Philip Morris Unethical Marketing, Case Study Example

Altria’s $10.1 Billion Appeal on “Light” Cigarette

The Altria Group is appealing a ruling by a court that gave back $10.1 billion to Philip Morris for marketing its products as “low tar” and “light” cigarettes (Esterl, 2014). This case is in line with a similar ruling that involved the United States v. Philip Morris in 1999. The company was sued for fraudulent conduct and re-imbursement of medical expenses related to tobacco. The company was sued on several grounds: firstly, the company deluded the public about the effects of smoking. Secondly, it misinformed the public on the risks associated with secondhand smoke and misrepresented the addictive nature of nicotine. Thirdly, the company allegedly marketed cigarettes christened as “low tar” and “light,” while aware that the cigarettes were just as hazardous as other brands (Esterl, 2014). Lastly, the marketing group targeted the youthful group with an aim of boosting sales. As a result, the Altria Group considered the verdict worthwhile due to the economic effects of smoking.

Effects of Tobacco and Cigarette Smoking

Tobacco and cigarette smoking has a dreadful toll on the economy of a country. All costs associated with prosecution of companies, therapeutic treatment for the addicts, and taking care of their immediate and continuous medical needs are additional costs to the government (Owing, 2009). Some of these consequences arise from long-lasting trends in the survivors including mental and behavioral disorders. In the case study above, youngsters who have inhaled nicotine may exhibit behavioral trends of drug addicts. As a result, they require special rehabilitation facilities, which in turn, is an additional cost to the government. Others who involve in smoking may also pose security threats to a country as they look for money to buy more drugs (Owing, 2009). Reasonably, the government will be compelled to deploy more officers to arrest the case. In addition, more finances will be invested in researching the differences between “low tar” and “light” cigarettes. This not only affects social growth, but also economic growth.

In the United States, inhaling of nicotine is the leading cause of throat and lung cancer, which have economic importance (Owing, 2009). In addition, it is responsible for finger and teeth browning among smokers. Inhaling a threshold amount of carbon dioxide reduces the quantity of oxygen availed to brain, muscles, and blood. This exerts pressure to the brain, which is compelled to work harder in order to meet oxygen requirements in the body. In critical conditions, airways and blood vessels narrow leading to pressure rise, which in turn, may lead to stroke and heart attack (Owing, 2009). It also increases risks of heart disease, circulation problems, and hardening of arteries. All these health effects have adverse implications on the economy of a country. Productive age groups succumb to heath disease, which in turn, reduces their productivity in the society. Ultimately, their deaths lead to labor gap, a factor that may lead to economic instability.

From these findings, the marketing strategies deployed by Phillip Morris are lethal to the future development of a country. Although the company benefits from high sales, the trend has disastrous effects to individuals and the economy at large. Firstly, it increases the government’s spending through therapeutic treatment and care required for nicotine addicts. These additional costs have a toll on both the government spending and planning. Secondly, it also leads to ill health and ultimate death of addicts who may be stakeholders of the economy. As a result, the economic productivity of a country is crippled.

References

Esterl, M. (2014). Altria to Appeal $10.1 Billion ‘Light’ Cigarette Ruling. Wall Street Journal, April 30, 2014.

Owing, J.H. (2009). Trends in Smoking and Health Research. New Jersey: Nova Science Publishers, Inc.