Marlboro Friday

AAA

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.

INVESTOPEDIA EXPLAINS '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."

RELATED TERMS
  1. Sin Stock

    A stock of a company that is either involved in or associated ...
  2. Brand Equity

    The value premium that a company realizes from a product with ...
  3. Socially Responsible Investment ...

    An investment that is considered socially responsible because ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, ...
  5. Value Added

    The enhancement a company gives its product or service before ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
Related Articles
  1. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  2. Active Trading

    Warren Buffett: How He Does It

    We look at the Sage of Omaha's methodology for evaluating value stocks.
  3. Mutual Funds & ETFs

    Socially (Ir)responsible Mutual Funds

    Not concerned about being an ethical investor? Maybe "sinful stocks" have a place in your portfolio.
  4. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  5. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  6. Investing Basics

    Unbundling

    Unbundling is what happens when a parent company with a few lines of business decides to keep its core businesses and sell the rest of its assets, product/service lines, divisions or subsidiaries. ...
  7. Many U.S. corporations keep funds overseas
    Investing

    Overseas Cash Hoards: Shareholder Boon Or Taxpayer Burden?

    American corporations are holding something in the neighborhood of $1.5 trillion in cash in the coffers of their offshore entities, usually to avoid tax liability. Needless to say, not everyone ...
  8. Retirement

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn the measures and how to analyze them.
  9. Personal Finance

    Scrooge-Like Actions Of CEOs

    Sometimes CEOs of big corporations aren't as generous and giving as most people would expect them to be.
  10. Personal Finance

    Athletes Who Make More From Endorsements Than Sports

    When an athlete becomes a one-person brand, he or she can make more from endorsements than the sport he or she is famous for playing.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center