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. [...]
[...] COMPANY BACKGROUND United Colors of Benetton, a brand of the Benetton Group (NYSE: BNG) along with Sisley and Playlife, is one of the leading manufacturers and designers worldwide that specializes in men's, women's and children's casual wear, footwear and accessories. The 115 million garments that the group annually produces are strongly Italian in character, rich in color, quality and passion. Presently, it has become one of the largest apparel makers in Italy, with operations in over 5,100 franchises in 120 countries that generate an annual turnover of HK$18billion. [...]
[...] ISSUES WITH BENETTON'S MARKETING STRATEGIES IN HONG KONG The global-centric nature of United Color's marketing strategies has a number of strengths. It enables the brand and its associated products to be easily recognized across multiple geographical and regional markets. For instance, consumers in the United States ideally can distinguish its products based on color, multiculturalism, world awareness, as effectively as consumers in Europe. Its product line and pricing strategies also place it as a high quality apparel manufacturer and designer on par with other Italian and European brand names such as A X (Armani Exchange) and French Connection, even though its products are comparatively more casual in design. [...]
[...] Moreover, Sisley outlets are usually paired with their United Colors counterparts in the same location, which can attract more customers into either outlet (both of which are owned by the Benetton Group) at the same time. The layout of many United Colors outlets may be described as brightly lit and large in size, which helps to promote the brand's status to the consumer. Apart from official outlets, other channels of distribution include factory outlets selling Benetton's products at discounted prices (i.e. [...]
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