Benetton Group

Benetton Group

REPORT BY COMPETENCY GROUP MARKETING STRATEGY OF UNITED COLORS OF BENETTON INDIAN INSTITUTE OF PLANNING AND MANAGEMENT Page 1 IIPM AHMEDABAD 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 Page 2 ACKNOWLEDGMENT We, the Competency Group, take this privilege while presenting this project report, to xpress 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.

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We would Ilke to express our gratltuae to all tnose wno gave us tne posslDlllty to complete 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.

Page 3 CONTENTS sr. NO Introduction Particular Page No. 05 2.. Objectives of the Study 07 3. Research Methodology 4. Marketing Strategy 9 5. Brands 14 6. Sales 15 7. Supply Chain 16 8. Sourcing 17 9. Visual Merchandising 10. Competitor Analysis 8 11. SWOT Analysts 20 12. Questionnaire Analysis 21 Recent Developments 29 14. Recommendations & Conclusions 15. Appendix 32 Page 4 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. y ln 1965 The Benetton Group is established. y ln 1970 A Duslness model making tne OITTerence: unique, nexlDle ana Innovative. y In Benetton communication campaigns: known all over the world. y ln 1990 A global company present in 120 countries. In 2000 Benetton grows with the market: over 1 50 million garments produced every year and distributed in around 6,000 contemporary store Page 5 1. 2 Overview of United Colors of Benetton: Today, the Benetton Group is presented in 120 countries around the world. Its core usiness 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 remoaernlslng tne complex, entrusted to arcnltects Atra ana IODIa 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: y 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. y The Benetton stores carry complete collections, as well as a wide selection of accessories, offering a full range of Benetton style and quality. Page 6 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. 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. . 1 Primary Research Research Design: The research design used in the study was descriptive in nature. page 7 Sample Design: i) Population: UCB customers all over the world. it) Survey population: IJCB customers in Ahmedabad. iii) Sampling unit: A consumer of fashion clothing and apparells (male or female). ‘v) Sampling technique: Non probability method using Judgmental sampling. v) Sample size: 150 v’) Research Tool: Questionnaire & unstructured interview and focus group discussion. . 2 Secondary Research Secondary research provided insights regarding Industry trends, Offerings of key layers 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 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 OITTerent scales sucn as nomlnal scale semantic differential scale. Page 8 4. MARKETING STRATEGY: 4. 1 The Pricing Strategy , LIKert scale, Importance ratlng scale as well as 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 o 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 ragrance. 4. 2 Production strategy 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 Page 9 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 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. page 10 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 round the world.

Internet Benetton’s website is one of easy way to invite, the user can see the new collection ana tne new campalgns. It’s a way to up to oate Tor customers all tne time Page 1 1 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 Whitep, ‘Russian and Americanp, ‘Jewish and Palestinianp. Benetton???s slogan is the well-known: ‘United Color of Benettonp.

The brand wanted to have the identity of colors. This is also a sign of allegiance, an outward sign of an 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 ocial issues. . 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-ln-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 Page 12 network. It generates 69% of sales in Europe, 9% in North America, 9% in Asia and

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