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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).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 Toscani:      

“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), racquetball-racquet maker Ektelon and snowboard brand Killer Loop. However, these brands performed poorly and 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 /Geographic Area
Euro
The Americas
Asia
Other Areas
9 Months 2002
9 Months 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: http://www.benetton.com

Exhibit: II
Benetton: Eight-Year Financial Highlights

Year
2002
2001
2000
1999
1998
1997
1996
Revenues (million euro)
1992
2098
2018
1982
1980
1878
1483
Net Income (million euro)
128
163
174
166
151
150
127
Source: http://www.benetton.com

Communication Strategy

From the early 1980s, Benetton believed in pursuing an unconventional communication strategy. As one company document put it:      

“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.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (i)::/sites/dl/free/0070939853/287530/1984ad.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (i) (25.0K)</a>Figure (i)

Source: http://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.”

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (ii)::/sites/dl/free/0070939853/287530/figure_02.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (ii) (24.0K)</a>Figure (ii)

Source: http://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.”

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (iii)::/sites/dl/free/0070939853/287530/figure_03.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (iii) (31.0K)</a>Figure (iii)

Source: http://www.benetton.com

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (iv)::/sites/dl/free/0070939853/287530/figure_04.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (iv) (19.0K)</a>Figure (iv)

Source: http://www.benetton.com

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 decision:      

“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.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (v)::/sites/dl/free/0070939853/287530/figure_05.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (v) (20.0K)</a>Figure (v)

Source: http://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 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.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (vi)::/sites/dl/free/0070939853/287530/figure_06.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (vi) (21.0K)</a>Figure (vi)

Source: http://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 strategy:

     
“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.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (vii)::/sites/dl/free/0070939853/287530/figure_07.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (vii) (32.0K)</a>Figure (vii)

Source: http://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 “United Colors of Benetton.” A more shocking advertisement showed close-ups of various parts of the human body (pubis, arms, stomach, bottom) tattooed with the English abbreviation “HIV Positive.” The tattoo mark was similar to the numbers tattooed by Nazis on concentration camp prisoners. Some advertisements also promoted homosexuality: two smiling men cheek to cheek, two women- one white and the other black, holding an Asian baby, wrapped in the same blanket, etc. Other controversial advertisements included a black stallion mounting a white mare, three identical human hearts, with stickers announcing different ethnic groups “white, black, yellow” (see figure: (viii)). The hearts portrayed that all were same inside, no matter what the outside skin color was.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (viii)::/sites/dl/free/0070939853/287530/figure_08.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (viii) (25.0K)</a>Figure (viii)

Source: http://www.benetton.com

In January 2000, Benetton launched a year- long $15 million global advertising campaign called “We, on Death Row.” This campaign, which featured 26 US prisoners who had been sentenced to death (see figure: (ix)) appeared on billboards and in major publications in Europe, America and Asia and on its website. Toscani developed the campaign after spending more than two years visiting death row prisoners in several American prisons.

The advertisements featured full color faces of death-row inmates, printing their names and dates of execution. A special booklet and video was also released that projected the reality and futility of capital punishment. The booklet included photos of the inmates and interviews about their life and the punishment. The booklet also contained carefully selected quotes from the Dalai Lama and the Pope, challenging the right of the state to execute its citizens. Benetton believed that if the public saw these inmates as “people,” then they would be less inclined to see them executed.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (ix)::/sites/dl/free/0070939853/287530/figure_09.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (ix) (23.0K)</a>Figure (ix)

Source: http://www.benetton.com

The campaign resulted in widespread protests from individuals and governments. The families of the victims and prisoners objected strongly to the campaign and accused Benetton of glamorizing murderers while ignoring the crimes they had committed. Many resented that the campaigns did not mention how the prisoners felt about the serious crimes they had committed. One website called Pro-death penalty.com wrote:

     
“While Benetton tries to improve their market share in the US, they are causing unnecessary pain and distress to the families of the innocent people killed by the men the campaign intends to humanize.”

Responding to such allegations, Mark Major, Director of Communications for Benetton US in New York defended the campaign:      

“We don’t develop contrived marketing campaigns that are merely designed to sell products. When we talk about death row or AIDS or war or peace, it’s not a contrived topic. It’s definitely something that people at Benetton feel very strongly about. We don’t apologize for the fact that dual purposes can be achieved. We can raise brand awareness that we are a company that cares about capital punishment and we can get people engaged in the topic.”

The state of Missouri (US) where the inmates in question were imprisoned filed a suit against Benetton, arguing that it had been misled regarding the use of the photos. This lawsuit was settled in June 2001 when Benetton agreed to write letters of apology to the four Missouri families whose relatives were murdered by the inmates featured in the ads and to donate $50,000 to the Missouri Crime Victims Compensation Fund. In the US, retailer Sears canceled an exclusive $100 million contract to sell a line of Benetton clothes, calling the death row images “terribly insensitive.” Sears ended its contract even after Benetton agreed to allow the retailer to preview future ads. Toscani had hoped that this campaign would have a positive impact in the US where about 98 inmates had been executed in 1999. Toscani believed that the sharp criticism in the US was not justified as Europe had more or less banned the death penalty. But, due to the increasing furor, Toscani resigned in May 2000.

In September 2001, Benetton launched a campaign called International Year of Volunteers (see figure: (x)), in collaboration with the United Nations (UN). “Volunteers” was Benetton’s first campaign after Toscani’s exit and was developed by new Creative Director James Mollison. The campaign emphasized that devoting one’s time and energy to others led the way to self-improvement and a better quality of life. A special issue of Colors Magazine was published for the campaign, devoted entirely to voluntary effort. Collaboration with the UN was an ongoing effort for Benetton. The company and the UN first worked together in 1996 for the World Food Summit organized by the FAO (Food and Agriculture Organization of the UN) to discuss the problem of hunger in developing countries. The following year Benetton and the UN came together again for a worldwide campaign celebrating the 50th anniversary of the Declaration of Human Rights. In 1999, Benetton organized a fund raising campaign for Kosovo with the collaboration of UNHCR (United Nations High Commission for Refugees). Such campaigns were shown throughout the world in newspapers, weekly magazines, women’s and lifestyle magazines and also on billboards located in major cities.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (x)::/sites/dl/free/0070939853/287530/figure_10.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (x) (30.0K)</a>Figure (x)

Source: http://www.benetton.com

Other campaigns following Toscani’s exit suggested that Benetton was changing its communication strategy. The company started showcasing advertisements featuring exuberant models frolicking in colorful knitwear against a white background (see figure: (xi)). The models used in the campaign were not professionals. One model was a poet who performed at local coffee houses. Others were discovered on the street in bars or riding the subway. Developed with a budget of $10 million dollars, this campaign was available in print, catalog and TV media.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (xi)::/sites/dl/free/0070939853/287530/figure_11.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (xi) (31.0K)</a>Figure (xi)

Source: http://www.benetton.com

An important aspect of Benetton’s communication strategy was its Colors magazine. Launched in 1991, Colors targeted young people across the world. The magazine was launched in four bilingual languages: English-Italian, English-German, English-Spanish and English-French, in an attempt to break the barriers of language and culture throughout the world. By 2002, the magazine was sold in eighty countries. Each edition of the magazine took an issue- war, religion, race, birth, immigration, ecology, travel, slavery, (see figure: (xii)), etc. “The Race Issue”, which featured a computer-generated picture of the Queen, changing her race to Indian, created a huge furor in the English press, but brought Benetton massive publicity. Over the years, the magazine had featured more than 5000 models, including Wodaabe warriors in Nigeria, Colombian soldiers, boy scouts in Oman, etc. In May 2003, Benetton launched the 56th volume of Colors, which featured “Violence” as the central issue.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (xii)::/sites/dl/free/0070939853/287530/figure_12.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (xii) (37.0K)</a>Figure (xii)

Source: http://www.benetton.com

Apart from advertisements for billboards and magazines, Benetton also created a number of catalogs titled “People and Places.” Catalog themes included Young People in Tokyo, Ponzano (Italy), Corleone (Italy), China, India, etc. Another theme was Sunflowers, which featured children suffering from Down’s Syndrome (a disease caused by chromosomal abnormalities). In 1998, Benetton used images of Arabs and Jews living and working together in Israel. Titled “Enemies,” the cover showed a 24-year-old Israeli student kissing her 22-year-old Bedouin boyfriend. The catalog included photos of an Arab grocer and a Jewish customer, Jewish and Arab youth leaders, a mixed kindergarten of Jewish and Arab kids (see figure: (xiii)) and a music band consisting of Jews and Arabs.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Figure (xii)::/sites/dl/free/0070939853/287530/figure_13.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Figure (xii) (39.0K)</a>Figure (xii)

Source: http://www.benetton.com

Over the years, many newspapers in various countries had refused to accept Benetton advertisements. In 1995, government authorities in Germany banned some Benetton advertisements, which featured child labor, the human body stamped “HIV Positive,” and a bird stuck in an oil slick. The advertisement featuring the newborn baby with the uncut umbilical cord was withdrawn from the media in Italy, France and the UK. The photo showing a priest and a nun kissing was promptly banned by the Italian Advertising Authority (The Vatican took a stern view but in England, this advertisement won the Eurobest Award). Benetton was also sued by many retail outlets, which believed the provocative advertisements drove away customers. But the more the company’s advertisements were banned, the more publicity Benetton seemed to get.

Oliviero Toscani’s Advertising Philosophy

Toscani believed that the industry as a whole had to change the way advertisements were used as consumer-spending patterns had changed over the years. He emphasized the need for creativity:      

“To capture their (consumer’s) attention, advertising must become an artistic product in itself, like a play or a film. That has never happened because the only things that condition the industry are money and marketing managers, who are idiots. All they know how to do is repeat what’s already been done.”

Toscani explained his role in Benetton:      

“Nobody ever told me my job was to sell anything. I’m responsible for the company’s communications; I’m not responsible for its economics. Mr. Benetton has given me incredible freedom to propose issues that should be communicated. To be really contemporary, an up-to-date company, we must take our communication in another direction. Not the one usually followed by most companies, in the apparel business, at least- when there’s an obvious connection between product, model and merchandising. I’m aware that, having a relatively big budget, it would be like throwing money away if we only explained that our product is better than the competition’s. Advertising should give something more... That’s my work, to report something that exists. We can’t be like ostriches who put their head in the sand.”

Toscani saw himself not as an advertiser, but as a reporter-photographer. He believed in communicating to the world in a less traditional way. Toscani identified a number of drawbacks in traditional advertising:      

“There is a crisis in advertising. The industry is lagging behind social trends, but it’s so rich and powerful that it’s very difficult for it to change. In the early twentieth century advertising focused on a company’s buildings and machines. After that it started presenting products. Then, since all products started looking alike, they could no longer be at the heart of the message. So in the 1960s advertisers started showing leggy models to sell cars. The long legs offered added value. The product took a back seat and what was sold was a symbol. The problem with this technique is that the message is always based on consumers’ shortcomings and makes them feel guilty. It tells them, ‘if you haven’t got this product, you’re out of it. On the other hand, if you buy a certain brand of sports shoes you can play like Ronaldo even if you can’t kick a ball.”

Due to his radical campaigns, many people in the advertising industry hated Toscani. But Toscani believed he had achieved his objective. Since he had joined Benetton, the company’s sales had grown more than twenty times. As he once remarked:      

“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!”

Looking Ahead

One leading business school publication summarized Benetton’s advertisements:      

“They seem to take the virtuous stand for the betterment of humanity and thus create a sense of power in the viewer who agrees with the safe, politically correct message, even if the message is made with shocking images. By empowering the viewer, the consumer, the company associates itself with engineered feelings of empowerment and righteousness. Through the use of such images Benetton as a company has become an icon for this kind of protest in advertising which tries to claim the ability for social change. In reality Benetton creates an empowered viewer who will buy their product through shock value, empowerment, and memorability.”

Following Toscani’s exit, Benetton announced it would revert to a more conventional advertising strategy. The company’s website highlighted its advertising strategy for the future:      

“We need to have models wearing our clothes by UCB in our advertisements. We need to show consumers that we are an actual clothing line, and not a political or governmental company. By picturing our stylish clothes, we will attract more business. Consumers want to buy our clothes because they are attractive and have a high quality reputation. People who respect our clothing line are the only ones that actually buy it, despite the political issues that we represent. If we can undo the damage that we have already caused in the minds of many consumers by ceasing to offend them, our sales will greatly increase. Let’s show the world that we make great clothing, not that we have controversial opinions on various subjects.”

From 2001, Benetton’s advertisements started featuring conventional images- teenagers in colorful Benetton clothing. Benetton, however, maintained that the company would still continue with its “socially responsible” status by focusing on non-controversial themes like racial discrimination, poverty, child labor, AIDS awareness, etc. To that effect, in early 2003, Benetton in association with UN’s World Food Programme, launched a year- long $16 million communication campaign, called Food for Life. This campaign covered around 30 countries and the stories and photos taken from these countries were used in Colors, under the title “Hunger.” The images in this campaign showed crisis and poverty.

When questioned about Benetton’s new strategy of using models and products to advertise, Toscani just commented: “It’s a waste of money.” However, he was supportive of the company’s decision not to move away from highlighting social causes. As 2003 got underway, Benetton management, advertising gurus and customers alike wondered the impact the new philosophy of product- based advertisements would have on Benetton’s brand building efforts and sales.


Chicken of the Sea International: The Jessica Simpson Spokesperson Decision

Introduction

Chicken of the Sea International (COSI) is one of the oldest seafood companies in the United States. The company processes and markets a variety of seafood items under the Chicken of the Sea brand name including canned tuna, salmon, sardines, mackerel, crab, and clam products. The original company was founded in 1914 by Frank Van Camp and his son who bought the California Tuna Canning Company to can albacore tuna and changed the name to the Van Camp Seafood Company. However, the company began using the Chicken of the Sea trademark and brand name as a way to describe the taste of its tuna to consumers. Van Camp was the first company to can "light" tuna. So consumers would know to expect a mild-flavored white fish – that tasted similar to chicken – the company marketed it under the brand name Chicken of the Sea. It was such a success that the company eventually adopted the product name.

     The company operated under the Van Camp Seafood Company name until 1963 when it was purchased by Ralston Purina, a producer of processed foods, pet food, and livestock and poultry feeds. In 1988 Ralston sold its Van Camp division to P.T. Mantrust, an Indonesian corporation that wanted to execute a fully integrated approach to supplying canned tuna to the U.S. However, due to high interest rates in Indonesia and its overly leveraged structure, P.T. Mantrust experienced cash flow difficulties and the primary creditor, The Prudential Life Insurance Company of America, became the majority owner. In 1997 the company was purchased by an investment group known as Tri-Union Seafoods and the name of the company was changed to Chicken of the Sea International. In 2000 the investment group sold the company to Thai Union International, Inc. making it the sole owner of the company. In 2003 COSI acquired Empress International Ltd. which imports frozen shrimp and other shellfish into the U.S. With the acquisition of Empress, COSI total annual sales would exceed $600 million.

     The Chicken of the Sea name is well known and has a high level of brand equity among consumers. The brand’s identity is strongly related to the Chicken of the Sea mermaid who is one of the best known brand icons in the world. She first appeared on the Chicken of the Sea label in the early 1950s and has symbolized quality for the brand for more than 50 years. The mermaid was the focal point for the brand’s advertising for many years and the recognition of her is still very strong today. The catchy jingle that was developed in the early 1960s continues to be used in the company’s advertising: “Ask any mermaid you happen to see…what’s the best tuna? Chicken of the Sea!” Chicken of the Sea changed the look of its famous mermaid icon in 2003 to make her appear more contemporary. Consumer research had indicated that the mermaid icon was “getting a little tired” and needed to be updated. Qualitative and quantitative research was used to guide this process and ensure that the traits and characteristics consumers associated with the mermaid were captured in the new image. These included attributes such as being trustworthy, magical, attractive, friendly, approachable, contemporary and fitting with the Chicken of the Sea brand.

     COSI launched a new web site (www.Chickenofthesea.com) that provides value-added information to its customers. The web site includes an easy-to-use recipe generator, product information, resources on health and nutrition, as well as games and educational content. The site also contains the Mermaid Store, where consumers can shop for everything from T-shirts to watches to sporting goods featuring the classic mermaid logo. The web site has become an important part of Chicken of the Sea’s integrated marketing communications program as the company uses other forms of media to drive consumers to the site and engage them in the brand. For example, company used its web site as part of its U.S. Synchronized Swim team sponsorship promotion. Consumers could enter a recipe contest online and register to win a trip to the summer Olympics. In 2003 COSI began offering a customer loyalty program called the Mermaid Club, which consumers can join through its web site. Club members receive special offers, health tips and articles, new product updates, and an informative e-newsletter. They also can communicate with other club members to share information and ideas such as new recipes.

Market and Competitive Overview

Tuna is the primary product in the canned/packaged seafood market which also consists of other items including salmon, crab, shrimp, mackerel, oysters, and sardines. The tuna category accounts for nearly $2 billion in sales each year which includes sales to warehouse and club stores as well as the food service market (restaurants, hospitals, dormitories). The industry is dominated by three major brands including StarKist which has approximately a 40 percent market share, Bumble Bee with a 24 percent share and Chicken of the Sea with 18 percent of the market. Private label brands account for the remaining 18 percent of sales in the canned/packaged tuna category. There is a considerable amount of brand loyalty in the category have surveys have shown that 44 percent of consumers are loyal to a particular brand of tuna. The primary target consumer for tuna is females between the ages of 25-54. In recent years there had been a considerable amount of product innovation in the tuna category. One of the most significant innovations was the development of the flavor fresh pouch packaging which provides consumers with tuna that is fresher tasting, firmer in texture, and requires no can opener or draining. Other product innovations have included the tuna salad kit which was introduced by Chicken of the Sea and provides the ingredients to make fresh tuna salad in single or multiple servings as well as a Lunch To-Go product that was introduced by StarKist.

     The market leader in the tuna category is StarKist which was owned by the H.J. Heinz Company for many years but was sold to Del Monte Foods Co. in late 2002 along with several other well-known brands including 9-Lives cat food and Kibbles n’ Bits dog food. These acquisitions helped push Del Monte, which is the largest manufacturer and marketer of canned fruits and vegetables, into the top 20 U.S. packaged foods companies with revenue of more than $3.1 billion. Advertising for StarKist has featured the well-known “Charlie the Tuna” character as a personality symbol for the brand for more than 40 years. Charlie was first introduced to consumers in 1961 as the star of the classic “Sorry Charlie” commercials. The spots featured Charlie trying to trick fishermen into catching him but always being rejected because he was not good enough for StarKist tuna. Consumer awareness of Charlie the Tuna has been estimated at more than 90 percent as the cool bespectacled icon has a whimsical character and personality that resonates with consumers. Recent commercials have featured Charlie plugging a number of the company’s new products such as StarKist Tuna in a Pouch and StarKist Tuna Creations which is another pouch product that is marinated to produce tuna with a distinct flavor (e.g., zesty lemon, hickory smoked, sweet & spicy, or herb & garlic).

     StarKist focuses exclusively on canned/packaged tuna and does not market any other seafood products. Sales of the various StarKist tuna products were approximately $800 million in 2003. Del Monte’s marketing strategy for the brand is to expand packaged tuna consumption beyond sandwiches by promoting its new the portability and variable usage of its pouch products such as StarKist Tuna Creations its new StarKist Lunch To-Go product which contains the fixings for a tuna salad such as crackers, mayo and relish, along with a mixing spoon. It was estimated that Del Monte would spend approximately $7 million on media advertising in 2004 for the various StarKist products. Information regarding StarKist products as well as its advertising can be found on the company’s web site at http://www.starkist.com.

     COSI’s second major competitor is Bumble Bee Seafoods, LLC which was founded in 1899 when a group of canners banded together in Oregon as the Columbia River Packers Association. Over the next 50 years the CRPA developed the Bumble Bee brand into one of the most respected premium labels for canned seafood. In 1950 Castle & Cooke, a prominent Hawaii-based seafood company, purchased a majority interest in CRPA and Bumble Bee Seafoods, Inc. was formed as a wholly owned subsidiary. In 1997 Bumble Bee was acquired by International Home Foods (IHF) in 1997 who provided the company with the opportunity to launch a new line of specialty products including shrimp, oysters, clams, smoked scallops and more. IHF in turn sold the company to ConAgra Foods, Inc. in 2000. However, in 2003 ConAgra decided to shift its portfolio of brands and businesses and concluded that Bumble Bee did not fit well into its core product mix. ConAgra sold the company to Bumble Bee’s senior management team in partnership with the investment firm Centre Partners Management LLC. With more than $500 million in annual revenues, Bumble Bee Seafoods is the third largest marketer of canned/packaged seafood products in the U.S. The company’s well known “Bee” can be found on a variety of caned/packaged seafood products including tuna, salmon and a variety of specialty seafood items. Over the past several years Bumble Bee has run almost no media advertising for its products choosing instead to allocate its marketing funds to consumer and trade promotions.

     Over the past 10 years, the tuna market has become extremely competitive. The major competitors have shifted most of their promotional budgets to consumer and trade promotions and spending on media advertising has been minimal. As noted, Bumble Bee has not been running any media advertising and commercials for StarKist and Chicken of the Sea are rarely seen on television. Most of the promotional spending toward consumers has been spent in print through FSIs in Sunday newspapers containing coupon offers. As a result, tuna has become somewhat of a commodity with many consumers often purchasing the brand that was on promotion or offered the lowest shelf price. The three major companies have also been facing increased competition from private label brands which usually are priced lower than the national brands. The reduction in media advertising and increased emphasis on sales promotion, as well as the growth of private label brands, also has resulted in a shift in power from the manufacturers to the retailers. The profit margins on canned tuna in particular have become very small as retailers are demanding lower prices and more trade allowances. Given these developments, the major competitors have been finding it increasingly difficult to allocate funds to media advertising that could be used to maintain and build brand equity.

The Famous Jessica Simpson Fish Faux Pas

In the summer of 2003 the MTV cable network began airing a new reality program, Newlyweds: Nick & Jessica, featuring pop singer Jessica Simpson and her husband Nick Lachey. The 23 year old Simpson is a rising pop star who was particularly popular among young teens while Lachey is best known as a heartthrob member of the boy band 98 degrees. The first season of the show followed the couple from their October 2002 wedding through the beginning of their life together, and became hugely popular thanks to Simpson's ditzy comments and behavior. In one of the episodes of the show Simpson made what became known as her famous fish faux pas when she turned to her husband while eating a can of Chicken of the Sea tuna and asked whether the product inside the can is chicken or tuna. Viewers of the show laughed and/or shook their heads in bewilderment while the media quickly picked up on the comment and began comparing Simpson to ditzy stars from previous generations such as Gracie Allen, Lucille Ball, and Marilyn Monroe.

     While Simpson’s gaffe became the target of jokes and a myriad of media stories, it also ignited a wave of popularity for both her and the show. As the media attention intensified, Chicken of the Sea’s Senior Vice President of Marketing, Don George, recognized that Simpson’s now famous faux pas presented the company with an interesting publicity opportunity. George invited Simpson to attend the company’s sales conference in San Diego in October 2003 for a few hours. Simpson agreed to attend the sales meeting (for an undisclosed fee) and received a standing ovation from the company’s employees. At the meeting George explained the true meaning of the Chicken of the Sea brand name and Simpson joined him in singing the company’s “Ask Any Mermaid” jingle. COSI’s president and CEO presented the pop princess with a basket of Chicken of the Sea products and an apron for use in her role as a new homemaker. Following the meeting a video news release containing an interview with Don George and highlights of Simpson’s appearance at the sales meeting was sent out. The story was picked up by close to 750 prime time affiliates, 10 national television shows, including E! and Inside Edition, and more than 22 cable shows. COSI’s public relations agency estimated that Simpson’s the story reached an audience of more than 38 million TV viewers. The story of Simpson’s visit to COSI was also covered by a number of major newspapers and national magazines which generated several million more exposures for the company.

     Following her visit to the company, Don George and other COSI executives began preliminary discussions with Simpson’s father, who is also her agent, about the possibility of hiring her as a spokesperson for the company. The company and its advertising agency began brainstorming ideas as to how she might be used in advertisements and other promotional efforts. Meanwhile, Jessica Simpson was becoming increasingly popular as she had released a new CD titled In This Skin along with a music video of the single With You. In January 2004 she and Lachey were featured performers at the FedEx Orange Bowl Halftime Show and she sang the national anthem at one of the National Football League playoff games. A few weeks later, Simpson and Lachey were the guest hosts on NBC’s Saturday Night Live and the second season of the Newlyweds premiered the following week on MTV. Simpson’s popularity showed no signs of declining as she was in negotiation with ABC for a role in a new sitcom and signed to play the part of Barbara Eden’s character in a movie version of the ‘60s TV series “I Dream of Jeanie.”

The Endorsement Decision

Chicken of the Sea continued to benefit from Simpson’s rising popularity and exposure. Her music video contained a scene showing her eating a can of Chicken of the Sea tuna and she and Lachey did a skit on Saturday Night Live poking fun at her chicken or tuna faux pas. However, as Simpson’s popularity increased, Don George realized that the cost of retaining her as a spokesperson for the company was rising as well. He estimated that it would probably cost the company at least $1 million to sign her to an endorsement contract that would allow the company to use her in its ads and on various promotional items. COSI was about to begin a major new branding initiative that was developed to help the company meet its growth objectives and increase its $340 million in sales in the tuna category as well as sales of its other seafood products. The owners of the company were supportive of the new branding initiative and planned to support an increase in COSI’s media budget to as much as $11 million in 2004. George and his marketing staff along with COSI’s advertising agency were considering ways they might use Simpson as part of a new campaign. They recognized that the publicity the company had received from Simpson’s faux pas was helping introduce Chicken of the Sea tuna to a younger audience who may not have been familiar with the brand and/or had not yet developed a brand preference. However, there were still a number of issues that would have to be considered in making a decision whether to hire Jessica Simpson as a spokesperson.

     One major issue to consider was whether the company could afford to hire Simpson. They also had to consider how they would use her if she was retained. Chicken of the Sea had planned on spending most of its media budget on radio and in magazines as well as on in-store ads such as floor signage. However, TV commercials would probably be the best way to use Simpson as an advertising spokesperson but the high cost of television time would limit the amount of advertising they could run given the company’s small media budget. Consideration also had to be given to how Simpson would be received as an advertising spokesperson by COSI’s core target market of 25 to 54 year old women. While Simpson was very popular among teens, George was concerned that her ditzy blonde image might not play well among older consumers. Another important issue that had to be considered was how the company would use Simpson if she was hired as a spokesperson for Chicken of the Sea. One obvious suggestion was to cast her as the mermaid with a campaign such as “Our mermaid never looked so good.” There was some concern, however, over doing anything that might affect the iconic status of the mermaid.

     One valuable source of information that Don George and the agency acquired for use in making a decision regarding the hiring of Simpson was Q scores which were obtained from Marketing Evaluations/TVQ, Inc. Exhibits 1 and 2, which appear at the end of the case, show the Q scores for Jessica Simpson as well as the category averages for other female musical performers and are broken down by various demographic groups. These scores were part of the Performer Q study that was conducted by Marketing Evaluations/TVQ during the summer of 2003.

     It was likely that Jessica Simpson would probably go down in pop-culture history as the girl who didn’t know the difference between chicken and tuna and Chicken of the Sea had received a tremendous amount of publicity from her famous faux pas. Now the company had to decide whether they should try to capitalize further on its association with Simpson. Don George realized that funds spent to hire Simpson as a spokesperson and run ads featuring her would come at the expense of other forms of promotion. On the other hand, Simpson’s popularity presented the company with a potential opportunity to generate tremendous brand awareness and interest for Chicken of the Sea, particularly among younger consumers. Of course, the ultimate question he was trying to answer was whether increases in advertising and brand awareness that might result from using Simpson as a spokesperson would move the sales needle and help build brand equity for Chicken of the Sea.

Discussion Questions

  1. Discuss the consumer decision making process for a product such as canned/packaged tuna and the response hierarchy model this is most likely to be applicable in the purchase of this product.


  2. Discuss the role integrated marketing communications plays in the marketing of canned/packaged tuna for a company such as Chicken of the Sea International. How might the company use the various IMC tools as part of its marketing program?


  3. Discuss how Chicken of the Sea’s marketing personnel and advertising agency might evaluate the appropriateness of using Jessica Simpson as a spokesperson for the company and whether she is a good fit for the brand.


  4. Discuss the pros and cons of Chicken of the Sea International hiring Jessica Simpson as a spokesperson for the company. Can the company afford to hire her and spend the money on TV advertising to use her effectively?


  5. What would you do if you were Don George? Would you recommend that the company hire Simpson as a spokesperson? Why or why not?

MAZDA – POSITIONING A PRODUCT LINE

Introduction

Mazda has been selling cars and trucks in the highly competitive U.S. market for more than three decades. The company’s various models have always received high marks from consumers in areas such as styling, performance, reliability, and value. Sporty models such as the rotary engine RX-7, which was introduced in 1978 and was Mazda’s signature car for many years, and the Miata roadster helped the company sell nearly 400,000 cars and trucks per year in the U.S. throughout the decade of the ‘80s and into the early ‘90s. However, during the mid ‘90s Mazda embarked on an expansion program in an attempt to compete directly with Honda, Toyota and Nissan. This plan included the introduction of five new models in less than a year that resulted in a lack of focus in the company’s marketing and advertising plans. From 1994 to 1997 Mazda’s U.S. sales declined by 33 percent and reached their lowest level in 15 years as the various models were positioned primarily on the basis of value for the money. When the new president took over Mazda North American Operations in early 1997, he found an inefficient company with an image that was bouncing all around. Most of the advertising for the various Mazda models touted the prices and functional features of the cars with little attention being given to image and positioning. A change in marketing strategy as well as advertising philosophy was clearly needed if Mazda was to regain its strong position in the U.S. market.

The Road to Recovery

To begin its recovery, a new marketing strategy was developed which called for Mazda to refocus its efforts and target a younger generation of drivers who appreciate cars with sporty features and want to make a statement about themselves with their cars. In the fall of 1997 Mazda parted ways with its advertising agency of 27 years and awarded its business to a new agency, W.B. Doner & Co., now known as Doner. The new agency was given the charge of building an image that would capture Mazda’s overall personality and set it apart from other cars, i.e., to develop a brand DNA. They were also asked to develop an advertising theme that could be used for the Mazda brand rather than trying to establish a separate image for each model. Doner developed a simple but powerful slogan for Mazda, “Get In. Be Moved.” The slogan was seen as more than just an advertising tagline, it was a brand promise. Mazda’s group manager of brand strategy and communication noted that “It’s an invitation to the consumer; a motivation and a promise that you come to Mazda, you get in, and we promise that you’ll be moved by what our cars have to offer.”

Repositioning of the Protégé

One of the first challenges Doner undertook was to develop a campaign to completely reposition Mazda’s subcompact Protégé model for the 1999 model year. The Protégé had been positioned as a car that was a step up from a compact sedan but retained compact attributes such as fuel efficiency and price. The dual market for the Protégé included entry level young buyers and older, empty nesters who wanted a smaller second car. However, the new advertising strategy for the Protégé called for positioning it as a cool, fun and hip to drive vehicle for young, individualistic females. The ads targeted young professional women in their early 20s to mid 30s and promoted euro-chic styling, room for friends, value, reliability, and cool features of the car.

     To launch the repositioning campaign for the Protegé, Doner developed several television commercials combining computer-generated backgrounds with live action and featuring a group of hip “20-somethings” carpooling in a Protégé. One of the most popular spots was called “Protégé World” and showed the group driving a Protegé through a surrealistic cityscape accompanied by a vocal set to music from the rock group Nails’ “88 Lines About 44 Women,” bemoaning the trials and tribulations of their workday lives. As the car drives off the screen, the voice over describes how the Protegé “is a change from your high-maintenance relationships.”

     In addition to the commercials, Mazda also gave the redesigned Protegé a major push on the Internet. Mazda kicked off what it called “the world’s largest online automotive launch party” with banner ads on a number of web sites and portals such as Yahoo!, Excite, America Online’s Autocenter, CarPoint, and MTV. The ads led visitors to the Protégé section of Mazda’s web site, which was created by CKS Group, Mazda’s interactive agency. Once there they could start the Protegé Road Trip where users picked the traits and a photograph of an imaginary travel companion before starting on a cyber journey that included choosing virtual roads to take. Fun facts about the car were offered along the way. While online, travelers could also enter a sweepstakes to win a new Protégé and play trivia games supplied by the game show site Uproar. Mazda also mailed a CD-ROM with music, movie reviews and interviews to people who requested more information while visiting the Protégé web site. The IMC program was extended to dealer showrooms by developing point-of-purchase cubes that used the same imagery and tonality as the television and print messages.

     The IMC program developed by Doner was highly successful in repositioning the Protégé and attracting younger buyers. Protégé sales increased 33 percent in the fourth quarter of 1998 and nearly 12 percent in 1999. Imagery perceptions were also used to track and evaluate the effectiveness of the campaign and revealed that the campaign was successful in creating a new image for the Protégé as younger, hipper, and more intelligent. The research also showed an increase in perceptions of the Protegé on key attributes such as overall quality, reliability, and dependability.

Zoom-Zooming in a New Direction

The success of the Protégé campaign prompted Mazda to use the “Get In. Be Moved” as it overall branding theme and as the tagline in campaigns for various other models. However, the company’s marketing executives were still not entirely sold on the tagline. In 1999 Mazda North America hired a new group manager for brand strategy and communications. She felt that Mazda still lacked a strong brand position, as “Get in. Be moved.” was too passive and vague and could just as easily work as a tagline for an airport tram as a car. The new manager was an advocate of the idea of using a unified branding effort as she felt that having a different advertising theme for every model would weaken Mazda’s overall brand image. However, she wanted a theme that could be used to appeal to the driving enthusiast in everyone and build on Mazda’s heritage as the creator of sporty vehicles such as the RX-7 and Miata roadster.

     Ironically, when Doner had pitched the Mazda account in 1997, one of the creative ideas that was presented centered on a theme based on the phrase “Zoom-Zoom.” The agency had presented a “brand essence” tape that showed images of children enjoying their “wheels” which included toy cars, tricycles and bicycles. The adults in the pitch tape were shown still expecting and experiencing the same excitement when it comes to their automobiles. In early 2000 Mazda had Doner develop a new branding campaign that would communicate the idea that the company makes fun-to-drive cars for adults who are still in touch with their inner child. The first commercials in the campaign showed a young boy running up to a road and turning to the camera to whisper, “Zoom-Zoom.” Interspersed were images of children laughing and playing with wheeled objects and adults being playful as well (such as a young man riding a shopping cart through a supermarket parking lot). The message also included a bouncy, Jamaican-toned jingle that keeps repeating the “Zoom-Zoom” phrase. The “Get In. Be Moved” tagline still appeared in the ads but was no longer emphasized.

     The first Mazda vehicle to use advertising featuring the “Zoom-Zoom” creative platform was the company’s new Tribute sport utility vehicle which was positioned as an SUV with the “soul of a sports car.” The campaign for the SUV broke in August 2000 and ran through late November. The launch of the Tribute was extremely successful and its strong sales continued into 2001. Mazda had also begun incorporating the “Zoom-Zoom” phrase and music in ads for other models which resulted in increases in brand as well as advertising awareness. By the summer of 2001 Mazda had decided to phase out the “Get In. Be Moved” tagline and replace it with the “Zoom-Zoom” message in all of its advertising. Mazda and the agency refused to characterize it as a new tagline as Simmons described it as more of the “mantra” of the automaker noting that “’Zoom-Zoom’ sums up everything we stand for as a company.”

Extending the Protegé Line

By the summer of 2001, the “Zoom-Zoom” message was integrated into all new Mazda advertising which began carrying a sportier look. Advertising for the new Mazda Protégé positioned it as an agile, fun car to drive, with a sports car heritage. New commercials were developed which began with a shot of the Mazda Miata sports car, and asked the question “Where is it written that only a sports car can behave like a sports car?’ in a not so subtle attempt to associate the Protegé with the sporty Miata. The commercial also showed the new 2.0 liter engine Protegé keeping pace with the Miata on a curvy highway to demonstrate its speed and handling. All other elements of the IMC program reflected this positioning.

     In addition to changing its advertising strategy, Mazda North American Operations had embarked on a new corporate strategy as well. Part of the Millennial Plan strategy included the launching of a number of new products including two models that were built on the Protegé platform, the Protegé5 and the MAZDASPEED Protegé. The Protegé5 is a four-door hatchback designed to fit into the growing niche of “crossover” vehicles. While many car buyers had rejected hatchbacks as boring and too much like station wagons, Mazda and other car companies were repositioning them as sporty and youthful, as well as practical. The target market for the Protegé5 is approximately 60 percent male, under 34 years old, college educated, with a college education and annual household incomes of nearly $70,000. From a life style perspective, the target consumer has an active lifestyle, makes time to have fun, loves to drive, and is likely to be a car enthusiast. To appeal to this audience, commercials for the Protegé5 took the perspective of someone riding a bike zooming about the city, maneuvering around curves and having fun. A second commercial took a similar perspective from a skateboard. The message being conveyed was that if you think this is fun and exciting, you can now have the same experience in the new Protégé5. Advertising for the Protegé5 also noted that it was the only car to score a perfect 10 in Car & Driver Magazine’s “fun to drive” category and was ranked number one in head-to-head comparisons against other competitors in the category. Examples of some of several ads used for the Protegé5 are provided at the end of the case.

     In the fall of 2002 Mazda introduced the MAZDASPEED Protégé, a high performance version of the Protégé sedan model. Mazda had previously positioned the Protégé sedan to appeal to young, college-age and professional women and the goal was to extend the appeal of the car. Mazda added some major “bells and whistles” to the MAZASPEED Protegé from a performance aspect to attract more male buyers in the same age range and appeal to real driving enthusiasts. These included a powerful 170 horsepower turbocharged engine, a sport-tuned suspension, racing inspired front air dam, a lightweight rear wing, and aggressive styling. Attempting to capitalize on a growing trend toward street rods, Mazda positioned the MAZDASPEED Protégé model as an affordable “Pocket Rocket” that appeals to the twenty-something, largely male audience that has made “slamming” (customizing compact cars with lowered suspensions, power infusions, outrageous wheels and ear-splitting sound systems) an American phenomenon. According to Mazda’s vice president of product strategy and development, “MAZDASPEED vehicles are the ultimate expression of Mazda performance. This car takes factory-tuned sport- compact performance to the extreme.”

The MAZDA6

Perhaps the most critical new product introduction from Mazda in more than a decade was the launch of the 2003 MAZDA6, the long awaited successor to the 626 family sedan. Mazda’s marketing vice president referred to the introduction of the MAZDA6 as “one of the most important launches in Mazda’s history” since it competes in the mid-size sedan segment of automobile market where most cars sell for $20,000 to $25,000. This is the most important segment of the market, because of its sales volume and the halo effect that results from having a successful brand in this segment. Mazda’s target customer in this segment is a mid-30s car enthusiast, although not to the extreme, who lives an active lifestyle.

     The advertising strategy for the MAZDA6 departed from the approach used for the Protegé, as it involved what the company describes as a “more mature” effort that is designed to position the car as a refined, sporty alternative to the Toyota Camry, Nissan Altima, and Honda Accord. While the ads still use the “Zoom-Zoom” line, the campaign features a more confident and less playful feel than that used with the Protégé. The commercials are designed to reflect a more “grown-up” approach, with the young boy that appeared in the Protégé ads removed but still delivering the “Zoom-Zoom” phrase in the voiceover. The ads also use more action shots of the car and its workings. Introductory TV spots and print ads focused on attributes such as styling, performance and handling with each calling out mechanical features like zero-loss brake boosters, double-cone synchronizers and/or the car’s double wishbone suspension. A number of the prints ads for the MAZDA6 are also provided at the end of the case.

     The promotional strategy for the MAZDA6 utilized a heavily integrated communications program. Print advertising accounted for 12 percent of the overall budget with ads being run in “enthusiast” magazines as well as in lifestyle magazines and newspapers. The broadcast media schedule was heavily weighted to college and pro football and included a marketing deal between Mazda and ESPN. This deal includes advertising of the MAZDA6 through ESPN’s various media including print (ESPN Magazine), TV, radio and the Internet as well as in ESPN Zone restaurants. It also integrates the MAZDA6 into various promotions such as ESPN’s “Pigskin Pick’Em” game and “Exhilarating Moments” along with nationwide exposure through the ESPN Truck. The IMC program for the MAZDA6 also includes an extensive publicity/public relations campaign, direct mail, and the use of interactive media such as online advertising, CD-ROMs, and a mini-web site on www.MazdaUSA.com. The MAZDA6 also received strong media acclaim including being named one of Car & Driver’s 10 Best Cars for 2003.

Moving Forward

During the 1980s and ‘90s Mazda North American Operations had spent much of its time and effort trying to imitate and keep up with its major competitors in the U.S. market such as Honda, Toyota and Nissan. However, by 2003 Mazda was on its way to returning to its roots as a marketer of sporty, fun-to-drive, stylish vehicles. While overall sales in 2002 had declined by 4.2 percent from the previous year, much of this decline was due to the phasing out of the Mazda 626 and Millenia models. The company had assembled a strong product line with vehicles such as the Tribute SUV, Protegé, and MAZDA6 showing very strong sales. Sales of the Protegé models rose to 83,367 units in 2002, a 5.9 percent increase over the previous year. By July 2003 sales of the MAZDA6 reached 32,297 units as the new flagship sports sedan was on track to exceed the previous year’s sales of the 626, which it had replaced.

     In July 2003 Mazda introduced the new RX-8 sports car which had been in development for nearly 10 years and marked the return of the rotary engine. The RX-8 was eagerly anticipated by the automotive community and first few month’s sales were very strong. The success of the RX-8 would be critical to Mazda’s recovery as the senior vice president of marketing and product development referred to it as “our halo car, the one at the top of the mountain.” The launch campaign for the RX-8 included product placements in TV shows and films, including being featured as the escape vehicle for the hero in the movie X-Men 2. One of the launch commercials featured a man’s loving admiration of his RX-8 in his garage being interspersed with his fantasies of open-road driving. At one point he is shown hugging the car and its doors close in such a way that the vehicle seems to be returning his embrace. All of the RX-8 spots feature the “Zoom-Zoom” message.

     As Mazda prepared to move forward, the issue now facing the company was to ensure that its advertising, as well as other elements of its integrated marketing communications program, would continue to resonate with consumers and support its positioning platform. Mazda had become identified as the “Zoom-Zoom” brand and a decision had to be made as to whether this was the image that would best serve the company in the highly competitive U.S. automotive market.

Discussion Questions

  1. Analyze the role of integrated marketing communications in the marketing of automobiles such as the Mazda Protegé and MAZDA6. How is each IMC element used to market automobiles?


  2. Evaluate Mazda’s decision to drop the “Get In. Be Moved’ tagline for the Protégé and adopt the “Zoom-Zoom” theme for its advertising.


  3. Evaluate the strategy Mazda is using to advertise the new MAZDA6 sports sedan. Do you agree with the decision to use a more mature and less playful approach for the MAZDA6?


  4. What recommendations would you make to Mazda regarding its integrated marketing communications strategy as the company moves forward?



Gateway: Searching for the Right Agency

Company Background

The story of Gateway is an inspiring one. The company, originally called Gateway 2000, was founded in 1985 in an Iowa farmhouse by Ted Waitt, the son of a fourth-generation Iowa cattleman. Armed with a rented computer, a three page business plan, and a $10,000 loan guaranteed by his grandmother, Waitt dropped out of the University of Iowa to pursue his dream. Gateway’s early value proposition was similar to what it is today: offer products directly to the customer, build them to their specifications, provide them with the best value for the money, and offer unparalleled service and support. Waitt’s start-up company had $100,000 in sales in its first year and by 1993 it became a Fortune 500 company with sales of nearly $3 billion. The company’s rapid growth continued throughout the ‘90s, reaching a peak of more than $9.6 billion in 2000.

     Over the past 18 years Gateway has been a technology and direct-marketing pioneer. It was the first company in the industry to sell computers online, the first to bundle its own branded internet service with a PC, and among the first direct retailers to sell its own branded consumer electronic products. In 1996 the company became one of the first “brick and click” retailers when it introduced a nationwide network of Gateway Country stores. Today, the company has nearly 200 stores where customers can try out Gateway products, get advice from technical experts, and learn more about technology in classes offered in high-tech classrooms. Underlying Gateway's growth has been Ted Waitt’s vision that technology should be fun, easy to use and should enhance and improve the user's quality of life. Gateway uses all of its sales and distribution channels including its call centers, Gateway.com Web site, and its nationwide network of retail stores to sell its products to consumers, businesses, government, and educational institutions.

     As its customers’ desire for innovative computer technology and other electronic products has grown, Gateway has been searching for the best way to communicate its product offerings and value proposition to an increasingly tech savvy and demanding marketplace. In a business as competitive and fast evolving as the PC industry, Gateway recognizes that differentiation and brand image are very important in developing and sustaining a competitive advantage. However, in recent years Gateway has struggled to find an advertising theme that resonates with consumers and clearly differentiates the company from competitors such as Dell, Hewlett Packard (HP)/Compaq, Sony, and Apple. In the process Gateway changed advertising agencies five times over the past six years and three times in a 14 month period from early 2002 to 2003.

Gateway’s Agency History 1993 to 1998

Until 1993, Gateway 2000 relied solely on print advertising that was produced in house. However, as the company grew rapidly, it decided to add television ads to the media mix and to retain the services of an outside agency to work with its in-house advertising department. The company’s first outside agency was Carmichael Lynch, Minneapolis who was hired to handle its television advertising. The agency hired a New York commercial director and filmmaker, Henry Corra, to direct the first Gateway commercials. Ted Waitt liked the unscripted, folksy ads that Corra was shooting and his ability to capture the real people in Sioux City, South Dakota which was the home of Gateway at the time. The visionary entrepreneur and artist trusted one another and developed a strong personal relationship. In addition to Carmichael Lynch, Gateway had retained the services of the London-based Finex agency to handle its European and Japanese creative as the company’s sales in these markets were increasing.

     As Gateway 2000 grew rapidly and its international sales increased, the company decided it needed a global agency. In March 1997 the company moved its estimated $70 million worldwide account to D’Arcy Masius Benton & Bowles, a global agency that could help the company with its growing international business. DMB&B was selected over several other agencies which made finalist presentations including J. Walter Thompson and TBWA/Chiat Day. Gateway’s senior VP of global marketing cited DMB&B’s strategic thinking and chemistry as reasons for choosing the agency over the other finalists. The new agency began working with Gateway’s in-house advertising department, focusing on the consumer market and handling most of the media buying outside of PC publications. Gateway’s in-house group created ads and purchased media in PC enthusiast publications. DMB&B took over Gateway’s advertising in the U.S. market immediately and then transitioned into handling creative as well as media buying in Europe and Asia.

     The first ads from the new agency retained the “You’ve got a friend in the business” tagline that Gateway had been using for several years. A few months later the agency introduced a campaign theme saying Gateway goes “From South Dakota to the rescue.” An agency executive explained the rationale behind the campaign by noting that “South Dakota is a state of mind, a way of doing business, and dealing with people.” However, Gateway and DMB& B got off to a rocky start as both sides grappled with the precise roles of the agency and the in-house group and how to collaborate. Also, the agency’s creative approach was geared more toward traditional advertising that used actors and scripted TV spots, such as one showing a family in a computer store where piped-in music segues into advice that the family can get what it really needs from Gateway.

     These types of ads quickly fell short of the expectations of Ted Waitt, who was known for his dislike of traditional advertising. Waitt noted: "When you're just trying to capture reality, you don't need scripts, you don't need concepts, and you don't need agency overhead. You just shoot, pick the magic moments and put them on the air. Our customers and employees come up with better stuff than you could ever write. And better yet it's real." Waitt became dissatisfied with DMB&B’s traditional campaigns and in early 1998 Gateway 2000 took its television creative back in-house leaving the agency to handle media buying and newspaper advertising. On March 19, 1998 Gateway fired DMB&B, dropping the agency after less than a year. Waitt brought back Henry Corra to work on Gateway’s advertising along with another agency, DiMassimo Brand Advertising, a small creative boutique. Corra and the new agency produced a number of unscripted TV commercials for Gateway that were used for several months.

The McCann Erickson Era

As the personal computer market became more competitive Gateway 2000 made a number of changes to keep pace. In January of 1998 Jeff Weitzen, a former AT&T executive was brought in to run Gateway as Waitt decided to step back from the day-to-day operations of the company. The company also hired a number of high level executives in areas such as marketing, finance, human resources and engineering. A week after dismissing DMB&B, the new CEO announced the hiring of McCann-Erickson Worldwide , one of the largest agencies in the world, as it new agency of record.

     Meanwhile the changes at Gateway continued. In April 1998, the company dropped 2000 from its name, shortening it to Gateway as it felt that the “2000” moniker would become dated in the new millennium. The company also introduced a new logo featuring a hand-drawn version of its signature cow-spot box. Over the next few months Gateway began moving its corporate headquarters from South Dakota to San Diego, a move that company officials said was prompted by difficulties in recruiting key executives to a small town in the Midwest. Gateway also began changing the process of transforming itself from a manufacturer of personal computers into a company that would derive its revenue from a variety of sources. The “beyond the box” strategy was designed to diversify Gateway’s offerings to include PC financing, Internet access, and various other computer-related accessories and services.

     McCann Erickson’s first campaign for its new client broke in late April and used the tagline “Let’s talk about your Gateway.” Over the next several years the agency developed a number of other campaigns for Gateway including one targeting consumers using the “Yourware” tagline and another targeting businesses using the “Gateway@Work” theme. Perhaps the most popular campaign McCann developed for Gateway was the “People Rule” campaign that began running in August 2000 and was based on the idea that technology is beneficial only if it helps people in their daily lives. One of the phases of this campaign featured actor Michael J. Fox as a spokesperson who was portrayed as the voice of empathy for consumers trying to understand technology issues such as how to choose the right PC, when and how to upgrade, and how to use their computers. Gateway’s revenue hit an all time high in 2000 reaching $9.6 billion while the company’s market share was 8.2 percent, making it the number three PC maker in the U.S. behind Dell and Compaq.

     Gateway began running the ads featuring Fox in January 2001. However, in the month prior Gateway had held discussions with several other agencies about the future of its brand and the direction of its advertising. In late January, after a management shake-up, Jeff Weitzen resigned as CEO and Ted Waitt resumed control of the daily operations of the company once again. Upon his return as CEO, Waitt announced a net loss of $94.3 in the fourth quarter of 2000 as Gateway's core PC business was not profitable. A few days after Waitt resumed control of the company, Gateway dismissed McCann-Erickson as its agency. A Gateway spokesman described the parting as “amicable” while McCann executives viewed the dismissal as part of the wholesale changes and management shakeup that accompanied Ted Waitt’s return. Some industry observers speculated that Gateway had become increasingly dissatisfied with the level of service it was receiving from McCann since the agency had won the Microsoft account in 1999. One source also noted that Gateway felt that McCann’s creative work was “more corny than folksy” and that the agency really did not understand the company’s intensely Midwestern culture.

     Soon after Waitt took control once again, several agencies made presentations to Gateway including former agency DiMassimo Brand Advertising; Fallon, Minneapolis; and Los Angeles-based Siltanen/Keehn. Most observers speculated that Gateway would be awarding the account to Fallon which appeared to best understand the folksy, Midwestern culture of the company. However, negotiations with Fallon broke down over strategic differences and Gateway Brand decided to move its advertising back in-house. Once again, Ted Waitt turned to his friend Henry Corra to direct the company’s commercials. Gateway also revived a favorite tagline from the past, the “You've got a friend in business” tagline, in a series of new TV spots promoting the company’s close relationship with customers. The spots featured longtime Gateway employees talking about meeting customer needs as well as testimonials from loyal customers. Meanwhile the sales decline continued as Gateway’s revenue for 2001 fell to $6.1 billion and its market share eroded to 7.2 percent while industry leader Dell’s share increased to 23.5 percent.

Siltanen/Keehn’s Brief Tenure

While Corra continued to direct and shoot the TV commercials for Gateway throughout 2001, the company also began working with yet another agency, Siltanen/Keehn whose founders worked on Apple Computer’s “Think Different” campaign at TBWA/Chiat/Day. After working with Gateway on a project basis for five months, S/K became the company’s agency of record for print and broadcast advertising in early 2002 while direct and online advertising remained in-house. The new agency began focusing on brand building for Gateway with ads ranging from humorous spots featuring Ted Waitt with a talking cow, to stylish product-focused ads promoting a new line of lap top computers. The ads featuring interplay between Waitt and the loquacious Holstein cow who advised Waitt on offers and deals to entice customers to buy Gateway products were very popular. Both the client and agency felt that Gateway had a great deal of brand-building potential with the campaign as a cow had been a symbol of the company since it was founded. Rob Siltanen, the agency’s chairman and chief creative officer noted that: "They have a lot of equity with the cow. It's at the stores. It's on their signage. And we want to leverage that to its fullest extent."

     Reactions to the ads developed by S/K were very positive from Gateway’s customers and employees and it appeared that Gateway had finally found the right agency. During the 2002 Winter Olympics Gateway was running frequent TV spots featuring Waitt and the advice dispensing cow. However, although the whimsical spots continued to run through the summer of 2002, the company had already decided to move its advertising in a new direction. The change was part of Gateway’s decision to move away from the folksy, rural image and brand itself as a more modern and hip company. The company was struggling with weak earnings and sales and Waitt realized that Gateway needed to modernize its product offerings and expand into new markets in order to shore up the company's slipping market share. Studies conducted gauging consumers' perceptions about Gateway revealed that its advertising was viewed as "entertaining," "friendly," and "Midwestern." However, the research also showed that the campaign featuring the bovine was not playing particularly well in the business space. The campaign raised consumer awareness but was not helping to build the Gateway brand. Additionally, customer tracking research showed some declines in perceptions of Gateway on key attributes such as technology leadership and reliability. While being perceived as "friendly" and "nice" was all well and good, this image was running counter to the identity Gateway now wished to portray.

     Gateway management decided that it was time to "farm out" the quirky and folksy aspects of its corporate image and create an identity for the company as a maker of sophisticated computer technology with the latest in advanced components. Gateway continued using advertising developed by Siltanen/Keehn into the Fall of 2002. However, S/K’s tenure as Gateway’s agency of record was short-lived as the company parted ways with the agency after 10 months and moved its advertising to the Arnell Group, New York in October 2002.

Evolving the Brand: From Folksy to Hip with the Arnell Group

The decision to move away from its folksy, rural image and brand itself as a more modern and hip company was not made lightly. However, Gateway had already begun the process of what Ted Waitt called the "de-prairiefication" of Gateway even before dropping S/K as it agency. Several months earlier, the company had commissioned a new branding campaign from the Arnell Group which was known for its work on brands such as Banana Republic, Donna Karan, Reebok, Samsung, and Chrysler. Arnell’s branding work included the redesigning of the “cow spot” logo and Gateway Country stores and integrating a new creative tagline that had been developed by S/K - “Gateway: A Better Way.”

     The Arnell Group developed new ads featuring up and coming artists that were designed to project a fresh new image with a cool urban look and feel. In addition to the new ads, the image makeover was also reflected in the introduction of a new logo resembling a computer power button rotated on its side to form a stylized “G” while retaining a hint of a cow spot. The goal of Gateway's new advertising and branding effort was to show how Gateway provides a better way for people to experience cutting-edge digital electronics and PCs in Gateway Country stores and to purchase direct. As part of its new overall corporate strategy Gateway’s wanted to leverage its nationwide network of stores and its direct sales model to offer consumers a shopping experience previously unavailable. Gateway stores were becoming digital destinations offering consumers a one-stop shopping experience for computers as well as other electronic products. Gateway offered consumers a hands-on opportunity to try a variety of digital products in its stores and learn firsthand from highly trained sales people how these items could be integrated with a PC.

     As part of its new strategy Gateway began offering over 150 digital electronics products including a complete selection of digital cameras, digital video gear, MP3 players, printers, software as well as Gateway's own plasma TV with a 42-inch screen. According to Waitt: "Increasingly, consumer electronics are based on digital technology, yet most shoppers aren't able to try them out with a PC, which is the heart of their digital world. We've listened to customers' frustrations with how digital electronics are sold today, and we're introducing a better way to shop for them." With its "better way" advertising theme Gateway hoped to focus on its overall superior customer service in digital electronics retailing. Gateway promised that everything would be better relative to its competitors, both direct and at retail - better products, value, service, support and customer experience.

Leo Burnett Takes Over

Gateway used advertising from the Arnell Group for the remainder of 2002 including the important holiday season. However, the company’s sales decline continued as 2002 revenue dropped to $4.2 billion and the company reported a loss of $309 million. Gateway, along with other PC manufacturers, faced intense competition from Dell which continued to cut prices in an effort to increase its market share over Hewlett Packard which had completed its acquisition of Compaq Computer in 2002. By early 2003, Dell had increased its share of the U.S. PC market to just over 30 percent followed by Hewlett Packard at 19 percent and Gateway at six percent. However, Gateway was showing some indications that its new strategy might be working as its plasma TV launch was very successful, capturing more than 10 percent of the U.S. consumer plasma TV market in less than 10 weeks. Gateway’s expanded line of digital solution products such as cameras, MP3 players and camcorders also produced increases in sales at the company’s retail stores. However, Gateway was still getting nearly 75 percent of its revenue from sales of personal computers.

     In early 2003 Gateway began an unpublicized review process for yet another agency and heard pitches from two new agencies, Leo Burnett USA and GSD&M in Austin, Texas. The stealth review lasted only three weeks and in March 2003, Gateway announced that it changing agencies for the third time in 14 months and moving the creative portion of its account to Chicago-based Leo Burnett. A Gateway spokesperson noted that the Arnell Group was hired only on a provisional basis to get the company through the critical Christmas shopping season. Some industry observers were surprised by the move to Leo Burnett as Ted Waitt had tended to favor smaller, independent agencies. However, Gateway’s new executive vice president of consumer marketing was a former Leo Burnett executive who was very familiar with the outstanding work the agency did for clients such as the U.S Army, Kraft, General Foods and many other companies and brands. In addition to moving its creative work to Leo Burnett, Gateway also awarded the media buying on its $150 million account to Starlink, a unit of the Starcom MediaVest Group which, like Leo Burnett is a part of the Publicis Groupe.

     New advertising from Leo Burnett broke in May 2003 using yet another new tagline, “The Comforts of Gateway.” The goal of the new advertising is to underscore Gateway’s folksy charm while positioning the company as a solutions provider for an increasingly complex technological world. The first commercials from Leo Burnett depicted a small town Americana’s main street coming to life as people use their computers and other personal electronic items.

     In September 2003, Gateway launched its first fully integrated business-to-business campaign since 2000 with print and TV ads based on the theme “Humanology.” The ads are designed to show the importance of the human touch behind hardware and software products and depict images of human anatomy merged with Gateway technology.

     Gateway is hoping that the new campaigns from Leo Burnett can reverse its declining sales in the stagnant personal computer industry while helping the company succeed in its efforts to sell a wide array of digital electronic products. The company knows that the personal computer, as well as other segments of the consumer electronics industry, have become extremely competitive and having a strong brand image is critical for companies who want to continue to compete in these markets.

Discussion Questions

  1. Analyze Gateway’s decisions to change advertising agencies so many times over the past six years. Identify and discuss specific factors that may have led to each decision to change agencies.


  2. Discuss how Gateway’s frequent agency switching has affected the company’s branding and positioning efforts. What recommendations would you make to Gateway management regarding its agency switching and its impact on the company?


  3. If you were an executive at an advertising agency and Gateway’s decided to switch agencies again, would you advise your account development team to pursue the company’s business? Why or why not?



Using Advertising to Fight the War on Drugs: The Power of Social Marketing or a Waste of Money?

Introduction

Every day, in almost every city and town across America, children are deciding whether to use drugs. Drug abuse is a process that more often than not begins in childhood. The younger the person is when he or she begins using drugs, the more likely that other serious problems, including addiction, will follow. One approach to preventing children from trying and using drugs is by helping them understand the dangers of using them and how to resist pressure from peers. For nearly two decades, the advertising industry has been tackling the problem of illicit drug use through the Partnership for a Drug Free America (PDFA), which is a private, nonprofit coalition of professionals from the communications industry whose collective mission is to reduce demand for drugs in America. The U.S. government became involved in the use of advertising to fight the problem of adolescent drug use when the U.S. Congress approved The Media Campaign Act of 1998 which directed the Office of National Drug Control Policy (ONDCP) to conduct a national media campaign for the purpose of reducing and preventing drug abuse among young people in the United States.

     The use of media advertising to fight the “War on Drugs” is as controversial as it is well intended. Supporters of the cause cite various studies suggesting that media advertising has been successful in curbing drug use. However, critics point to other studies which conclude that anti-drug advertising has had little or no impact on drug use among young people. Moreover, the PDFA and ONDCP have also been in disagreement over the type of advertising that should be used to discourage drug use as well the extent to which other forms of integrated marketing communications should be used in the campaign. The Partnership has argued that what began as a relatively simple idea of using advertising to repeatedly deliver messages regarding the dangers of drug use has become a very complex and politicized process.

The Partnership for a Drug Free America –The Early Years

In the mid 1980’s two advertising executives, Dick O’Reilly and Phil Joanou, originated the concept of using a cause campaign designed to enlist advertisers and media in a partnership to help kids and teens reject substance abuse by influencing attitudes through persuasive information. Funded by a grant from the American Association of Advertising Agencies, the two men set out to gather advice and to recruit others to the cause. Their success resulted in the formation in 1986 of what would become the largest public-service advertising campaign in history. The coalition of advertising and media people working together to combat drug use was called “The Partnership for a Drug Free America,” and was officially launched on March 5, 1987. Unfortunately, Mr. O’Reilly never got to see the immediate success the coalition would have, as he was killed in a rafting accident while recruiting new partners.

     After O’Reilly’s death, James Burke, the retired Chairman of Johnson & Johnson, picked up where O’Reilly left off. Burke was quite well known in the advertising and business community for his handling of the Tylenol product tampering crisis which is often cited as one of the most successful examples of the handling of a crisis management situation. When Burke was elected chairman of the Partnership in 1989, there had already been more than 30 TV commercials, 64 print ads and numerous radio spots produced by some of the country’s leading advertising agencies. The anti-drug messages were being aired on the major broadcast and cable television networks, radio stations and in various magazines through time and space donated by the media.

     While all those involved with the PDFA in the early years had good intentions, as might be expected, there were a number of problems. Many considered the early spots as “melodramatic” relying too much on scare tactics and stereotypes such as the school bus driver who snorts cocaine; African-American boys selling crack in the school yard; and the “one puff and you are hooked” messages. Academics as well as others studying the effects of drug abuse programs questioned these approaches, noting that scare tactics often have not been found to be an effective way to change attitudes and behavior. Others criticized the program for exaggeration and distortion of the facts, arguing that this detracted from the credibility of the program. Misrepresentation of facts, such as a 1987 ad claiming to show the brain waves of a 14 year old smoking pot when it was really the brain of a person in a coma, resulted in further skepticism. As a result of these criticisms, the PDFA overhauled its review process and began more closely scrutinizing the ads and commercials before releasing them. In spite of early problems, the PDFA was successful in gaining billions of dollars of pro bono time and effort from advertising agencies, as well as media time and space.

     While few questioned the intentions of those involved in the PDFA, throughout the ‘90s, there were still those who were skeptical about the effectiveness of their efforts. Critics argued that there was no evidence to support the claim that the anti-drug ads could alter behavior. To maintain their reputation, and reduce criticism, the PDFA consistently found itself in a position whereby it was necessary to demonstrate that the ads were having an impact on drug abuse. Adding to the problem was the fact that government surveys taken during this time period showed increases in the use of cocaine and heroin by urban youth and in the use of LSD by college students nationwide.

     In response to the critics, Burke and the PDFA argued that while there might not be proof of actual behavior change, there was a strong correlation between teens’ exposure to the anti-drug messages and their disapproval of drug use. Burke based much of the defense of the program on research provided annually by the Gordon S. Black Corporation, a Michigan based marketing research firm that conducted the annual Partnership Attitude Tracking Surveys (PATS). In addition, Dr. Lloyd Johnston, a research scientist at the University of Michigan, who used mall intercepts of high school students to collect annual survey data for the National Institute on Drug Abuse (N.I.D.A.), concluded that most teens remembered the anti-drug ads and reported being influenced by them. Johnston supported the program noting that “its clear things have moved in the right direction.” An editorial also appeared in Advertising Age, the leading trade publication in the advertising industry, in September 1996 praising the effectiveness of the Partnership’s ads and calling for more media support of its efforts. However, media support and pro bono time and space declined every year from 1991 to 1998 and those who felt that the program was effective feared that it was losing its impact because fewer young people were seeing fewer anti-drug messages.

The White House Gets Involved In the War on Drugs

The U.S. government became involved in the use of advertising to fight the war on drugs with the passage of The Media Campaign Act of 1998 which included the allocation of $195 million per year over the next five years to fund the purchase of media time and space to deliver anti-drug use messages. The decision of the government to become involved with the anti-drug advertising effort was based on the premise that the PDFA program was effective but needed more support since donations of free media time and space were declining. This program was to be administered through the White House’s Office of National Drug Control Policy (ONDCP). The responsibility for creating the ads would be assigned to the PDFA, although they would receive no monies directly from the government. Nevertheless, the money from the government would make it possible to attain more media time and space than was being offered through public service announcements (PSAs) and other pro bono donations. However, critics noted that the PDFA would be facing a loss of autonomy and increased involvement from the government bureaucracy in exchange as a tradeoff for the additional monies to run the anti-drug messages.

     The ONDCP made several changes upon becoming involved with the anti-drug advertising efforts. The office hired the Ogilvy & Mather Worldwide advertising agency to coordinate the campaign and handle the media planning and buying. Another change instituted by the ONDCP was a greater focus on market segmentation. Recognizing that all drugs (and their consequences) are not the same, the ONDCP suggested that ads should be developed with the understanding that adolescents have different beliefs and attitudes toward various drugs, their consequences, the perceived risk associated with them, and social disapproval of their use. New ads were developed taking into consideration the type of drug and its consequences and the specific target audience. Different messages were designed to appeal to specific age groups such as young people, teens, and parents as well as different geographic, socio-economic, and ethnic audiences. The ONDCP also made it clear that it would demand more accountability and expect to see evidence showing that the money being spent on the campaign was having an impact on reducing drug use. U.S. drug czar Barry M. McCaffrey, a retired four-star general, made it clear that he wanted hard numbers to provide the campaign was working stating: “there are no points for style. We’ve got to achieve an outcome. We have to change the way Americans act.”

Concern with ONDCP Involvement

Not all of the changes associated with government’s involvement in the anti-drug media campaign were perceived as positive. A number of leading business and advertising industry publications criticized the ONDCP’s involvement with the anti-drug advertising efforts. They argued that the involvement of the ONDCP would change the role and orientation of the cause and result in a much more partisan perspective. Many questioned whether the ONDCP would deal squarely with the agencies and media companies involved in the campaign, or if they would attempt to politicize the efforts. They also brought into question the assumptions and goals of the new campaign such as zero tolerance of any illicit substance being the only acceptable paradigm. Many critics were also opposed to the fact that it would be the American public who would be footing the bill for the campaign through their tax dollars.

Determining the Effectiveness of the Campaign

One of the major challenges facing the ONDCP and PDFA was proving that the money being spent on the anti-drug messages was having an impact and achieving the goal of reducing drug use among young people. Both groups pointed to several research studies that they contended showed that the anti-drug advertising was working including the Gordon S. Black and Lloyd Johnston tracking studies. However, three studies were most often cited to support the large government involvement including one conducted at The Johns Hopkins University School of Medicine, a second from the Stern School of Business at NYU and the third from the University of Michigan’s Institute for Social Research. However, these studies were severely criticized by Daniel Hill in an April 1998 article in Brandweek, a leading advertising and marketing trade publication. In the article, Hill argued that the support for funding more anti-drug advertising was based on faulty research. He noted that the lead author of the Johns Hopkins study reported that she now had grave doubts about the research techniques used to support the conclusions that the anti-drug messages were effective. The NYU study was withdrawn from consideration for publication seeking further econometric support, and studies conducted by Lloyd Johnston were never submitted for publication and peer review. Hill also cited other critics who contended that previous research used in the campaign was often inadequate and resulted in the development of ads that preach to the choir or insult the intelligence of the target audience.

     Despite these criticisms, the ONDCP remained committed to the $195 million in funding for advertising for anti-drug messages over the next four years, with approximately 50 percent of the effort to be targeted to adults. The funding was based on the media matching the time and space that was purchased by the government on a dollar for dollar basis, which meant that approximately $2 billion would be spent on the anti-drug advertising campaign from 1998-2003.

The New PDFA/ONDCP Campaign

In 1998 the Partnership and ONDCP began work on a new campaign that was designed to educate America’s youth as well as their parents about the dangers of drug use and provide them with resistance techniques that could be used when confronted with the choice of using drugs. The strategy for the new campaign evolved around five themes:

  1. Instill the belief that drug use is not as common as kids think


  2. Enhance negative social consequences of using drugs


  3. Enhance the positive aspects of not using drugs


  4. Enhance the variety of personal and social skills needed by youth


  5. The positive use of time

The first year of the campaign consisted of three phases. The first phase involved a 12 city test of $20 million in paid anti-drug ads that were evaluated through focus groups, telephone surveys, and community feedback. The second phase included $65 million in paid media advertising beginning in the summer of 1998, while the third phase consisted of $93 million in paid integrated media, including high impact programs such as sports and entertainment events, “non traditional media” such as movie and video trailers, brochures, strategic ad placements, and Internet web sites. While there was no rough testing of print ads or commercials, some focus group pre-testing of finished ads was conducted to prevent against some of the problems that occurred in the early days of the PDFA.

     The new strategy was seen by many as a very positive step. For example, Richard Earle, author of the book The Art of Cause Marketing: How to Use Advertising to Change Personal Behavior and Public Policy, welcomed the new strategy, praising the integrated marketing effort, the targeting, and the consistent theme that carried across all media. Earle particularly liked the use of TV and print advertising to drive viewers to the ONDCP and PDFA websites and the use of informational brochures. He predicted that the campaign would be very successful.

The ONDCP Decides To Link Drug Use With Terrorism

In early 2002 John P. Walters was appointed as the new head of the ONDCP. However, even before taking office Walters had expressed concern over the type of ads that were being used to fight the war on drugs. In the fall of 2001, following the September 11th terrorist attacks on the World Trade Center in New York City, the PDFA conducted surveys with parents and kids and found that they believed there was a connection between drugs and terrorism. The Partnership recruited the Grey, New York agency to produce a set of PSAs to educate parents and kids about the link using footage of President Bush, and then planned to follow with more hard-hitting spots. However, at the same time, the ONDCP had directed the Ogilvy & Mather agency to begin working on ads that would use an even harder approach. In December of 2001 the PDFA presented some of its early concepts for ads focusing on the link between drugs and terrorism to Walters and the ONDCP staff. However, the ONDCP decided that they wanted “edgier” creative that would break through all of the other patriotic ads being run following the tragedy of September 11th. The Partnership said it never heard back from the ONDCP on its plans for the terrorism-related ads, while the drug office said the PDFA withdrew from the process. Meanwhile, Ogilvy was given the green light to proceed with the development of a campaign linking drug use with the support of terrorism that would be done outside of the normal channels involving the PDFA.

     The first ads in the campaign ran during the 2002 Super Bowl, and took advantage of the public’s outrage over the terrorist attacks on the World Trade Center. The commercials featured footage of assault weapons, duct tape, and explosives and implied that the weapons used by terrorists were funded by drug sales in the U.S. Some groups were critical of the ads and the government’s effort to draw a connection between drug money and terrorism, arguing that it was unfair to blame nonviolent drug users for the actions of terrorists. However, the director of the campaign for the ONDCP described the reaction to the first set of ads as phenomenal, noting that it generated debate on the drug issue. A survey sponsored by the National Parents’ Resource Institute for Drug Education found that 74 percent of students surveyed indicated the terrorism ads made them less likely to use drugs.

     Eight months after the first ads ran, the ONDCP followed with another round of ads that were designed to refute the notion that drug use is a victimless crime and link drug use to crime and terrorism. The drug office noted that viewers of the initial ads had a difficult time believing that the drug-terrorism link applied to marijuana purchases. Thus, the second set of ads more closely showed the connection between the use of pot and terrorism. One of the commercials began with a pretty young woman buying a dime bag of marijuana and ended with a child being shot in drug-warfare crossfire. Another linked a marijuana user to various parties in the supply chain and ended with a connection to a drug cartel.

     Not everyone was in favor of the ads linking drug use with terrorism including the PDFA whose vice chairman-executive creative director, Allen Rosenshine, who stated that they violated a basic premise of consumer advertising by telling people “what they are doing is stupid and bad.” Some critics of the drug/terrorism ads suggested that they created a false paradigm that terrorism is caused by drugs and not the illegality of drugs. Groups such as the National Organization for Marijuana Legalization noted that the ads argued more for decriminalization of certain drugs than abstinence. However, the ONDCP felt that the point of the ads was summarized quite well by the onscreen message at the end of each spot: “Drug money supports terrible things. If you buy drugs you might too.”

Problems Develop Between the PFDA and the ONDCP

The disagreement over the drugs and terrorism ads was indicative of the tension that was developing between the ONDCP and the PDFA over the creative direction of the anti-drug campaign as well as a number of other issues. The Partnership was becoming frustrated with the long and drawn out creative approval process mandated by the ONDCP, as the government agency had developed a behavioral-change expert panel consisting of a group of 10 psychologists, sociologists and advertising experts who provided feedback on how effective ads were likely to be. The panel was part of what the PDFA viewed as a “Byzantine” 18- step creative approval process that could take nearly six months.

     By the fall of 2002 the battle between the PDFA and ONDCP had escalated and the tension between the two groups was very high. John Walters was openly critical of the anti-drug campaigns, stating that the efforts over the past few years had failed, and suggested that the campaign was in need of a complete overhaul. He offered support for his argument by citing a report released by a consultant showing the results from a two year study on the effectiveness of the campaign. The research concluded that the anti-drug ads targeted to adults were effective, while those aimed at kids were not and may have even have had negative effects. For example, females in the 12-13 age group who did not use drugs indicated that the ads made them curious to try them. Many government officials were both concerned and angry, calling for a cut in the programs. While Walters wanted to keep the same budget allocation, sources noted that he wanted to replace the PFDA and pay for creative services rather than relying on pro bono efforts. He also demanded that all commercials be tested for effectiveness prior to their showing, noting that 65 percent of ads were not pre-tested because they were produced too close to airing for testing to occur.

     The PDFA and ONDCP blamed each other for the problems. The ONDCP claimed that the PDFA was uncooperative and allowed ads to be created that were not tailored to the goals of the program, which resulted in changes and delays or ads having to be dropped. The creative was also attacked for being too “soft” and “indirect”. The drug office also wanted more input into the creative process, and wanted to be allowed to use just one creative agency, arguing that working with as many as 62 agencies was too cumbersome. The PDFA countered with its own list of criticisms of the ONDCP which included its bureaucratic approval procedures, its failure to listen to the PDFA, and the office’s meddling into the creative process despite its lack of experience in this area. The PFDA also complained that only $130 million of the budget was being allocated to media advertising while the remainder was being spent on research and integrated marketing efforts. PDFA vice chairman Allen Rosenshine testified at a government hearing that while the anti-drug campaign originated with “an elegantly simple vision, today it attempts to adhere to an unwieldy theoretical construct of a fully-integrated social marketing campaign.” Rosenshine criticized the campaign as being too complex and attempting to achieve 19 different communications objectives via an integrated communications plan involving celebrities, entertainment content, on-line events, corporate involvement, corporate sponsorships, and more. The PDFA wanted a return to spending most, if not all, of the money on media advertising, arguing that the integrated tools were less effective. The drug control office countered that 87 percent of the funds spent in 2001 went to traditional media advertising while the PDFA said the number was closer to 70 percent.

     PFDA officials claimed there were political motives involved in the campaign as well, and that the government wanted the Partnership phased out in favor of the Ad Council. The PDFA also charged that politics were involved in the government’s decision to re-appoint Ogilvy & Mather to oversee the campaign and purchase media. In 2002 the agency agreed to pay $1.8 million to settle government allegations that its employees altered time sheets and billed for items that were not allowed under government contracts. Some top PDFA officials believed that because Ogilvy had created the anti-terrorism campaign for the ONDCP, they were given preferential treatment.

The ONDCP and PDFA Move Forward

While the PDFA and ONDCP were still at odds with one another, both parties recognized that they needed to work on resolving their differences if they wanted to continue to receive government funding to support the anti-drug advertising program. One thing both groups did agree upon was that cuts in the appropriations for the campaign had negatively impacted its effectiveness. From its starting point of $195 million/year, the budget was cut to $180 million in 2001 and to $150 million in 2002. In March 2003, the ONDCP announced that it would end the controversial drugs-and-terror ads and change the emphasis of the anti-drug campaign to focus more on youth (as opposed to parents) in an effort to get the U.S. Congress to extend funding for the program. The ONDCP also announced that it would end its $8 million annual study to measure the effectiveness of the campaign. The PDFA had argued that the findings of this study conflicted with other government research and duplicated the Partnership’s own strategic and effectiveness work. The shift in strategy meant that 60 percent of the media buy would be directed toward youth oriented media—the same percentage it had previously directed to adults. The objectives of the advertising campaign would also change, with the emphasis now focusing on halting drug use among kids already using drugs rather than attempting to deter them from starting.

     The shift in strategy clearly represented an attempt by the PDFA and the ONDCP to present a unified front on the campaign. Both organizations realized that the bickering between the two threatened future funding, and that the dropping of the ads linking drugs with terrorism and the evaluation studies funded by the ONDCP would lead lessen the tension. Still to be determined was the control over the creative and the media budget allocation as the PDFA wanted more monies to be allocated to media advertising and less to other forms of communication. It was expected that the funding would be approved by Congress, albeit with language limiting the drug office’s ability to go outside the PDFA for creative, and a requirement that the Ogilvy media buying contract be re-evaluated. Later in the year, The House Appropriations Committee approved the $150 million budget, but required that 77% be spent on media buying.

     In September 2003, the Senate voted to slash $50 million from the anti-drug advertising campaign, cutting the total amount by a third to $100 million, citing previous reports questioning the campaign’s effectiveness. The committee also included language in the bill that would require 80 percent of the media campaign spending be dedicated to media advertising. Both the PDFA and the ONDCP expressed disappointment in the budget cuts. In November of 2003, the White House drug office announced that Ogilvy & Mather would not have its contract renewed, and that the media buying would be put up for review. However, Ogilvy was informed that they would be allowed to reapply for the contract. A few months later the U.S. Attorney’s Office announced that charges were being brought against one former and one current employee of Ogilvy & Mather for defrauding the government and overcharging the White House Drug Office for work done on the account. The charges came nearly two years after Ogilvy settled for $1.8 million with the government on civil charges.

     In January 2004, the findings of a study commissioned by the National Institute on Drug Abuse (NIDA) were released which concluded that the advertising of the ONDCP has had little impact on its primary target: America’s teenagers. The study, which was conducted by the University of Pennsylvania’s Annenberg School of Communications and the Westat research firm, concluded that “there is little evidence of direct favorable advertising campaign effects on youth.” The report, which was titled “Evaluation of the National Youth Anti-Drug Media Campaign: 2003 Report of Findings,” noted that the anti-drug advertising campaigns had a favorable effect on parents but not on children, whose illicit drug use is the focus of the ads. However, the ONDCP officials had questioned previous NIDA reports, claiming that they surveyed a smaller number of youths than the long-running University of Michigan’s “Monitoring the Future” surveys. A December 2003 release of the Monitoring the Future report showed an 11% decline in drug use by eighth, 10th and 12th graders between 2001 and 2003. Spokespersons for both the PDFA and the ONDCP attributed some of those results to the ad campaign. However, officials at both organizations recognized that the debate over the effectiveness of the anti-drug ads would continue and they would have to continue to argue their case to avoid further cuts in government funding for the campaign.

Discussion Questions

  1. Evaluate the creative strategy used by the Partnership for a Drug Free America in its advertising campaign, particularly with respect to the use of strong fear appeals.


  2. Discuss the market segmentation strategies used by the PDFA and ONDCP in the anti-drug campaigns. Which of these segmentation strategies would be most likely to be effective?


  3. Much of the controversy surrounding the anti-drug advertising campaigns has involved the determination of the effectiveness of the ads. Evaluate the various approaches used to determine the effectiveness of the anti-drug ads. What types of measures should be used to evaluate the effectiveness of the campaign?


  4. Discuss the merits of using an integrated marketing communications program that encompasses a variety of communication tools to prevent drug use versus an approach that relies primarily on media advertising.


  5. Evaluate the advertising campaign developed by Ogilvy & Mather for the ONDCP linking drug use with terrorism. Do you think these ads were an effective way of changing the attitudes and behavior of young people with regard to the use of drugs? Why or why not?


  6. Evaluate the merits of the anti-drug advertising campaign from a social perspective. Should the government be involved in this effort or is the PDFA the more appropriate organization?

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