Are there any Boundaries in the Virgin Brand name?

Prathamesh Bobade, PGP31079Indian Institute of Management, LucknowBrand Management, Section A

About the Company• British multinational branded venture capital conglomerate founded by entrepreneurs Richard

Branson and Nik Powell• The brand name "Virgin" arose when Richard Branson and Nik Powell formed a record shop. They

considered themselves virgins in business. • Branson has described the "V" in the logo as an expressive tick, representing the Virgin seal of

approval • Virgin Group has its headquarters at The Battleship Building in the Paddington district of the City

of Westminster• The Virgin Group of companies have a complex structure that contains elements of a generic

conglomerate, a Keiretsu and sometimes simply licences its brand (Virgin Records & Media)

Brand Values • Fun : Enjoyment and Humour, Not offensive and incompetent• Value for Money : Simple, Not cheap• Quality : Attention to detail, not expensive for the sake of it.• Innovation : Challenging convention, not different for the sake of

being different • Competitive challenge : responding to consumer needs, not

being irrelevant • Brilliant Customer Service : Empowered, not unprofessional

Overview Strategy

Get into Categories where consumer needs are not well met and do different things to satisfy consumers

DiversificationBranding

Pioneering Ventures

Brand Extensions

400+ Sub brands

Brand Architecture• Brand architecture is the structure of brands within an organizational entity. • It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one

another. • The architecture should define the different leagues of branding within the organization to reinforce the

core purpose of the corporate brand to which they belong.

Brand-Product Matrix

Ansoff Matrix

Virgin Group : Market Penetration StrategyThis involves increasing

market share within existing market segments. This can be achieved by selling more products or services to established customers or by finding new customers within existing markets. This can be accomplished by: (i) Price decrease; (ii) Increase in promotion and distribution support; (iii) Acquisition of a rival in the same market; (iv) Modest product refinements

Virgin Group : Product Development StrategyThis involves extending the product range available to

the firm's existing markets. These products may be obtained by: (i) Investment in research and development of additional products; (ii) Acquisition of rights to produce someone else's product; (iii) Buying in the product and "branding" it

Virgin Group : Market Development StrategyIn market development strategy, a firm tries to expand

into new markets (geographies, countries etc.) using its existing offerings.This can be accomplished by (i) Different customer segments (ii) Industrial buyers for a good that was previously sold only to the households; (iii) New areas or regions about of the country (iv) Foreign markets.

Virgin Group : Diversification Strategy In diversification an organization tries to grow its market

share by introducing new offerings in new markets. It is the most risky strategy because both product and market development is required. (i) Related Diversification - Here there is relationship and, therefore, potential synergy, between the firms in existing business and the new product/market space. (a) Concentric diversification, and (b) Vertical integration. (ii) Unrelated Diversification:

Brand-Product Matrix Extensions

Awareness generation by Sir. Richard Branson

Virgin Group (Fun, Informative, Humours Advertisements)

Virgin Group (Informative, Humours Advertisements)

Virgin Group (digital & Social Media Presence)https://www.youtube.com/watch?v=KS_6HHQ7jOA ; Virgin Atlantichttps://www.youtube.com/watch?v=dWphkogbaG8 : Virgin Hotelshttps://www.youtube.com/watch?v=I9V53Q7q-fU ; Virgin Mobile Indiahttps://www.youtube.com/watch?v=XSlKay88Ruc ; Virgin Train Ad

Brand Extension Advantages

Facilitate new product acceptance :• Improve brand image• Reduce risk perceived by customers• Increase the probability of gaining

distribution and trials• Increase the efficiency of promotional

expenditures• Reduce cost of introductory and follow up

marketing programs• Avoid cost of developing a new brand• Allow for packaging an labelling efficiencies• Permit consumer variety seeking

Provide feedback benefits to parent brand :• Clarify brand meaning• Enhance the parent brand image • Bring new customers into the brand

franchise and increase market coverage• Revitalize the brand• Permit subsequent extensions

Brand Extension Dis-Advantages • Can counter or frustrate consumers• Can fail and hurt parent brand image• Can succeed but cannibalize sales of parent

brand• Can succeed but diminish identification with

any one category • Can succeed but hurt the image of the

parent brand• Cab dilute the brand meaning• Can cause the company to forgo the chance

to develop a new brand.

• The line and Category extension is very aggressive

• Diversification in un related products can dilute the brand image of the parent brand if it doesn’t go hand in hand with the consumers perceived image

• Not all the extended products have been successful.

• Use of Richard branson to launch new product is working but if the brand image of Richard branson suffers it will have a direct impact on the parent brand ‘Virgin’ as there seems to be a great degree of brand association between Richard branson and Virgin

Virgin Group

These slides were prepared as a part of the course ‘Brand Management’ taught by Prof. Sameer Mathur at IIM Lucknow

Marketing Professor 2009 – 2013

Ph.D. and M.S. (Marketing) 2003 – 2009

Marketing Professor 2013 – Present

Indian Institute of Management, Lucknow

PGDM Student 2015 - 2017

Indian Institute of Management, Lucknow

Prof. Sameer Mathur

Prathamesh Bobade

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