Non-Branding Branding – Phillip Morris vs. Altria
The transformation of Philip Morris International into Altria is an interesting and particular case of business strategy and corporate branding. Two official pieces of information communicated 5 years apart help us understand the mechanism, but not the motivations behind the transformation. There is no point in going into too much detail, as you can read an extensive analysis on the modification here.
“March 28, 2008. Altria Group, Inc. (NYSE: MO) today completed the spin-off of Philip Morris International Inc. (PMI) to shareholders of Altria Group, Inc. (Altria).” The press release in full here.
“January 27, 2003. Tobacco companies to retain Philip Morris name, Kraft continues as name for food company. Philip Morris Companies Inc., (NYSE: MO), the parent company of Kraft Foods Inc., Philip Morris International Inc. and Philip Morris USA Inc., today changed its name to Altria Group, Inc. Kraft Foods will continue to be the name of the world’s second largest food company; Altria Group’s international tobacco company will continue to be called Philip Morris International; and Philip Morris USA will continue to be the name of the largest tobacco company in the United States.” The press release in full here.
The mechanism, as explained in the article in the link above, is due to both civil and legal actions against smoking. Philip Morris International, known as the largest cigarette company in the world, has been the focus of the anti-tobacco movement and the main target of lawyers and lawsuits for years. It should also be noted that PMI began to diversify their portfolio during that period, starting to hold important shares in companies specialised in all types of “foods”, from fast food, soft drinks, ice cream, frozen foods and so on. The diversification of their portfolio seems to be due to the effort to minimise the impact of financial pressure on its main business, cigarettes. As we can see, the transition took place in a relatively long period of time – starting with the acquisition of brands and “foods” companies and culminating in the corporate transformation of PMI into Altria, PMI only remaining a company owned by Altria, specialised in manufacturing cigarettes. Also, another determining factor in this equation was the decrease / fluctuation of the value of PMI shares on the Stock Exchange due to the negative impact of anti-smoking advertising and lawsuits against the industry and the company. An interesting quote that reflects this strategy: “Altria, which is the newly sanitised name for Philip Morris”. It should be noted that the Kraft group is a separate legal entity and its shares are traded on the Stock Exchange separately.
Changing the corporate identity is, from my point of view, a non-branding exercise; Altria means “nothing” for stock market investors, therefore it is “safe”. The name is derived from the Latin word “altus”, which means “up” or “rising”.
Visually speaking, a square composed of several coloured squares can symbolise, at best, diversity, or unity in diversity, and that’s about it. There is no longer any reference to the old and traditional PMI company, producer of the well-known Marlboro brand.
The result of this long process of changing business strategy and rebranding can be summarised as follows: “Twenty years later, the stock, now called Altria, is up 2,200 percent” CNN Transcript Jul 09, 2005
If we examine the issue in terms of branding / rebranding, I think we have witnessed the most important project of its kind, carried out over almost two decades. Specific to this case – contrary to the custom of all branding strategies that seek to create individualisation and relevance – is the deliberate effort to “anonymise” the brand and to detach completely from the past, as I said above. Paradoxically, we’ve witnessed a successful branding exercise through non-branding.
News: Kraft Foods becomes Mondelez.