Benneton

Benetton

Benetton’s core strategy is to put fashion on an industrial level. They wanted to realize the economy of scale so that they can get cost advantage while maintaining its quality. This strategy might have seemed strange to its competitor in Italy because they believed in their craftsmanship of Italian fashion. However, Benetton believed their strategy was a road to success and they developed various strategies to change artisan level to industrial level.

Their marketing strategy was to provide “the price quality combination, high-fashion content, and array of bright colors” with image of “youth and sports”. Although their target was clearly young people however they have multiple branding strategy to separate customer segments according to each customer segment needs. In addition, they spend twice as much as on their advertisement compared to its competitor and their advertisement focuses on youth and sports on mainly magazine. Their focus is very narrowed down when it comes to whom they want to be attracted. The case mentioned that only Benetton name could justify the multinational promotion cost because of its volume and number of outlets. This is the key point that goes back to Benetton’s core strategy which other Italian competitors are not able to achieve. To summarize their promotion activity, their focus is very tight and also they do massive promotion for the target but this can be done because of their sales volume.

Benetton’s logistic operation is carefully planned to be efficient hence Benetton has taken a position that they do not manufacture anything without an order. This process contributes to a significant cost saving and risk avoidance for the company because they do not have to carry any inventory, therefore they do not carry inventory cost or risk of inventory leftover. This is also a competitive advantage that competitors would not simply manipulate. In order to develop this process, Benetton had to do few things; 1....