UNITED COLORS OF UNITED COLORS OF BENETTONBENETTON

Presented by: Presented by: Jordan Carrasco Jordan Carrasco Emilie ClaveilleEmilie ClaveilleNiklas GustavssonNiklas GustavssonAlix ProvansalAlix ProvansalMaria VasileiouMaria Vasileiou

Ethical Perspectives Ethical Perspectives of Business Practicesof Business Practices

OVERVIEWOVERVIEW

HistoryHistory Advertising CampaignsAdvertising Campaigns Franchising policyFranchising policy Implications for the international Implications for the international

marketing managermarketing manager ConclusionConclusion

HISTORYHISTORY

1965: official date of birth of the company Benetton1965: official date of birth of the company Benetton 1969: internationalization of Benetton with the opening of 1969: internationalization of Benetton with the opening of

the first shopthe first shop Late 1980’s: groups of franchisees begun to suffer as a Late 1980’s: groups of franchisees begun to suffer as a

result of Benetton's relentless expansion which brought result of Benetton's relentless expansion which brought strong competition strong competition

From 1982-2000: collaboration with Oliviero Toscani From 1982-2000: collaboration with Oliviero Toscani By 2001: Benetton group operate in 120 countries through By 2001: Benetton group operate in 120 countries through

5,000 franchised Benetton stores5,000 franchised Benetton stores

UNITED COLORSUNITED COLORSOF BENETTONOF BENETTON

““If everyone likes a campaign, no If everyone likes a campaign, no one will talk about it.”one will talk about it.” Luciano BenettonLuciano Benetton

ADVERTISING: ADVERTISING: The cons point of viewThe cons point of view

Exploitation of negative social issues to Exploitation of negative social issues to increase the company’s notoriety & increase the company’s notoriety & profitprofit

Religious feelings infringement & Religious feelings infringement & racism promotionracism promotion

No consideration of cultural No consideration of cultural sensibilities nor historical context of sensibilities nor historical context of targeted countriestargeted countries

Need for competitors to imitate the Need for competitors to imitate the style of the campaignstyle of the campaign

ADVERTISING: ADVERTISING: The cons point of viewThe cons point of view

Negative impact on consumer’s decision Negative impact on consumer’s decision buying processbuying process

Aversion to advertising from the audienceAversion to advertising from the audience

Legal actionsLegal actions

Benetton as a martyr to censorshipBenetton as a martyr to censorship

ADVERTISING: ADVERTISING: The pros point of viewThe pros point of view

Memorability / Brand recognition Memorability / Brand recognition

Innovation in communicationInnovation in communication

Production of images of global concern for global Production of images of global concern for global customerscustomers

Socially responsible businessSocially responsible business

No provocation but awarenessNo provocation but awareness

ADVERTISING: ADVERTISING: The pros point of viewThe pros point of view

Differentiation from misleading campaignDifferentiation from misleading campaign

Challenge stereotypesChallenge stereotypes

Cost effectivenessCost effectiveness

Awards winning and exposure in galleries around the worldAwards winning and exposure in galleries around the world

Exploitation of clothing to raise social issuesExploitation of clothing to raise social issues

CONTROVERSIAL ADVERTISING CONTROVERSIAL ADVERTISING CAMPAIGN: Death RowCAMPAIGN: Death Row

Negative pointsNegative points

No clear impression of Benetton's view on the subject No clear impression of Benetton's view on the subject

Widespread protest from customers as well as government Widespread protest from customers as well as government bodiesbodies

Strong objections from the families of the victims and Strong objections from the families of the victims and prisonersprisoners

Downfall on salesDownfall on sales

Black identity could be connected with criminality and deathBlack identity could be connected with criminality and death

Trivialisation of death penaltyTrivialisation of death penalty

CONTROVERSIAL ADVERTISING CONTROVERSIAL ADVERTISING CAMPAIGN: Death RowCAMPAIGN: Death Row

Positive pointsPositive points

Actual controversial issueActual controversial issue

Arouse people awarenessArouse people awareness

CONTROVERSIAL ADVERTISING CONTROVERSIAL ADVERTISING CAMPAIGN: AidsCAMPAIGN: Aids

Negative pointsNegative points

Exploitation of the victim Exploitation of the victim

Creation of the a debate about the limits of advertisingCreation of the a debate about the limits of advertising

Loss of sales and retailersLoss of sales and retailers

Obscene advertising campaignObscene advertising campaign

CONTROVERSIAL ADVERTISING CONTROVERSIAL ADVERTISING CAMPAIGN: AidsCAMPAIGN: Aids

Positive pointsPositive points

Launch during the AIDS crisis in 1991Launch during the AIDS crisis in 1991

Permission of Kirby's family to use the picture in their advertisingPermission of Kirby's family to use the picture in their advertising

Raising attention of the growing AIDS epidemicRaising attention of the growing AIDS epidemic

Company involvement in AIDS organisations Company involvement in AIDS organisations

Benetton's condom ads provided one solution of the problemBenetton's condom ads provided one solution of the problem

Benetton promoted the use of condomsBenetton promoted the use of condoms

UNITED COLORS OF BENETTON UNITED COLORS OF BENETTON FRANCHISINGFRANCHISING

““Benetton has often been quoted as an Benetton has often been quoted as an

example of a company which has been able to example of a company which has been able to grow extensively and rapidly with minimal grow extensively and rapidly with minimal financial commitment in retail outlets because financial commitment in retail outlets because the individual franchisees have been the individual franchisees have been responsible for their own financing”responsible for their own financing”

(Bruce, 1987; Dunkin, 1988; (Bruce, 1987; Dunkin, 1988;

Dapiran,1992)Dapiran,1992)

UNETHICAL POINTSUNETHICAL POINTS

Exclusive distributionExclusive distribution

Demand of a certain threshold of sales volume Demand of a certain threshold of sales volume

Pre-labellisation of productsPre-labellisation of products

No take back of unsold / defective items No take back of unsold / defective items

Minimum amount of ordersMinimum amount of orders

Heavy control (layout, music, light…)Heavy control (layout, music, light…)

Negative impact of the campaignsNegative impact of the campaigns

ADVANTAGES FOR THE ADVANTAGES FOR THE FRANCHISEEFRANCHISEE

Ease of brand identification Ease of brand identification

Neither fee nor royalty paidNeither fee nor royalty paid

A four-year payoutA four-year payout

Selection of desired clothesSelection of desired clothes

IMPLICATIONS FOR THE INTERNATIONAL IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGERMARKETING MANAGER

IMPACT ON THE MARKETING MIXIMPACT ON THE MARKETING MIX

PRODUCTPRODUCT Advertising known more than the productAdvertising known more than the product

Need strong quality to fight negative impactNeed strong quality to fight negative impact

PRICEPRICE Imposed pricesImposed prices

Curb in pricesCurb in prices

PEOPLEPEOPLE Boycott / complaintsBoycott / complaints

PROMOTIONPROMOTION Controversial advertising campaignsControversial advertising campaigns

Refusal of printing Benetton’s adsRefusal of printing Benetton’s ads

Banishment of the ads in several countriesBanishment of the ads in several countries

Absence of the productAbsence of the product

PACKAGINGPACKAGING Benetton bags printed only with facesBenetton bags printed only with faces

IMPLICATIONS FOR THE IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGERINTERNATIONAL MARKETING MANAGER

IMPLICATIONS FOR THE INTERNATIONAL IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGERMARKETING MANAGER

PARTNERSPARTNERS Loss of sales for franchiseesLoss of sales for franchisees

Legal actionLegal action

PLACEPLACE

Less availability of products due to the closing of shops/franchisesLess availability of products due to the closing of shops/franchises

No shocking images in the storesNo shocking images in the stores

IMPACT OF THE KEY IMPACT OF THE KEY STAKEHOLDERSSTAKEHOLDERS

Customers : BoycottCustomers : Boycott

Suppliers: resentment to offensive adsSuppliers: resentment to offensive ads

Shareholders: End of collaboration Toscani-BenettonShareholders: End of collaboration Toscani-Benetton

Retailers: Legal actionsRetailers: Legal actions

USE AND ROLE OF INTERMEDIARIESUSE AND ROLE OF INTERMEDIARIES

Manipulation of the franchising lawManipulation of the franchising law

Rapid market development at relatively low priceRapid market development at relatively low price

Cannabilization Cannabilization

Exclusive distributionExclusive distribution

REGULATORY AUTHORITIESREGULATORY AUTHORITIES

ASA – Advertising Standards AuthorityASA – Advertising Standards Authority

Statement of the German Supreme CourtStatement of the German Supreme Court

Need for harmonization within EUNeed for harmonization within EU

CONCLUSIONCONCLUSION