BY: NOOR BHATIA RIDHIMA BATRA SAKSHI SUDHAN SMRITI TANEJA OVERVIEW OF THE APPAREL INDUSTRY The Indian apparel industry is one of the major sectors of the Indian economy due to the huge amount of investment, earning of revenues, generation of employment and trade. The number of apparel and fashion manufacturing units in India are approximately 30,000 and this sector has around 3 million people working under it. It is also a major earner of foreign exchange for the economy. The major features of the Indian apparel industry are a huge product variety, short product lifecycle, unpredictable demand and a long supply process. In recent years, the industry has seen a considerable consolidation in retail and an increased use of e-commerce. The important segments that come under the apparel industry include clothing for men, women and kids, wedding wear for brides and grooms and intimate apparel. There is also a vast apparel wholesale distribution network in India. The major channels of distribution for apparel include brick and mortar, catalogue and internet. The market shares of the different channels are: Category Sales $ Billion Market Share (%) Brick and Mortar 169.256 92.9 Catalog 7.177 3.9 Online/ Internet 5,873 3.2 Total 182.306 100.00 The global textile and apparel industry in total stood at $550 billion in 2007, out of which, the Indian textile and apparel industry stood at $52.5 billion in 2007. The industry is expected to grow to $805 billion by 2015. In India, about $32 billion is used in the domestic market and the rest $20.5 billion is used for exports. About seven markets account for 75% of the textile and apparel export, the US market being the largest at 32% of the 75%. Since 2008, recession and the global economic slow down have been effecting the Indian apparel industry. The exports have also seen a decline due to this. However, it will soon emerge from this down turn. http://www.eworldtradefair.com/indian-apparel-industry-a56.html http://www.fashionproducts.com/fashion-apparel-overview.html#io http://www.business-standard.com/india/news/kit-indias-textileapparel-industry/345936/ Benetton Group Type Public (NYSE: BNG) Founded Treviso, Italy (1965) Headquarters Villa Minelli, Ponzano Luciano Key people Benetton, Chairman Giuliana Benetton, Director Gilberto Benetton, Director Carlo Benetton, Deputy Chairman Industry Clothing Products Complete list of Benetton brands Revenue €1,8 billion (2005) Employees 7,987 (2005) Website www.benettongroup.com FOUNDERS OF UNITED COLOURS OF BENETTON FOUNDERS Luciano, Giuliana, Gilberto and Carlo Benetton, launched the activities of the Benetton Group in 1965. The company is today present in 120 countries around the world. Its core business is clothing with the casual United Colors of Benetton, fashion oriented Sisley, Playlife leisurewear and Killer Loop streetwear brands. Benetton Group is listed on the stock exchanges of Milan, Frankfurt and New Luciano York. Benetton Born in 1935, Luciano Benetton is Chairman of the Benetton Group. He is also on the Board of Directors of Edizione Holding, the family-owned financial holding company and was He a Senator is the of the Italian father Republic of from four 1992 to 1994. children. GiulianaBenetton Born in 1937, Giuliana Benetton is currently on the Board of Directors of both Edizione Holding (the financial family-owned holding company) and Benetton Group. She is married and has four children. GilbertoBenetton Born in 1941, Gilberto Benetton is President of Edizione Holding, the family holding company, President of Autogrill and Director of Benetton Group. He is Vice President of Olimpia, the main shareholder in Telecom Italia where he holds the same position. Gilberto is also a Director of Autostrade, Mediobanca, Pirelli, Infrastrutture and Sviluppo CarloBenetton Born in 1943, Carlo Benetton is Deputy Chairman of both Edizione Holding (the familyowned financial holding company) He is the father of four children. HISTORY OF BENETTON 1960s 1965 The idea of color. The Benetton Group is established. A business model making the 1970s difference: unique, flexible and innovative. Benetton 1980s communication campaigns: known all over the world. 1990s A global company present in 120 countries. and of Benetton Group. Benetton grows with the market: 2000s around 150 million garments sold annually in 5,000 contemporary stores. ALL ABOUT BENETTON Benetton is present in 120 countries around the world with a strong italian character whose style, quality and passion are clearly seen in its brands: the casual United Colors of Benetton, fashion oriented Sisley and the leisurewear and streetwear brands Playlife and Killer Loop. The Group has a total yearly production of around 150 million garments and a distribution network with 5,000 contemporary stores, mainly managed by independent partners, generating a total turnover of over 1.9 billion euro. Established in 1965, Benetton is now controlled by Edizione Holding (a holding company wholly owned by the Benetton Family) with a 67% stake. It listed on the stock exchanges in Milan in 1986, in Frankfurt in 1988 and in New York in 1989. http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-VCBrandsIdentity FINANCIAL HIGHLIGHTS Year 2006a 2005a 2004a 2003b 2002b Revenues (million euro) 1,911 1,765 1,704 1,859 1,992 Net Income (million euro) 125 112 109 108 [10] a) These figures are IAS/IFRS compliant and not comparable with the previous years b) These figures are compliant with Italian accounting procedures Sales by Region Sales by Brand 31.12.2008 % 31.12.2007 % 31.12.2006 % UCB Adult 983 50% 945 50% 790 46% UCB Kid 589 30% 575 30% 498 29% Sales by Brand [millions of euro] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-VCBrandsIdentity http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsYear http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsYear BENETTON STOCK Exchange Last Change Milan 12.75 0.08 % Frankfurt 12.71 1.68 % New York 34.20 0.00 % http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsHighlights FACTORS AFFECTING COSTS The Benetton Group has grown massively in the past years. The company has incurred many costs to achieve this position in the apparel industry. Some of the factors affecting its costs are as follows: GROWTH AND EXPANSION - The growth and expansion strategy is one of the major reasons for the increase in fixed and operation costs for Benetton. To increase the market share and to strengthen its image, Benetton has made huge investments to open up retail stores to sell its products through directly-owned retail stores rather than the traditional method of franchise stores that the group used. The Benetton Group operates more than 280 wholly-owned shops in different locations which have led to an increase in the costs. With this respect, the increasing property rental costs are also applicable. Also these investments expose Benetton to an additional risk that some of the chosen locations may turn out to be inadequate because of changes in the area’s demand scenario, its demographic profile or the location of shopping districts. http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx COSTS OF RAW MATERIAL - Raw material is one of the major components that add to the costs of The Benetton Group. With the fluctuations in prices of raw materials like fabric, threads, buttons, zips etc, the costs also fluctuate. QUALITY CONTROL SYSTEM - Due to strict quality checks, lot of wastage such as rejection of apparel due to non-accurate colours, unused bulk orders etc takes place. This wastage adds on to the costs to a great extent. INFLATION - Inflation and increasing prices of basic amenities used in the factory such as gas, water, electricity and other basic expenses such as transportation costs, labour costs, upgradation of technology which is required at short intervals in this techno savvy world etc contribute to the increase in costs of Benetton. Due to shortage of labour and increase in work load, the employees ask for more salaries and incentives which lead to increased costs for the company. FOREIGN EXCHANGE RATE FLUCTUATIONS - Sales and operating income of Benetton may be influenced by foreign exchange rate, appreciation of euro, interest rate fluctuations, foreign exchange rate fluctuations in the sale currencies, which in turn causes an impact on the prices of products sold, the cost of sales, and operating income. Foreign currency exchange rate variations against the euro may have a negative effect on sales, operating results, and the international competitiveness of the production facilities of various business units. Since Benetton makes use of hedging in order to manage currency exposure, the strategies adopted may not be sufficient to protect income from the negative effects of future fluctuations. It also holds assets and liabilities which are sensitive to interest rate variations and are necessary in managing liquidity and financial needs. These assets and liabilities are exposed to interest rate risk, which is, at times, managed through the use of derivative financial instruments. http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx OTHER FACTORS - Other financial expenses such as loans and interest payable, and a few political decisions of any increase in tax etc., leads to an automatic increase in the indirect costs of the company. http://www.coursework.info/AS_and_A_Level/Business_Studies/Marketing___Research/Factors_a ffecting_Supply_and_Demand_L46386.html MANUFACTURING Benetton entered India with a 50:50 joint venture with the DCM Group in the year 199192, and now since the past 5 years, it operates as a wholly owned subsidiary of the Benetton Group, Italy. Besides retailing, Benetton India has also started a manufacturing unit in Gurgaon where almost 50% of the garments required in India are manufactured. The remaining products required for the Indian market are outsourced from other parts of India like Ludhiana, Delhi, Bangalore, Chennai, and Nepal and Benetton International through contract manufacturing. The designs manufactured are selected from the global collection create by the product design and development team based in Italy. Manufacturing in India has given Benetton many benefits such as low cost labour, lower production costs from suppliers which led to a cut in prices of Benetton products by almost 20%. Also Asian fabrics are cheaper and thus, reduce the cost of apparel manufactured in India. Another benefit is that India made products will attract lower tariffs. Therefore, there is an increased emphasis on making India an outsourcing hub for Benetton globally, along with China. Production plans for India were in excess of 6 million units by 2007 which have exceeded now. OPERATIONS Supply Flexibility Benetton's industrial set-up is based on a double supply chain, which is a better measured and more efficient one, based on a logical sequence of activities for minimizing costs. It is a more rapid system with better response capabilities as it’s an integrated planning system that optimizes in parallel the activities of R&D, product design, production and sales. A balance between the twin tracks of activities makes the supply system flexible and provides the required support for the large expected growth in production from the current level of around 150 million items that Benetton may face soon. The major functions of the dual supply system like design, planning, coordination and programming are maintained in Italy. It focuses on rapid response to the market, while looking outside Italy for a proper combination of product quality, efficiency, and the necessary cost control. The Production Planning Office prepares forecasts of market dynamics, and makes it possible to anticipate and decrease production times in order to respond to the needs of the target market in a timely manner. http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsSupplyFlexibility Integrated Planning: The Dual Supply Chain EFFICIENCY SPEED Sequential Supply Chain Integrated Planning System Vs Industrial Flexibility The production system of Benetton operates in Italy, Eastern Europe, the Mediterranean region, and transitional Asian markets, such as India and China. During the past few years, most of the investments were allocated towards the managerial independence of production centers in Croatia, Tunisia, and Hungary, which operate complete production cycles (from raw materials to finished product), and on quality control systems to meet the strict Benetton Group quality standards. The operational work of the Benetton Group relies on the outsourcing of the laborintensive phases of production, such as tailoring, finishing, and ironing, to small and midsize enterprises (SMEs) which is directly controlled by the Italian and foreign production sites. Whereas, the strategic activities and operations that require heavy automations like dyeing, weaving etc, and quality controls are done in-house. http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsIndustrialFlexibility Logistics The logistics operations of Benetton at Castrette (Italy) has a fully automated sorting system which is capable of handling individual orders for Benetton’s over 6,200 shops worldwide. It automatically sorts out the folded and hanging garments, which are then packed into boxes and sent through a one-kilometer tunnel to the Automated Distribution Center. This covers an area of 30,000 square meters, has a total capacity of 800,000 boxes and can handle 80,000 incoming/outgoing boxes a day with a very small size of working staff. This European platform has been supplemented by our asian hubs. The automated Honk Kong's Hub supply our worldwide network while the Taiwan and Shangai Hubs supply straightly their domestic market. http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsLogistics EXPORT AND IMPORT OVERVIEW Benetton operates in a large international market, and thus, lot of import and export takes place. There are many risks involved in the import and export activities which are as follows: LATE PAYMENTS – receiving and sending payments overseas is a difficult and lengthy process, and thus, payments usually get late. POLITICAL AND ECONOMIC STABILITY IN COUNTRIES OF OPERATION – with political and economic changes, importers and exporters have to face difficulties, and sometimes restrictions due to new rules and regulations can even lead to losses for importers and exporters. CHANGES IN LEGISLATION – leads to new rules, taxes and tariffs etc which can become a drawback for the importers and exporters. LINGUISTIC AND CULTURAL BARRIERS – when dealing in different countries importers and exporters have to face many linguistic and cultural problems as it differs from country to country. TARRIFS OR TRADE BARRIERS – some countries exercise free trade while some do not. Changing tariffs and trade policies can make major fluctuations in the importing and exporting businesses. PRICE OR EXCHANGE RATE CONTROL – as currencies in different countries vary and exchange rates keep on fluctuating, it becomes risky for the importers and exporters to conduct business. http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx SEGMENTATION United Colors of Benetton segments the market on the basis of demographic factors such as age, gender and income. According to age Benetton targets infants, kids and adults. Its strategy includes opening separate stores for kids and mothers-to-be. It targets men as well as women in the upper middle income group. Behavioural segmentation for Benetton can be done on the basis of occasion of usage. It offers apparel as well as accessories for casual and formal occasions. PRICING For years, United Colors of Benetton has a brand image of an aura of exclusivity at high prices. But in the mid 1990’s, Benetton had adopted a worldwide price reduction strategy. A complete departure from its earlier premium plank when it started its Indian operations, it now wanted to target smaller, non-metro cities, where pricing was to play a major role. That is when Benetton wanted to scrutinize its pricing strategies. Prices were slashed to a major extent, and simultaneously a decrease in production cost was also considered. Benetton was able to grow tremendously in the Indian market after applying its pri reduction strategies. Now Benetton has moderate priced boutiques and the strategy of the firm is the match between its internal capabilities and external relationships. It is caught between premium and mass market pricing. http://books.google.co.in/books?id=TDRr5GTNBSMC&pg=PT41&lpg=PT41&dq=benet ton+pricing+strategy&source=bl&ots=diXUZBjZPy&sig=ZtXMX3LcsU0SLEDvooG4Ht1Rs4&hl=en&ei=J2QJS76sGsydkAXNzojYCQ&sa=X&oi=book_result&ct=result &resnum=10&ved=0CCcQ6AEwCQ#v=onepage&q=benetton%20pricing%20strategy&f =false course.shufe.edu.cn/course/marketing/shuangyu/jxal/benetton.doc http://www.pricingsociety.com/articles/Art_How_to_Sell_a_Price_Cut_FF.htm United Colors of Benetton mainly follows two types of pricing strategies that are psychological pricing and value pricing. It follows psychological pricing as most of the products it offers are often priced at an amount little less than a round number. For instance, they may be priced at Rs. 1199 and not Rs. 1200 or Rs. 1999 and not Rs. 2000. Also it follows value pricing as it offers value for money, i.e. it provides high quality apparel and accessories at reasonable prices. COMPETITOR ANALYSIS Benetton mainly operates in the apparel sector, which is a highly competitive industry with respect to production, distribution and sales. There is a lot of diversity in competition ranging from local, national and global department stores, specialized retailers, independent retailers and manufacturing companies. In India, the major competitors of Benetton include Mango, FCUK, Guess, Promod, Westside, etc. The company faces a lot of competition internationally as well from brands like Gap, H&M etc. The competition in the industry has increased in the last few years, owing to the entry of foreign brands into the Indian market, and thus low cost production plays a key role. Apart from competition for sales, the companies also compete for significant store locations. The intensity of competition also puts a price pressure onto the operating companies in the industry or could lead to a loss in market share. http://www.slideshare.net/haughtynarcissist/consumer-research-for-united-colors-ofbenetton KOUTONS Koutons is a manufacturer of readymade and stylish garments and it retails itself as a discount retail store. It has a vision of providing apparel for men, women and children at affordable prices for the masses. It focuses on value for money and creating an environment for family shopping. It is perceived as a low price brand and its strategy is to target the middle class which prefers buying on discounts. http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C356MVG00 http://www.franchisebusiness.in/c/KOUTONS NUMERO UNO Numero Uno is one of India’s first denim manufacturing brands which was started in 1987. It started by manufacturing men’s jeans and moved on to jeans for women and ultimately started designing and manufacturing complete collections for men and women. It differentiates itself on the basis of innovative fabrics, washes, treatments and fusing in international trends at affordable prices. It caters to the changing lifestyles and tastes of the youth. http://numerounointl.com/ CATMOSS Catmoss retail ltd. Established itself in the kids wear segment in 2004. It has 152 exclusive stores in leading malls, departmental stores, high streets and upcoming markets throughout India and plans to open another 75 stores by the end of 2009. The company offers the latest trends and styles at affordable prices. It plans to build a global brand by targeting the international kids wear market. http://franchisemart.in/CATMOSS_178.html http://www.linkedin.com/companies/catmoss-retail-ltd. LILLIPUT Lilliput was started in the year 1990 as a manufacturer of world class kids wear. Today, it has a presence in domestic as well as international market with more than 210 exclusive outlets. It tries to expand its brand width by retailing its products through multi-brand outlets and other channels. It has also entered into the shoe market for kids and plans to further widen its range through inner wear, night wear and accessories. Lilliput has an enviable brand image in the Indian kids wear market. http://www.linkedin.com/companies/catmoss-retail-ltd http://infotech.indiatimes.com/Enterprise-IT/Lilliput-Kidswear-Gets-techedge/articleshow/4529046.cms http://www.naukri.com/gpw/lilliput/index.htm http://www.cultonweb.com/cult/images/Wills%20Lifestyle%202%20line%20logo.jp g MANGO Mango clothing company is a worldwide famous manufacturer and distributor, specializing in women's and men's apparel and accessories. Mango clothing brand MNG was founded in 1984 and has become one of the leaders in retail sales. Mango retail stores are based in big city shopping malls and on shopping streets. Mango (MNG) is a Spanish company which is based in Barcelona but which has expanded to over 92 countries with more than 1000 shops; and with further expansion planned. http://www.modernights.com/shop/mango/ GUESS Guess? Inc. The Group's principal activities are to design, market, distribute and license lifestyle collections of casual apparel and accessories for men, women and children that reflect the American lifestyle and European fashion. The Group operates through the following divisions: Retail, European, Wholesale and Licensing. The Group also grants licenses to manufacture and distribute products, which complement its apparel lines. Its products include collections of denim and cotton clothing, including jeans, pants, overalls, skirts, dresses, shorts, blouses, shirts, jackets, and knitwear. The company also grants licenses to manufacture and distribute various products, including eyewear, watches, handbags, footwear, kids’ and infants’ apparel, leather apparel, swimwear, fragrance, jewelry, and other fashion accessories. It sells its products through its own stores, a network of wholesale accounts, and the Internet. http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_401617105 http://www.linkedin.com/companies/guess GAP The Gap, Inc is American clothing and accessories retailer based in San Francisco California, and founded in1969. The company has five primary brands: the namesake Gap banner, Banana Republic, Old Navy, Piperlime and Athleta. Gap, Inc. remains the largest specialty apparel retailer in U.S., though it has recently been surpassed by the Spanish-based Inditex Group as the world’s largest apparel retailer. Gap Inc. is one of the world’s largest specialty apparel retailers, with more than 3,100 stores and fiscal 2008 revenues of $14.5 billion. http://www.gapinc.com/public/About/about.shtml http://en.wikipedia.org/wiki/Gap_(clothing_retailer) ESPRIT Esprit is an international youthful lifestyle brand offering smart, affordable luxury and bringing newness and style to life. The Group offers 12 product lines encompassing women’s wear, men’s wear, kid’s wear, edc youth as well as shoes and accessories through over 640 directly managed retail stores and over 12,000 wholesale points-of-sale worldwide, occupying over 817,000 square metres directly managed retail space in more than 40 countries. http://www.esprit.com/index.php?command=Display&navi_id=50 However, the company tries to gain competitive advantage over its rivals by focusing on factors such as quality and range of products, customer service, ambience of the store, value provided to the customers and its marketing strategies. www.msg-design.com/HTML_Site/.../BenettonAdvertisingPaper.doc PERCEPTUAL MAPPING PRICE HIGH QUALITY LOW HIGH LOW In comparison to its competitors, Benetton is a reasonably priced brand with reasonable product quality. With respect to its international competitors, it is the most affordable as can be seen in the above illustration. All the competitors have better quality with higher prices. Gap has the highest price and quality in comparison to all the international competitors of Benetton. Whereas, relative to its Indian competitors, it is the highest priced but also offers the highest product quality. In case of Indian competitors, Lilliput is placed just a little below Benetton for its price and quality, and Kuotons is the lowest priced with lowest quality with respect to the Indian competitors of Benetton. RECENT TRENDS IN THE INDIAN APPAREL INDUSTRY Indian consumers have converted to ready-to-wear; designers have introduced prêt lines for ready-to-wear market. Indian companies see a huge opportunity in partnering with luxury brands wishing to enter India. Apparel brands have responded to increasing demand for organic friendly products with use of more organic cotton. Since kids are heavily influenced by icons, character licensing is very critical in the apparel industry. Companies are exploring new locations and tying up with cafes and restaurants for dedicated merchandising. Store layouts have been redefined with the objective of optimizing the competition of orders and to improve the shopping experience of the end consumer. Mergers and acquisitions and backward integrations are used to cut costs. A major technological trend in the Indian apparel industry is the powerful Point-of-Sale (POS) application in order to manage activities and handling billing stocks and offers at the store level. It helps the top management to acquire important information like the daily sales and inventory management reports of the individual outlets. Benetton uses high technology computer facilities for the design and cutting of the garments, the machines being directly linked to microcomputers using CAD-CAM software. At the other end of the chain, a sophisticated network ensures that any shop in the world can receive a “re-assort” in less than 3 days. This is achieved by running the firm and its information systems as a whole and having an active presence throughout the business system in planning, direct coordination and unification of goals. It has helped in increasing efficiency with respect to the customers as well as operations. http://press.benettongroup.com/ben_en/about/ http://books.google.co.in/books?id=dLEH43XzXQMC&pg=PA88&lpg=PA88&dq=bene tton+customer+segmentation&source=bl&ots=b7Klij0FFI&sig=Px0N4_5MJR1HgA78N zaMqnvjRHU&hl=en&ei=ZLIGS_CdGIz-7AOUJ2IDw&sa=X&oi=book_result&ct=result&resnum=10&ved=0CCEQ6AEwCTgK#v=one page&q=&f=true http://www.benetton.com/portal/web/guest/home Specifically, the recent product trend of the Indian apparel industry for ladies include double breasted trench coats, cotton muslin shirts with flounces, cotton shorts with darts, viscos vest top, cotton muslin Jodhpur trousers, cotton tail jacket with stin lapels etc. For men’s unlined nylon trench coat, round neck cotton sweater, slim fit cotton trousers, suede leather jacket, cotton scarf with fringes etc. Lastly, for kids the latest trends include polka dot nylon jacket, stripped cotton shirts with ruffles, crinkled affect cotton muslin dress. http://press.benettongroup.com/ben_en/collections/ PRODUCT DIFFERENTIATION United Colors of Benetton provides a wide range of vibrant colours and great styles in all shapes prints and sizes, hence fulfilling the requirements of all customers. It also puts together its best variety and a great range of basic accessories such as shoes, socks, belts, wallets, scarves etc, which makes it unique and distinguished from others. EXCLUSIVITY OF DESIGN – Benetton is a provider of some exclusive and one of a kind design as they belong to the contemporary world and are stated to be trend setting garments. They are unique in cuts and colours and live up to the expectations of its target customers. COMFORTABILITY OF GARMENTS – the Benetton garments are extremely famous for their fits and comfort level. They also give a great shape to the body structure. HUGE AND SPACED OUT SHOWROOMS – Benetton outlets are quite spacious and customer friendly as the products are properly laid out. It is easy for a large number of people to walk around the outlet to make their buying selections. Cooperating and helpful sales people and some light music make the ambience of the outlet favourable for shopping. These factors distinguish Benetton from its competitors and have led to its great success. POSITIONING The positioning of Benetton is a combination of "color, energy and practicality". Benetton has positioned itself in such a way that customers who buy Benetton products feel good about themselves as they have a social conscience, and also they feel morally strong by using them. The company has positioned itself very distinctively; it has a very clear and unequivocal position that would not be forgotten by the customers easily. http://www.communication-newsletter.com/contrarian.htm Another main theme of Benetton’s positioning is colors. As the social corporate approach does not work in Asia, “Colorful” is another way to distinguish Benetton from other brands. Benetton is always associated with Colorful, energetic and young. The style of clothing sold in Benetton is mostly casual wear for the young. http://www.exampleessays.com/viewpaper/46180.html http://www.accessmylibrary.com/article-1G1-79900470/back-future-benettontransforms.html FACTORS AFFECTING DEMAND India serves as a huge market for the Benetton Group. United Colors of Benetton has more than 100 stores across 45 cities in India and the demand shows an increasing trend since its entry. Benetton also sees a huge potential in the future and would like to be present wherever the market exists, whether it is large cities or small towns. Benetton's outlets in India The demand for Benetton products in India can be affected by the following reasons: CONSUMER SPENDING PATTERNS – consumer spending patterns may be affected by local economic condition, business conditions, taxation policies, shifts in discretionary spending towards other goods and services, general shifts in consumer tastes and preferences etc. Such factors may cause a shift in demand of Benetton products. ABILITY TO PREDICT FASHION TRENDS – Benetton’s sales depends on how the company is able to respond to the changing fashion trends and the consumer tastes in a timely manner. COMPETITION– Benetton operates in a highly competitive sector as the barriers to entry are few in the industry. Benetton competes with local as well as global players and thus demand gets affected with the entry of new players or due to certain activities of the existing players EXCLUSIVISITY OF DESIGN - Benetton is provider of some extremely exclusive and one of a kind designs. They are stated to be the trend setting garments belonging to the contemporary world; they have a unique variety of cuts and colours living upto the expectations of the fashionable market of today. COMFORTABILITY OF GARMENTS - Benetton apparels are extremely famous for its fit and comfort level. As they are highly comfortable to the skin and give a grey shape to the body structure. These garments compliment the skin and protect the skin from the changing weather and various skin problems. WIDE VARIETY - Benetton is one brand that makes it convenient for its buyers to pick up all kind of products from one shelter as it has all the possible products needed by a customer ranging from T-shirts, jeans, track suits, trousers, formal wear, kids wear, woman and men’s wear as well. Not only garments they also keep accessories such as hats, caps, bags, shoes, belts and perfumes. COMPETETIVE PRICES - One of the major factors that affect the demand of Benetton is its pricing, as these garments are quite reasonably priced making them affordable for people belonging to middle and higher income groups. As most of the people want a combination of good quality, great style and a good price. Keeping this in mind Benetton is leading the show and has covered all the aspects of success to its brand name. WELL FITTED CLOTHES- DEPENDING ON INDIAN BODY STRUCTURE - Benetton designs clothes depending upon the body structures of people belonging to different regions and countries. In case of India, Benetton has been successful enough to reach the satisfaction level of people as far as fits are concerned. There garments are extremely well fitted and give a nice shape to the body making it extremely wearable GOOD AND ATTRACTIVE PRESENTATION - One of the major factors that affect the demand of Benetton is its display. From outershell, innershell of the showrooms to the mannequins and the colour coordination has played a major role in increasing the demand for its products. style and placement of the garment and items displayed in the showroom is extremely flamboyant and attractive and gives a crave to customers to grab a watch of the apparels. SPACED OUT SHOWROOMS - Showrooms are quite spacious, that makes it easy for a large group of people to fill in and walk around, hence making the environment calm and cool, with some friendly sales people and great music making the atmosphere light and suitable giving it an aromatic feel which has lead to great success of Benetton. EASILY APPROACHABLE - Benetton showrooms are spread all over, there showrooms have been seen in all the popular malls and areas making it easily accessible. At certain places there are more than three showrooms catagorised for ladies, gents and kids, else wise they are huge enough n divided into 3 story building for all genders n age groups, making it convenient and easy to catch. Benetton is spread all over specially covering the fashion hubs of the country by giving franchise to people making it an easy game to make its name all over the place. CREDITABLE AND TRUSTABLE COMPANY - Benetton is more than a decade old and has been successful enough to create its goodwill among large masses from upper, lower income groups to all age groups and genders. it is known for its dynamism and quality at a affordable price also providing a wide range of products from corporate wear to casual and sports wear. HUGE RANGE OF SIZES, COLOURS AND STYLES Benetton provides the widest range of vibrant colours, great styles in all shapes, prints and sizes depending upon the needs of customer hence fulfilling the requirements of all its buyers, not only in clothes but also in basic accessories it puts its best variety and a great range making itself unique from others. GOOD MARKETING STRATEGIES - Benetton is extremely well equipped when it comes to marketing as they keep adopting newer ideas of attracting people to its brand with its innovative style. Be it there banner, showroom, internet or even media, Benetton is able to capture complete market control. DYNAMIC STRATEGIES AND EVER CHANGING ATTITUDE - Benetton is extremely quick as they follow the fashion spiritually and even make changes as and when required. They change according to the season, whether it’s the styles, trends and even colours that are in for the season. They live up to the expectations of the buyers and the customers which leads them both completely satisfied. FACTORS AFFECTING SUPPLY DEMAND – as the demand for Benetton apparel decreases or increases, the supply also decreases or increases respectively. When the consumer demands increase, the supplier needs to provide more products to fulfill the demand. When the consumer does not need a particular product, then there is no use of the supply as it will not sell. Hence, demand of Benetton apparel is one of the major reasons affecting its supply. AVAILABILITY OF RESOURCES SUCH AS RAW MATERIAL – affects the supply of United Colors of Benetton as when resources are scarce, the producer is unable to produce as much it used to. Also the prices of the resources rise due to scarcity and hence, the producer produces less, and reduces its supply because of rising costs. AVAILABILITY OF LABOUR – there are times when labour has conflicts with the management, within themselves, they might go on strike or even leave jobs for some reason, which effects work and hence reduces productivity. Due to such reasons of scarcity of labour, supply gets affected. PRODUCTION CAPACITY – supply also depends on the production capacity of a producer. A machine may get obsolete or may need some repairs, and thus, the production capacity reduces or vice-versa (a manufacturer may increase production capacity by installing new machinery) thereby affecting supply of Benetton apparel. QUALITY CONTROL SYSTEMS – as Benetton follows strict quality check systems, it rejects apparel even with minor faults and so it takes long for an apparel to reach the retail store. Hence quality control systems also affect the supply of Benetton apparel. INCREASE IN TAXES – increase in taxes leads to increased costs for the producer, and also increased prices for the consumer. Hence the supply decreases as costs of production increase and also because demand decreases because of high prices. TRANSPOTATION COST – as the transportation costs are to be beared by the supplier, his costs increase with the increase in transportation costs. Hence, the supplier is not willing to supply at increased costs. This is another factor that leads to decreased supply of Benetton apparel. http://press.benettongroup.com/ SWOT ANALYSIS STRENGTHS Benetton Group is a world leader in the design, manufacture and marketing of distinctive casual apparel for men, women, and children. Benetton is well known around the world; it has a good image and a good reputation through the 120 countries they are selling in. The Group's commercial network of 7,000 retail outlets around the world is increasingly focused on large floor-space mega stores offering high quality customer services. Benetton is traditionally known for knitwear and casual clothing in a wide array of colors, featuring fashionable Italian design and projecting a youthful image. Benetton is active in the sportswear and sports equipment sector with brands such as Prince, Rollerblade, Nordica, Kästle, Killer Loop and Ektelon. Benetton has its own communication research and development center: Fabrica. It has a pluralistic view on things that is guaranteed by the mix of young people from countries with different languages, cultures, and attitudes. They work on projects that include fashion, interiors, industrial design, and cinema. Colors is a bimonthly magazine that talks to young people all around the world, and is in 50 countries. They have seven editions published in eight languages, and Internet site that has won a record number of hits and critical acclaim. Benetton is one brand that makes it convenient for its buyers to pick up all kind of products from one shelter as it has all the possible products needed by a customer ranging from T-shirts, jeans, track suits, trousers, formal wear, kids wear, woman and men’s wear as well. Not only garments they also keep accessories such as hats, caps, bags, shoes, belts and perfumes. WEAKNESSES Because of its controversial way to advertise, Benetton retailers may terminate their contract anytime because they don’t want to lose customers. In the United States, Benetton is only retailed by Sears who is not very well know for the quality of its products, so people associate Benetton with low quality products. In Europe, Benetton products are expensive which gives opportunities to many competitors who provide lower prices for the same quality. Benetton, as it’s spread all over the world, doesn’t have a new geographical market to get in, except the United States. OPPORTUNITIES Benetton does not have a lot of market shares in the United States, so it can improve its position in that market. As Benetton is diversifying, it allows the company to compete on several markets and it makes Benetton less sensitive in regards of the fluctuating economy. THREATS The clothing market is getting saturated and the competition is getting tougher and tougher (Wills Lifestyle, Mango, Guess, TnG, Blackberry, Tommy Hilfiger, Levis, Pepe, Catmoss, Liliput, etc). With the changing government policies regarding the liberalization of the FDI norms in India, more foreign apparel brands like Zara, Topshop, etc are entering the market. Due to growing inflation, there has been an increase in the cost of raw materials and transportation The decreasing fashion cycle is one of the major threats as new collections need to be brought in very frequently. http://blogs.siliconindia.com/rohitkantprasad GOVERNMENT POLICY Historically, the Indian textile and apparel industry has been protected from foreign competition, through quantitative restrictions and high tariffs. For over 50 years, India had claimed almost all its quantitative restrictions in the balance of payments provisions of the General Agreement on Tariffs and Trade (GATT) Article XVIII: B. Though India has been liberalizing its trade barriers and reducing tariffs to a great extent for many industries, the import restraints, additional taxes, troublesome clearance formalities at customs and custom duties still apply for the imports related to textile and apparel industry of India. As far as the exports of the apparel industry are concerned, India provides incentives which include tariff incentives and export promotion techniques like duty exemptions or payment of low tariffs on raw material, capital inputs and other resources required by the industry. Also, they have access to access to special import licenses for restricted inputs, pre and post shipment financing, and exemption from paying income tax on earnings made from apparel export. TARIFF BARRIERS The textile and apparel tariffs in India are among the highest in the world, especially on products that can be domestically substituted, even though India had recently reduced the tariff rates considerably. In addition, the tariff rates become even higher due to the domestic taxes applied to both imported as well as domestic goods. Effectual from 1st April, 2000, the tariffs on manmade fibers and filament yarns were reduced significantly by the Government of India. Tariffs on cotton yarn were reduced from 25% to 20%, on spun, blended and wool yarn from 40% to 20% etc. Also a tariff binding commitment agreement was done between the U.S.A. and India on 15th September, 2000, under which tariffs on 265 textile and apparel products like textured yarns of nylon and polyester, sportswear, filament fabric and home textile were fixed by India. EXCISE DUTIES According to the government policies in India, excise duties and many other miscellaneous taxes are not levied on the apparel products, but they are categorized as restricted imports. IMPORT LICENSING Import licensing regime for the Indian textile and apparel industry has been liberalized to a certain extent, but it still limits market access for U.S. apparel. Import is unrestricted for items like yarns and fabrics intended for further processing. Generally, apparel and other textile goods either require a special import license (SIL) or are subject to import restrictions that apply to consumer goods. EXIM POLICY The Government of India revised its Export-Import (EXIM) policy on March 31, 1999, by removing import licensing necessities for 894 items of agriculture products, consumer goods, and textiles, as compared to 600 items required under its WTO commitments. India also eliminated another 414 items from the “restricted list”, and allowed them to be imported against a special import license (SIL). On December 28, 1999, the United States and India reached an agreement on a timetable to lift quantitative restrictions on imports of 1,429 agricultural, textile, and consumer products, including apparel. This agreement followed a WTO ruling that these restrictions were no longer justified under the BOP provisions of GATT Article XVIII:B. India removed restrictions on 715 tariff items as of April 1, 2000, and agreed to remove restrictions on the remainder by April 1, 2001. Once the restrictions are lifted, India will allow, without restriction, imports of apparel and other made-up textile goods. Duty Entitlement Passbook Scheme (DEPS) DEPS is available to traders and export companies in India on a pre and post export basis. The pre-export credit requires that the beneficiary firm has exported during the past three year period. The post-export credit is a transferable credit that exporters of finished goods can use to pay customs duties on succeeding imports of any unrestricted products. Export Promotion Capital Goods (EPCG) Scheme The EPCG scheme is provided for those export companies and traders who inform the Government of India about the type and value of capital goods being imported by them and the exports they expect to produce using those imports. The Government of India provides a license to the exporters allowing them to import capital goods either duty free or at very low rates of duty, on the basis of the export commitment made at the time of import of goods. Pre- and Post-Shipment Financing Pre-shipment financing is provided by the Reserve Bank of India to Indian exporters through commercial banks for purchasing raw material, packaging material and other required material by presenting a confirmed order or letter of credit. Also RBI provides post-shipment financing through commercial banks at preferential rates to Indian exporters presenting export documents. These programs make a financial contribution to Indian firms to the extent of the difference between benchmark short-term interest rates and the preferential interest rates. Export Processing and Special Economic Zones The EXIM policy provides for the establishment of export processing zones (EPZs) and special economic zones (SEZs). Units in the EPZs that export all of their output can import all the industrial inputs required free of customs duty. A five year relief from tax is permitted to any industrial unit in an EPZ and all profits of 100% EOUs are exempted from income tax. Units that are not considered 100% EOUs receive tax exemptions only on their export earnings. To attract investment, the Government of India allows 100% foreign ownership of units in the EPZs as well as the SEZs. CUSTOM PROCEDURES The custom procedures in India are cumbersome procedures. They are highly timeconsuming with delays taking place very frequently as extensive documentation is required. Also they are bureaucratic in nature. MARKING, LABELLING, AND PACKAGING REQUIREMENS Marking, labeling, and packaging requirements for the Indian textile and apparel industry are technically complicated, complex and hard to fulfill. Textile Regulation 1988 is designed to protect consumers from getting misled and thus, it imposes stringent safety and marking guidelines on fabrics and other textile products that are sold in India. This regulation is applied on domestic products as well as imported textile products. According to the regulation, it is required that all tops, yarns, and fabrics to have the statutory or legal markings standardized in the government notification and also it states that such markings should not be misleading the consumers in any way. FOREIGN DIRECT INVESTMENT Initially foreign investment in textile and apparel production was not allowed in the Indian economy. Gradually, with the elimination of such restrictions and decrease in the import duties of capital equipment by the Government of India, foreign investors have started setting up manufacturing facilities in India. Recently, India has become a manufacturing platform for many global companies in the textile and apparel industry. Benetton has also recently started manufacturing in India. However the taxes and duties levied on this industry have been decreased significantly, an outline of VAT is being implemented in place of all other tax diversifications, which will clear these imbalances once it is imposed fully. LABOUR LAWS The labour laws in India are found to be unfavorable to the trades, with companies following a ‘hire and fire’ policy. Many companies have even tried to break down their businesses into small units so as to avoid problems created by the labour unions. In the recent past, there has been a gradual movement towards reforming labour laws, which is anticipated to make the environment more favourable. FISCAL POLICY The Indian economy has shown a striking performance with a significant growth of 9% and improvement in fiscal indicators in the last four years. Due to this the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 regime has put India on a higher growth path stimulating confidence in the medium to long term prospects of the economy. The economy has shown a considerable improvement in fiscal deficit from 5.9% of GDP in 2002-03 to 2.7% of GDP in 2007-08, and revenue deficit has also decreased from 4.4% to 1.1% of GDP. After the Union Budget was presented in February 2008, the world economy had to face three unprecedented crises that are rise in petroleum prices, rise in other commodities prices, and the breakdown or crash of the financial system. This led to a serious inflationary problem in the first-half of that year, which in turn was bound to affect all emerging economies including India. To solve this issue, a series of fiscal measures both on tax revenue and expenditure side were undertaken with the intention of moderating supply side constraints. These measures were supplemented by monetary initiatives through policy rate changes by the Reserve Bank of India, and this contributed in controlling and softening the domestic prices. The second-half of the financial year 2008-09 was also hit by the financial crisis world over, and had to face a recessionary trend. India being no exception was also impacted due to the financial crisis, and the focus of the fiscal policy was shifted to providing growth stimulus. The impacts of the fiscal measures taken by the Government of India to stimulate growth have been reflected by the significant reduction in the gross tax revenues of the economy. In the first half of the current financial year, the government borrowings were in line with the indicated auction calendar decided upon in consultation with the Reserve Bank of India. However, due to the global financial crisis the government had to revise its fiscal policies to balance the situation, and hence the borrowing calendar of the government had to be revised in the second half of the current financial year. TAX POLICY The recent taxation policies of the Government of India are as follows: Raw cotton has been fully exempted from custom duties since 8th July, 2008 so as to control the prices of raw cotton and expand its domestic supply. A fiscal stimulus package was implemented with effect from 7th December,2008, under which the government implemented an across-the board reduction of 4% points in the ad valorem rates of excise duty on non-petroleum items, with a few exceptions. Thus the three major ad valorem rates of Central Excise duty viz. 14%, 12% and 8% have been reduced to 10%, 8% and 4%, respectively. The refund of service tax paid by exporters on various taxable services attributable to export of goods has been further extended to include clearing and forwarding agents services. The upper limit of refund of service tax paid by exporters on foreign commission agent services has been enhanced from 2% of FOB value to 10% of FOB value of export goods. In the past 5 years, direct taxes have been ushered by widespread reforms. The reform strategy comprises of the following essentials: Distortions in the tax structure have been minimized by expanding the tax base and rationalizing the tax rates. Good quality taxpayer services and enhanced deterrence levels have been provided by the tax administration. Both these objectives reinforce each other and have promoted voluntary compliance. The business processes in the Income tax department have been reengineered through widespread use of information technology like e-filing of returns, epayment of taxes, selection of returns for scrutiny through computers, issue of refunds through ECS and refund bankers, establishing a Centralized Processing Centre and an effective taxpayer information system. The measures taken in the reform strategy have substantially increased the direct tax revenue productivity from 3.81% of GDP in 2003-04 to approximately 6.35% of GDP in 2008-09. Moreover, the share of direct taxes in the Central tax revenues is now significantly higher than the share of indirect taxes resulting in a substantial improvement in the equity of the tax system. Therefore, the reform strategy in the medium term is to consolidate the achievements of the past. FISCAL POLICY FOR THE ENSUING FINANCIAL YEAR India has been adversely affected by the global economic meltdown, but the government has taken various steps to respond to its adverse effects. These measures taken by the government has resulted in a short fall in revenues and substantial increases in government expenditures, which led to a temporary deviation from the fiscal consolidation path mandated under the FRBM Act during 2008-09 and 2009-2010. As a result the revenue deficit and fiscal deficit for R.E.2008-09 and B.E.2009-2010 are higher than the targets set under the FRBM Act. The fiscal policy for the year 2009-2010 will continue to be guided by the objectives of keeping the economy on the higher growth trajectory amidst global slowdown by creating demand through increased public expenditure in identified sectors. However, the medium term objective will be to revert to the path of fiscal consolidation at the earliest, with improvement in the economic situation. http://www.rediff.com/money/2009/feb/16bud-budget-the-fiscal-policy-overview.htm MONETARY POLICY The Indian economy has been developing at a considerable growth rate since independence, but it has never been able to achieve the targets set up. In the first quarter of the year 2009-10, the Indian economy was growing at a rate of 6.1%, which is higher than that of 5.8% in the fourth quarter of the financial year 2008-09, but lower than 7.8% in the first quarter of the year 2008-09. The year-on-year (y-o-y) deceleration in growth was broad-based covering all the three major sectors, viz., agriculture, industry and services. Real GDP Growth (%) Sector Financial Year 2007-08 2008-09 Quarterly Growth Rates (y-oy) 2008-09 2009-10 Q1 Q4 Q1 Agriculture 4.9 1.6 3.0 2.7 2.4 Industry 7.4 2.6 5.1 (-) 0.5 4.2 Services 10.8 9.4 10.0 8.4 7.7 9.0 6.7 7.8 5.8 6.1 Overall GDP Source: Central Statistical Organisation (CSO). In the Indian economy, clear signs of revival from recession and growth of the industrial sector have been seen in the recent months. The index of industrial production (IIP) showed an increase by approximately 5.8% during April-August 2009 as compared with a growth of 4.8% in the corresponding period of the previous year. While the basic, intermediate and consumer durable goods sectors (that includes the apparel industry) witnessed higher growth, the performance of the capital goods and consumer non-durable sectors was relatively modest. The core infrastructure sector experienced a growth of 4.8% during April-August 2009, as compared to 3.3% in the corresponding period of the previous year. The leading indicators of industrial production, both quantitative and qualitative, also point to revival of industrial activity in the months ahead. The results of the Industrial Outlook Survey done by the Reserve Bank of India that tracks the business expectations for the current quarter and the business outlook for the following quarter, conducted in July-August 2009 showed a turnaround in the business sentiment. The assessment for the second quarter of 2009-10 showed continuing upturn with a 7.8% increase in the Business Expectations Index (BEI) over the previous quarter. Also considerable improvement was shown in key indicators such as production, order books and capacity utilisation. The financing conditions have also become better. Inflation that is measured by year-on-year variations in the wholesale price index (WPI), remained negative during June-August 2009 due to the base effect, but returned to a positive figure in September 2009. Inflation based on the CPI for industrial workers (IW) and urban non-manual employees (UNME) has also witnessed a one-time step-up reflecting significant upward revision in imputed prices of rent-free houses emanating from the Sixth Pay Commission Award. The Central Government has already completed net market borrowing of Rs. 3,19,911 crore (as much as 80.4 per cent of the budget estimate) through dated securities during 2009-10 (up to October 26, 2009). MONETARY CONDITIONS Growth in monetary aggregates during 2009-10 (up to October 9, 2009) has evolved broadly in line with the projections. The cash reserve ratio (CRR) of the banks showed a reduction of 400 basis points during October-January 2008-09, which was a result of the reduction in reserve money. This also resulted in reduced banks’ balances with the Reserve Bank. Adjusted for the first round impact of changes in the CRR, reserve money growth was positive, but lower than in the previous year. Annual Variations in Monetary Aggregates (%) Item 2008-09 (October 2009-10 (October 10, 2008) 9, 2009) Reserve Money 28.8 (-) 4.0 Reserve Money (adjusted for CRR 20.6 14.3 changes) Currency in Circulation 21.4 15.4 Money Supply (M3) 20.9 18.9 M3 (Policy Projection) 16.5-17.0 * 18.0 ** Money Multiplier 4.44 5.5 Ratio of Net Foreign Exchange Assets of 210.6 175.9 RBI to Currency * Projection as indicated in the Annual Policy Statement 2008-09 (April 2008). ** Projection as indicated in the First Quarter Review of Monetary Policy 2009-10 (July 2009). BANK CREDIT Non-food credit by scheduled commercial banks decreased considerably, with the growth rate (y-o-y) falling to 11.2% as on October 9, 2009 from 29.4% in the corresponding period of the previous year. On a financial year basis (up to October 9, 2009) too, the growth in scheduled commercial banks’ non-food credit at 4.3% is drastically lower than the growth of 10.5% in the corresponding period of the previous year. The various factors that have contributed to the slowdown in non-food bank credit are as follows: 1. Overall credit demand from the manufacturing sector slowed down reflecting a decrease in commodity prices and drawdown of inventories. 2. Corporates were able to access non-bank domestic sources of funds and external financing – which had almost dried up during the crisis – at lower costs. 3. Oil marketing companies reduced their borrowings from the banking sector as oil prices moderated. 4. A significant amount of bank finance has gone to the corporate sector through banks’ investment in units of mutual funds. 5. Banks have also reined in credit to the retail sector due to the perceived increased risk on account of the general slowdown. This credit cutback was more pronounced in the case of foreign banks and private banks. TOTAL FLOW OF FINANCIAL RESOURCES TO THE COMMERCIAL SECTOR During the peak of the crisis in the third quarter of the financial year 2008-09, the flow of resources to the commercial sector from both bank and non-bank sources were contracted. While bank credit continued to slow down, there had been a turnaround in financing from non-bank sources. The resource flow from non-bank sources increased in the second quarter of 2009-10 with increase in foreign direct investment, increased support from insurance companies, pick-up in primary issues, and large investment by mutual funds in non-gilt debt instruments. While the resource flow from the non-bank sources had marginally increased in 2009-10 (till October 2009), the total flow of financial resources to the commercial sector declined in comparison with the corresponding period of 2008-09 due to slowdown in bank credit. INTEREST RATES In response to the crisis, the Reserve Bank has effected a substantial reduction in policy rates beginning October 2008: the repo rate by 425 basis points and the reverse repo rate by 275 basis points. The CRR was also reduced by 400 basis points of NDTL of banks. Monetary Easing by the Reserve Bank since October 2008 Item Early October Reduction October 2009 (basis 2008 points) Repo Rate 9.00 4.75 425 Reverse Repo Rate 6.00 3.25 275 9.00 5.00 400 Cash Reserve Ratio (% of NDTL) Taking cues from the reduction in the Reserve Bank’s policy rates and easy liquidity conditions, all public sector banks and most private sector banks have reduced their deposit and lending rates. http://rbi.org.in/scripts/NotificationUser.aspx?Id=5326&Mode=0 RECOMMENDATION Benetton should develop its business in emerging markets like China and India. In such developing countries, it should follow new commercial strategies like “stores in stores” through agreements with large-scale retailers. The success of any company depends on its ability to respond and anticipate the changing trends and consumer needs and thus, Benetton should take more and more steps to keep a track of such changing trends. Benetton should engage in less controversial advertising in order to attract the right segment of customers. Benetton must evaluate market potential correctly in order to reduce losses, expand and increase market penetration Being an international brand, Benetton must learn to adapt to the local environment. This includes foreign policy, business models, local laws, local consumer preferences, competition etc. Continuous efforts are required to maintain a distinct style to products and hence differentiate from the competition while at the same time adapting to changing consumer tastes. Benetton must keep the strategic risks in mind since it helps the group to take advantage of business opportunities that may develop in new geographical areas and business segments, evaluating the market potential correctly, allocating the resources generated on more profitable markets to potential growth areas. Evaluating the strategic risks would also help the group to invest its know-how in order to ensure quality products and processes, to protect its brands important for succeeding and competing in the market and lastly to choose and integrate a model best suited for each local market (license v/s partnership; wholesale v/s retail) REFERENCES http://www.eworldtradefair.com/indian-apparel-industry-a56.html [Accessed on 5th October, 2009] http://www.fashionproducts.com/fashion-apparel-overview.html#io [Accessed on 5th October, 2009] http://www.business-standard.com/india/news/kit-indias-textileapparel-industry/345936/ [Accessed on 5th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-VCBrandsIdentity [Accessed on 5th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsYear [Accessed on 5th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsYear [Accessed on 5th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-reportsHighlights [Accessed on 6th October, 2009] http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx [Accessed on 6th October, 2009] http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx [Accessed on 6th October, 2009] http://www.coursework.info/AS_and_A_Level/Business_Studies/Marketing___Research/ Factors_affecting_Supply_and_Demand_L46386.html [Accessed on 6th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsSupplyFlexibility [Accessed on 6th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsIndustrialFlexibility [Accessed on 6th October, 2009] http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irolVCOperationsLogistics [Accessed on 6th October, 2009] http://sec.edgar-online.com/benetton-group-spa/20-f-annual-and-transition-reportforeign-private-issuer/2004/06/30/section7.aspx [Accessed on 7th October, 2009] http://books.google.co.in/books?id=TDRr5GTNBSMC&pg=PT41&lpg=PT41&dq=benet ton+pricing+strategy&source=bl&ots=diXUZBjZPy&sig=ZtXMX3LcsU0SLEDvooG4Ht1Rs4&hl=en&ei=J2QJS76sGsydkAXNzojYCQ&sa=X&oi=book_result&ct=result &resnum=10&ved=0CCcQ6AEwCQ#v=onepage&q=benetton%20pricing%20strategy&f =false [Accessed on 7th October, 2009] course.shufe.edu.cn/course/marketing/shuangyu/jxal/benetton.doc [Accessed on 7th October, 2009] http://www.pricingsociety.com/articles/Art_How_to_Sell_a_Price_Cut_FF.htm [Accessed on 7th October, 2009] http://www.slideshare.net/haughtynarcissist/consumer-research-for-united-colors-ofbenetton [Accessed on 10th October, 2009] http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C356MVG00 [Accessed on 10th October, 2009] http://www.franchisebusiness.in/c/KOUTONS [Accessed on 10th October, 2009] http://numerounointl.com/ [Accessed on 10th October, 2009] http://franchisemart.in/CATMOSS_178.html [Accessed on 10th October, 2009] http://www.linkedin.com/companies/catmoss-retail-ltd. [Accessed on 10th October, 2009] http://www.linkedin.com/companies/catmoss-retail-ltd [Accessed on 10th October, 2009] http://infotech.indiatimes.com/Enterprise-IT/Lilliput-Kidswear-Gets-techedge/articleshow/4529046.cms [Accessed on 10th October, 2009] http://www.naukri.com/gpw/lilliput/index.htm [Accessed on 10th October, 2009] http://www.cultonweb.com/cult/images/Wills%20Lifestyle%202%20line%20logo.jp [Accessed on 10th October, 2009] http://www.modernights.com/shop/mango/ [Accessed on 14th October, 2009] http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_401617105 [Accessed on 14th October, 2009] http://www.linkedin.com/companies/guess [Accessed on 14th October, 2009] http://www.gapinc.com/public/About/about.shtml [Accessed on 14th October, 2009] http://en.wikipedia.org/wiki/Gap_(clothing_retailer) [Accessed on 14th October, 2009] http://www.esprit.com/index.php?command=Display&navi_id=50 [Accessed on 14th October, 2009] www.msg-design.com/HTML_Site/.../BenettonAdvertisingPaper.doc [Accessed on 14th October, 2009] http://press.benettongroup.com/ben_en/about/ [Accessed on 14th October, 2009] http://books.google.co.in/books?id=dLEH43XzXQMC&pg=PA88&lpg=PA88&dq=bene tton+customer+segmentation&source=bl&ots=b7Klij0FFI&sig=Px0N4_5MJR1HgA78N zaMqnvjRHU&hl=en&ei=ZLIGS_CdGIz-7AOUJ2IDw&sa=X&oi=book_result&ct=result&resnum=10&ved=0CCEQ6AEwCTgK#v=one page&q=&f=true [Accessed on 14th October, 2009] http://www.benetton.com/portal/web/guest/home [Accessed on 16th October, 2009] http://press.benettongroup.com/ben_en/collections/ [Accessed on 16th October, 2009] http://www.communication-newsletter.com/contrarian.htm [Accessed on 16th October, 2009] http://www.exampleessays.com/viewpaper/46180.html [Accessed on 16th October, 2009] http://www.accessmylibrary.com/article-1G1-79900470/back-future-benettontransforms.html [Accessed on 16th October, 2009] http://press.benettongroup.com/ [Accessed on 13th November, 2009] http://blogs.siliconindia.com/rohitkantprasad [Accessed on 13th November, 2009] http://www.rediff.com/money/2009/feb/16bud-budget-the-fiscal-policy-overview.htm [Accessed on 13th November, 2009] http://rbi.org.in/scripts/NotificationUser.aspx?Id=5326&Mode=0 November, 2009] APPENDICES Benetton already exists in the following cities: • Agra • Ahmedabad • Aizwal • Amritsar • Bangalore • Bhuvneshwar • Chandigarh • Chennai • Cochin • Darjeeling • Dehradun • Delhi • Gangtok [Accessed on 13th • Ghaziabad • Goa • Gurgaon • Guwahati • Hyderabad • Imphal • Indore • Itanagar • Jaipur • Jammu • Jamshedpur • Jullundhur • Kohima • Kolhapur • Kolkata • Lucknow • Ludhiana • Mohali • Mumbai • Nagpur • Noida • Panchkula • Patiala • Pune • Ranchi • Shillong • Siliguri • Simla • Srinagar • Surat • Trimulghery • Yamunanagar