The marriage between U.S. tobacco giant Philip Morris and Indonesia's top cigarette producer PT HM Sampoerna has produced a world first -- a Marlboro kretek (clove-blended) cigarette.
Unlike other Marlboro Cigarettes, which dominate the mostly machine-rolled, non-clove segment of the market, the new brand, named Marlboro Kretek Filter, will be jockeying for space in the machine-rolled kretek cigarette market, complementing Sampoerna's existing Dji Sam Soe Filter brand.
Sampoerna managing director Angky Camaro said during the launch of the new brand Tuesday that with its introducing to the Java and Bali markets, Marlboro Kretek would be the first international brand offering the taste of kretek in Indonesia.
"With the kretek taste and the strong image of Marlboro, we believe that our new brand will attract More mature smokers," he said.
Sampoerna obtained a license from Philip Morris to produce and market products using the Marlboro trade name in June 2006. Afterwards, Sampoerna conducted a survey to ascertain what smokers really wanted from its products, and then set to work developing new products based on the survey findings.
According to Angky, 92 percent of adult smokers in Indonesia prefer kretek Cigarettes to non-clove ones.
Machine-rolled kretek Cigarettes control around 35 percent of the total cigarette market, second to hand-rolled kretek Cigarettes, which control a 39 percent share.
Henny Susanto, Sampoerna brand marketing director, said that after being launched on the Java and Bali markets, Marlboro Kretek would be rolled out nationally, and then internationally.
However, she refused to estimate potential sales figures.
"Because this is a new product, we will first focus on building consumer awareness of it and strengthening distribution in Java and Bali," she explained.
Sampoerna will advertise the new brand using the well-known "Marlboro Country" concept. It will use billboards, print media and theater commercials as promotion tools.
Philip Morris owns a 98 percent stake in Sampoerna.
Sampoerna currently controls a 28.2 percent share of the country's cigarette market, followed by Gudang Garam on 23.6 percent and Djarum on 20.4 percent.
In 2006, Indonesian cigarette makers produced a total of around 220 billion Cigarettes.
By the end of the first quarter, Sampoerna had booked a 15.7 percent increase in net profit to Rp 1.095 trillion (US$125.7 million) from Rp 947 billion during the same period last year.
Sales of its machine-rolled Cigarettes rose to 6.4 billion from 6.2 billion previously. (11)