Marlboro Leverages Brand Name in Smokeless Rollout

Source from:  August 22, 2007 By Mike Beirne brandweek.com  09/24/2007

One of the strongest brand names in consumer packaged goods will jump into a new category when Philip Morris USA rolls out Marlboro Moist Smokeless Tobacco in an Atlanta test market during October. The No. 1 cigarette brand will appear in the snuff market with Original and Wintergreen flavors and will be available in Long Cut and Fine Cut varieties. The price could shake up the competition during the test. The Marlboro snuff will be priced at about $3 a can; cheaper than premium-priced brands like Skoal and Copenhagen sold by US Smokeless Tobacco, Greenwich, Conn.; and could be a trade-up product because it will cost slightly more than value brands like Grizzly manufactured by Conwood, a unit of Reynolds American. "We are intrigued by the price positioning of the product given Marlboro's heritage of premium-priced, aspirational cigarette brand," wrote Filippe Goossens, of Credit Suisse, New York, in a recent report Analysts assert that after taking in lessons from test runs for other Philip Morris smokeless tobacco products-Taboka and Marlboro Snus-a national launch for both Marlboro Snus and Smokeless is likely during the first half of 2008. Marlboro Snus started a trial run in Dallas/Fort Worth and is positioned as a spit- free tobacco option for smokers when they are in situations where they can't light up. The slide-pack package is displayed with cigarette products. However, Marlboro Smokeless will be merchandised with competing smokeless products and vie for the dippers. The Smokeless category is attractive because sales increased 6% last year as cigarettes declined 2.4%, per the Maxwell Report, Richmond, Va. That growth also attracted R.J. Reynolds Tobacco, Winston-Salem, N.C., to test Camel Snus during June. The Marlboro franchise remains active on the cigarette front as well with the September introduction of Marlboro Virginia Blend, a single leaf blend, and Marlboro Smooth 100s Box following the national launch of Marlboro Smooth last March. Enditem