Philip Morris: New Name, Same Game

The company sells macaroni and cookies, but “Philip Morris” spells “cigarettes” to most people. And with tobacco products accounting for 60 percent of its worldwide operating revenue, the marketer’s sales still reflect its legacy, although its name no longer does.

Last week, the 101-year-old company made good on a 2002 promise to change its name to Altria and launched a two-month campaign to get the word out.

The ads, to run on cable TV and in financial publications, use photographs of trees, bridges and waterfalls to draw parallels to the company and its business units. One print ad shows a suspension bridge, with the headline, “Where do we grow from here?” Copy touts the company’s financial performance, noting that Philip Morris has had 35 dividend increases in 33 years. Spending on the campaign was not disclosed.

But Wall Street analysts have largely ignored the new moniker, derived from the Latin altus, meaning “lofty” or “high.” Martin Feldman at Merrill Lynch termed the name “entirely cosmetic in nature” in a report last week. “We would not expect it to have any impact in the company’s equity valuation,” he said.

Still, “the Philip Morris name people took to mean as tobacco, but the parent company has meant more than that for some time,” said representative David Tovar. The campaign is focused on the business community, he said, “because they will be the ones primarily interacting with Altria at its holding company level.”

As Altria, Philip Morris can clear the air for its other divisions, including Kraft Foods and Nabisco. “It’s easier to talk about their food company without tobacco on their backs,” said James Bell, senior partner at brand-identity consultancy Lipincott Mercer.