I've been meaning to write this post for ages, so here we go. It draws on the research done for the brand stretch book (blatant plug: the only book in the whole wide world on brand extension). I'm offering a free copy of the book to the reader who is first to answer a Virgin brand trivia question at the bottom of the post.
Virgin is perhaps the most mis-understood and mis-used examples of brand extension ever. Make no mistakes, Sir Richard Branson has more balls, bravado and billions that I or anyone reading this will ever have. But when it comes to a case study in brand strategy, he's not the guy I'd use for inspiration.
Virgin is often portrayed as a 'philosophy' or 'lifestyle' brand that has successfully stretched into everything from life assurance to lingerie, unbound by banalities such as functional product performance. According to this theory, its the emotional values that ties together the 350 different disparate Virgin companies. So, people fly Virgin Atlantic because they buy into the philosophy of the brand challenging the big bully boys like BA.
This is, how can I put this politely? Sorry, I can't...its a load of old bollocks.
Firstly, the brand stretch performance of Virgin has been patchy. Virgin Atlantic is by far the biggest success, with its £1.9billion of turnover roughly 50% of the entire Virgin Group's sales. But as Professor Mark Ritson of London Business School commented in Marketing magazine, 'For every Virgin Atlantic there have been numerous failures such as Virgin Cola'.
Second, and most importantly, it aint the emotional 'sizzle' of lifestyle values that drove Virgin's success. The successful brand extensions all have a great product 'sausage', inspired by the Virgin personality of being irreverent and fun. You can see this in the Virgin brand values from the brand's website. Four of the six values are linked to product/service (innovation, brilliant customer service, quality and value for money), with the other two more about the sizzle (fun and competitively challenging). Of course the antics of Sir Richard have been a huge help in getting PR for the brand's extensions. But the long term success or failure of these extensions comes down to how good the product is.
Virgin Atlantic works because of the host of great service features they offer, such as a limmo service, amazing lounges, market-leading entertainment, on-board massages and so-on. But look at Virgin Vodka, Virgin Jeans and Virgin Cola and ask 'where's the sausage'? Where was the innovation? Would you ditch your Diesels for Virgin Jeans, or pour away you Absolut for Virgin Vodka? No. These products were examples of logo slapping the Virgin name onto me-too products. In the case of vodka and jeans, the brand lacked the credibility to compete in these markets. These are what I call 'brand ego trips', where the brand gets too big for its boots.
The other thing the sharp minded readers out there may have figured out is that there is another common feature of the successful Virgin brand extensions that differentiates them from the failures. What is it they have in common?
Prize of a free brand stretch book for the first correct answer posted below in the comments section (Monday e-mail readers, click on the title of this post to go to the site and add a comment).