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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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Philip Morris International logo
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

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AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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