United Colors of Benetton

United Colors of Benetton, a major brand of the Benetton Group, is a leading apparels manufacturer and designer based in Treviso, Italy. Its operations are mainly based in the European Union market; however, recent market trends and developments have compelled the company to expand its presence in Asia, especially in the fast-growing Chinese market. Our project will look at Benetton’s operations in Hong Kong, a region usually considered as the ‘gateway’ to China due to its close economic and cultural ties to the mainland. Specifically, it will (1) briefly explain Benetton’s history and its marketing strategies in the global retail and apparel market; (2) analyze the company’s marketing strategies in Hong Kong by considering marketing mix elements such as product, promotion and customer value; (3) discuss the strengths and weaknesses in implementing these strategies; (4) discuss the major competitive threats posed by a major competitor in the local market and (5) make recommendations for Benetton to improve its existing marketing strengths and curtail its weaknesses.

[...] ‘United Colors of Benetton’, its main brand, can be considered a global brand among the most well known in the world. It has an international style that combines color, energy and practicality. The women’s wear, men’s wear, children’s wear and underwear collections offer a total look for everyday, for work and for leisure, in the city and outdoors. ‘Undercolors’ is an extension of the Benetton brand, featuring underwear, beachwear and sleepwear collections, and accessories for women, men and children. A wide selection of recurring basic colors is enriched every season with the latest trends. [...]

[...] An objective consideration of all these issues described earlier can account for the problems United Colors is currently facing in the Hong Kong market, as indicated in our primary data analysis of sources such as interviews, surveys and observational studies. Concurrently, the company also faces pressure from external competitors, commonly international fashion brands that are also operating in the local market. This will be discussed in more detail in the following section. COMPETITIVE ENVIRONMENT Comparing Benetton with other companies is sometimes difficult because it does not outsource any functions in its value chain, unlike competitors like GAP and which concentrate on selected aspects of the value chain. [...]

[...] Recommendations and Opportunities The resignation of Benetton Group’s chief executive, Silvano Cassano and chief financial officer, Pier Francesco Facchini early in November 2006 over disagreements on the company’s growth direction will give United Colors an opportunity to revamp its overall strategies after the new CEO’s appointment before May 2007. In particular, Benetton stated that this new director would concentrate on developing its business in Asia. This may indicate that the group recognizes the existence of problems in the various Asian markets and a new direction would be necessary. [...]