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 COLORS OF BENETTON “If everyone likes a campaign, no one will talk about it.” Luciano Benetton 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

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

12. CONTROVERSIAL ADVERTISING CAMPAIGN: Death Row  Positive points Actual controversial issue Actual controversial issue Arouse people awareness Arouse people awareness

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

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

16. UNITED COLORS OF BENETTON FRANCHISING 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) (Bruce, 1987; Dunkin, 1988; Dapiran,1992)

17. 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

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

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

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

21. PARTNERS PARTNERS  Loss of sales for franchisees  Legal action PLACE PLACE  Less availability of products due to the closing of shops/franchises  No shocking images in the stores

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

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

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

25. CONCLUSION