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
 Conclusion
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
UNITED COLORS
OF BENETTON
“If everyone likes a campaign, no
one will talk about it.”
Luciano Benetton
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
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
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
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
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
CONTROVERSIAL ADVERTISING
CAMPAIGN: Death Row
 Positive points
 Actual controversial issue
 Arouse people awareness
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
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
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)
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
ADVANTAGES FOR THE
FRANCHISEE
 Ease of brand identification
 Neither fee nor royalty paid
 A four-year payout
 Selection of desired clothes
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
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
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
IMPACT OF THE KEY
STAKEHOLDERS
 Customers : Boycott
 Suppliers: resentment to offensive ads
 Shareholders: End of collaboration Toscani-Benetton
 Retailers: Legal actions
USE AND ROLE OF INTERMEDIARIES
 Manipulation of the franchising law
 Rapid market development at relatively low price
 Cannabilization
 Exclusive distribution
REGULATORY AUTHORITIES
 ASA – Advertising Standards Authority
 Statement of the German Supreme Court
 Need for harmonization within EU
CONCLUSION