Virgin Mobile
The case discusses the brand extension strategies adopted by the Virgin group.
Detailed information is provided about the values of the Virgin brand and the part they played in the group's foray into many different businesses.
The case also discusses how the Virgin group's Chairman and CEO, Richard Branson, became an integral part of the brand itself.
It then moves on to discuss the criticism leveled against the group for allegedly diluting the equity of the Virgin brand through reckless brand extensions.
The views of various industry observers and analysts are provided along with the views of people employed by Virgin.
Finally, the case discusses the future prospects for the brand in light of the various problems the Virgin group was facing in the early 21st century
I believe there is almost no limit to what a brand can do. You can ignore those who go on about brand stretching.
- Richard Branson, Chairman & CEO, Virgin Group, in October 1998.
"There are times that a brand just has to say 'no' to a brand extension. Weak brand extensions weaken the entire brand, and that is a terrible thing to do to a strong brand name."
- John L. Mariotti, President & CEO, The Enterprise Group, commenting on Virgin's brand extension strategies, in July 2002.
The story of Virgin, one of the United Kingdom's (UK) most globally popular brands, evolving into the "most stretched brand ever" in the history of the corporate world, had become a part of marketing folklore by the end of the 1990s.
The issue of the role played by the man behind the brand, Richard Branson (Branson), in building it through unconventional publicity stunts, has also been done to death.
The amount of media coverage that the Virgin group and Branson have generated is indeed impressive.
In fact, Virgin is often cited as THE answer to silence those who claim that no brand can be everything to everyone.
Spanning a wide range of businesses, such as music, aviation, FMCGs, broadcasting, publishing, bridal emporiums, cosmetics, telecommunications, financial services and utilities, Virgin seems to defy many widely believed marketing postulates, particularly the ones related to brand extensions.
Supporters of the Virgin group's business strategies claim that in a world of one product/idea companies, such as Coca-Cola, McDonald's and Southwest, Virgin was one of those select few that were equally at home with selling condoms and running trains.
But did these brand extensions translate into financial success?
Since the late 1990s, many of Virgin's extensions had fared rather poorly, particularly its cola, vodka, utilities, train services, computers and mobile telephony (in Singapore) businesses.
Since the Virgin group was a private entity, analysts did not have access to its financials, and hence could not categorically comment on its overall performance.
The fact that Branson and his team made elaborate efforts to balance the poor showing of one venture with profits of another further complicated the matter.
Given these circumstances, it was but natural for marketing experts and industry observers to take divergent stands regarding the soundness of Virgin's branding strategies.
Commenting on the issue, Jeremy Bull more, advertising industry veteran and outside director for advertising firm WPP Group, said, "I cannot think of a company that has put its brand on so many products.
Overstretching ends up in only one way: snapping. Excerpts. Building the Virgin Empire
The Virgin empire's origins can be traced to a music record shop started by Branson in London in 1972.
The name Virgin was chosen since all the people involved in the record shop venture were virgins (denoting novices) as far as the world of business was concerned.
From the very beginning, Virgin Record Company was a success, with artists and groups such as Mike Oldfield, Phil Collins, Peter Gabriel, Paula Abdul, Janet Jackson, Bryan Ferry, Belinda Carlisle, The Rolling Stones, Simple Minds, The Human League, Culture Club and Genesis in its portfolio...
Building the Virgin Brand
According to Branson, since the Virgin brand conveyed a sense of youth, quality, innovation and fun to young people across the globe, the decision to launch products such as cola, vodka and clothing under the label made perfect sense...
Virgin in Trouble:
Business Week article, Virgin had experienced the perils of entering unrelated businesses early on, when it entered the aviation business.
After all, problems with Virgin Airways had led to the distress sale of the profitable Virgin Records.Contrary to his earlier stand that he sold the music business because he did not find it challenging enough, Branson said, "I had to sell a company I loved." Reportedly, his bankers had pressurized him to sell the music business...
The Issue of Brand Extension/Brand Dilution
Branson responded to criticisms of Virgin's brand extension strategies by arguing that Virgin looked at long-term growth and not short-term profits.
On the issue of dilution of brand equity, he said, "The key to making sure the Virgin name stays fresh and successful is obviously not to overdo it, and to make sure any product we apply it to is really going to go in there and shake up the industry it is in.
So we are really only working with products that we think can grow into global billion dollar businesses within five years." Commenting on the detractors of brand stretching, Branson said, "They think that brands only relate to products and that there is only a limited amount of stretch that is possible...
Where Does Virgin Go From Here/future of the company..
Meanwhile, problems with various Virgin businesses continued into the 21st century. Virgin Clothing was closed in 2000 and Virgin Cosmetics posted a loss of £6.7 million for the financial year ending March 2001.
After the terrorist attacks in the US in September 2001, Virgin's airlines businesses suffered from the global slump in the industry.
Virgin Rail was also expected to become a problem when the subsidies from the UK government that were making the venture profitable ceased...................
The case discusses the brand extension strategies adopted by the Virgin group.
Detailed information is provided about the values of the Virgin brand and the part they played in the group's foray into many different businesses.
The case also discusses how the Virgin group's Chairman and CEO, Richard Branson, became an integral part of the brand itself.
It then moves on to discuss the criticism leveled against the group for allegedly diluting the equity of the Virgin brand through reckless brand extensions.
The views of various industry observers and analysts are provided along with the views of people employed by Virgin.
Finally, the case discusses the future prospects for the brand in light of the various problems the Virgin group was facing in the early 21st century
I believe there is almost no limit to what a brand can do. You can ignore those who go on about brand stretching.
- Richard Branson, Chairman & CEO, Virgin Group, in October 1998.
"There are times that a brand just has to say 'no' to a brand extension. Weak brand extensions weaken the entire brand, and that is a terrible thing to do to a strong brand name."
- John L. Mariotti, President & CEO, The Enterprise Group, commenting on Virgin's brand extension strategies, in July 2002.
The story of Virgin, one of the United Kingdom's (UK) most globally popular brands, evolving into the "most stretched brand ever" in the history of the corporate world, had become a part of marketing folklore by the end of the 1990s.
The issue of the role played by the man behind the brand, Richard Branson (Branson), in building it through unconventional publicity stunts, has also been done to death.
The amount of media coverage that the Virgin group and Branson have generated is indeed impressive.
In fact, Virgin is often cited as THE answer to silence those who claim that no brand can be everything to everyone.
Spanning a wide range of businesses, such as music, aviation, FMCGs, broadcasting, publishing, bridal emporiums, cosmetics, telecommunications, financial services and utilities, Virgin seems to defy many widely believed marketing postulates, particularly the ones related to brand extensions.
Supporters of the Virgin group's business strategies claim that in a world of one product/idea companies, such as Coca-Cola, McDonald's and Southwest, Virgin was one of those select few that were equally at home with selling condoms and running trains.
But did these brand extensions translate into financial success?
Since the late 1990s, many of Virgin's extensions had fared rather poorly, particularly its cola, vodka, utilities, train services, computers and mobile telephony (in Singapore) businesses.
Since the Virgin group was a private entity, analysts did not have access to its financials, and hence could not categorically comment on its overall performance.
The fact that Branson and his team made elaborate efforts to balance the poor showing of one venture with profits of another further complicated the matter.
Given these circumstances, it was but natural for marketing experts and industry observers to take divergent stands regarding the soundness of Virgin's branding strategies.
Commenting on the issue, Jeremy Bull more, advertising industry veteran and outside director for advertising firm WPP Group, said, "I cannot think of a company that has put its brand on so many products.
Overstretching ends up in only one way: snapping. Excerpts. Building the Virgin Empire
The Virgin empire's origins can be traced to a music record shop started by Branson in London in 1972.
The name Virgin was chosen since all the people involved in the record shop venture were virgins (denoting novices) as far as the world of business was concerned.
From the very beginning, Virgin Record Company was a success, with artists and groups such as Mike Oldfield, Phil Collins, Peter Gabriel, Paula Abdul, Janet Jackson, Bryan Ferry, Belinda Carlisle, The Rolling Stones, Simple Minds, The Human League, Culture Club and Genesis in its portfolio...
Building the Virgin Brand
According to Branson, since the Virgin brand conveyed a sense of youth, quality, innovation and fun to young people across the globe, the decision to launch products such as cola, vodka and clothing under the label made perfect sense...
Virgin in Trouble:
Business Week article, Virgin had experienced the perils of entering unrelated businesses early on, when it entered the aviation business.
After all, problems with Virgin Airways had led to the distress sale of the profitable Virgin Records.Contrary to his earlier stand that he sold the music business because he did not find it challenging enough, Branson said, "I had to sell a company I loved." Reportedly, his bankers had pressurized him to sell the music business...
The Issue of Brand Extension/Brand Dilution
Branson responded to criticisms of Virgin's brand extension strategies by arguing that Virgin looked at long-term growth and not short-term profits.
On the issue of dilution of brand equity, he said, "The key to making sure the Virgin name stays fresh and successful is obviously not to overdo it, and to make sure any product we apply it to is really going to go in there and shake up the industry it is in.
So we are really only working with products that we think can grow into global billion dollar businesses within five years." Commenting on the detractors of brand stretching, Branson said, "They think that brands only relate to products and that there is only a limited amount of stretch that is possible...
Where Does Virgin Go From Here/future of the company..
Meanwhile, problems with various Virgin businesses continued into the 21st century. Virgin Clothing was closed in 2000 and Virgin Cosmetics posted a loss of £6.7 million for the financial year ending March 2001.
After the terrorist attacks in the US in September 2001, Virgin's airlines businesses suffered from the global slump in the industry.
Virgin Rail was also expected to become a problem when the subsidies from the UK government that were making the venture profitable ceased...................