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The Philip Morris cigarette company was established by Philip Morris in 1847 in London, specializing in hand-rolled cigarettes. In 1902, the company moved to New York City and ventured into a new market. Despite the relocation, it maintained its small size and ranked sixth among tobacco companies in the United States. Nevertheless, with the introduction of its renowned "Marlboro Man" advertising campaign, Philip Morris garnered attention and grew to become the leading cigarette company in America by 1983. This achievement led to expansion into diverse industries and global markets.
Philip Morris, the company that acquired Miller Brewing Company in 1970 and General Foods in 1985, became a publicly traded company in the same year through its incorporation as Philip Morris Companies.
In 1988, they further expanded their portfolio by taking over Kraft, and in 2002, they merged South African Breweries with Miller Brewing. In 2003, Philip Morris Companies changed its name to Altria Group Inc. and spun off Kraft Foods in 2007. Additionally, they acquired the international business of Philip Morris as a separate company and also gained control of U.S.
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Smokeless Tobacco Company.
The holding company, including subsidiaries like Philip Morris USA, U. S. Smokeless Tobacco Company, Philip Morris Capital Corp, and Nu Mark specializing in Nicotine Lozenges production, continues to dominate the cigarette market in the United States. Its cigarette brands hold about half of the market share, with Marlboro being its flagship brand. Other popular brands owned by Philip Morris are Parliament, Virginia Slims, Merit, Cambridge, and Basic. The company attributes a significant part of its success to innovative advertising campaigns during the 1950s.
Among these efforts, the "Marlboro Man" campaign played a crucial role in propelling Philip Morris to become an industry leader.
Using the image of a rugged cowboy enjoying a cigarette while riding a horse, Marlboro effectively captured men's attention and promoted their brand. This 1955 advertisement greatly contributed to Marlboro's impressive $154 million in cigarette sales the previous year. In order to enhance brand recognition, the campaign also showcased sports stars, racing drivers, and other traditionally masculine figures. The campaign remained influential in popular culture until 1999 and continues to have an impact today. Philip Morris attributes a significant portion of its success to the addictive qualities of their product.
The tobacco industry is currently facing challenges due to regulatory measures, which is impacting their customer loyalty. Customers who have a physical dependence on a product tend to be highly loyal, especially when there is high demand. Despite its successful financial performance in the past century, Philip Morris now confronts these challenges. In the 1960s, smoking became popular and glamorous in the United States, with almost everyone participating. However, in 1963, the Surgeon General's report officially linked smoking cigarettes to cancer.
Since then, the tobacco industry has faced increasing regulation. In 1965, the Cigarette Labeling and Advertising Act was passed, which required all cigarettes sold to have a warning from the Surgeon General. As scientific studies on smoking's harmful effects grew more convincing, further restrictions and bans were put in place. By 1990, smoking on buses and domestic flights was banned as a first measure to protect non-smokers and eventually eliminate smoking entirely. These regulations also led to legal battles between the tobacco industry and both individual smokers and other organizations.
In 1998, tobacco companies agreed to pay $246 billion over 25 years as part of a settlement to shield themselves from potential government lawsuits. Although they initially denied the link between smoking and lung cancer, these companies experienced declining sales due to increasing health worries. To address this issue, cigarette makers introduced filtered cigarettes that claimed to reduce harmful particles in tobacco smoke.
In 2006, the District of Columbia District Court ruled that tobacco companies committed various offenses, including deceiving the public about health risks and targeting children through their marketing strategies. Consequently, these companies must now eliminate false claims about filtered cigarettes' safety and provide more transparency regarding their corporate practices. Philip Morris, a specific tobacco company, has experienced higher taxes on tobacco due to stricter regulations. Nevertheless, it is crucial to acknowledge that despite being marketed as safer, filtered cigarettes were discovered to be equally harmful as regular cigarettes. This is because individuals compensated for the reduced smoke by inhaling more deeply.
The government imposes direct taxes on cigarettes for state-owned property, causing cigarette prices to increase. Philip Morris and other companies pass on this tax burden to their customers. Despite significant changes in the tobacco industry, Philip Morris remains profitable by participating in different markets. (4) Even though people are aware of the health hazards linked to smoking, millions of addicted smokers continue with their habit. Given that Philip Morris profits from a product that is addictive and harmful to its consumers, it is reasonable to question the company's ethical values.
An Ethical Look on a “Evil” Company With full speculation as corporations go Philip Morris is certainly on the list as a “Evil company. The fact is that the company sells a harmful addictive products that kill almost 20% of Americans each year. In addition the company has long known about the dangers of smoking despite repeatedly denying the medical claims. Although these accusations Philip Morris is taking steps to change their business outlook. The steps to gain a more favorable public opinion shows that the company is not acting unethically.
When health reports linking smoking to various health issues emerged, Philip Morris made a significant choice. Instead of addressing the health concerns and attempting to produce "safer" cigarettes, Philip Morris opted to target a younger demographic. Although it may not be illegal to directly sell to minors, it is evident that the company views reaching a younger and more susceptible audience as the solution. Determining Philip Morris's moral stance proves difficult, but their continued prosperity comes at the cost of their customers' well-being.
Philip Morris, a company known for its concern about its stakeholders, has demonstrated a commitment to positive ethical behavior. In contrast to its smaller competitors, Philip Morris has never produced flavored cigarettes, which have come under criticism for targeting younger individuals with blends like Twista Lime, Mandarin Mint, and Beach Breezer. Instead, Philip Morris has made efforts to discourage minors from smoking.
Since 1998, the company has invested $1 billion in youth smoking prevention, which includes the "Think Don't Smoke" campaign initiated in the 2000's. The Philip Morris website is filled with information concerning the hazards of smoking, and the company has shown support for FDA regulation of tobacco. This support eventually led to the Tobacco Control Act in 2009. Additionally, Altria was featured on Fortune Magazine's Top 100 most admired companies of 2011, specifically in the fourth position within the Socially Responsible category.
The company contributed $54 million to several nonprofits, such as the Red Cross, the Smithsonian, and the United Negro College Fund. When examining the company, it becomes evident that they prioritize ethics and the societal impact they can make. However, once the true nature of Philip Morris's business activities come to light, it becomes a hindrance for the company. The company's perspective and approach align with utilitarian principles. It is evident that Philip Morris's public relations division is actively working towards their goals. Despite their efforts in social outreach, their intentions may be misguided.
The argument can be made that the company's social agenda is simply another expense that enhances Philip Morris's reputation as the lesser of two evils. While the company's endorsement of FDA tobacco regulation may have appeared to be a moral choice, it ultimately benefits Philip Morris. This is because FDA regulation makes it increasingly difficult for smaller cigarette companies to stay afloat. Only Philip Morris possesses the necessary supply chain and brand recognition to remain profitable in an increasingly regulated cigarette market. Furthermore, FDA regulation renders the industry less appealing, thus intensifying the obstacles that Philip Morris must overcome in gaining a competitive edge.
Applying the Utilitarian approach offers an intriguing perspective on the ethical breakdown of the company. Utilitarian thinking envisions an ideal society where all individuals start on an equal footing. Any subsequent changes in equality should benefit everyone. This particular company, however, is impacted by an imbalanced distribution of wealth, assets, or abilities. In a society where individuals have an equal opportunity to possess an unequal share of wealth, assets, or abilities, each person would strive to create an unequal distribution that benefits society.
In terms of the Utilitarian viewpoint, it is evident that Philip Morris is not engaging in fair practices. The company utilizes various business strategies to uphold its competitive edge, such as endorsing FDA regulations that would eliminate its rivals. Furthermore, the wealth disparity accumulated by Philip Morris over time has not benefitted society as a whole. In fact, the company's prosperity has come at the cost of society's health and overall wellbeing.
Even though Philip Morris does not follow this approach, it is understandable that the company may not be completely responsible. The fact is that smoking has well-documented and widely recognized negative effects, which puts the responsibility for a healthy life on the individual since smoking is known to be harmful to this right. However, the addictive nature of nicotine complicates this argument. For many years, Philip Morris consistently denied claims about the health risks of smoking and introduced filtered cigarettes that were promoted as healthier options.
In terms of their business, avoiding contributing to the deprivation of people's right to live a healthy life would have been directly contradictory. This is what makes Phillip Morris an intriguing case. Tobacco has been ingrained in western culture for approximately 500 years and was predominantly celebrated as a luxury for a significant portion of that time. It played a crucial role in generating income for the colonies. Nowadays, tobacco is stigmatized and the companies that were once highly prosperous and esteemed in America are being urged to curtail their operations.
To demand that Philip Morris behaves entirely ethically would require them to cease all operations. The product they sell has the capability to shorten lifespans and is the cause of 440,000 fatalities annually. Though they can strive to innovate "healthier" methods of smoking and nicotine consumption, it is impossible for the company to function without causing harm. What sets tobacco apart in the realm of business ethics is the customers' willingness to buy products that will ultimately prove detrimental to their well-being.
When it comes to business ethics, the common perception is that it leads to detrimental behavior towards the environment. However, in the case of Philip Morris, it is their customers who willingly accept the negative consequences. Consequently, resolving this issue does not solely rely on Philip Morris or other tobacco companies.
Despite previous instances of unethical conduct, including the concealment of health risks and deception about cigarette safety, the tobacco industry is currently making efforts to behave ethically. Their main goal continues to be meeting the high demand for their product. It is our government's responsibility to protect individuals who may lack the capacity to make informed decisions on their own. As stated in this report, nicotine—the addictive substance present in cigarettes—is the real hazard. The FDA should take charge of this matter and enforce regulations. Until then, both tobacco and its suppliers will continue to be closely examined while Philip Morris persists with their current approaches.
The Rise and Fall of Philip Morris: A Tobacco Industry Giant. (2016, Sep 19). Retrieved from https://studymoose.com/philip-morris-ethical-issues-essay
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