Topic on Brand extension of Virgin Group

1. Are there any
Boundaries in
the Virgin
Brand name?Prathamesh Bobade,
PGP31079
Indian Institute of
Management, Lucknow
Brand Management, Section A

2. 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)

3. 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

4. Overview Strategy
Get into
Categories
where
consumer needs
are not well met
and do different
things to satisfy
consumers
DiversificationBranding

5. Pioneering
Ventures

6. Brand Extensions
400+ Sub
brands

7. 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.

8. Brand-Product
Matrix
Ansoff Matrix

9. Virgin Group : Market Penetration
Strategy This 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

10. 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

11. 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.

12. 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:

13. Brand-Product Matrix
Extensions

14. Awareness generation by Sir. Richard
Branson

15. Virgin Group (Fun, Informative,
Humours Advertisements)

16. Virgin Group (Informative, Humours
Advertisements)

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

18. 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

19. 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

20. 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
Disclaime