DEFINITION of 'Marlboro Friday'
A reference to Friday, April 2, 1993, when Philip Morris, the maker of Marlboro cigarettes, announced that it would be cutting the price of Marlboros to compete with generic cigarette makers. The company's stock tanked 26% following the announcement, losing about $10 billion off its market cap in a single day.
The day is remembered as a landmark moment in the 1990s consumer movement away from name brand products in favor of cheaper generic products with prices 50% lower than their branded competitors. In its wake, money managers moved cash from name brand consumer goods makers such as Coca-Cola and Tambrands (the former maker of Tampax tampons) to technology stocks and generic consumer goods producers.
BREAKING DOWN 'Marlboro Friday'
Even though Philip Morris's announcement caused the company to initially lose $10 billion in market cap, the event marked the end of a price war. Competitors were priced out of the market, and only two years later, Philip Morris' stock had fully recovered from Marlboro Friday's loss. One analyst (James A. Taylor) was quoted in the New York Times as saying, "I believe the 1990s officially began with Marlboro's inability to sustain its price."