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UNITED COLORS OF BENETTON

UNITED COLORS OF BENETTON. Presented by: Jordan Carrasco Emilie Claveille Niklas Gustavsson Alix Provansal Maria Vasileiou. Ethical Perspectives of Business Practices. OVERVIEW. History Advertising Campaigns Franchising policy Implications for the international marketing manager

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UNITED COLORS OF BENETTON

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  1. UNITED COLORS OF BENETTON Presented by: Jordan Carrasco Emilie Claveille Niklas Gustavsson Alix Provansal Maria Vasileiou

  2. Ethical Perspectives of Business Practices

  3. OVERVIEW • History • Advertising Campaigns • Franchising policy • Implications for the international marketing manager • Conclusion

  4. HISTORY • 1965: official date of birth of the company Benetton • 1969: internationalization of Benetton with the opening of the first shop • Late 1980’s: groups of franchisees begun to suffer as a result of Benetton's relentless expansion which brought strong competition • From 1982-2000: collaboration with Oliviero Toscani • By 2001: Benetton group operate in 120 countries through 5,000 franchised Benetton stores

  5. UNITED COLORSOF BENETTON “If everyone likes a campaign, no one will talk about it.” Luciano Benetton

  6. ADVERTISING: The cons point of view • Exploitation of negative social issues to increase the company’s notoriety & profit • Religious feelings infringement & racism promotion • No consideration of cultural sensibilities nor historical context of targeted countries • Need for competitors to imitate the style of the campaign

  7. ADVERTISING: The cons point of view • Negative impact on consumer’s decision buying process • Aversion to advertising from the audience • Legal actions • Benetton as a martyr to censorship

  8. ADVERTISING: The pros point of view • Memorability / Brand recognition • Innovation in communication • Production of images of global concern for global customers • Socially responsible business • No provocation but awareness

  9. ADVERTISING: The pros point of view • Differentiation from misleading campaign • Challenge stereotypes • Cost effectiveness • Awards winning and exposure in galleries around the world • Exploitation of clothing to raise social issues

  10. CONTROVERSIAL ADVERTISING CAMPAIGN: Death Row • Negative points • No clear impression of Benetton's view on the subject • Widespread protest from customers as well as government bodies • Strong objections from the families of the victims and prisoners • Downfall on sales • Black identity could be connected with criminality and death • Trivialisation of death penalty

  11. CONTROVERSIAL ADVERTISING CAMPAIGN: Death Row • Positive points • Actual controversial issue • Arouse people awareness

  12. CONTROVERSIAL ADVERTISING CAMPAIGN: Aids • Negative points • Exploitation of the victim • Creation of the a debate about the limits of advertising • Loss of sales and retailers • Obscene advertising campaign

  13. CONTROVERSIAL ADVERTISING CAMPAIGN: Aids • Positive points • Launch during the AIDS crisis in 1991 • Permission of Kirby's family to use the picture in their advertising • Raising attention of the growing AIDS epidemic • Company involvement in AIDS organisations • Benetton's condom ads provided one solution of the problem • Benetton promoted the use of condoms

  14. UNITED COLORS OF BENETTON FRANCHISING • “Benetton has often been quoted as an example of a company which has been able to grow extensively and rapidly with minimal financial commitment in retail outlets because the individual franchisees have been responsible for their own financing” (Bruce, 1987; Dunkin, 1988; Dapiran,1992)

  15. UNETHICAL POINTS • Exclusive distribution • Demand of a certain threshold of sales volume • Pre-labellisation of products • No take back of unsold / defective items • Minimum amount of orders • Heavy control (layout, music, light…) • Negative impact of the campaigns

  16. ADVANTAGES FOR THE FRANCHISEE • Ease of brand identification • Neither fee nor royalty paid • A four-year payout • Selection of desired clothes

  17. IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGER IMPACT ON THE MARKETING MIX PRODUCT • Advertising known more than the product • Need strong quality to fight negative impact PRICE • Imposed prices • Curb in prices PEOPLE • Boycott / complaints

  18. IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGER PROMOTION • Controversial advertising campaigns • Refusal of printing Benetton’s ads • Banishment of the ads in several countries • Absence of the product PACKAGING • Benetton bags printed only with faces

  19. IMPLICATIONS FOR THE INTERNATIONAL MARKETING MANAGER PARTNERS • Loss of sales for franchisees • Legal action PLACE • Less availability of products due to the closing of shops/franchises • No shocking images in the stores

  20. IMPACT OF THE KEY STAKEHOLDERS • Customers : Boycott • Suppliers: resentment to offensive ads • Shareholders: End of collaboration Toscani-Benetton • Retailers: Legal actions

  21. USE AND ROLE OF INTERMEDIARIES • Manipulation of the franchising law • Rapid market development at relatively low price • Cannabilization • Exclusive distribution

  22. REGULATORY AUTHORITIES • ASA – Advertising Standards Authority • Statement of the German Supreme Court • Need for harmonization within EU

  23. CONCLUSION

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