Brand Extension or Brand Dilution

The value of brand is significant to a company; most of the companies around the world want to have a good image in uplifting its brand image. Virgin Group, a British company is being considered the most stretched bran ever in the history of the corporate world.

Richard Branson, the Chairman and CEO of the company played a big role in creating the brand image for the company. Instead of spending millions of dollars on advertising campaign, he uses himself as a live advertisement. Does his publicity works in helping Virgin's brand and profit?Not necessarily. Branson has leaded the Virgin Group in many different ventures in completely different segments of the business; this includes cola, vodka, utilities, train services, computers, mobile phones etc. He actively involves in many different business in trying to diversify Virgin into a rounded corporation, however, Virgin ran into problems. First was the intense competition in its airline business, Branson was forced to sell its money making record company to help on the airline business survive.

Then Virgin decided to run part of the British Rail by promising that they will improve the service and also making the trains arrive on time. Unfortunately, they were not able to deliver their promises to the British people. In addition, Virgin brand had been built around fun and goodwill to enter various businesses; however, they may have failed to take the new ventures serious enough to make the best out of them. Although being involved in various businesses can give the people the image of being competitive and diversified, however, it can also send out mixed messages in the image of the Virgin brand.

Some of the thing Virgin can do to improve the above problems are the following. Virgin may want to concentrate on the ventures that are making money for them. Instead of selling them to compensate for the newly immature ventures, they should build firm basis on the already successful businesses. Not only is this good for Virgin Group in the financial aspect, but also provides good brand image to the public as a successful company.

Furthermore, Virgin will also have to deliver what they have promised.If there are possible difficulties in achieving a goal, they shall not exaggerate it. There will be major damage to a company's credential when a company can not deliver what they have promised to the pubic. Finally, concentrate on a few ventures that they have first before jumping into another venture will also facilitate the public to think of them as inconsistent. There is nothing wrong in giving the public a "young-oriented" image. However, being too actively involved in many different ventures may just give public the opposite image and negative effect.

Virgin may want to reconsider its positioning of their marketing strategy in ensuring the young-oriented yet mature image for its brand. Question One: According to you, what values does the Virgin brand stands for? Answer. Richard Branson, the founder of the Virgin Company, has claimed that the brand name is the most valuable thing for the company. "Virgin" brand has always attached with the image of Branson, in which it creates brand awareness to people around the world.

He has played an important role in the branding image and became the symbol of all the Virgin businesses.According to PR Week opinion poll, 97% of people were aware of Richard Branson, while only 93% are aware of Virgin brand. This may imply that Branson is the major value of "Virgin" brand. All of the businesses in Virgin group have invested very little in marketing campaign or any advertising. Branson was the one who will always appear at different Virgin's events to attract people, especially consumers' attention. His popular personality and smart public relation skills turn Virgin Groups into a renowned brand name.

Therefore, the Virgin name also appeared with the image of Branson.The brand has also conveyed its concept to consumers as a sense of youth, quality, innovation, and fun to young people around the world. Their reputation on being innovative has attached to people's mind that Virgin always comes up with initiative and interesting products. In addition, the brand had also been built around goodwill to create global brand and build trust to consumers. The positive impression of brand towards consumers allows the company to penetrate into different markets with different kinds of products and services industry easily.

However, the brand has been diluted since the company has faced many failures.The company has failed to follow its own concept and keep the image in some business, such as the railway business in United Kingdom, finance, and telecommunication business. Consequently, the first Brand Marketing Director of Virgin group, Ashley Stockwell, was appointed to deal with the negative image that Virgin is now facing and protect the value of Virgin brand name. Therefore, the Virgin brand has its value in the name itself in which no other companies can compare and imitate. The brand name with famous reputation of Richard Branson and the unique concept of the Virgin Groups combine to create the value for Virgin brand.