Success Strategy of Benetton.
Julia Belenkova
Group 111.

Type | Public (BIT: BEN) | Industry | Fashion | Founded | 1965 | Headquarters | Ponzano Veneto, Italy | Key people | Alessandro Benetton, Chairman
Carlo Benetton, Deputy Chairman
Luciano Benetton, Founder and non-executive Director
Franco Furnò and Biagio Chiarolanza, delegating operative management of the company
Giuliana Benetton, Director
Gilberto Benetton, Director | Products | Clothing, Accessories and Footwear | Revenue | 2,032 million euro (2011) | Employees | 9,557 (2011) |
Benetton Group S.p.A. 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 over 6,500 stores in 120 countries. The stores are managed by independent partners and generate a total turnover of over 2 billion euros. The Strategy of the company is very multi-faceted and is seen in every of the following activities:
The Start
The Benettons produced ordinary woolen sweaters of traditional somber colors and scratchy wool as many others in the industry until one day Giuliana Benetton developed more colorful and fashionable designs. So the Benetton’s first success was a bright violet pullover made of a soft blend of wool. Thus their first key to success was that in contrast to their competitors they developed a radical change not only in clothes but also in attitude to life – pleasant soft materials and very bright colors attract attention and give the customers the feeling of changing for the better – far away from gloomy routine with bright colors. And we all know that if you wear something comfortable and bright you have no chance of being unnoticed and unhappy.
Brands
The company's core business remains their clothing lines: United Colors of Benetton, Undercolors of Benetton, Sisley, and Playlife. Their products include womenswear, menswear, childrenswear and underwear and they have expanded into perfumes, stationery, eyewear and travel bags.
The Group has a network of over 6,500 stores around the world.
So the most important strategic aspect here is that Benetton develop their own styles, but not just copy others – thus they stay well-distinguishable among other brands. Besides they don’t try to produce everything at once like “from a pin to a car” – they focus on a comparatively limited number of item types produced, but they try to produce high quality products. In fashion qualitative characteristics are much more important than quantitative – and this strategic consideration adds to Benetton’s success.

Production
As well as having over 9,500 employees, Benetton has developed a network of small suppliers who do contracting in the Northern Italian region around Treviso. Besides the company sells its goods through distributors who act as independent agents or partners of the company, which is a very positive feature if we consider the fact that every distributor treats his sales as his own business. The fact that the company does not depend on one or two suppliers and distributors is very favorable as it enables Benetton to stay competitive and at the same time choose the best from the best. One more interesting and extremely important feature of Benetton’s production is that they arrange the process in a very unusual way – they create new designs for a new season but they don’t dye them until they get information about the colors which will be in demand from their distributors and customers. They also gather information on most preferred colors throughout the season which helps them to predict the demand for the future and helps them to avoid the accumulation of unsold goods.
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Marketing
The company is known for sponsorship of a number of sports, and for the provocative and original "United Colors" publicity campaign. The latter originated when photographer Oliviero Toscani was given carte blanche by the Benetton management. Under Toscani's direction, ads were created that contained striking images which became one of the reasons people around the world paid attention to Benetton.
These graphic, billboard-sized ads included depictions of a variety of shocking subjects. One of the adverts prompted more than 800 complaints to the British Advertising Standards Authority during 1991 and was featured in the reference book Guinness World Records 2000 as 'Most Controversial Campaign'. Others included close-up pictures of tattoos reading "HIV Positive" on the bodies of men and women, a cemetery of many cross-like tombstones, a priest and nun about to engage in a romantic kiss, an electric chair, an advert showing a boy with hair shaped into the devil's horns, three different hearts with "black", "white" and "yellow" written onto them (from March 1996), and a picture of a bloodied t-shirt and pants ridden with bullet holes from a soldier killed in the Bosnian War (this one appeared in February 1994). The company's logo served as the only text accompanying the images in most of these advertisements and here Benetton used a psychological aspect of human nature – those images being extremely scandalous attract attention. Besides most of the advertisements, although not all, show a plain white background behind the image - that speaks volumes without words, as if saying “we are sure that you know whose advertising it is, and we do not even have to say anything” – this idea adds to Benetton’s attractiveness in the eyes of young and daring people who want to emphasize their individuality and independence.
2011 marketing campaign
In autumn 2011, Benetton launched its new worldwide communication campaign, an invite to the leaders and citizens of the world to combat the “culture of hatred” and creates the UNHATE Foundation. This campaign was created as the group’s corporate social responsibility strategy and not as a cosmetic exercise. The Benetton Group “seeks to contribute to the creation of a new culture against hate”. Benetton’s research communication center, Fabrica, partnered up with 72andSunny to create the UNHATE poster series. According to Benetton “These are symbolic images of reconciliation—with a touch of ironic hope and constructive provocation — to stimulate reflection on how politics, faith and ideas, even when they are divergent and mutually opposed, must still lead to dialogue and mediation”. 72andSunny adds “United Colors of Benetton returns to the cultural conversation with a simple and powerful message of tolerance: UNHATE. Hate and love are often in a delicate and unstable balance. This campaign promotes a shift in the balance”. However, these posters of the lip-locking political and religious figures have sparked controversy. In addition, Benetton released an advertisement that displayed President Barack Obama of the United States and President Hugo Chávez of Venezuela kissing.
On November 17, 2011 The Vatican announced that it would take legal action against Benetton after the company used a photo purportedly showing Pope Benedict XVI kissing Ahmed Mohamed el Tayeb, the imam of the Al Azhar mosque in Egypt. Benetton responded: "We reiterate that the meaning of this campaign is exclusively to combat the culture of hatred in all its forms," said a Benetton Group spokesman. "We are therefore sorry that the use of the image of the Pope and the Imam has so offended the sentiments of the faithful. In corroboration of our intentions, we have decided, with immediate effect, to withdraw this image from every publication".
Thus we can see that Benetton not only commits corporate social responsibility strategy, takes interest in political matters but being very popular influences the views of people, and the case with The Vatican proves not only its popularity and ability to influence but also shows that the company is trying to maintain a positive image and is responsible for its actions which is a significant part of their strategy.
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Sport and sponsorship
Benetton Group entered Formula One as a sponsor of Tyrrell in 1983, then Alfa Romeo in 1984; this arrangement was extended to both Alfa and Toleman in 1985. Benetton Formula Ltd. was formed at the end of 1985 when the Toleman and Spirit teams were sold to the Benetton family. The team saw its greatest success under Flavio Briatore, who managed the team from 1990 to 1997. Michael Schumacher won his first Drivers' Championships with the team in 1994 and 1995, and the team won their only Constructors' title in 1995. From 1996, the team raced under an Italian license although it continued to be based, like Toleman, in Oxfordshire in England. The team was bought by Renault for US$120m in 2000 and was rebranded Renault F1 in 2002.
In 1979, Benetton first sponsored their (then amateur) local rugby team, A.S. Rugby Treviso. Benetton Rugby has since become a major force in Italian rugby, with 11 league titles and supplying many players to the national team.
Benetton Group has sponsored the Treviso rugby, basketball and volleyball teams for many years, underlining close links with its origins and its city, through a vision of sport that is both competitive and social. The Benetton group has the same strategic philosophy to sport as to business: i.e. passion, challenge, competition and results.
Fabrica
Since 1994, the Benetton Group has financed a communication research center in Treviso. The center aims to combine culture with industry and offers young people the opportunity for creative growth and multicultural interchange. The center accepts young people from around the world, and its base was restored and enlarged by Tadao Ando.
Young artists and designers are invited to the center and given a one-year study grant together with professional training and resources. Residents work in the areas of design, visual communication, photography, interaction, video, music and publishing under the guidance of experts.
So no one would argue against the fact that Benetton is socially responsible and thinking about the future.
Thus we can come to a conclusion that the strategy of Benetton is deep, well thoughtful and farseeing and it is one of the best examples to follow, probably except for some extremely scandalous facts and aspects of their marketing strategy.

Sources: 1) Harvard Business School materials. 2) Financial Times 3) The Internet materials