Benattin Case Study

Problem Statement

The Benetton Group’s (Benetton) current image in India is that of a discounted brand however a recent television campaign aimed at changing this image has resulted in positive feedback.  Benetton must now identify market segments, and determine positioning and communication strategies to capitalize on a potential opportunity in India.

Situation Analysis

Benetton started as a single shop in Italy and has grown to over 7,000 locations (99% franchised) in 120 countries. Known for distinctive advertising campaigns based on image advertising, Benetton uses lifestyle as a basis for disaggregate international consumer segmentation. These campaigns are unique in the sense that there is no call-to-action, no products and no prices, but rather images that appeal to an individual’s core values; AIDS, peace, war and death have all been themes. The intent is to create a psychological connection to the consumer which will then create the connection on a product level, thus creating a heightened brand loyalty.

Benetton’s product lines include men’s, women’s and children’s wear. In addition to premium casual wear, they design sportswear clothing and state-of-the art sports equipment. Benetton’s sponsorship of sporting teams includes developing sporting facilities and allowing many young athletes to acquire their first taste of sport through Benetton sponsored clubs.

Benetton’s international expansion was received with mixed results. Their examination of the US market didn’t identify a regional segment specific to that country resulted in missing the target market. An attempt to appeal to a wider market through a joint-venture with Sears Roebuck and Company (Sears) failed when customer complained and boycotted due to Benetton’s anti-death penalty campaign (2008). Benetton’s edgy advertising campaigns did not mesh well with Sears’ wholesome department store image.

An inability to adapt to varying global cultures has also contributed to Benetton’s hit-and-miss international expansion. From publishing the US President with AIDS lesions, to the “Croatian Soldier” and “HIV Positive” (which was barred by Germany’s high court) campaigns in Germany, Benetton failed to identify country-of-origin strategies that could have been used to customize campaigns across countries and cultures. Revenue decreases during these tumultuous periods were attributed to a mix of factors including recession, mismanagement and a failed pricing strategy.