brand extension- virgin
TRANSCRIPT
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