Company Background

Benetton - Founded as a single shop in Italy in 1965 Benetton group is a global clothing brand The name comes from four members of Benetton family Today, it is present in 120 countries Produces over 90 million items of clothing each year Benetton's overall turnover amounts to about 4,000 billion Euros

The Sub-brands

For Casual Wear

United colors of Benetton

For Under Garments

Under colors of Benetton

For Fashion Wear

Sisley

For Leisure Wear

Playlife

For Street Wear

Killer Loop

Strength

Threat

SWOT Analysis

Weakness

Opportunity

STRENGTH
World leader in the design and manufacture of distinctive casual apparel Has its own communication, research and development center :Fabrica

Has high quality products usually made of wool

Known for its knitwear and casual clothing

WEAKNESS

Benetton products are expensive

OPPORTUNITY

As Benetton is diversifying, it allows the company to compete on several markets

THREAT
The competition is getting tougher

The clothing market is getting saturated

PRICE

PROMOTION

4Ps
PLACE

PRODUCT

 Basic t-shirts Rs. 899 onwards Casual Shirts Rs. 1099 onwards Jeans Rs. 2099 onwards PRICE

PRODUCT

Back in the 80s, Benetton launched its new product line, based only on clothing and accessories The mix of products include brightly colored clothing lines, accessories, shoes UCB products are designed for young people of all ages and colors

PLACE

It is nearly the worlds largest retailer with a network of 6000 large stores Benettons distribution strategy revolves around a large network of independent franchises Benetton does not impose very strict rules on the independent distributors regarding the presentation of merchandise, completeness of range and general store ambience

Benetton advertisements are one of Benettons main assets

PROMOTION

From 1984 to 1990 Benettons advertising strategy was based on pictures of young people, each of them representing a different skin color

COMPETITORS

SWEDEN

AMERICA

SPAIN

MARKET ANALYSIS

THE APPAREL INDUSTRY

It is one of the most important sectors of the economy with regard to investment, revenue and employment generation all over the world The apparel industry in India has substantially diversified on the basis of fashion, climate, region, culture and fiscal factors Indian textile is witnessing great growth and development in the industrial sector in India as well as abroad Apparel sector in totality contributes to the country's GDP after agriculture The important segments covered in apparel industry include home decor and furnishings along with clothing and fashion accessories for kids, women and men

OVERVIEW OF INDIAN TEXTILE AND APPAREL INDUSTRY

INDIAN TEXTILE AND APPAREL MARKET (Rs. 3,01,500 crore)

DOMESTIC MARKET (Rs. 2,02,500 crore)

EXPORTS (Rs. 99,000 crore)

TEXTILES (Rs. 54,000 crore)

APPAREL (Rs. 1,48,500 crore)

TEXTILES (Rs. 54,000 crore)

APPAREL (Rs. 45,000 crore)

Source: Technopak Analysis estimated exports for 2009, values rounded off

Trends in Indias Domestic Fashion Market

The Indian textile and apparel industry has witnessed tremendous growth in the last 2 decades with market size US$ 67 billion

India has positioned itself as a manufacturing destination with cheap labour, cotton-based raw material and easy access to US and Europe markets

The Indian domestic apparel market size is US$ 33 billion of which only 16 per cent is organized

The Casual Wear Market In India

The casual wear market is growing rapidly in India. Its current size is estimated at $2.3 billion for the top 30 cities

The key growth drivers are: The mens Rapidly growing segment has the youth and urban largest share (63 population; more per cent) in the people frequently category wearing casual outfits to work

Casual wear brands in India see potential in all segments of the market lower medium, medium and semi-premium

BENETTON IN INDIA

BENETTON IN INDIA

RESEARCH METHODOLOGY AND DATA INTERPRETATION

Problem Identification:
UCB products are very expensive and their target audience is the young consumers who find it difficult to afford the brand so they generally shift to other brands. Brands facing similar kind of problem came up with diffusion brands.

They are step-down line extensions of existing luxury brands, normally less expensive than the main-line merchandise. They are often called second lines, sub brands or endorsed brand.

LITERATURE REVIEW
Several observations in relation to Diffusion Brands:

Examples of diffusion brands around in the fashion world are: Armani launched Armani Exchange, Calvin Klein introduced CK, and Prada started a diffusion brand with a whole new name: Miu Miu By launching a diffusion brand, a parent luxury brand enters a new world of luxury also referred to as mass luxury and affordable luxury Diffusion brands are a good way to target young consumers and they can tap well into the trend of status consumption Research demonstrates that diffusion brands have the same quality and status perception among younger target market as parent brands Also, the success of diffusion brands is often determined by a brand naming strategy. So, it is important for a child brand to bear the name of the parent brand

To explore the feasibility of UCB for a diffusion brand

RESEARCH OBJECTIVE (RO)

1.To understand the buying behavior of customers of casual wear clothing 2.To explore the customers perception of UCB and its competitors 3.To study the existing Diffusion Brands in India and their performances 4.To understand the degree of acceptance for UCB Diffusion Brand

RESEARCH SAMPLING SAMPLE SAMPLE DATA(RD) TECHNIQUE SIZE FRAME (AGE GROUP)
Primary & Secondary data Online study, interview and questionnaire 50

SAMPLING UNIT (PLACE)

18-22 years Malls-G.K, City Walk, South Ex. College-PAF

Primary & Secondary data

Online study, interview and questionnaire

50

18-22 years Malls-G.K, City Walk, South Ex. College-PAF

Primary & Secondary data

Online study, interview and questionnaire

50

18-22 years Malls-G.K, City Walk, South Ex. College-PAF

Primary data

Interview and questionnaire

50

18-22 years Malls-G.K, City Walk, South Ex. College-PAF

1. UNDERSTAND THE BUYING BEHAVIOUR OF CUSTOMERS OF CASUAL WEAR CLOTHING

The customers have become more brand conscious Target Market

Teenage Segment (15-22 years) Twice a month

Frequency of buying

Average spending

Rs. 3,000 - Rs. 5,000 Malls, retail stores

Place of buying

2. EXPLORE THE CUSTOMERS PERCEPTION OF UCB AND ITS COMPETITORS

1. It is the closest competitor to Benetton.

2. It has more than 1,300 shops in almost 40 countries. 3. The company has a larger market share than Benetton with 68% compared to Benettons 12%. 4. This is due to the Inditexs six banners compared to Benettons five, and also because of the Benettons marketing campaigns which were banned in several countries.

3.STUDY THE EXISTING DIFFUSION BRANDS IN INDIA AND THEIR PERFORMANCE

ARMANI ARMANI EXCHANGE

CALVIN KLEIN

CK

LEVIS

LEVIS SIGNATURE (DENIZEN)

FACTORS AFFECTING THE PURCHASE OF A DIFFUSION BRAND:

50% 45%

40%
35% 30% 25% 20% 15% 10% 5% 0% Parent brand reputation Unique design Lower price Promotion

WOULD THE DIFFUSION BRAND DEVALUE ITS PARENT BRAND?

30% yes 70% no

4. UNDERSTAND THE DEGREE OF ACCEPTANCE

FOR UCBS DIFFUSION BRAND

RESPONSE

72% positive 28% negative

FINDINGS
Following are the findings from the research that was conducted:According to 70% of the sample size, "Price is one of the most important determinant that influence customers buying behavior. Other determinants include: brand name, country of origin (which are indirectly related to the product) and rest are: safety, fiber content, color,etc(these are directly related). 65% of the people who were part of survey, find UCB prices high as compared with its competitors. 70% feel that diffusion brand would not devalue its parent brand while the remaining 30% feel opposite. According to 55%,the main reason they would buy diffusion brand of any premium brand is because of the brand reputation and brand name. 72% feel UCB should launch its Diffusion brand.

ANALYSIS
United colors of Benetton is a global company which specializes in designing and manufacturing of clothing. It is Italian-based company. Today, it is present in 120 countries around the world. It has five banners under its product category selling which sells everything from casuals wear to fashion wear garments. The clothing industry is getting saturated with more and more companies coming into the picture and selling the same product.UCB biggest competitor present in the market is Zara. With the help of the research conducted, the problem identified is that its main target audience is the young consumers who have low purchasing power, find UCB prices high as compared to other brands, as a result, they tend to shift their brand. The solution to this problem is found through research which is launch of UCB Diffusion Brand like other premium brands did when they were facing the similar kind of problem.

RECOMMENDATIONS
Our recommendation is that UCB (United Colors of Benetton) should launch its second line of products (i.e. Diffusion Brand) which are cheaper and affordable by younger generation as compared to its main line products, in order to retain its customers and face the competition.

LAUNCH OF DIFFUSION BRAND

4ps:

Price: Prices has to be lower than the main line products like: t-shirts Rs.500-600 and jeans Rs.1000-1500
Product: It consists of casual wear like:t-shirt,jeans, shirts,capris. People: Their target audience is younger generation ageing between 18-22 years Place: Small markets like: Rajouri market,GK Promotion: Through websites like: facebook,twitter;etc.