Virgin - Brand Extension or Brand Dilution?
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Case Details:
Case Code : MKTG072
Case Length : 14 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Virgin
Industry : Airline
Countries : USA
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The Debate on Virgin Contd...
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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?
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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.4
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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 Bullmore, 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."5... |
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