REPORT BY COMPETENCY GROUP

MARKETING STRATEGY
OF
UNITED COLORS OF BENETTON

INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

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 REPORT BY COMPETENCY GROUP

An Analysis of Marketing Strategy of

United Colors of Benetton

A report submitted towards the partial fulfillment of the requirements of the two
years full-time MBA Degree.

Guided By:
PROF. PABITRA RANJAN CHAKRAVORTY

Submitted By:
SHREY GHOSAL
STEFFY VELAYUDHAN
SANDEEP SINGH BHADAURIA
SUMIT TANWAR
HARSHIL PATEL
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ACKNOWLEDGMENT

We, the Competency Group, take this privilege while presenting this project report,
to express our deep gratitude to all those who offered their valuable help and devoted
their precious time to help us in completing the project successfully. This journey into
project methodology would have been a travesty had it not been for the guidance,
assistance, encouragement and moral support from many. It would be unjust if we do
not commence this study by acknowledging their efforts. We would like to express our
gratitude to all those who gave us the possibility to complete this Marketing Strategy
Report. We would like to thank Indian Institution of Planning & Management.

We are deeply indebted to our faculty and guide Mr. Pabitra Ranjan from Indian
Institution of Planning & Management for his valuable guidance, stimulating
suggestions, patience and for encouraging us to go ahead with our project report.
We want to thank all the faculties and our friends in Indian Institution of Planning
& Management for their help support, interest and valuable hints during our project.

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CONTENTS

Sr. No Particular Page No.

1. Introduction 05

2.. Objectives of the Study 07

3. Research Methodology 07

4. Marketing Strategy 9

5. Brands 14

6. Sales 15

7. Supply Chain 16

8. Sourcing 17

9. Visual Merchandising 17
10. Competitor Analysis 18

11. SWOT Analysis 20

12. Questionnaire Analysis 21

13. Recent Developments 29

14. Recommendations & Conclusions 30

15. Appendix 32

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1. INTRODUCTION:
1.1 History:

Benetton Group is a global fashion brand, based in Treviso, Italy. The name comes from the
Benetton family who founded the company in 1965. Benetton Group is listed in Milan. Benetton has
a network of around 6,000 stores in 120 countries. The stores are managed by independent partners
and generate a total turnover of over 2 billion euro.

In 1965, Luciano Benetton, the eldest of four children, was a 30-year-old salesman in
Treviso. He saw a market for colourful clothes, and sold a younger brother's bicycle in order to buy
his first second-hand knitting machine. His initial small collection of sweaters received a positive
response in local stores in the Veneto region, and soon after he asked his sister and two younger
brothers, Gilberto and Carlo, to join him. In 1965, the entity known as the "Benetton Group" is
formed.

In 1966, the Benettons opened their first store in Belluno and three years after in Paris, with
Luciano as chairman, his brother Gilberto in charge of administration, their younger brother Carlo
running production, and Giuliana as a chief designer.

 In 1965

The Benetton Group is established.

 In 1970

A business model making the difference: unique, flexible and innovative.

 In 1980

Benetton communication campaigns: known all over the world.

 In 1990

A global company present in 120 countries.

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 In 2000

Benetton grows with the market: over 150 million garments produced every year and distributed
in around 6,000 contemporary store

1.2 Overview of United Colors of Benetton:

Today, the Benetton Group is presented in 120 countries around the world. Its core business is
fashion apparel: a group with a strong Italian character whose style, quality and passion are clearly
seen in its brands, the casual United Colors of Benetton, the glamour oriented Sisley, Playlife
American college style and Killer Loop streetwear. The Group produces over 150 million garments
every year. Its network of more than 5,000 contemporary stores around world, offers high quality
customer services and generates a total turnover of over 2 billion euro.

 Target Customers:
 The companies target group is between the ages of 16 to 32
 The prices must be logical for someone as young as 16 is able to afford the product
 The older people who have their own income don’t find the product price to cheap or
expensive.
 Older women (over 32) buy these clothes so that feel and dress younger than their
real age.

 Headquarters:
Benetton Group's Corporate headquarters is located at Villa Minelli in Ponzano,
about 30 km from Venice. Villa Minelli is a complex of sixteenth century buildings
of great historical and cultural interest.

The villa was acquired by Benetton in 1969 and the task of restoring and
remodernising the complex, entrusted to architects Afra and Tobia Scarpa, took over
fifteen years.  From the mid 1980s Villa Minelli became the headquarters of the
Group and home to all its strategic functions.

 Around 6,000 stores worldwide:

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 The development of Benetton's commercial network, characterised by prestigious

locations in historic and commercial centres and by the high level of customer
services offered, has been supported by a major programme of investment worldwide.
 The Benetton stores carry complete collections, as well as a wide selection of
accessories, offering a full range of Benetton style and quality.

 Design:
 A staff of 300 designers from all over the world creates the collections for the casual United
Colors of Benetton, the glamour oriented Sisley, the leisurewear brand Playlife. The design
team is also engaged in researching new materials and creating new lines for different
targets from children, men and women to expectant mothers, offering them not only
practical and modern styles but also maximum comfort.
 The result is the latest trends in design and a rich output of many models a year which are
realized with computer assisted design systems fully integrated with the rest of the
company's production phases.

2. OBJECTIVES OF THE STUDY

2.1 Primary Objective:

To analyse the marketing strategy of United Colors of Benetton.

2.2 Secondary Objective:

 To study the various promotional schemes of United Colors of Benetton.

 To study the Branding strategy of United Colors of Benetton.
 To understand the perception of consumers towards United Colors of Benetton.
 To analyse the strategy of competitors of United Colors of Benetton.

3. RESEARCH METHODOLOGY

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The methodology of our project was purely based on personal observation as well as interaction and
discussion with customers. The study involved both exploratory and descriptive research techniques
using both primary and secondary sources.

3.1 Primary Research

Research Design: The research design used in the study was descriptive in nature.

Sample Design:
i) Population: UCB customers all over the world.
ii) Survey population: UCB customers in Ahmedabad.
iii) Sampling unit: A consumer of fashion clothing and apparells (male or female).
iv) Sampling technique: Non probability method using judgmental sampling.
v) Sample size: 150
vi)Research Tool: Questionnaire & unstructured interview and focus group discussion.

3.2 Secondary Research

Secondary research provided insights regarding Industry trends, Offerings of key players and
Consumer Profile and preferences; Focus Group discussions and Depth Interviews provided
information about Consumer perception about the Product/Service offering, Key factors that
influence their choice, Satisfaction levels with current offerings, and desirable features.

3.3 Design Considerations

All questions (except identification-based) were closed-ended. The basic questions were posed
first, and identification questions were at the end. Careful wording was used to avoid ambiguity or
biasing questions. Several questions involved the respondent expressing his/her level of agreement
with a certain issue. Few of these questions were stated positively and few others negatively to
avoid biasing in response. Sensitive information such as Information regarding Income/Family

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Status had response categories and was placed towards the end of the questionnaire to increase
response rate.

3.4 Questionnaire Development

A well-structured questionnaire was developed after a review of Internet commerce literatures. The
first half of the questionnaire tried to study the general perceptions and attitudes of consumers
towards online ticket booking and the second half tried to study their perceptions related to online
travel portals. The questionnaire included different scales such as nominal scale, Likert scale,
importance rating scale as well as semantic differential scale.

4. MARKETING STRATEGY:

4.1 The Pricing Strategy

Benetton has moderate priced boutiques and the strategy of the firm is the match between its internal
capabilities and its external relationships. The strategy describes how it responds to its suppliers, its
customers, its competitors, and the social and economical environment within which it operates. The
inclusion of several of its competitors, such as the GAP and others in the garment industry, would
appear to suggest that although conditions in the apparel market are undoubtedly tough, the more
brand focused organizations are adapting to the market evolution and are still commanding a
premium for added value sales.

In the absence of a store or even on-line prices, to find pricing information for Benetton clothing a
search on E-bay was the only site to yield clothing information and since this was an auction site, the
prices on the clothing were not an actual representation of the corporation’s pricing policies. A
plethora of information could, however, be found in regards to the accessory line, the magazine, and
on the fragrance.

4.2 Production strategy

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The Benetton group to the U.S market in hopes of revitalizing its brand across the country. The new
benetton stores will have a larger format ranging from 6000 square feet to 20,000 square feet. They
will also have a more expensive line of products and a minimal design, say company officials.

The retailers plan to open three stores in Manhattan this fall and are looking at sites in Los Angeles,
san Francisco and Atlanta.

Today United Color of Benetton is one of the best known brands, with daring campaigns and new ,
innovative and high quality products. This brand stayed in the top for more than twenty years.
Anything done under this brand proved to be successful from the start.

The mix of the products made under the brand name United Color of Benetton include the consumer
products as brightly colored clothing lines, accessories, shoes, baby clothing lines, each collection
with is own personality adapted for a larger consumer scale as possible. The organizational products
include licenses and franchising. The UCB products designed for young people of all ages, colors,
nationalities, with the desire to have more color in their life.

A global brand that has an international style combining color, energy, and practicality, the united
Colors of Benetton sells in addition to a range of male and female clothing for several occasions, a
magazine, a fragrance line, and accessories. The core group of Benetton is the clothing line which
has a strong Italian character in design and style offering a total look for every day.

The adult clothing line is described as having no boundaries or set rules. The adult clothes line
extends from casual to formal to glamour’s to sportswear that allows the consumer to mix materials,
style, and themes.

The children’s clothing’s line assimilates popular and emergent trends, encouraging children’s
explosives creativity. Much as the adult line, the children’s line offers a multi-ethnic eclectic range
of choices. For teenagers, there is an entire dedicated line referred to as, The Hip Site.

4.3. Promotional Strategies

"Communication should never be commissioned from outside the company, but conceived from
within its heart". 

Benetton Group use the value to creating from capitalize on an image, the Benetton group's
advertising campaigns are not only a means of communication but a feeling of us. They use the

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mediums through their universal impact; they have succeeded in attracting the public to attend to
their brand and especially, in standing out among the current clutter of images.

All the colors of the world" this is the first slogans to appear in Benetton ads, and thence later has
modified to "United Colors of Benetton." this concept communicated on a strong of colors.

Examples of advertisement media.

Magazine

Colors Magazine is one of magazine about the rest of the world. It's on sale in 40 countries,
published in 4 languages. Colors Magazine let talk to young people in around the world.

Internet

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Benetton's website is one of easy way to invite, the user can see the new collection and the new
campaigns. It's a way to up to date for customers all the time.

Fabrica

Fabrica is Benetton's communication research centre, they made it with the aim of combining culture
with industry and volunteering young people from around the world to creative and interchange their
experience. Fabrica give an opportunity to young artists/designers for training and studying, and
develop into the experts.

The promotion strategy of Benetton is mainly the advertising strategy and it Is one of Benetton’s
main assets. At first, from 1984 to 1990 Benetton’s advertising strategy was based on picture of
young people, each of them representing a different skin color, wearing really colorful outfits. The
main point of this advertising strategy was to set up individuals together from all over the world, no
distinction between skin colors. The brand’s value was about brotherhood and cultural tolerance.
The ads were focusing on cultural tolerance such as “Black and White”, “Russian and American”,
“Jewish and Palestinian”. Benetton’s slogan is the well-known: “United Color of Benetton”. The
brand wanted to have the identity of colors. This is also a sign of allegiance, an outward sign of an
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ideology and a set of values and brand culture (social issues). This strategy was an innovative
advertising strategy, because the company uses social issues. In the same way, it created a long term
relationships with customers with strong brand recognition.

Nevertheless, in 1991, Benetton changed its advertising strategy. The company repositioned itself in
showing the real world and its issue. The advertisements are more and more shocking, the topics are
wider such as Aids, war, pollution, and other social issues.

4.4 Place strategy

Benetton is arguably the world’s largest retailer with a network of 6000 large stores, smaller
branches and franchises in 120 countries, worldwide. The company trades on the basis of Just-In-
Time coloration and finishing providing flexibility to consumer demand.

Benetton is an Italian clothing manufacturer with sales of 1.9 billion pounds in 2002. The company
distributes mainly through third-party independent retailers, but is currently developing its own retail
network. It generates 69% of sales in Europe, 9% in North America, 9% in Asia and 13% in the rest
of the world. Italy is Benetton’s single largest market accounting for about 31.1% of sales.

Benetton’s distribution strategy revolves around a large network of independent franchises and
resellers who invests capital in their own network of stores( totaling roughly 5,200 at the end of
2002). These in turn buy merchandise from Benetton and sell directly to the retail customer.
Benetton does not impose very strict on the independent distributors regarding the presentation of
erchandise, completeness of range and general store ambience.

Off course, this strategy creates a number of risks for Benetton. First, the company has less control
over the production positioning and the way merchandise is presented to consumers. This raises the
risk of inconsistence and variations in consumer perception to the detriment of the overall brand.
Second, relying on the third-party distribution weakens business intelligence and customer feedback
and generally creates a less responsive business model.

Benetton sees itself as a “clothing service company” rather that a retailer or a manufacturer. Its
customers are its shops, which are owned by outsiders. Unlike normal franchises systems, the shops
pay no royalties and Benetton accepts no returned stock. A network of 83 area agents knits the whole
operation together, finding investors for the shops and keeping Benetton’s head office near Treviso
in touch with customer taste around the world.

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5. BRANDS:

 A global brand, and one of the most well known in the world

 United Colours of Benetton has an international style that combines colour, quality and
fashion

 The Benetton Baby label is a new product line dedicated to the prenatal and the under-fives
world.

 The brand is present in many other sectors, from the elegant accessories to the eyewear lines
and perfumes, from the home collection to baby products.

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 It is an extension of the Benetton brand, featuring under wear, beachwear,

sleepwear, accessory collections

 Under colors is available in its own chain of stores which now has more than 500 locations in
thirty countries and in selected Benetton Shops.

A fashion brand for young adults, with a resolute and distinctive style. It is inspired by
teenagers' favorite role models and icons. Killer Loop is the Benetton brand that edgily
interprets "street“ vibrations.

 This is the Group's most fashion forward brand

 Sisley presents elegant and seductive collections, with special attention given to the choice of
design, fabrics and new shapes

 The brand has created the very fashionable Sisley Young line for children from 8 to 12 years
old
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 It is the Benetton leisurewear brand that redefines a style

 With its clean and elegant collections Play life blends exclusive styles with strong sense of
individuality

6. SALES:

 Benetton achieved 967 million euro in sales of its brand "United Colours of Benetton Adult",
that is 51% of the total sales in 2009.

 Another 31% of sales have been achieved through sales of the brand "United Colors of
Benetton Kid", that is 601 million euro.

 The third highest percentage of 16%, that is 300 million euro grossed the "Sisley" brand.

 The "Playlife" brand grossed 37 million euro.

7. SUPPLY CHAIN:

 Information technology links the market place with the manufacturing process. Electronic
Data Interchange (EDI) allows Benetton's agents in each country to regularly transmit orders
to Benetton's head office.

 The market is updated every 24 hours allows Benetton to carefully track and react to demand
by manufacturing only those garment styles, colours and sizes required.

 Communications technology has allowed Benetton to "eliminate the filters between the
customer and production" and to link the customer directly to the factory.

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 It established WIDE (Worldwide Integrated Distribution Enterprise) to manage the

international forwarding and customs clearance functions.

 WIDE was first established to manage the North American product movements.

 This organization deals directly with air carriers--eliminating a level of freight-forwarded

intervention.

 EDI technology allows Benetton to transmit documentation ahead of consignment arrivals. to

allow speedy clearance through customs and forwarding to the retail outlets. These functions
are managed or performed by WIDE.

 The result of this rationalization was a 55 per cent reduction in physical distribution costs and
a reduction in lead times to the USA from 22 days to seven days.

 Benetton is creating great designs, but also building a logistics system to compete with the
fast fashion companies.

 It has invested more than $160 million into its supply chain for its brands that also include
Sisley and Playlife.

 Benetton is outsourcing the production of high-margin accessories and has a world-wide

distribution network.

 The company can reroute merchandise during shipment if another store needs more clothes.

 Benetton sends inventory in small shipments, ships every two weeks, but can ship in seven
days if a product is hot

 THE ROBOTIC DISTRIBUTION CENTRE

 Benetton has huge distribution centre where the garments are already packed in
one of two standard boxes which are bar-coded and pre-addressed to customers.
 The bar-coded cartons are delivered by high speed conveyors from the receipt
bays to rail-guided transporters in the storage area.
 Each transporter can transfer up to 24 cartons at a time to and from the racking.
 Simultaneous put-away and retrieval occurs to maximize efficiency.
 The storage zone has a capacity of 250,000 boxes sorted randomly.
 The DC handles 12,000 boxes a day. equivalent to 6,000 consignments a day,
representing some 60 million garments a year.

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8. SOURCING:

 Sourcing the finished product

In recent years special attention has also been focussed on the "Sourced Products" areas, with
outsourcing of production in countries like China, India and Thailand, Turkey.

 Three main areas of sourcing:

- China coordinated from Hong Kong;

- South East Asia (Thailand, Cambodia, Laos, Vietnam, Indonesia) coordinated from
Bangkok;
- India (coordinated from Bangalore).

9. VISUAL MERCHANDISING:

 It should be simple yet attractive with appropriate color and lighting. It

should focus on the best selling products and should carry a distinct
theme.
 Window displays have been found to promote sales, highlight seasonal
changes, and announce the arrival of new products apart from
showcasing the best selling merchandise.

 It provides a view of both the exterior as well as the interiors of the store. Walks and entry
should be so designed that there is sufficient space for customers to
have a hassle free movement.
 Benetton provides Valet parking for its customers. The following
Exhibitor shows the signage put on the entrance of the store

10. COMPETITOR ANALYSIS

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Benetton mainly operates in the apparel sector, which is a highly competitive industry with respect
to production, distribution and sales. There is a lot of diversity in competition ranging from local,
national and global department stores, specialized retailers, independent retailers and manufacturing
companies. In India, the major competitors of Benetton include Mango, FCUK, Guess, Espirit,
Westside, etc. The company faces a lot of competition internationally as well from brands like Gap,
H&M etc. The competition in the industry has increased in the last few years, owing to the entry of
foreign brands into the Indian market, and thus low cost production plays a key role. Apart from
competition for sales, the companies also compete for significant store locations. The intensity of
competition also puts a price pressure onto the operating companies in the industry or could lead to a
loss in market share.

MANGO
Mango clothing company is a worldwide famous manufacturer and distributor, specializing in
women's and men's apparel and accessories. Mango clothing brand MNG was founded in 1984 and
has become one of the leaders in retail sales. Mango retail stores are based in big city shopping
malls and on shopping streets. Mango (MNG) is a Spanish company which is based in Barcelona but
which has expanded to over 92 countries with more than 1000 shops; and with further expansion
planned.

GUESS
Guess? Inc. The Group's principal activities are to design, market, distribute and license lifestyle
collections of casual apparel and accessories for men, women and children that reflect the American
lifestyle and European fashion. The Group operates through the following divisions: Retail,
European, Wholesale and Licensing. The Group also grants licenses to manufacture and distribute
products, which complement its apparel lines. Its products include collections of denim and cotton
clothing, including jeans, pants, overalls, skirts, dresses, shorts, blouses, shirts, jackets, and
knitwear. The company also grants licenses to manufacture and distribute various products,
including eyewear, watches, handbags, footwear, kids’ and infants’ apparel, leather apparel,
swimwear, fragrance, jewelry, and other fashion accessories. It sells its products through its own
stores, a network of wholesale accounts, and the Internet.

GAP
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The Gap, Inc is American clothing and accessories retailer based in San Francisco California, and
founded in1969.  The company has five primary brands: the namesake Gap banner, Banana
Republic, Old Navy, Piperlime and Athleta. Gap, Inc. remains the largest specialty apparel retailer in
U.S., though it has recently been surpassed by the Spanish-based Inditex Group as the world’s
largest apparel retailer. Gap Inc. is one of the world’s largest specialty apparel retailers, with more
than 3,100 stores and fiscal 2008 revenues of $14.5 billion.

ESPRIT 
Esprit is an international youthful lifestyle brand offering smart, affordable luxury and bringing
newness and style to life. The Group offers 12 product lines encompassing women’s wear, men’s
wear, kid’s wear, edc youth as well as shoes and accessories through over 640 directly managed
retail stores and over 12,000 wholesale points-of-sale worldwide, occupying over 817,000 square
metres directly managed retail space in more than 40 countries.

11. SWOT ANALYSIS

The SWOT analysis includes the Opportunities, Threats, Strengths and Weaknesses.

Strengths:

 Customers are brand loyal.

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 Benetton is enjoying competitive edge vis-à-vis competitors in Italy.

 Benetton is maintaining good company relationship with labor.
 Benetton is having soundness in financial management.
 Benetton system procedures, structures, processes are consistent with designed industry
standards.

Weaknesses:

 Benetton needs improvement in re-inventing vision, mission and strategic objective and
goals.
 Marketing improvements are needed in marketing management.
Improvements are needed in Human resource Management.

Opportunities:

Economics conditions including all its indicators reflect positive health of Italy economic conditions.

 Benetton is reasonably equipped to internalize the social shift.

 Benetton is implementing all the related laws and its article/clauses.

 Apparently Government policies are supportive towards industry.

 Benetton is reasonably equipped to maintain the pace of technological changes.
 International components namely economics, political, technological, legal exhibit normally
in USA.

Threats:

 Italy is experiencing social shift in terms of customers. Customers are seeking value and
they have become savvy also.
 Legislations are being passed frequently related to apparel (textile) industry.
 The industry is subject to technological changes and having a high vulnerability.
 Benetton is facing fierce competition in USA and their counterparts dominating the
market.
 In USA due to cultural diversity customers have different taste, preferences and they see
out different values from their transactions.
12. QUESTIONNAIRE ANALYSIS

1. From where do you purpose fashion garments ?

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Shopping Place
2%
16%

33% Street Market

Retail Shops
Mall
Internet

49%

2. How frequently do you go for shopping of garments?

60% 56.50%

50%

40%
34.50%
30%

20%

10% 8.00%
1.00%
0%
Weekly Quarterly Monthly Annualy

Frequency

3. For which purpose you go to Mall most ?

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Purpose
60%
53%
50%

40%
31% Purpose
30%

20%
9%
10% 7%

0%
Shopping Games Movies Others

4. What is your monthly budget for shopping of garments ?

Monthly Budget(Rs.)
8%
25%

X < 1000
1000-3000
3000 < X

68%

5. Have you ever seen any advertisement of “United Colors of Benetton” ?

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Watched Advertisement

42% 81.50%
18.50%

58%

6. Which brand of fashion garments you prefer more ?

Brand

18%

United Colours of Benetton

44% Levi's
Spykar
Others

30%

9%

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7. Which factor of “UCB” attracts you more ?

Factor
90%
8. How
80%
much do
70% you
60% appropriate
50% Factor quality
assurance
40% 84.00%
of “United
30% Colors of
20% Benetton” ?

10%
6.00% 5.00% 5.00%
0% Response
Price Quality Brand Ambassador Advertisement
70%

60%

9. Which brand of 50%

“UCB” you like the
most ? 40% Response
65%
30%

20%
10. On which occasion
do you like to purchase 10% 20%
13%
the “UCB” most? 2%
0%
0%
Very Much Appreciable Can't Say No Appropriable Not at All

11. Would you suggest “UCB” to your relatives / friends?

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Response
Yes No
19%

81%

12. Do you find sufficient varieties of accessories & apparels at “UCB” outlets?

80%

70%

60%

50%
73%
40%

30%
27%
20%

10%

0%
Yes No

Response

13. Do you find enough number of outlets of “UCB” in Ahmedabad ?

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32%
100%

80%

60% 68%

40%

20%

0%
Response

Yes No

14. For whom do you prefer the product of “UCB” ?

Category
23% 13%

Kids
Gents
Ladies

64%

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13. RECENT DEVELOPMENTS

 UCB Men's Collections

United Colors of Benetton has consolidated its product range and expanded the assortment in its
men's collections, a segment that now accounts for around 21% of UCB sales.

 Sisley Young

Sisley Young collection for children from 3 to 12, but concentrating on the 8-12 age group, it
plays on sensations, emotions and creativity, all of which are reworked, filtered and adjusted to the
young age of our very modern little women and men.

 LUCKY YOU

From 30 October 2010, customers purchasing in a single transaction three items from the
United Colors of Benetton “Toddler” and “Kid” (from size 74 to XXL) lines among those marked
with the special LUCKY YOU sticker will receive the cheapest item free (subject to availability in-
store at the moment of purchase).

The promotion will be valid at participating “United Colors of Benetton” stores, displaying
the special “United Colors of Benetton. Lucky you” advertising posters.

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The UCB’s product merchandising policy is also important in its success because they
emphasized a climate of scarcity and opportunity. So, its consumers know that if they like
something, they must buy it in this moment and not later. All these characteristics makes UCB a
business model difficult to imitate and for this reason its competitive advantages are more
sustainable.

In conclusion, Benetton uses knowledge management to balance structure and creativity. They
recognize that both creativity and structure is crucial in ensuring the success of the venture.

14. RECOMMENDATIONS & CONCLUSIONS

Recommendations

Based on the analysis of information gathered and inferences made thereof, some recommendations
are as follows

Promotional Offers: Consumers are price-conscious and are attracted towards promotional offers.
Give the usual promotional offers that other brands do, like cash back offer on usage of certain credit
cards.

Customer Care: Easy and quick access to customer care acts as a re-assuring factor and increases
customer satisfaction with service offering. The company should look at providing multiple channels
of customer care, though the focus should be on customer care over phone, as revealed through data
analysis.

Conclusion

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Since 1984 wearing Benetton clothing was not just an act of covering the body or nice, it was a
statement. A statement that he or she wearing them is an open-minded, modern person. This
mentality was achieved by the highly inspired and original advertising directed by Toscani. Every
campaign they have launched under his direction always attracted an enormous quantity of attention
and almost every poster or billboard they had put up attracted many reactions.

Their campaigns have introduced new words in the advertising language, words such as
‘shockvertissement’ and ‘reality ads’.

Today the brand Benetton no longer stands out from other clothing and apparel manufacturers which
is also showed the lower profits they get every year. So they still have quite the ethnic diversity in
their promotion, but in today’s modern society this is no longer something of frown upon, but a
necessity. So their billboards continue to be simple and not so commercially intensive, but if this is
not backed up by a powerful story, the effect is almost null.

The advertising society, especially in Europe, has reached a point where simple commercials that
directly try to convince the buyer to buy a product or service, no longer work. The buyer has become
quite an intelligent breed, they do not want other people telling them what to buy, and they want to
be convinced by arty commercials, smart ads a company philosophy they relate. And because
Benetton didn’t change their advertising style since 2000, everyone got used to it and even grew
tired of it. Their simple portraits with white background just don’t cut it when faced with the
aggressive and intelligent campaigns by

rivals such as Nike, Adidas, Puma, and Reebok. Even though Benetton like to think of themselves as
above this ‘sport &leisure wear’ league and into the Marks & Spencer, The Gap etc. ‘lifestyle wear’
league, the lack of a strong identity places them somewhere in between. Some people would rather
see Benetton maintain the controversial ads. In Britain, when the new, happy-faced ads broke early
in 2001, they were panned as ‘so innocuous as to be invisible’. Even though these new ads were
made by his disciples at Fabrica, Oliviero Toscani was even more dismissive. ‘It’s a waste of
money’ he said.

Bitterly attacked by some and internationally acclaimed by others, Benetton’s campaigns are not
only means of communication but also an expression of our time. At the same time they have paved
the way for innovative models of transmitting corporate ‘intelligence. ‘

In the end, some might say that it doesn’t matter what critics said, that the campaigns were
‘tasteless,’ that the company was exploiting the world’s problems to create the image. It doesn’t
matter Toscani said that ads were only trying to raise awareness on social and cultural issues. What
matters is that Benetton brand was built on petty cash and in a very short time frame; it is now
among the world’s best known brands, and this was achieved in less than 20 years by one
photographer, only print ads and billboards, no advertising agencies, no television commercials.

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Today, the Benetton Group is present in 120 countries around the world. Its core business is fashion
apparel: a group with a strong Italian character whose style, quality and passion are clearly seen in
its brands, the casual United Colors of Benetton, the glamour oriented Sisley, the leisurewear
brand Play life.
The Group produces over 150 million garments every year. Its network of around 6,000
contemporary stores around the world offers high quality customer services and generates a total
turnover of over 2 billion euro.

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