NEW YORK – Philip Morris.
It's a pronounceable name known around the world. A name that invokes memories of the tobacconist who opened a shop in London in the 1800s. And now, it's a name that the company wants to distance itself from.
Philip Morris Cos. Inc. on Thursday proposed a corporate name change to Altria Group Inc.
Altria — a coined term that comes from "altus" — the Latin word for "high" — was chosen to reflect its "peak performance," the company said. Still, the move is being viewed by many as a clear sign that the company no longer wants to be shrouded in a name synonymous with cigarettes.
"We fully expected some criticism," Senior Vice President of Corporate Affairs Steven Parrish said during a Friday conference call with analysts and others. "Obviously, we're going to monitor it very carefully and we'll respond where appropriate."
Analysts questioned the move, but did not seem alarmed.
"I don't think people will care in six months anyway," said Prudential Securities tobacco analyst Rob Campagnino, who is not concerned about investors voting against the change.
"I think shareholders love Geoff, and if Geoff says he loves it, shareholders are going to love it," he said, referring to Chairman and Chief Executive Geoffrey Bible.
Coining a new word for a company name is not new. A bevy of other companies have come up with new words for their names, including a number that start with "A" — such as Altera Corp., Agilent Technologies Inc., Aon Corp., and Accenture Ltd., the consulting firm formerly known as Andersen Consulting, which went public earlier this year.
Accenture reportedly spent some $175 million on marketing, but Philip Morris on Friday said that the cost of their plans are "not even close" to the $100 million mark.
Parrish said that the project has been "surprisingly inexpensive so far" and he does not think it will cost much going forward. While the company is taking out full-page ads in some Monday newspapers, there are no other ad plans right now.
STILL THE HOME OF CHEEZ WHIZ
If the change is approved by shareholders at next April's annual meeting, Philip Morris will start to use the new name for its corporate moniker, but the operating companies that the public is familiar with will retain their own personas.
Kraft Foods Inc. will still make Cheez Whiz and Planters nuts, Miller Brewing Co. will still brew Miller Genuine Draft and Red Dog, and yes, Philip Morris USA and Philip Morris International will still sell cigarettes.
"The name Philip Morris really means tobacco to people," Parrish said. "It has a long and proud heritage with tobacco and people strongly associate the name Philip Morris with tobacco."
While the company's extensive corporate image campaign has improved its overall image "significantly" since its October 1999 launch, "there was still confusion about the tobacco issue, and therefore, our corporate identity," Parrish said.
Still, he called that campaign "a sound investment."
Altria actually comes close to the name of Franco-Spanish tobacco group Altadis, whose cigarette brands include Gauloises and Gitanes. Parrish said that Philip Morris is not concerned about the similarity.
The company did not approach any other companies with similar sounding names about the plan, a spokesman said.
As for its famous ticker, "MO," Philip Morris has not yet decided if it will change. The company plans to talk to the board and the investment community about that possibility.
Philip Morris shares were up three cents at $48.02 in Friday morning trading on the New York Stock Exchange. The shares are up almost 4 percent since the beginning of the year and have traded in a 52-week range of $53.88 and $34.