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Phillip Morris (Altria) Group discussion - values, ethnocentricity, and global marketing strategy effectiveness

1. Did the expert's suggestions for the tobacco industry response surprise you? Why or why not? (1 Paragraph)

2. How closely entwined are values and ethnocentricity? (1 Paragraph)

3. How can this relationship hinder global marketing strategy effectiveness? (1 Paragraph)

4. What can be done to limt, constrain, or eliminate the effects of ethnocentricity? (1 to 2 Paragraphs)

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Denise Chisholm Unit 3 DB Global

In addition to Turkey, the Phillip Morris (Altria) group, Great Britain's B.A.T. Industries PLC, and other tobacco companies are targeting smokers in China, South Korea, Thailand, India, Russia, and other industrializing nations. These are nations in which a combination of forces - relatively high economic growth, the public's acceptance of smoking as a fashionable activity, and the status assigned to Western cigarette brands - may interact. Moreover, because many women in these countries view smoking as a symbol of their improving status in society, the tobacco companies are aggressively targeting women. One reason for the success of Western brands is that American-blend" cigarettes are milder than most domestic brands, and a perception that locally-made products are of lesser quality. Cigarettes constitute a $28 billion market in Japan, the country widely believed to have the highest smoking rate in the world. Sixty percent of Japanese men smoke, and, overall, smokers comprise about 36 percent of the population.

Turkey provides a case study in the approach the Atria Group has perfected over the years. An estimated 43 percent of Turkey's 63 million people smoke. Moreover, the market is especially attractive, because cigarette consumption is increasing at an average of nearly 5 percent. In addition to Turkey, Phillip Morris, Great Britain's B.A.T. Industries PLC, and other tobacco companies are targeting smokers in China, South Korea, Thailand, India, Russia, and other industrializing countries. These are nations in which a combination of forces - relatively high economic growth, the public's acceptance of smoking as a fashionable activity, and the status assigned to Western cigarette brands - may interact. Moreover, because many women in these countries view smoking as a symbol of their increasing status in society, tobacco companies are aggressively targeting women. In 1996, nearly 600 billion cigarettes were sold in Eastern Europe and the former Soviet Union. One reason for the success of Western brands is that " American-blend" cigarettes are milder than most domestic brands, and a perception that locally-made products are of lesser quality. Additionally, cigarettes constitute a $28 billion market in Japan, the country widely believed to have the highest smoking rate in the world. Sixty percent of Japanese men smoke, and, overall, smokers comprise about 36 percent of the population.

Cigarettes constitute a $28 billion market in Japan. Cigarette advertising on television is permitted late at night. Nevertheless, foreign cigarette sales still represent only 17 percent of the market. The reason is simple: Japan Tobacco, Inc. is a government monopoly that generates $15 billion in tax revenues each year. Thus, the government's attitude of tolerance stands in stark contrast to much of the industrialized world. Indeed, the warning on cigarette packs says only, "For the sake of health, don't smoke too much." A great deal of the cigarette advertising in Asia targets women. The shift in focus of the global tobacco giants - both in terms of geography and gender - is alarming to many observers. Officials at the World Health Organization accuse the tobacco companies of exploiting increased prosperity in emerging economies by pushing an addictive product linked to serious health problems.
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Solution Preview

1. Did the expert's suggestions for the tobacco industry response surprise you? Why or why not?
I am not surprised about the suggestions, especially the comments about the countries. Because if we carefully examine recent social and economic challenges in these nations, we can easily figure out the success of western tobacco companies. Turkey is the most westernized eastern country in the world which has very close political and economic ties with U.S and European countries. The country is also in the candidacy stage in European Union membership. Most U.S companies carried their manufacturing operations to developing "cheap labor" countries like China in the recent years. Many companies in Europe and U.S outsource their operations (especially in IT) in India. Soviet Union is adapting to its new economic system and trying to improve its relations with EU and U.S. Japan and South Korea are always known with their close trade relations with western world. These relations naturally influence the cultural perspectives of the people in these countries and they tend to have more interest in U.S and European brands since they consider them as symbols of "modern ...

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"Sometimes this may lead to false assumptions based on subjective aspects from limited experiences. We have our own perceptions of colors, time frames, values on industriousness, social roles, beliefs about life and the universe, and..."

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