brand extension- virgin

Are There Any Boundaries To Virgin.??

Virgin Timeline

Virgin Growth Strategy

The time to go into a new business is when its badly run by others

-Virgin

Growth Through New Brand

House OF BrandsUse of Different brand

names for different categories of products

Growth Through Sub Brand

Growth Through Same Brand

Branded HouseEvery new

venture is launched with the name of the parent company

Improved Image• Consumers build

perceptions• Likely to expect same

performance

Reduced Risk• Less perceived risk with a

known brand family• Credibility through

experience

Higher Acceptance• Higher probability of trial

and distribution• Brand Reputation a key

selection criterion in supermarkets

Why Branded House..??

Higher Promotional Efficiency• Ad-to-Sales ratio 10% for

extension as compared to 19% for new Brand

• Awareness of brand not required; efforts concentrate on product

Packaging and labeling efficiencies• Create a billboard effect• Cost saved by using similar

designs effectively

Introductory and follow-up efforts reduced• Brands can save upto 30-40% of

launch cost• Association with multiple

brands allows for less follow-up efforts

Why Branded House..??

Increased Market• New customers in Brand

Franchise• Diversified revenue

sources

Revitalized Brand• Extensions renew interest

in a brand• Spillover Effects help

mature products to earn more

Easy Extensions• A Branded House

philosophy helps in easy future extensions

• Higher recognition and acceptance

Why Branded House..??

Virgin Communication

• Suitability issues with related extensions• New extensions may not get shelf space

Confused Customers

• Only top-selling brands preferred• Might require additional shelf cost

Retailer Resistance

• Extension might prove to be a failure• Immediate effect on the parent brand

Hurt Parent Brand Image

Risks With Brand Extension

• The extension might be a success• Overlap of customers may lead to cannibalisation

Cannibalize Parent Sales

• The extension may be a success in a non-related industry• Might weaken the belongingness with original industry

Diminish Identification

• Premium image in one industry• The extension might be low end product and dilute brand

Dilute Brand Meaning

Risks With Brand Extension

Failed Virgin Brands

Failed Virgin Brands

Extension Guidelines

Favorable Parent Brand + Extension Fit= Success

Extension GuidelinesBrands Seen as Prototypical for

a product Difficult to Extend

Extension GuidelinesVertical Extensions can be difficult

And may require Sub-Branding

Conclusion

Brand Extension with due

diligence and thought-out action plan

Failure due to over

exploitation of brand

extension

• Created by Shubham Vijay during Brand Management course under the guidance of Prof. Sameer Mathur (IIM Lucknow)

Disclaimer