Virgin: the worst or best of brand extension? (and win a free book)

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).

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[Nick]

Virgin successes come from from two main drivers- from offering a good product (or service actually in most cases) and from offering a real competitive advantage or difference.

The brand part is represented by the way that these two things are combined and reflect the Virgin "personality", which is what provides the difference and the appeal and so on.

So where Virgin "works" is when it is an integrated holistic package consistent with the brand and offering a sought for point of difference vs competitors. So after 3 of your books they should be getting the point by now...

[David Taylor (from Where'sTheSausage)]

Dear Mr Gates,

What an honour to have such an important person commenting on WTS! Apologies for assuming mis-correctly that billionaires had no time for branding blogs

;-)

[Bill Gates]

Dear David

Please don't make too many assumptions concerning the wealth of your readers.

[David Taylor (from Where'sTheSausage)]

Rob, The more detailed Virgin story in the book suggests that Virgin has a "dual core". As you rightly point out, the whole thing started with record label (in fact, even before this, with a mail order record business...which got closed down as Branson was not paying VAT. He only avoided going to prison as his Grandad was a high court judge, apparently).
=> the music business have the brand its youthfullness, and irreverence

The 2nd bit of the core was then the airline..this is where the "Fighter for value and service" bit of the brand was born

Its this dual core that, in my book, created the platform for everything else.

[robertc17]

I'd challenge this summary of their success. Surely Virgin's real success, and in fact the business that kicked started the whole Virgin Empire was the record label.

Without Mike Oldfield etc. Branson wouldn't have been able to sell it to EMI to allow him to start Virgin Atlantic.

Rob.

[David Taylor (from Where'sTheSausage)]

Rebecca, You were lightening-quick out of the blocks with the correct answer...most of the succesful Virgin extensions are indeed service offers, and most of the flops products. Even Virgin Megastore (retail) is a service offer.

Seems it in service where the Virgin differentiation can shine through, with service innovation (sausage) inpired by the Branson spirit (sizzle).

Plse email your address, and a copy of brand stretch will be in the post!

[Rebecca]

The first thing that popped into my head was that they were all service driven (there isnt really any products involved), but then I think of Virgin Megastores.

Did you know they even have a small bridal store in Manchester?