Benetton & Volkswagen

Benetton1.Do you believe Benetton is sincere in its efforts to promote social causes through its advertising? I do believe that Benetton was making the attempt to promote the social cases that they saw as key contributors to the worlds problems like, power, sex, race, and war. The only thing that really strikes me is that Benetton used pictures without captions so it makes it difficult to see which side they are really on if any.

The campaigns showed that Benetton had somewhat of social consciences but the ads themselves it failed to show exactly what it is (AIGA, 2006). 2.Compare and contrast the controversy over the “We, On Death Row” advertising campaign with the controversies generated by earlier campaigns of the 1990s. Do you think Americans would respond differently than Europeans?

Why or why not? The “We, On Death Row” ad campaign was right along the same lines as all their other campaigns whether to raise awareness about AIDS or racism they kept their focus on making controversial subjects that pulls at the consumers moral fibers. With the release of their AIDS campaign consumers refused to shop the stores anymore in Biloxi, Mississippi because they sold products from a “sick” company (Keegan & Green, 2005).

With using the pictures of death row inmates in their ads it was a slap in the face to the murder victim’s families. Since America actually uses the death penalty for convicted criminals and Europeans feel that the death penalty has no place in a democratic society (Book Shop, 2006).

The difference in the response would be huge. Europeans would actually be more offended than those in the US since they feel strongly about abolishing the death penalty. 3.There is a saying in the marketing world that “there is no such thing as bad publicity.” Does that apply in the Benetton case? Yes and no, they ads have definitely ticked some people off but as their creative director and chief photographer Oliviero Toscani states “most good ads are forgotten after six months, but who still remembers the Benetton ad with the priest kissing the nun?

Ten years later and people remember! That’s immortality!” he said (Keegan & Green, 2005). In the US market I think that the statement doesn’t pull the weight it does around the globe. The US consumers are more sensitive to what is going on with advertising just like the ad with the black mother nursing a white baby was not allowed to enter the US, but at the same time won awards in France and Italy.

The US market seems to be the only market where Benetton is having a hard time really appealing to the consumer. The US only makes up about 11% of Benetton’s total revenue, and with the number of stores declining Benetton has launched a new more conservative ad campaign to attempt to win back the American people. 4.Assess Benetton’s efforts to boost sales in the United States.

What recommendations would you make to management and why? Benetton has changed their strategy away from social issues in the US and has focused their new ads on their products similar to Gap, and Old Navy by doing this they should increase market share. Benetton must promote the image to their target market that they have the highest quality products and the largest selection of knitwear, shoes, and cosmetics. By turning away form the social issues that may offend a consumer they should try harder to see exactly what it is that their consumers need and want.

Volkswagen1.Evaluate Volkswagen’s goal of becoming Europe’s first global automaker. What is the rationale behind the strategy? The rationale is based on the large success they are having around the globe in markets such as Mexico and China. With the strong showing in these markets VW feels they have a real opportunity to make a big impact on the global market. 2.What is the biggest challenge currently facing Volkswagen management? The biggest challenges that management faces in is the long struggle to improve profitability and productivity (Business Week, 2006). With their large push of the VW brand cars it has the possibility of hurting their other line, Audi.

Their previous CEO Ferdinand Piech has said in the mist of his retirement that VW is a prime take-over candidate prime for acquisition (Business Week, 2006). 3.In 2002, Volkswagen launched a new super luxury model, the $85,000 Phaeton. Assess its prospects for success. According to all the research I’ve done on this luxury model it doesn’t seem to have a chance.

JD Power’s research manager Al Bedwell said, “It is really hard to see a good reason why anyone would really buy it” (Wintonsworld, 2006). It was first forecasted at 30,000 units per year, then went to 15,000 and now it is at around 10,000 so VW could likely regret, making the decision to enter the luxury market with a new brand and not just push their already established Audi brand.

References:AIGA. Tibor Kalman. Retrieved May 27, 2006, from Book Shop. Death Penalty. Retrieved May 27, 2006, from Business Week. Volkswagen. Retrieved May 27, 2006, from Keegan, W.J., & Green, M (2005). Global Marketing: 4th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall. Wintons World. VW Phaeton. Retrieved May 27, 2006, from