Written by
Bin Li, Chief Product Officer, Philip Morris International
When people think of innovative sectors, the tobacco industry probably wouldn’t be the first that springs to mind. But that is something Philip Morris International (PMI) has been working hard to change.
Coming from a software technology background, I was surprised to discover the innovation-paved path that PMI is on. Operating in a very old product space that has been around for more than 150 years, the company has found a way to disrupt the very industry in which it operates. In the process, it has also disrupted itself—by investing more than USD 10.5 billion in product development and innovation since 2008, driven by the clear purpose of delivering a smoke-free future.
Disruption at such scale is no simple task. With any large legacy company, it’s not easy to alter course. It’s akin to turning a tanker around. But what if you not only want to go in a new direction, you also don’t want to be a tanker anymore? What if you want to rebuild your ship while you are sailing toward a new destination?
This is the evolution we’re seeing in real time at PMI.
The key is understanding consumers’ unmet needs and helping to address them.
Such is the accelerating progress we’re making toward our ambition of delivering a world in which cigarettes no longer exist. Our goal is now for at least two-thirds of our total net revenues to come from smoke-free products by 2030.
Essentially, from the launch of our heated tobacco product in 2015, we’ve given ourselves 10 years to fundamentally change our business model and excel in a different product space.
We are well on track to achieving our goal. In 2022, our smoke-free products accounted for more than 30 percent of our total revenues.
That’s aggressive, fast, and an inspiration to all employees on our onward journey.
Meeting unmet needs by listening to our consumers
Our transformation as a company is centered around innovation that serves a genuine, important purpose—providing better choices to those adults who would otherwise continue to smoke.
In tandem, we are constantly looking to improve our products and processes to make them more sustainable, reducing the impact we have on the environment.
As Chief Product Officer, my role is to drive innovation and related technology strategies across the smoke-free product pipeline, ensuring our consumers remain at the heart of everything we do.
In business, as we gain access to ever more complex technologies, the understanding of how to meet the unmet needs of the consumer, as well as address any pain points, can be lost.
I want to ensure we are steadfast in our ambition to solve the right problem for our consumers—those adults who would otherwise continue to smoke.
The right questions lead to the right solutions
We know that changing behavior and routine is difficult, so our product innovation needs to address these issues head on.
Probably the most valuable lesson I’ve learned in my career—even though I’m from a technical background—is that you should always focus on the consumers’ needs and wants. The key is understanding consumers’ unmet needs and helping to address them.
That’s why I encourage my technical team to ask themselves: What kind of challenges do our consumers face? What are their unmet needs that we can help meet? How will this benefit them? What will encourage adult smokers who don’t quit to switch from smoking to a better alternative?
To achieve our ambition of delivering a world in which cigarettes no longer exist, we must never stop asking ourselves these questions.
