Assignment 1Complete Benetton Case StudyBenetton Case Study Questions attachedMinimum 7 page paper APA formatOrganize with sub headings (Question 1, Question 2, etc.).Assignment 2Read Chapter 8 and answer discussion questions 1, 2, 3, 6, 8, 10 (please access and download ebook from my google drive link)Read Chapter 21 and answer discussion questions 1, 4, 5, 8 (please access and download ebook from my google drive link)Chapter 8 and 21 questions should total 7 pages APA formatebook link: https://drive.google.com/file/d/12Xjh-RgeErxOq4Eho…Organize with sub headings (Question 1, Question 2, etc.).
benetton_case_study_questions.docx

benetton_case.doc

Unformatted Attachment Preview

Benetton Case Study Questions
1. What are the basic objectives of advertising? What are the advertising objectives of Benetton?
2. Explain Toscani’s view of his creative nature and how he sees his role as marketer. In what ways do
you think this has affected a total IMC?
3. Oliviero Toscani has defended Benetton’s use of shock advertising by noting that it constitutes nothing
less than a debate between advertising and art. He argues that potentially offensive images are
acceptable in the world of art and journalism while in other realms such as advertising they are not.
Do you agree with Toscani’s position?
4. Can you think of any other companies that use shock advertising? For what type of companies might
this type of advertising be effective?
5. Do you agree with Benetton’s decision to drop the use of shock ads and return to the use of more
conventional ads?
6. Did the Toscani creative aspect of his ads help brand awareness and provide your view on how it was
considered as part of the primary objective.
7. Explain how the marketing object changed after Toscani’s exit. How were the objectives aligned with
the new demographic they were seeking?
Benetton Group:
Evolution of Communication Strategy
This case was written by Senthil Ganesan with the help of Vamsi Krihna Thota, ICRAI
Knowledge Center. It is intended to be used as the basis for class discussion rather than to
illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources.
______________________________________________________________________________
© 2003, ICFAI Knowledge Center, Hyderabad, India
1
The purpose of advertising is not to sell more. It’s to do with institutional publicity, whose aim is to
communicate the company’s values (…) We need to convey a single strong image, which can be shared
anywhere in the world.
– Luciano Benetton, Founder and Chairman1
When Life magazine makes a cover about war, it makes the cover to inform, but also to sell the magazine
and to sell the advertising pages inside the magazine — Chivas Regal and all the others. So Time
magazine and all the others make a cover to inform and to sell. To do what I do, I do that to sell but also
to inform. And as soon as you inform, people point a finger at you and say, “You are exploiting!” No. It’s
the people who don’t even inform [who are exploiting]. I don’t care about the rejection; I’m not afraid to
be rejected. Actually, it’s a big honor in this world
– Oliviero Toscani, Benetton Creative Director and Photographer (1982 – 2000)2
Benetton Group*: Evolution of Communication Strategy
Introduction
Benetton, the Italian retailer was engaged in the manufacturing and distribution of clothing,
undergarments, shoes, cosmetics and accessories. Benetton also licensed its brand name to various
manufacturers of sunglasses, stationery, cosmetics, linens, watches, toys, steering wheels, golf equipment,
designer condoms and luggage. The group’s important brands included United Colors of Benetton (UCB),
Sisley, PlayLife and Killer Loop. During fiscal 2002, Benetton reported revenues of €1.99 billion and net
income of €128 million. Benetton spent €102 million on advertising and promotion during the year (see
Exhibit I for revenue split-up and Exhibit II for financial highlights). In addition to retail outlets around
the world, Benetton also operated megastores (3000 square foot stores) in such cities as Paris, Rome,
Kobe, Osaka, New York, London, Moscow and Lisbon. As of 2002, the company operated in about 120
countries through its 5000 retail stores and employed about 7250 people.
Benetton was well known for its colorful and provocative advertisements (Benetton termed its advertising
and marketing activities as Communication Strategy). The company employed unusual, controversial
advertising techniques and themes that used “shock value” and the power of photography to grab viewers’
attention. Unlike most advertisements which centered around a company’s product or image, Benetton’s
advertising campaigns focused on social and political issues like racial integration, AIDS awareness, war,
poverty, child labor, death, pollution etc. The advertisements initially succeeded in raising the brand’s
profile, but eventually began to cause dissatisfaction among customers, retailers, government bodies and
various international non-profit organizations.
Some of Benetton’s most memorable advertisements were a priest and a nun kissing, a just born baby
with uncut umbilical cord, a black stallion and a white mare mating, a colorful mix of condoms, a black
woman breast- feeding a white baby, the photo of an AIDS victim and his family taken moments before
his death, the bloody uniform of a dead Bosnian soldier (See Exhibit: II for Benetton’s advertisements).
1
www.benetton.com
Debra Ollivier, “The colorful dissenter of Benetton,” www.salon.com, 17th April 2000
* Benetton Group was controlled by Edizione Holding, a holding company, which owned businesses in garment
making, catering (Autogrill), telecommunications (Telecom Italia and Blu), services (Host Marriott Services) and
highways (Autostrade). Edizione owned 71% of Benetton Group, while the Benetton family owned 100% of
Edizione Holding.
2
2
Following the controversy surrounding a particularly provocative campaign called “We, On Death Row,”
Oliviero Toscani, Benetton’s Creative Director and Photographer, resigned from the company in May
2000. Benetton realized that it had crossed even the boundaries of unconventional advertising. Various
surveys suggested that some loyal customers had been put off by this campaign. One industry expert
commented about Toscani3:
“He has left a famous brand badly besmirched. Many of the things done in that name have
encountered a great deal of public resentment, hostility and boycott. It can be overcome, but not
easily.”
Following Toscani’s departure, 28-year-old Fabrica (Benetton’s Communication department) student
James Mollison took over as Benetton’s Creative Director. Under Mollison, it seemed Benetton was
reverting to a more traditional advertising strategy.
Background Note
The Benetton family (consisting of three brothers and a sister) established the Benetton chain in a small
Italian town in 1955. To support his family, Luciano Benetton (born in 1935), dropped out of school to
sell apparel. His sister Guiliana (b.1937) worked as a knitter in a local factory. Recognizing the potential
for a new business, Luciano and Guiliana decided to start their own apparel company. With thirty
thousand lire, Guiliana bought a knitting machine and put together a collection of 18 brightly colored
sweaters. These sweaters were immediately sold to the local stores. As the business grew, the remaining
two brothers joined the company. Each of the four siblings took responsibility for one aspect of the
business. Luciano concentrated on marketing. Guiliana directed the design department. Gilberto (b.1941)
handled administration and finance. Carlo (b.1943) managed production. Benetton was formally
incorporated in 1965 as “Maglificio di Ponzano Veneto dei Fratelli Benetton.”
The Benetton family initially sold their apparel through leading Italian department stores. But as the
business picked up, the company entered into an agreement to open an exclusive store for marketing the
apparel. The first store, opened in 1969, was an immediate success. Shortly thereafter, Benetton opened a
similar store in Paris. Unlike most small producers, who opted for the widest possible distribution, the
Benetton family decided to create a network of exclusive distributors, and used sub-contractors. By 1975,
Benetton had become a major player in Italy with about 200 shops (not all of them carrying the Benetton
name). To appeal to different segments of population, Benetton opened stores under different brand
names, which included Sisley, Tomato, Merceria and 012. Over a period of time, these brand names were
rolled into the Benetton name.
During the late 1960s and the early 1970s, Benetton rapidly expanded by setting retail outlets in France,
West Germany, Britain, Switzerland, and the Scandinavian countries. By the mid- 1980s, the chain had
built a significant presence in the major US cities and in Japan. Benetton’s popularity grew with a
impressive list of clientele- Princess Caroline of Monaco and Princess Diana of Wales. In addition to
setting up retail outlets across the world, Benetton also set up manufacturing facilities in France, Scotland,
Spain and the US. In 1986, Benetton went public by offering 15.6 million common shares (10% of the
company). Employees were also offered shares.
During the 1990s, Benetton went on an acquisition spree and purchased companies such as Rollerblade
(inline skates), Prince Tennis (racquets), Nordica ski boots, Nordica skis (originally Kästle), racquetballracquet maker Ektelon and snowboard brand Killer Loop. However, these brands performed poorly and
Mercedex Cardona, Alice Cuneo and Eric Lyman, “Benetton ad shift expected in the wake of Toscani exit,”
Advertising Age, May 8, 2000.
3
3
Benetton decided to divest all of them. In January 2003, Benetton sold Nordica to skiwear firm Tecnica
for €38 million. Two months later, Benetton announced that it would also sell Rollerblade to Tecnica for
around €20 million. Benetton also reached an agreement with Lincolnshire Management Inc., a US
private equity fund for the sale of Prince and Ektelon brands for about €36.5 million.
In 1994, Benetton set up Fabrica, a communications research center. Fabrica (from the latin word
meaning workshop) concentrated on communication projects ranging from cinema to graphics, from
industrial design to music, from publishing to new media to photography. The research center housed
several film, video and music labs, art, photo and design studios. Luciano described Fabrica as: “a bridge
between a visionary dream: between utopia and the reality a world facing changes that would have been
unimaginable only a few years ago.” Fabrica invited students from different countries, with creative
talents, offering them year- long fellowships. Among Fabrica’s successful projects were the film
“Blackboards,” which won a special award at the Cannes Film Festival in 2000, the film “Dayereh,”
which won a Golden Lion at the Venice Film Festival in 2000 and the film “No Man’s Land, co-produced
by Fabrica, which won the Oscar for the Best Foreign Film in 2002.
Exhibit: I
Benetton: Geographic revenue distribution by business segment
Business Sectors
Euro
The
Asia
Other
9 Months
9 Months
/Geographic Area
Americas
Areas
2002
2001
Casual Wear
849.9
66.2
109.2
144.6
1169.9
1162.1
Sportswear and Equipment 75.5
85.0
20.6
21.1
202.2
245.8
Manufacturing and Others
69.1
0.8
2.3
17.0
89.2
110.2
Total 9 months- 2002
994.5
152
132.1
182.7
1461.3
1518.1
Total 9 months- 2001
1033
164.8
143.8
175.8
1518.1
*Figures in € Million
**Business Sectors are as follows:
1. Casual Wear, representing the Benetton brands (United Colors of Benetton, Undercolors
and Sisley)
2. Sportswear and Equipment: Playlife, Nordica, Prince, Rollerblade and Killer Loop
brands.
3. Manufacturing and Others: Sales of raw materials, semi-finished products, industrial
services and revenues and expenses from real estate activity.
Source: www.benetton.com
Year
Revenues (million euro)
Net Income (million euro)
Exhibit: II
Benetton: Eight-Year Financial Highlights
2002 2001 2000 1999 1998 1997
1992 2098 2018 1982 1980 1878
128
163
174
166
151
150
1996
1483
127
Source: www.benetton.com
Communication Strategy
From the early 1980s, Benetton believed in pursuing an unconventional communication strategy. As one
company document put it4:
4
www.benetton.com
4
“Benetton believes that it is important for companies to take a stance in the real world instead of
using their advertising budget to perpetuate the myth that they can make consumers happy
through the mere purchase of their product. The company has opted for a communication
strategy in which issues and not clothes, play the lead part. The company has decided to devote
some of its advertising budget to communicate on themes relevant to young and old people
worldwide.”
Until the 1980s, Benetton advertisements had largely focused on its products and logo (stylized knot of
yarn with word Benetton printed under it, contained within a dark green rectangle). In 1982, Luciano
hired Oliviero Toscani, a prominent fashion and advertisements photographer to head Benetton’s
advertising department. Toscani’s initial advertisements were conventional. They showed groups of
young people wearing Benetton clothing. But Luciano and Toscani soon realized that Benetton
advertisements had to stand apart from the rest of the competition. They decided to promote Benetton as a
life style brand.
Toscani’s first theme featured teenagers and kids from culturally diverse nations. Colorfully dressed in
Benetton attire, the kids engaged in a variety of playful acts (see figure: (i)). By linking the varying
colors in the Benetton collection to the diverse “colors” of its world customers, Toscani portrayed a
picture of racial harmony and world peace. It was from these advertisements that the trademark “United
Colors of Benetton” emerged.
Figure (i)
Source: www.benetton.com
In 1984, Benetton launched a similar campaign titled “All the colors in the World,” showing groups of
teenagers and kids from different countries and ethnic groups dressed in Benetton clothing, with the
company logo in the corner. While the company received several letters of praise for company’s message
on racial integration, it evoked negative sentiments especially in South Africa, England and the US.
In 1985, Benetton’s advertisements included two black boys kissing each other (see figure: (ii)), with
little US and USSR flags in their hair and painted on their cheeks with the tagline “United Colors of
Benetton.” In 1986, the two little black boys appeared again, united by a globe and a chain with the peace
symbol. The globe became a symbol of unification, and appeared on all the posters that year. Themed
advertisements were launched for countries engaged in political battles with each other: England and
Argentina, Israel and Germany, Iran and Iraq, Israelis and Arabs, etc. The message read: “All colors are
equal, just as all men are equal.”
5
Figure (ii)
Source: www.benetton.com
In 1988, Benetton started blending culture and legends. New advertisements featured Adam and Eve,
Joan of Arc and Marilyn Monroe (see figure: (iii)), Leonardo de Vinci and Julius Caesar, all captioned
with the slogan: “United Superstars of Benetton.” Similar campaigns featured animals- a wolf and a lamb
(see figure: (iv)) with the tagline: “United Friends of Benetton.”
Figure (iii)
Source: www.benetton.com
Figure (iv)
Source: www.benetton.com
6
In 1989, Benetton decided to cancel its agreement with outside advertising agencies and develop
campaigns in house. Toscani’s photos were discussed by the advertising team and then shown to Luciano
for final approval. With less than ten people managing the entire process, Benetton could produce
advertisements, at about one-third the cost of its competitors.
Since Benetton’s clothing was sold in various markets with different style preferences, Toscani turned his
focus to photos that stimulated thinking. His new advertisements neither showed the products nor the
logo. The knot logo was replaced with a small green rectangle with the tagline “United Colors of
Benetton.” Luciano explained this decision5:
“Using these images in this unconventional way is an effort by Benetton to break through the
complacency that exists in our society due to the constant flow of even the most horrendous
realities communicated through conventional media such as the evening news or the morning
paper. By removing these images from their familiar contexts and putting them in a new context
they are more likely to be noticed and given the attention they deserve as the viewer becomes
involved in the process of answering the questions: What does this image mean? Why does this
image appear with a Benetton logo? How do I feel about the subject of the image? What can I
do?”
Famous advertisements during the late 1980s included a black hand and a white hand linked by a
handcuff and a black woman breast-feeding a white baby. The black woman- white baby advertisement
was severely criticized by many who thought that Benetton was reminding blacks of the days of slavery
when black women breast-fed white babies. However, Benetton maintained that such photos symbolized
universal brotherhood. Other advertisements with a similar message included a white wolf and a black
sheep nose to nose, a black child sleeping among a pile of white teddy-bears, a little black hand on a big
white hand, a piano duo showing little white hands being helped by big black hands, two children (one
black, the other white) facing each other sitting on their potties (see figure: (v)), tubes of personality tests,
miners and bakers united by the black of the soot or coal and the white of the flour.
Figure (v)
Source: www.benetton.com
In 1991, Toscani introduced a number of advertisements that attempted to draw public attention to
important social problems. The advertisements included a cemetery (signifying war deaths), many
different brightly colored condoms and a baby with an umbilical cord (see figure: (vi)). One
advertisement featuring a priest and nun kissing offended the religious sentiments of many, including the
5
Oliviero Toscani’s Advertising Philosophy, The Center for Interactive Advertising, www.ciadvertising.org.
7
Pope. The image of the baby with the umbilical cord evoked mixed responses. In the company’s view, the
advertisement simply conveyed the beauty of new life and the universal idea of love. The photo triggered
off a huge controversy throughout Europe. Many wanted it to be banned. But some liked it. For example,
the image was exhibited in a Flemish museum as part of a show celebrating the images of motherhood.
Figure (vi)
Source: www.benetton.com
In 1992, Toscani introduced political themes in Benetton’s advertisements. He selected various
photojournalistic images related to the AIDS crisis, environmental disaster, political violence, war, exile,
etc. These appeared in various journals and magazines as well as on billboards without written text except
for the conspicuous insertion of the green and white Benetton logo. Toscani explained the company’s
strategy6:
“Unlike traditional adverts, our images usually have no copy and no product, only our logo.
They do not show you a fictitious reality in which you will be irresistible if you make use of our
products. They do not tell anyone to buy our clothes, they do not even imply it. All they attempt to
do is promote a discussion about issues which people would normally glide over if they
approached them from other channels, issues we feel should be more widely discussed.”
In spite of the controversy his advertisements had generated, Toscani went one step further by embracing
“reality advertising.” Advertisements included: a dying AIDS victim with his family at his bedside, an
African guerrilla holding a Kalashnikov and a human leg bone (see figure: (vii)), a boat overcrowded with
Albanians, a group of African refugees, a car in flames after a Mafia bombing, a family weeping before
the bloodied corpse of a Mafioso and two Indians caught in a flood in Calcutta.
6
Oliviero Toscani’s Advertising Philosophy, The Center for Interactive Advertising, www.ciadvertising.org.
8
Figure (vii)
Source: www.benetton.com
Benetton also launched an advertisement with a series of masculine and feminine genitals, of different
ages and of different colors with the label “U …
Purchase answer to see full
attachment