Virgin Group: Advertising and Different Consumer Segment

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Table of Contents

Introduction
Virgin History and major events
The Richard Branson Factor
Conclusions
References

Introduction

Right kind of advertisement targeting the right people at the right time is the call of today’s marketing world and consumer market. Today companies are not only relying on domestic market but also venturing into international market for reasons that are but obvious – increase in profit, growth, share, brand recognition. For this they need the right kind of advertising and distribution of their products globally taking into account following factors:

Local consumption behavior;
Local purchasing power.

The brand name that has been considered for the scope of this paper is Virgin Group. Virgin Group is a business conglomerate, which has 200+ companies and several brands under the parent company. It has more than 50,000 employees spread across 29 countries and a revenue generation of more than £5 billion. Virgin Group is synonymous with Richard Branson who is the chairman and owner of Virgin Group – UK’s one of the most well known diversified business group. Branson is a prominent business figure in UK and is popular for his own crazy way of taking risks and promoting his brands. His eccentric publicity stunts and flashy lifestyle has made Virgin Group what it is today.

The way a brand is built and nurtured, determines how much robust and sturdy it will be in disturbed phases. Brand building has a significant share of advertisements and promotional activities but is in no way limited to it. It is a sum total of various other activities and efforts. At times the marketers go a step ahead and create ads to attract attention but end up becoming centres of problems and ruin the brand’s image (Messner and Oca. 2005, 1897).

Virgin History and major events

Year	Events
1972	Launched itself with a music record shop
1984	Virgin Atlantic Airways started between London and New York
1986	Became a Listed Company
1991	Virgin Record Company sold off to help the airlines business survive
1994	Virgin Cola and Virgin Vodka Launched
1995	Acquired MGM
1999	Sold 49% stake in Virgin Airways; also virgin mobile phones launched in UK
2001	Mobile Phone services launched in Singapore
2004	Launched Virgin Galactic – first Commercial Space Tourism Business ever launched

Major Advertising Strategies adopted by advertising firms and there relevance in Virgin Group:

Acquisition and Mergers: Virgin has entered the Russian Broadband market with ‘Virgin Connect’ which is operated by ‘Trivon’. This is a merger between Virgin Group and local operator Trivon.
Foreign Direct Investment: Virgin Group has invested in a low cost Malaysian Airlines called AirAsia X that began operating from 2007, where it holds 20% stake.
Global Presence: Virgin Group has started a radio station in France by the name Oui FM.

The Richard Branson Factor

Branson has always tried to expand his business to almost every product category possible, competing and taking directly on big shots of the industry like Coca Cola, Pepsi, British Airways. He wanted to be the largest and not the best for which he had brave heartedly taken many risks all through his career, believing there is money, revenue and profit in every business whether small or big.

Branson paid utmost importance to advertising and promotion of his brands. This is evident from the fact that the most highly paid and important employee in Virgin Group is public relations and communication director. The PR employee makes sure that any ill or negative publicity is handled at that very moment which can otherwise cause severe damage to the brand image, so high priority is given to such employees. Richard Branson devotes 25 percent time for PR activities. The key role of his PR director is to plan out his popular unconventional publicity stunts, and Branson admires there effort and wants the world to recognize it too. He believes that if he performs the publicity stunts himself rather that employing somebody else to do it, then he saves millions of dollars.

Branson has succeeded by always looking from consumers perspective and understanding that in making profit. Consumers have attached themselves very strongly to the Virgin brand as Branson has built it on his own through consumers point of understanding. He has instructed his employees to treat his customers the way he woul want himself to be treated. This is apparent from what has happened in Virgin Atlantic Airways, the hospitality has won hearts, won quite some awards. He spends time in recruiting the best and efficient people to help him in his business. He believes dealing with his employees with care is very important. He motivates them to the greatest possible extent, and encourages them to motivate other employees as well, hence employees feel happy and privileged to work in such an encouraging, motivating and caring environment.

Richard Branson is seldom concerned about profits and huge money flowing in, rather he lays stress more on recognition and standing out in crowd. He never talks about the revenue in numbers or percentages. He wants his employees to be proud of him and the Virgin Group, so he doesn’t believe in following conventional practices as done by rest of the industry, he wants the industry to look at him with gaze on his unconventional methods of doing things. For Mr Branson, employees are always the first priority, then comes the customers and at the end shareholders. He strongly believes that his employees need to be motivated and happy to get effective and efficient work out of them. This will in return automatically make the customers happy which will make the company perform well and ultimately shareholders will be satisfied as well. Branson never goes for extravagant lifestyle, mixes with his employees very well, stays where his employees stay. He makes sure that each of his employee is handed over a Virgin Card which would provide discounts on Virgin products and services like airline, electronic items, financial services. Branson goes through his employee mails everyday as the day starts. This gives Virgin Group a very open culture wherein employees feel free to interact directly with the chairman himself. This is a very positive move by Branson and for such a big conglomerate. As a result employees share there distress and unhappiness directly with him so that the message doesn’t get altered somewhere between through any middle man. Branson takes time and responds to each employee with patience and care which the employees appreciate and love about there chairman.

Few mistakes and brand failures associated with Virgin and reasons behind them:

Virgin Cola: Virgin Group tried to enter into an unfitting and inappropriate category with Virgin Cola. In a world witnessing the famous cola war between Coca Cola and Pepsi, Virgin Cola seemed out of place. In spite of knowing the fact about market, Branson decided to take a risk by introducing Virgin Cola at a price lower than Coca Cola and Pepsi. But this brand extension became a major failure in the history of Virgin Group. The main reason for its failure – Virgin Cola was not allowed to have sufficient shelf space in all major Supermarkets and Hypermarkets by Coca Cola and Pepsi. Hence the lapse was caused in distribution. (Haig, 2003, 94-95)
Virgin Money: Virgin Group always tried to associate itself with the youth. Venturing into financial services with Virgin Money was not accepted as an interesting idea by youth.

Branson feels that a brand flourishes around its reputation and not product. But it is not the case always as can be seen from the above 2 examples. But one prime example where the above mentioned Branson theory actually worked is in improving the condition of the badly shaped UK railways when Branson tried to influence it through its brand name with the introduction of Virgin Trains, and it worked, Virgin leveraged on its brand name.

How to build a strong brand and avoid mistakes – taking Virgin Group as an example.

Right Publicity: Richard Branson believes in unconventional publicities and advertisements. For eg. he came in a brides gown for the promotion of his attire company Virgin brides. He may have looked funny and foolish at times but he knows that it worked for the brand as it gained recognition through such publicity stunts. Other advertising stunts include – To introduce Virgin Cola he drove a tank down Fifth Avenue New York., he chose to ride himself in life risking hot – air balloon, he has also once acted as getting drowned in “Baywatch.”

Brand Egoism: At times brand tries to expand itself to every consumer product possible, not considering whether it can be fit into that expansion or not as happened with Virgin Cola. Branson was on a massive expansion plan without considering the consequences. Virgin had to bear the outcome as it failed in the market owing to poor publicity and distribution strategies.

Brand Fatigue: Sometimes brands get tired of their own brand when they are in the market for long, and they tend to shut businesses for those brands. This is apparent from the first business line of Virgin Group – Music Record Shop which started in 1972 and sold off in 1991. The business was there for a long time but the management couldn’t sustain it more believing it to be obsolete and out of date and closed down the music record business.

Brand Irrelevance: Whenever a new product line is introduced, the advertising and publicity should go with the image of the existing umbrella brand. In case of Virgin Money, people could not associate with the brand as Virgin Group has an image which associates itself with youth. The promotion was not proper as well.

Conclusions

As believed by Richard Branson that a brand revolves around its reputation, Virgin Group did prove it to quite an extent by exploring into almost every business imaginable and succeeding too. It could achieve all its glory through the right kind of promotion, advertising and distribution. Richard Branson gave utmost importance to advertising and promotion as is evident from the fact that public relation director is the most important and highly paid employee in Virgin Group. His eccentric public stunts like coming in brides dress, jumping off from high altitude tanks have given recognition to his brands – Virgin Brides and Virgin Cola respectively. He also believes that doing such flamboyant stunts himself rather than considering someone else to do those save him millions of dollars. Its promotional strategy involved mergers and acquisitions, Foreign Direct Investments as well. In a nutshell, Virgin Group has used the right advertising and promotional strategies to see Virgin Group where it stands today.

Brands are not created in a single day. They need sustained and planned approach to grow up. Virgin has proved that brands at times grow across cultures, nations, and become synchronous with images. Brand image change the way people perceive it’s need and usage. A brand like Apple even after a failure, is still adored by its customers/patrons due to it’s image which basically builds up its brand value.

Brands if nurtured properly bring value to the organization while if handled carelessly a brand can push an organization to the verge of destruction by financial loses. Advertising today has also outgrown it’s classical role and tries to be more focussed to cater to the audience which makes sense to the product. (Turow, 1997, 51) Further media communication today communicates similar messages across different media channels which are fallouts of Integrated Media Communication (IMC) initiatives. (Leslie, 1995, 402) Agencies have accelerated the push toward standardised campaigns, global research studies, global media buying, and international accounts. In this way, agencies mediate the globalization of both clients and consumptive markets.

References

Ezine Website, (2008). Web.

Haig,M. (2003), Brand Failures (P: 94-95), Web.

Leslie,D.A. (1995), Global Scan (P: 402 – 426). Web.

Messner, Michael A. and Signs, Jeffrey Montez de Oca. (2005). The Male Consumer as Loser: Beer and Liquor Ads in Mega Sports Media Events; 30, 3; Research Library Core (P. 1879).

Turow, Joseph. (1997). Breaking up America: The dark side of target marketing American Demographics; 19, 11; ABI/INFORM Global (P. 51).

Vimeo Website, (2008).

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