Diversification of Virgin Group
DIVERSIFICATION
The Virgin Group covers a wide range of industries
But keeping the brand name in all of them is not a good strategy. This is because the brand Virgin originally stood for a particular set of products/services with its own brand image. But when it affixed it to every possible product/service that wasn't necessarily related to the original product/service, it lost its value. The brand lost its brand image that it cannot deliver one particular message to its consumers as the products/services are too varied.
This fact can be proven when you ask people what words, images, or ideas they can associate with Virgin. Chances are they would mention different ideas and would not be able to come up with one coherent advantage that would differentiate Virgin from all others. What Virgin did was dangerous as consumers always have a certain perception about a brand and it can either be good or bad. If originally, they perceive a certain brand to be superior, and when it diversifies and its other products/services are not as good as the original, then the brand can lose its brand equity. On the other hand, if consumers originally perceive a brand to be mediocre or horrible, then attaching it to other superior products/services by the same company can ruin that particular product/service because of the negative associations the original brand has made.
By keeping the brand name Virgin in all of its products, the Virgin group has watered down the strength of the brand instead of strengthening it further. This is also probably why not one of their products is considered the leader in any of the industries it is in. Also, it is very hard to develop brand loyalty with Virgin, as the consumers cannot develop one particular relationship with the brand as it is not connecting in a way that is relevant to them.
On the other hand, Benetton pursued Related Diversification. It houses a variety of products that complement each other and are all related to fashion and
The Virgin Group covers a wide range of industries
But keeping the brand name in all of them is not a good strategy. This is because the brand Virgin originally stood for a particular set of products/services with its own brand image. But when it affixed it to every possible product/service that wasn't necessarily related to the original product/service, it lost its value. The brand lost its brand image that it cannot deliver one particular message to its consumers as the products/services are too varied.
This fact can be proven when you ask people what words, images, or ideas they can associate with Virgin. Chances are they would mention different ideas and would not be able to come up with one coherent advantage that would differentiate Virgin from all others. What Virgin did was dangerous as consumers always have a certain perception about a brand and it can either be good or bad. If originally, they perceive a certain brand to be superior, and when it diversifies and its other products/services are not as good as the original, then the brand can lose its brand equity. On the other hand, if consumers originally perceive a brand to be mediocre or horrible, then attaching it to other superior products/services by the same company can ruin that particular product/service because of the negative associations the original brand has made.
By keeping the brand name Virgin in all of its products, the Virgin group has watered down the strength of the brand instead of strengthening it further. This is also probably why not one of their products is considered the leader in any of the industries it is in. Also, it is very hard to develop brand loyalty with Virgin, as the consumers cannot develop one particular relationship with the brand as it is not connecting in a way that is relevant to them.
On the other hand, Benetton pursued Related Diversification. It houses a variety of products that complement each other and are all related to fashion and