Altria Group Inc., the owner of the biggest U.S. cigarette maker, Philip Morris USA, continues to focus its efforts on building its premium Marlboro brand which has been under pressure from competitors and lower-priced cigarette brands as consumers face economic challenges and unemployment remains high.
The brand sold for an average of $5.86 per pack during the fourth quarter, compared with an average of $4.38 per pack for the cheapest brand.
Those challenges are in addition to the tax hikes, smoking bans, health concerns and social stigma that have made the cigarette business tougher.
Volumes of the top-selling Marlboro brand fell 5.7 percent to 27.5 billion cigarettes during the fourth quarter, but its share of the U.S. retail market rose 0.2 percentage points to 43.7 percent.
The Richmond, Va., company has introduced several new products with the Marlboro brand, often with lower promotional pricing. They include "special blends" of both menthol and non-menthol cigarettes to try to keep the brand growing and steal smokers from its competitors, who also have fought cigarette sales declines with promotional prices.
And Altria has said it has a pipeline of innovative products to supplement the Marlboro brand moving forward.
In a conference call with analysts Thursday regarding fourth-quarter earnings for Altria, CEO Marty Barrington discussed the overall health of the Marlboro franchise:
"We think Marlboro performed terrifically. ... When we roll out Marlboro extensions we always check to make sure they are incremental to the equity of Marlboro. ... This has been the most successful brand in the category for decades and our approach continues to be to do that over time."