Competitive Strategies Case Study

Benetton’s Advertising: Looking Beyond Toscani

OR

Abstract:
The Italy based, €1.765 billion-Benetton group S.p.A.(Benetton) is a garment and apparel manufacturing company with a presence in 120 countries around the world. Benetton is known for its politically and culturally contentious advertising campaigns. The company is witnessing a decline in sales since the late 1990s, despite formulating a change in its erstwhile radically different approach to advertising. Its new advertising strategy, which is more product-led, non-controversial, and without politically or socially charged issues, has failed to arrest the decline in its sales. Benetton’s net profit for the fiscal year ending in March 31, 2005, has fallen by16.9 %, from € 28 million, ($35 million) to € 23 million, ($30.1 million), and revenue has dipped 0.8%, from € 381 million, ($476.6 million) to € 378 million, ($495.2 million). Analysts wonder whether Benetton's new advertising strategy, with a far more conventional edge, will help it find its niche within the retail market, or will it lead to a complete loss of identity for the famed Benetton brand? Should Benetton stick to its new advertising strategy or revert to the old one?

Pedagogical Objectives:

• To discuss the advertising strategy of Benetton
• To identify the reason behind the declining sales of Benetton
• To evaluate the new advertising strategy adopted by the company
• To evaluate and compare the old and new advertising strategies of Benetton

Keywords : Contrarian advertising; Sisley; Playlife; Competitive Strategies Case Study; Nordica; Rollerblade; Oliviero Toscani; James Mollison; Zara; fcuk; Gap

Contents : 
A Tumultuous Advertising History
Looking Ahead
BENETTON’S Financial Highlights
Benetton group’s consolidated income statement
Balance sheet and financial position highlights
Consolidated cash flow statement