robust tracking showing 25% improvement in harm reduction understanding
DIGITIZE

Transform customer experience through digital channels

  • PLATFORM: Launch next-gen digital engagement platform in top 20 markets with 3.5M active users
  • PERSONALIZATION: Deploy AI personalization engine driving 35% higher conversion from awareness
  • DATA: Increase first-party data collection by 50% while enhancing privacy compliance
  • AUTOMATION: Implement AI marketing operations reducing campaign launch time by 40%
REBRAND

Establish position as science-based harm reduction leader

  • PERCEPTION: Improve brand sentiment scores by 15 points in key markets through science messaging
  • PARTNERSHIPS: Secure 5 strategic partnerships with respected health organizations or universities
  • SUSTAINABILITY: Launch comprehensive sustainability initiative reducing product footprint by 30%
  • MEASUREMENT: Implement brand tracking showing 20% improvement in scientific credibility metrics
METRICS
  • SMOKE-FREE REVENUE: 30% YoY growth to reach 42% of total revenue
  • USER CONVERSION: 4.8M new users converted to smoke-free products
  • DIGITAL ENGAGEMENT: 55% of all customer interactions through owned digital channels
VALUES
  • Excellence in product innovation and scientific research
  • Consumer-centricity in all marketing initiatives
  • Transparency in communication about products and their health impacts
  • Social responsibility in driving reduced-risk alternatives
  • Operational integrity and regulatory compliance
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Align the learnings

Philip Morris International Marketing Retrospective

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To deliver a smoke-free future by transforming the tobacco industry through innovative alternatives that improve lives of adult smokers worldwide

What Went Well

  • GROWTH: Smoke-free products now represent 36% of total net revenues
  • EXPANSION: IQOS launched in US market with initial positive reception
  • ADOPTION: Added 3.1M new IQOS users in previous 12 months globally
  • MARGINS: Smoke-free products delivering higher margins than combustibles
  • DIGITAL: 42% increase in digital consumer engagement touchpoints YoY

Not So Well

  • CONVERSION: Slower than targeted conversion rates in key Asian markets
  • PERCEPTION: Brand sentiment scores below targets in Western markets
  • INTEGRATION: Post-acquisition integration challenges with Swedish Match
  • REGULATORY: Unexpected marketing restrictions in three European markets
  • COMPETITION: Lost market share to vaping competitors in UK and Germany

Learnings

  • EDUCATION: Scientific messaging requires significant simplification
  • REGIONAL: Marketing approaches need stronger regional customization
  • DIGITAL: Direct-to-consumer digital channels outperform traditional ones
  • DATA: First-party data collection critical for personalization success
  • ECOSYSTEM: Product ecosystem approach drives higher retention rates

Action Items

  • DIGITAL: Accelerate D2C digital platform rollout in top 10 markets by Q3
  • EDUCATION: Launch simplified science communication strategy by Q2 end
  • COMMUNITY: Develop IQOS user community strategy across key markets
  • PERSONALIZATION: Implement AI-driven personalization engine by Q4
  • TRAINING: Upskill global marketing teams on digital-first approaches
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To deliver a smoke-free future by transforming the tobacco industry through innovative alternatives that improve lives of adult smokers worldwide

Strengths

  • DATA: Robust customer data from 18.3M+ registered IQOS users
  • INVESTMENT: Significant AI R&D budget aligned with transformation
  • TALENT: Growing team of data scientists and AI specialists
  • INFRASTRUCTURE: Cloud infrastructure supporting AI initiatives
  • LEADERSHIP: Executive commitment to digital transformation

Weaknesses

  • INTEGRATION: Siloed data systems limiting AI effectiveness
  • LEGACY: Traditional marketing approaches still dominant in workflow
  • EXPERTISE: Limited specialized AI marketing talent in tobacco sector
  • ADOPTION: Varying levels of AI literacy across global marketing teams
  • MEASUREMENT: Underdeveloped AI ROI metrics for marketing initiatives

Opportunities

  • PERSONALIZATION: AI-driven user journey optimization at scale
  • PREDICTIVE: Machine learning for smoker conversion propensity models
  • CONTENT: AI-generated content tailored to regulatory requirements
  • ANALYTICS: Advanced attribution models for marketing effectiveness
  • SERVICE: AI chatbots for 24/7 product education and support

Threats

  • PRIVACY: Increasing global data protection regulations
  • ETHICS: AI bias in targeting potentially vulnerable populations
  • COMPETITION: Disruptive AI-native competitors entering the market
  • REGULATION: AI marketing capabilities restricted in tobacco sector
  • TRANSPARENCY: Consumer distrust of AI in sensitive health decisions

Key Priorities

  • PERSONALIZATION: Deploy AI for hyper-personalized conversion journeys
  • PREDICTIVE: Implement ML models to identify conversion-ready smokers
  • COMPLIANCE: Develop AI tools to navigate complex regulatory landscape
  • EXPERIENCE: Create seamless AI-powered omnichannel experiences