Picture the scene: You walk into a chic bar where the clientele is young and the drinks reassuringly expensive; you note the stylish combinations of red and white furniture, the impressive attention to detail that goes into everything from the cushions to the ashtrays. Suddenly, inexplicably, you urgently want to smoke a Marlboro cigarette.

It sounds the stuff of bad science fiction, but Philip Morris, the manufacturer of Marlboro, is such a believer in 'experiential' marketing - where furniture and design are used to subtly convey a brand's strengths - it has created a crack team to transform the insides of Britain's upmarket bars and music events, in an attempt to boost its profits.

As a smoking ban in England nears and tobacco advertising has been banned, cigarette companies have had to find other ways to sell their products.

Internal marketing plans, drawn up by the company last year and obtained by The Observer, show that Philip Morris offered financial incentives to managers to fill their bars with furniture bearing the Marlboro logo or place its branded ashtrays and vending machines in areas where smoking is allowed.

'Should you take up this offer [of ashtrays], Philip Morris will give you a £20 music voucher from HMV as a token of their thanks,' the marketing teams were instructed to tell the managers.

The company also experimented with subliminal ways of communicating its brand, through themed bar areas which could be put up at major social events, and did not feature the Marlboro logo or its packaging.

These 'installations', as they were called, created lounge areas by placing comfortable red sofas in front of video screens showing scenes redolent of Wild West 'Marlboro country' to convey the essence of the cigarette brand while circumnavigating sponsorship bans.

One plan Philip Morris experimented with was the use of 'chill out' smoking areas. These featured a sofa shaped like a bath, to give the impression it was an area in which smokers could relax, subtly suggesting cigarettes help people deal with stress.

'Philip Morris would pay for the installation - known as the Marlboro Motel - to be erected. That way the company could say they were paying for the right to sell cigarettes rather than sponsoring an event,' said one person familiar with the installations.

Experts said the company was not alone in trying to find new ways to communicate its brand amid severe marketing restrictions.

'All that former advertising money has to go somewhere,' said one industry insider. 'The tobacco firms are looking to create extensive "design languages" in bars and clubs and other venues through the use of particular types of furniture or material which will make people think of their brands.'

Experts said such marketing was becoming increasingly popular. 'The more subtle the message, the more likely it is to be accepted,' said Gerard Hastings, director of the Institute for Social Marketing and Centre for Tobacco Control based at Stirling University.

'If you see something blatant, it forewarns you. But if it's something subliminal it will go under the radar.'

The elite teams of marketing experts were armed with scripts to use when approaching bar managers and event promoters. 'Our customers are your customers,' runs the script. 'Nearly 80 per cent of Marlboro smokers are ABC1, aged 18 to 35.'

The teams were told to stress:'Marlboro is arguably the world's best known brand after Coca-Cola.'

The project was part of a wider plan to target affluent smokers aged between 18 and 35. The company sought to secure exclusive retail rights at the 2004 Glastonbury festival, and a number of other high-profile music events where attractive female 'Marlboro models' would sell cigarettes.

Since last December all cigarette advertising is banned except small displays on vending machines.

Amanda Sandford, research director of the anti-smoking group Ash, said the marketing plans raised serious concerns. 'Cigarette advertising is going underground, it's becoming more covert. This just shows the need for greater vigilance.'

A spokeswoman for Philip Morris said the company did not to discuss its marketing plans, but added: 'We have a range of strategies to support Marlboro which, combined with the taste of the product, have helped to contribute to its success.'