Description
the marketing and operational strategies of benetton, its garment manufacturing process, its supply chain, 4ps of marketing by benetton
Marketing and Operational Strategies of
BENETTON
FLOW OF THE PRESENTATION…
Company’s Inception
The Problem
The Options
Knitwear Industry
Marketing Aspects (Products, Price, Place and Promotion)
Pros and Cons of Alternatives
Garment Manufacturing Process
Operational Aspects (Manufacturing, Supply Chain & Logistics)
Evaluation and Suggestions
THE UNITED JOURNEY OF THE BENETTONS…
The Four Pillars of Benetton Empire
Carlo Gilberto Giuliana Luciano
• Giuliana’s Designs • Luciano’s Business Acumen • First shop in Belluno in 1968 • By 1975, over 200 shops in Italy • Current Scenario : Turnover in 2008 is Euro 11.8 Billion
THE NOT SO UNITED INDUSTRY OF KNITWEAR…
UNDERWEAR
?Needs high productivity ?High investment ?Huge manufacturing set up with hundreds of employees ?Vertical Integration Developed in US Used synthetic yarns
HOSIERY
?Highly Capital Intensive ?Almost all processes can be mechanized with minimum human intervention ?Huge manufacturing set up Developed in US Used Synthetic Fibres
OVERWEAR
?More Steps ?More Labour ?Less Expensive Equipment Lower Levels of Technology Italy became the largest producer in Europe Used natural wool and cotton
1980s onwards… More sophisticated Manufacturing set ups
Subcontractors (1970s) with greater production capacities
Groupers (1950s) or Intermediaries
THE BASIC PROCESSES OF GARMENT MANUFACTURING
Purchase and warehousing of RM
Knitting
Dyeing
Assembly
Finishing
TAKING FASHION TO THE INDUSTRY LEVEL…
• While most of the other Italian fashion was still on artisan level, Benetton took fashion to an industrial level • How ?
– Mechanically making the hard & rough wool soft and smooth, even before machinery for this was developed.
– Manufacturing women’s stockings seamlessly using the same machines which made seamed stockings.
– Dyeing – critical for quality, but a bottleneck due to time taken. Benetton started dyeing assembled garments, instead of dyeing the yarn. – Using re-meshing process for assembling the garment parts with invisible seams.
THE COMPLEX MANUFACTURING SET UP OF BENETTON… • Internally and externally decentralized operations • 9 factories of its own (7 in Italy, 1 in France and 1 in Scotland), each performing one, more or all operations. • Over 220 other production units (groupers and subcontractors) • Jeans manufacturing completely outside of Benetton’s factory • Purchasing, Technical Research and Planning at the headquarters – Ponzano Veneto, Italy. • Wool bought from Italy, pre-dyed cloth for jeans imported from US.
THE CO-ORDINATED SUPPLY CHAIN OF BENETTON…
Feb March
• Production Planning of woven cotton and woolen items starts 8 – 10 months before the scheduled launch (Spring-Summer or Autumn-Winter Collections) • Presentations to Agents – Agents to Customers and Orders Received • Trial Productions made, rough production plans made, negotiations and purchase orders placed for Raw material and Accessories • Orders produced and delivered to stores
May July
July End
November - January
October
• Payment to Sub contractors, collections from retail franchisees
THE LOGIC OF LOGISTICS AT BENETTON…
• Extreme care in planning the logistics
•
• • • • •
Stores planned with limited storage space – merchandize placed directly to the shelf
No manufacturing without order in hand Order Collection by agents and relaying the same to Benetton for production Merchandize pre-marked in currency of destination country Sophisticated information system New warehouse of 200,000 sq foot at Castrette – 10 robot stacker cranes – handling 250,000 boxes of merchandize, 15,000 boxes handled daily
•
All the boxes labeled at the factory. Can be read by optical scanners that routed the
merchandize through warehouse.
•
New warehouse saved 20 % of the transport costs.
THE UNITED WAYS OF MARKETING AT BENETTON…
PRODUCT
Products branded under different labels – ? “012 Benetton” for children ?“Jeans West” for youth ?“My Market” –higher fashion content for men & women ?“Sisley” for sophisticated men ?For each trade name, appropriate style of furniture, equipments, color of lightings, type of music, dress style of sales people etc
PRICE
Median Retail Price $ 20, ranging from under $ 10 to $ 120 ?Pricing was lower compared to the
competitors for the quality it gave
?Very good value for money ?High fashion content ?Array of bright colours ?Excellent price-quality combination
THE UNITED WAYS OF MARKETING AT BENETTON… Benetton’s Marketing…
PLACE (DISTRIBUTION)
Agents assigned huge territories through verbal agreements across Europe Agents to recruit , help and train store owners, assemble the orders, stock recording etc for a commission and profit from the stores they help open. Store owners carried Benetton’s merchandize only maintain min sales level and pay to Benetton on time Stores always at prime location without compromise.
PROMOTION
Stores at Prime locations wit bright , inviting appearances, open shelves Advertisements in Television, Press, and even sponsored sports events such as Italian rugby team and handball team, also a race car in 1983 for F1 Maintained the youthful and sporty image, with lots of bright colors.
Spent a lot of money on magazine advertisements , aimed at young adult All stores to use Benetton’s fixtures and follow or child.
basic merchandizing concepts like open shelves.
THE PROBLEM…
Increased competition from Italy and Europe Benetton’s product line had reached a saturation point
Benetton
Arrival and spread of bigger brands such as “Kappa Sport” and “Stefanel” Increased imports from far east and stagnant Italian economy
Alternatives…
Penetrate further in to the European Market
Develop other markets such as USA and Japan
THE PROS AND THE CONS OF ENTERING USA…
CONS PROS
IF THEY DO ENTER USA, THEN…
Marketing Support
• Huge promotional investments (min $ 2 Million in advertisement)
• Advt Budget’s allocation to different media options
Operational Support
• New Plant with Dyeing Facilities and a Warehouse ? • New Warehouse only to stock the merchandize coming from Italy ? • Direct Distribution to US Retail Sites from Europe – Air Shipments
THE SUGGESTION…
Direct Distribution to US Sites from Europe + Alternative Products in Japan
THE UNITED WAYS OF SAYING “THANK YOU”
GRAZIE !! BUONA GIORNATA!!
doc_789699296.pptx
the marketing and operational strategies of benetton, its garment manufacturing process, its supply chain, 4ps of marketing by benetton
Marketing and Operational Strategies of
BENETTON
FLOW OF THE PRESENTATION…
Company’s Inception
The Problem
The Options
Knitwear Industry
Marketing Aspects (Products, Price, Place and Promotion)
Pros and Cons of Alternatives
Garment Manufacturing Process
Operational Aspects (Manufacturing, Supply Chain & Logistics)
Evaluation and Suggestions
THE UNITED JOURNEY OF THE BENETTONS…
The Four Pillars of Benetton Empire
Carlo Gilberto Giuliana Luciano
• Giuliana’s Designs • Luciano’s Business Acumen • First shop in Belluno in 1968 • By 1975, over 200 shops in Italy • Current Scenario : Turnover in 2008 is Euro 11.8 Billion
THE NOT SO UNITED INDUSTRY OF KNITWEAR…
UNDERWEAR
?Needs high productivity ?High investment ?Huge manufacturing set up with hundreds of employees ?Vertical Integration Developed in US Used synthetic yarns
HOSIERY
?Highly Capital Intensive ?Almost all processes can be mechanized with minimum human intervention ?Huge manufacturing set up Developed in US Used Synthetic Fibres
OVERWEAR
?More Steps ?More Labour ?Less Expensive Equipment Lower Levels of Technology Italy became the largest producer in Europe Used natural wool and cotton
1980s onwards… More sophisticated Manufacturing set ups
Subcontractors (1970s) with greater production capacities
Groupers (1950s) or Intermediaries
THE BASIC PROCESSES OF GARMENT MANUFACTURING
Purchase and warehousing of RM
Knitting
Dyeing
Assembly
Finishing
TAKING FASHION TO THE INDUSTRY LEVEL…
• While most of the other Italian fashion was still on artisan level, Benetton took fashion to an industrial level • How ?
– Mechanically making the hard & rough wool soft and smooth, even before machinery for this was developed.
– Manufacturing women’s stockings seamlessly using the same machines which made seamed stockings.
– Dyeing – critical for quality, but a bottleneck due to time taken. Benetton started dyeing assembled garments, instead of dyeing the yarn. – Using re-meshing process for assembling the garment parts with invisible seams.
THE COMPLEX MANUFACTURING SET UP OF BENETTON… • Internally and externally decentralized operations • 9 factories of its own (7 in Italy, 1 in France and 1 in Scotland), each performing one, more or all operations. • Over 220 other production units (groupers and subcontractors) • Jeans manufacturing completely outside of Benetton’s factory • Purchasing, Technical Research and Planning at the headquarters – Ponzano Veneto, Italy. • Wool bought from Italy, pre-dyed cloth for jeans imported from US.
THE CO-ORDINATED SUPPLY CHAIN OF BENETTON…
Feb March
• Production Planning of woven cotton and woolen items starts 8 – 10 months before the scheduled launch (Spring-Summer or Autumn-Winter Collections) • Presentations to Agents – Agents to Customers and Orders Received • Trial Productions made, rough production plans made, negotiations and purchase orders placed for Raw material and Accessories • Orders produced and delivered to stores
May July
July End
November - January
October
• Payment to Sub contractors, collections from retail franchisees
THE LOGIC OF LOGISTICS AT BENETTON…
• Extreme care in planning the logistics
•
• • • • •
Stores planned with limited storage space – merchandize placed directly to the shelf
No manufacturing without order in hand Order Collection by agents and relaying the same to Benetton for production Merchandize pre-marked in currency of destination country Sophisticated information system New warehouse of 200,000 sq foot at Castrette – 10 robot stacker cranes – handling 250,000 boxes of merchandize, 15,000 boxes handled daily
•
All the boxes labeled at the factory. Can be read by optical scanners that routed the
merchandize through warehouse.
•
New warehouse saved 20 % of the transport costs.
THE UNITED WAYS OF MARKETING AT BENETTON…
PRODUCT
Products branded under different labels – ? “012 Benetton” for children ?“Jeans West” for youth ?“My Market” –higher fashion content for men & women ?“Sisley” for sophisticated men ?For each trade name, appropriate style of furniture, equipments, color of lightings, type of music, dress style of sales people etc
PRICE
Median Retail Price $ 20, ranging from under $ 10 to $ 120 ?Pricing was lower compared to the
competitors for the quality it gave
?Very good value for money ?High fashion content ?Array of bright colours ?Excellent price-quality combination
THE UNITED WAYS OF MARKETING AT BENETTON… Benetton’s Marketing…
PLACE (DISTRIBUTION)
Agents assigned huge territories through verbal agreements across Europe Agents to recruit , help and train store owners, assemble the orders, stock recording etc for a commission and profit from the stores they help open. Store owners carried Benetton’s merchandize only maintain min sales level and pay to Benetton on time Stores always at prime location without compromise.
PROMOTION
Stores at Prime locations wit bright , inviting appearances, open shelves Advertisements in Television, Press, and even sponsored sports events such as Italian rugby team and handball team, also a race car in 1983 for F1 Maintained the youthful and sporty image, with lots of bright colors.
Spent a lot of money on magazine advertisements , aimed at young adult All stores to use Benetton’s fixtures and follow or child.
basic merchandizing concepts like open shelves.
THE PROBLEM…
Increased competition from Italy and Europe Benetton’s product line had reached a saturation point
Benetton
Arrival and spread of bigger brands such as “Kappa Sport” and “Stefanel” Increased imports from far east and stagnant Italian economy
Alternatives…
Penetrate further in to the European Market
Develop other markets such as USA and Japan
THE PROS AND THE CONS OF ENTERING USA…
CONS PROS
IF THEY DO ENTER USA, THEN…
Marketing Support
• Huge promotional investments (min $ 2 Million in advertisement)
• Advt Budget’s allocation to different media options
Operational Support
• New Plant with Dyeing Facilities and a Warehouse ? • New Warehouse only to stock the merchandize coming from Italy ? • Direct Distribution to US Retail Sites from Europe – Air Shipments
THE SUGGESTION…
Direct Distribution to US Sites from Europe + Alternative Products in Japan
THE UNITED WAYS OF SAYING “THANK YOU”
GRAZIE !! BUONA GIORNATA!!
doc_789699296.pptx