C O M M U N I C A T I O N I D E O L O G Y
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2,000 people in eight factories in northern Italy.
Additionally, the firm used about 220
contractors or groupers and their many subcontractors that employed a further 10,000
people. We could view the size of the firm as 2,000, or as 12,000 because the firm controls
the contractors, many of which are owned or part-owned by Benetton employees. In 1989
some 185,000 people were working in 4,600 franchised shops, of which 1,300 were sited in
Italy. Other factories were located in France and Scotland.
The prize in Europe for inventiveness, creativity and business aptitude certainly goes to
the Italians. Their remarkable qualities for adaptation, as well as their art for compromise,
have even given them the reputation of being chameleons. Enthusiasm,
creativity and
dynamism are elements of their character. The Italians appreciate people who have ideas,
who innovate, because they themselves are without any particular prejudices and are open
to everything new. They are naturally curious and inventive and
have a very sophisticated
business sense. This entrepreneurship, Italian style, has been exported and is the hallmark
of Italian success abroad, the Benetton phenomenon (in the top-six Italian retailers) being
an example. This gift of Italian entrepreneurs has created a style, and added to that gift is
their unmatched artistic sense for aesthetics, refinement, design and fashion. European
teenagers seek the latest trends in fashion through the stores,
which are popular in
many city retail quarters and airport shopping malls. About 80% of customers are
aged 18–34, while almost 90% buy on quality and style/fashion. Some 83% of customers
surveyed said that they would pay more for a Benetton product
even if an equivalent
was available elsewhere at a lower price. Only 13% felt that another retailer had a colour
range that matched or was better than that available from their local Benetton shop (Schmidt
et al
., 1994). Stores are bright with almost all stock on the shelves, creating ambience and
vibrancy – the garments are brightly coloured – especially effective in attracting in ‘window-
shoppers’ aged 19–25. In Italy, the Benetton brand is subdivided into ‘012 Benetton’
(children’s wear), ‘Mt Market’ (higher-fashion content), ‘Sisley’ (sophisticated menswear),
‘Mercerie’ (sophisticated womenswear), and ‘Tomato’ (trousers and knitwear for the urban
youth market).
The opportunistic strategy is popular for competing in the garments industry. For
example, Benetton’s global network of suppliers, agents, and retailers is managed by using
a global information system. Benetton’s designers create new apparel offerings from the
corporate headquarters in northern Italy. The information
system transmits orders and
designs to producers. Benetton makes extensive use of independent suppliers, drawing on
the depth of experience in dyed knitwear production in the regional community. The
company enters new geographical markets and develops new apparel designs as consumer
preferences change and market opportunities are identified.
To gain control over their channels of distribution, spoken agreements based on trust
were made with ‘agents’ across Europe. Each of these people set out to recruit small investors
and store operators with the ‘Benetton mentality’ with whom individual partnerships were
established at the single store level. By 1982 there were 70 such agents. It seems that the
term ‘franchise’ is in this case something of a misnomer. Although stores do not pay a fee
or royalty, they must stock only Benetton products, use their fixtures, adhere to strict price
mark-ups and payments schedules, follow basic merchandising concepts, and develop ‘an
understanding of Benetton’s way of doing business’.
Sales promotion is firmly founded on carefully selected store location and bright, inviting
store appearance, often with sparing window displays and a clear view of open shelves of
colourful merchandise.
