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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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
The Issue of Brand Extension/Brand Dilution
Branson responded to criticisms of Virgin's brand extension strategies by arguing that Virgin looked at long-term growth and not short-term profits.
On the issue of dilution of brand equity, he said, "The key to
making sure the Virgin name stays fresh and successful is obviously
not to overdo it, and to make sure any product we apply it to is
really going to go in there and shake up the industry it is in. So
we are really only working with products that we think can grow into
global billion dollar businesses within five years."
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Commenting on the detractors of brand stretching, Branson said, "They think that brands only relate to products and that there is only a limited amount of stretch that is possible...
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Where Does Virgin Go From Here?
Meanwhile, problems with various Virgin businesses continued into the 21st century. Virgin Clothing was closed in 2000 and Virgin Cosmetics posted a loss of £6.7 million for the financial year ending March 2001.
After the terrorist attacks in the US in September 2001, Virgin's airlines businesses suffered from the global slump in the industry. Virgin Rail was also expected to become a problem when the subsidies from the UK government that were making the venture profitable ceased... |
Exhibits
Exhibit I: The Virgin Group of Companies*
Exhibit II: Virgin - Some Major Events
Exhibit III: The Virgin Philosophy
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