How IQOS is succeeding in the global tobacco and e-cig markets — a creative overview
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If you are familiar with cigarette brands, you’ve most probably heard of Marlboro. With a market share of almost 40% of the overall tobacco industry, the brand is well-known among smokers.
Back then, Marlboro was a small business that produced mainly cigarettes for female consumers. But as soon as this information became public, Philip Morris International (PMI) decided to alter its marketing strategy.
They marketed a character that every man wanted to look like: well-built, charismatic, and tough. The Marlboro Man soon became the icon of manliness and masculinity.
Within a year of the Marlboro Man going public, the commercial became a massive change for the PMI.
Following this success, cigarette commercials were permanently banned from TV. Brands could no longer directly showcase their products, which led to a downfall for most.
The Marlboro man himself was the company’s main focus rather than the product, which allowed the brand to continue to remain relevant.
Business Transformation
The brand was evolving, and so was our society. As many people were following the path of nicotine addiction, the PMI decided to alter the brand’s perspective radically.
Philip Morris International (PMI) declared in 2016 that it would undergo a significant business transition, moving away from cigarettes and other combustible tobacco products toward healthier, smoke-free nicotine products.
IQOS — I quit ordinary smoking.
If you don’t smoke, don’t start. If you smoke, quit. If you don’t quit, change.
About the product
IQOS is a cutting-edge cigarette substitute made by Philip Morris International. Instead of burning the tobacco, consumers heat the device.HTPs only heat to about 250–350 Celsius, but a burning cigarette reaches a tip temperature of about 900 degrees Celsius.
Health Benefit Claims
A lot of people think it’s the nicotine in cigarettes that causes morbidity and mortality. But it’s not. Nicotine is addictive, but it’s not the primary cause of the disease. The FDA has clarified that. The problem is combustion. If you can eliminate combustion, then you can significantly reduce the harmful chemicals the product emits compared to cigarette smoke. The best thing a smoker can do, of course, is to stop nicotine consumption altogether. But a billion people still smoke, so the next best thing you can do is to convince them to change their behavior by creating products that they can switch to. That is what we are doing.
Laboratory demonstration by sales staff in IQOS stores, comparing cigarettes to IQOS.
Illustration from PMI website
Smoking is known to be harmful to your teeth and gum health. At a webinar in Russia, 2 smokers (an ordinary smoker and a heated smoker) were exposed to smoking for 3 weeks. The results were then compared, and the pictures were posted on social media. From the pictures, they concluded that “IQOS did not cause obvious tooth discoloration and color discrepancies between teeth and tooth resins, unlike cigarette smoke.”
Benefits of IQOS posted on the website
Keeping the health benefits of this brand-new device aside, what kind of marketing strategies is PMI using to promote IQOS?
The origins of the product and its development
The purpose of PMI’s creation of IQOS was to increase sales of their IQOS HEETS to make up for the declining profits of its widely popular Marlboro cigarette brand. In response to the progressive decrease in cigarette sales, PMI has invested “over $6.0 billion in research, product, and commercial development” of its portfolio of heated tobacco product lines over the decade 2008–2018.
According to PMI, the estimated number of IQOS users has increased from 2.9M (2017) to 13.2M(2022), which resulted in a 25% decrease in global cigarette unit shipment volume.
Cigarette Shipment Volume (in billions) announced by PMI
Branding and Overall marketing
The truth is, most consumers buy solely for the enticement of the feelings the product provides. I've always wondered if customers were affected in any way by images that were below their conscious level.
The worldwide ban on tobacco advertising incentivized companies to invest a significant portion of their marketing budgets in subliminal brand exposure.
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" Philip Morris, for example, offers bar owners financial incentives to fill their venues with color schemes, specially designed furniture, ashtrays, suggestive tiles designed in captivating shapes similar to parts of the Marlboro logo, and other subtle symbols that, when combined, convey the very essence of Marlboro — without even the mention of the brand name or the sight of an actual logo. These “installations,” or “Marlboro Motels” as they’re known in the business, usually consist of lounge areas filled with comfy Marlboro red sofas positioned in front of TV screens spooling scenes of the Wild West — with its rugged cowboys, galloping horses, wide open spaces, and red sunsets — all designed to evoke the essence of the iconic “Marlboro Man.” (Ref: Buyology)
However, because IQOS is advertised as lowering smokers’ health risks, it is no longer necessary to make substantial efforts in subliminal branding. Social media, traditional marketing, sponsorships, and influencer marketing are widely used to promote IQOS.
The hummingbird image was particularly chosen for the banner and advertising to emphasize speed, agility, and good health.
Hummingbirds are pollinators of the tobacco plant and consume harmful insects, but they also have a role in the lore of tobacco. A design document for an IQOS boutique suggests that the “unstoppable and untiring” constant force of the hummingbird’s wings may subtly reflect the company’s persistence. (Ref: GM Stand Design, 2018)
Market testing
The IQOS first went on sale in Japan, Italy, and Switzerland; it is now available in the marketplaces of 70 different countries.
Because e-cigarettes are banned in Japan, IQOS had no rivals to compete with, which is why the PMI first began “water-testing” there before moving to other countries such as Russia, Portugal, or Switzerland.
Free trial
The first time IQOS was introduced to new markets, consumers were extremely fascinated but also hesitant, despite the company’s successful advertising claims.
Because of this, PMI decided to implement the “free trial” policy, which allows customers to try a product for 30 days in exchange for a pack of cigarettes or a lighter before deciding whether to purchase it or not.
Customers experience “loss aversion” as a result of this. It takes around 20 days to form a habit, and adding nicotine makes quitting much more challenging. Therefore, I think this marketing strategy for IQOS is well-considered and effective.
Sensory Branding
Consumers have become blind to logos because there are too many of them fighting for our attention at the same time.
Sensory branding is one of the most effective ways of marketing as it has the potential to “seduce” customers into buying a product.
The issue with advertising is that they are formatted in such a way that most customers “turn off” when they see them, just as they have grown accustomed to ignoring flashing banner ads on websites.
However, product placement in films and television may activate viewers’ mirror neurons, regions of the brain that control imitation. Since imitation is a key evolutionary ability by which individuals learn, including a product in an on-screen plot stimulates the subconscious in a way that makes viewers want to buy it. The secret is making the product a logical component of the narrative.
No matter how old you are, if you take a whiff of Johnson & Johnson’s Baby Powder, chances are good that all those primal childhood associations will be reignited in your memory. Being fed by your mother. What it felt like to be held in her arms. These kinds of associations are why some companies use the scent of vanilla — which is found in breast milk (and, not coincidentally, is the most popular scent in the United States) — in their products. (Ref: Buyology)
At launch, IQOS was literally everywhere:
IQOS tobacco containing HEETS come in multiple flavors, typically named for colors with descriptors of menthol, citrus, nuts, dried fruit, vanilla, cocoa, and herbs. The use of colors rather than flavors in the product names emulates sister brand Marlboro. IQOS suggests pairing its flavors with macaron cookies, chocolates, and coffee flavors endorsed as being complementary to IQOS flavors by famous chefs.
The best sensory branding strategy PMI can utilize, in my opinion, is the use of well-known fragrances from luxurious brands. The product is clearly marketed to those with high incomes because it is relatively more expensive than the majority of nicotine-containing products.
Sunk Cost Effect
IQOS is not a one-time investment; you need to keep buying HEETS to complement the device.
After convincing the customer to purchase the slightly more expensive device, the customer will feel obligated to continue buying HEETS, even if they are not totally satisfied with the product.
Final opinion
In a world where companies are actively looking for a prospect, it is easy to overlook the ways that they are speaking to us.
Imagine the effort required to build a loyal customer base for a business that already faces competitive pressure. Therefore, business developers must constantly offer a variety of ways to connect with their audience.
Remember, it is the survival of the fittest.
Thank you!
Let me know what you think of this article. PM me for any questions or comments.
Special note for my tagged connections:
Dear Bahadir Elezoglu and Baris Y. ,
Writing this article and getting to know PMI has helped me develop a keen interest in the ways PMI is operating, specifically in the business development field. I would consider it an exciting experience to get the opportunity to collaborate with you in the near future!
Thank you for reading this article.