Philip-Morris-Marlboro Essay Example for Free

Philip-Morris-Marlboro EssayThe largest cig bette manufacturer in the United States is Philip Morris but there are also four major players in the industry. In 1998, due to a decrease in number of gross revenue and customer feedback, Philip Morris resulted to cold shoulder prices among the four players and take aim the competition. It is evident that the different manufacturers are sign onting the edge of being cheap because more people buy their product. Philip Morris is a notch higher because of its quality and sizeable sense hence smokers would prefer to smoke more and pay for less. Philip Morris consciously cut prices to avoid consumers to switch to cheaper cigarettes. When this was d adept, the shipments towards retail sellers dropped twice as fast meaning the make a motion of Philip Morris to cut prices was effective.The Philip Morris was yet to be successful since the other players such as Marlboro and R.J. Reynolds Tobacco Holdings Corp, which is the second-biggest cigarette producer, panicked and had implemented the uniform changes to their prices but this time they concord also intensified advertisements to attract more customers. With this economic trend, it shows that cigarette smokes are really particular when it terms of prices. Quality is the second thing that they look upon since they exigency to smoke more for less compensation. Since it was a good run for Philip Morris, there dumbfound been enlarged promotions that helped diminish the discrepancy among other competitors that have cheaper prices. The lower prices helped Philip Morris increase its share of cigarette sales.It would be wise for Philip Morris to be polymorphous and adaptive about the prices. To have cut prices would entail that they are elastic in personality and his highly sensitive to other cigarette manufactures. When it comes to health, the move of organization to intensify their opposition against smoking could really be a factor so to have cut prices means th at they are want to keep their consumers regardless of the posing health risks. Back to the economic terms, to have cut prices is to maintain the competition among the other players in the cigarette industry. A simple trade of small sales with high prices or large sales with low prices, either way is good as long as the net income is still enough to break-even or be profitable.With the reputation and the prestige that Philip Morris already established. Changes in prices among rival players would all be minor and can be handled easily. To take into consideration, the people in the retailing department are the ones who really set the prices for their product. Since retailers buy them in wholesale, the tendency is that they get the product cheap and sell it high. Well, that is basic but the fact is they remain unaffected in terms of competition hence they are unaware of the boost conflict in the greater economy. If the market were in perfect monopoly then buying low and selling high would be very effective. To have cut prices is to level the competition for other players. It is not done unreasonably. Price hikes and cut prices depend on the economic trend being foreseen or predicted according to the sales and income a company gets. Given a chance, to decide if Philip Morris should have a cut price, I would agree because there are many new players in the cigarette industry that are cheap and quality too and besides being the number one producer does not necessarily mean that one is the number one seller. People have different preferences when it comes to smoking cigarette hence the posing threats to their health are neglected. To make the long story short, Philip Morris should only watch the trends before jumping into having cut prices. Discounts and price cuts does not necessarily mean greater sales. It comes along with timing and situation. Putting it into economics, the demand for the product is same at all levels, the supply is also the same, then the determ ining factor to a successful sales is that to have prices that will catch the attention of the consumers and would baffle the assets of the rival players. Pricing ones product is a key to be successful in the industry.List of ReferencesConvience Store news. (2003). Philip Morris Revamps Rebate Program. on-line available from http//www.allbusiness.com/retail-trade/food-stores/4477294-1.html February 8, 2008Irish Examiner (2004.). Philip Morris to cut cigarette prices to keep customers on-line available from http//archives.tcm.ie/irishexaminer/2004/01/01/story447418409.asp February 8, 2008Gleen Collins. (2003. Philip Morris Sharply Cuts Prices on-line available from http//query.nytimes.com/gst/fullpage.html?res=9506E7DF1E39F935A25757C0A960958260 February 8, 2008