Marketing Analysis of RJR Nabisco

R. J. Reynolds sales exceeded those of Nabisco by approximately threetoone, at the time of the merger (Moskowitz, Katz, and Levering, 1986, p. 881). Total sales of the two firms in the year of the merger approximated $16.6 billion (Conway, 1985, p. 334). In 1991, total company sales were $14.8 billion, a drop of 10.8 percent since the merger, and a drop of 12.9 percent since the high point in company sales was recorded in 1988 (Sullivan, 1991, p. 1585). All of the sales losses recorded by RJR Nabisco have been sustained by the tobacco unit, R. J. Reynolds Tobacco Company. In 1991, tobacco sales contributed 52 percent of total company sales, while food products contributed 48 percent.

Profit margins remain higher on tobacco operations than on food processing operations. RJR Nabisco's net profit in 1991 was $350 million, down 74.9 percent from the record $1.4 billion recorded in 1988 (Sullivan, 1991, p. 1585).

The findings of the market analysis are presented in three separate discussions. The first discussion compares RJR Nabisco's domestic marketing operations with the company's foreign marketing efforts. The second discussion pr

. . .
manufacturers should not be required to stop advertising their products; especially, as the links between cigarette smoking and adverse health effects are only inferential. In the economic sphere, tobacco companies are faced with serious threats. Both the proportion of persons in the American population and the absolute number of persons who smoke are declining. In this environment, cigarette manufacturers must seek to both protect and to increase their market shares, because a growing market volume does not exist. Advertising has been demonstrated as an effective means of protecting and improving market share for cigarettes; thus, it should not be expected that the companies will voluntarily cease to advertise. In addition to the problems caused by a shrinking market, cigarette manufacturers face a significant threat to their continued existence, as a consequence of the product liability movement which has been launched against them in the judicial system (Seredon and Glaberson, 1985, pp. 5859). Should the companies lose the product liability fight, there will be no tomorrow for them. Management, therefore, feels obligated to pursue the economic interests of their firms, and the employees, farmer suppliers, and investors
. . .

Some common words found in the essay are:
RJR Nabisco, United Konrad, Tobacco Industry, Historically United, General's Office, Food Processing, Michael McCaskey, Surgeon United, Freeman Robinson, Tobacco Company, strategic planning, rjr nabisco, tobacco companies, cigarette advertising, tobacco industry, tobacco products, external environment, food processing, tobacco company, cigarette smoking, strategic planning process, reynolds tobacco company, sullivan 1991 1585, food processing industry, domestic market united,
Approximate Word count = 7779
Approximate Pages = 31 (250 words per page)

More Essays on Marketing Analysis of RJR Nabisco