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The Benetton Affair - A case of marketing failure.
5 August 2006
The management team at Australian Wool Innovation (AWI) has proved to
be sadly lacking in the most basic marketing skills, with the failure
to address the real issue surrounding the Benetton affair.
Hailed as an “historic” agreement by AWI, and welcomed by
all, the agreement with Benetton was supposed to have “a significantripple
effect throughout the textile industry.”
The media report of 13 July (Farm Weekly) stated that “AWI has launched
its biggest
salvo against animal rights groups by signing on clothing retailer, Benetton”.
AWI chairman, Ian McLachlan made the announcement while addressing the
recent World Merino Conference.
Whoever allowed this cheap political shot at AWI’s Federal Court
enemy has cost woolgrowers at least $16 million in the two year life of
the project, as it was claimed to double Benetton’s purchase of
Australian merino wool.
Make no mistake, this should have been a brilliant marketing coup, and
the $1.5 million investment with Benetton would be an example of AWI’s
new marketing strategy.
In the latest “Beyond the bale”, CEO Len Stephens states that
AWI’s strategy “is to work
directly with key apparel companies around the world. This approach is
working and I believe it will create demand for Australian Merino wool
in 2006 and 2007.”
Well Len, your approach is not working and never will while customers
have the perception that AWI is essentially a political organisation,
headed up by a former politician, and run on party political lines. This
perception means that your organisation will never create new demand for
Australian merino wool, not in 2006, not in 2007, not ever. The sad end
of the Benetton Affair proves it.
Today’s wool prices prove it.
The continuing exodus of people out of the industry proves it.
Ian McLachlan believes that the Benetton affair “appears to be a
combination of misunderstandings”. So was calling one of our biggest
wool customers, Laurence Modiano “a hypocrite”, for daring
to criticise AWI’s performance at the same venue that launched the
doomed Benetton deal. So was McLachlan’s latest embarrassing foray
into federal politics.
Wool growers understand one fact, that is their continued poor farm gate
price for the
quality product they produce. They also know that AWI are currently spending,
according to Len Stephens, over $100 million of growers money. At Woolpoll,
growers will be asked to reinvest into a company that talks the marketing
talk, but cannot walk the marketing walk.
This sad demonstration of AWI’s marketing failure with Benetton,
combined with politics
and little market common sense, means that 0% (ZERO) levy is a very real
option at Woolpoll 2006.
Will Crozier
Casterton VIC
Director
AWGA Mobile 0428 820 281
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