acquired the Miller Brewing Company. Relatively soon thereafter, the company acquired the Seven Up Company. Seven Up was divested, however, and the company no longer participates in the softdrink industry. In 1985, Philip Morris acquired General Foods, and, in 1988, the company acquired Kraft Foods (Dowd, 1991a, p. 318).
The company's diversification strategy is designed to insure that Philip Morris will remain a large and powerful corporation long after the tobacco industry has gone into eclipse. In the early 1990s, however, Philip Morris remains the largest competitor in the American tobacco industry, and tobacco remains the largest contributor to both the company's revenues and its profits (Moody's Investors Service, 1991, pp. 3307 3313).
The domestic tobacco industry is beset with challenges to its advertising practices, health claims against its products, and legal and quasi legal restrictions on its activities. Each of these factors affects the ways in which the industry competitors market products in the United States. In many foreign markets, these factors do not pose serious challenges to the marketing of tobacco products. In some, however, such as the European Community, market challenges to tobacco products are developing along similar lines to those in the domestic market of the United States (Dowd, 1991b, p. 313).
The health issue surrounding the use of tobacco products is the most serious marketing challenge facing the tobacco industry in the United States. Smoking tobacco, particularly in the form of cigarettes, creates a risk of sudden cardiac arrest for smokers three times higher than the comparable risk for a non smoker (Koop, 1988, p. 1). Approximately 85 percent of all lung cancers in the United States are caused by smoking tobacco; persons smoking two packs of cigarettes per day have a lung cancer rate 25 times that of the non smoker (Koop, 1988, p. 1). Cigarette smoking is the major cause of chro...