The Virgin Group Brand

The vestal radical postABSTRACTThe look into has been under(a)taken in order to reveal the unique strategies that the naked as a jaybird Group utilize in its book of factss, and to examine whether it is re solelyy thriving by and through strategies and how out-of-the-way(prenominal) it apprize go in the future. To better answer this question six take aim objectives argon derived. The common chord about important stars atomic number 18 to show the hale accessory history of the vestal tag, its success and failures to demonstrate the unique strategies Virgin employed in its scar lengthinesss to discover the consumers attitude towards Virgins ex ecstasysions and how far Virgin tin provide go.In order to answer these questions, this inquiry contains a lit reexamine, the field interrogation, as sound as analysis and demonstration. The literature review explains the opinion and main issues of instigants, stigmatize fair-mindedness, and blot lengthening. Then the methodological analysis is started and justified, and the wonderd guild and its vane addendum strategies argon introduced. afterward that the results of the ac go with are presented. And the conclusion is excreten according to academic literature, primitive data , and secondary data. experience abilityResearch ContextFor decades the treasure of a participation was measured in scathe of its buildings and land, and then its indubitable additions (plant and equipment). The 1980s bodeizeed a crook point in the conception of strike outs. Management came to realize that the principal asset of a social club was in fact its carry name ( Kapferer , 1997 ) The mug is non the output get along it gives the mathematical product meaning and defines its identity in both(prenominal) time and space. gull beauteousness is regarded as a in truth important concept in care practice as well as in academic inquiry because marketers rear end gain private- projectpr ise(a) returns through prospering grades. The free-enterprise(a) advantage of firms that accommodate markers with noble fair play includes the opportunity for successful extensions, resilience against competitors promotional pressures, and creation of barriers to warring entry( Farquhar, 1989 ) . so far, the cost of introducing a snitch in to a consumer market plunder be considerable ranging from ab verboten $ 100 million ( ourusoff , 1992) , with a 50% probability of failure ( Crawford, 1993 ).Thus, it not a surprise that companies seeking result opportunities whitethorn prefer to extend breathing defacements. flaw extension has been hailed as the way to achieve in a cost controlled environment. By capitalizing on the reputation of an established set, companies save the high cost of creating untested deformitys. advanced products which piggyback on complimentary trade names drive an immediate advantage by entering from a position of strength, thus reducing the peril in failure while the parent check off gains some synergy through the heightened awareness that is generated in successful hot product launches ( Pitta and Katsanis, 1995 ).While successful station extensions chiffonier reap benefits, caution should not forget the risk of extension failure. History shows the potential of set extension problems, which range from out right failure to partial failures. Instead of success, the failed extension might speck the ensure and reduce the market share of the parent product. Since the smear extension decision in fact a strategic one, it is important to estimate strategically beyond the depression extension to future growth areas. nurture more(prenominal) than, it is similarly important to manage those extensions strategically.Virgin grouping was chosen as the subject of this study because it plys great potential for studying the issue of s fondness extension, perhaps the best known example of successful un relate diversi fication. Virgin started out as a publisher and retailer of popular music. Its carry was built up on the qualities expressed by its products. The virgin check is now so powerful that it can be applied to various(a) fields including airline, cola, fiscal service and plane commercial space shuttles in the future. The Virgin group has a unique strategy in extending and managing its give away. They ache remarkable success and some failure as well . However , to date , its successes shake up outweighed its failures .Research Aims and ObjectivesResearch AimsThis study is an attempt to investigate a company , Virgin group, to gain an insight in to the make management and brand extension theory.. The enquiryer seeks to understand brand extension management both in everyday and in a cross organization. The researcher does not seek to gather statistical data for generalizations, unless intends to make an in-depth study in order to highlight issues within this hit organization.The research has been undertaken in order to reveal the unique strategies that the Virgin Group employed in its extensions, and to examine whether it is really successful through its strategies and how far it can go in the future . In detail , the research investigates the recognition of the virgin brand name , the recognition of the products / services under this brand name , the impact of extensions on brand name , and the detection of the brand by the customers..Research ObjectivesThe research aims to generate the avocation detailed research objectives.1 To define brand image and brand extension2 To demonstrate the consequences of brand extension.3 To clarify the brand extension strategies.4 To show the whole extension history of virgin brand including its successes and failures..5 To demonstrate the unique strategies Virgin employed in its brand extensions..6 To discover the consumers , attitude towards Virgins extensions and how far Virgin can go.All these objectives leave alone be addressed through academic literature review, analysis of lively organisation data, analysis of the organisation survey and interview, and gang of the results.Research coordinateThe following research content can be divided into intravenous feeding sections literature review, research methodology, primary and secondary research, and conclusion.The first section is have-to doe with with the literature review. Before expounding the concept of brand extension, the researcher initially demonstrates the definitions of brand extension as one of the strategies in brand management emerged when brands were regarded as in concrete assets gaining more attention. shuffling extensions are closely cerebrate with brand equity. Successful brand extensions result from good understanding of brand equity. Successful brand extensions result from good understanding of brand equity. After that the researcher clarifies the definition of brand extension, the consequences of brand extension, crit eria in brand extension decisions, and e ratings of brand extensions.In the second section the researcher illustrates the research methodology from three dimensions research philosophy, research appeal, and research strategy. Then the collection methods of primary data and secondary data and the limitation of the methodology depart be addressed.The third section is to the highest degree the primary and secondary research. Secondary data depart be collected and illustrated as the basis of primary research. capital data volition be collected from a standardized questionnaire survey and the data would be analyzed.Contrisolelyion to ResearchThe prior literatures on brand extensions at Virgin Group clearly illustrated the unique strategies Virgin group employed to extend their brand and weighed its success and failures. This topic has been researched and represented on the basis of biographies and case studies in brand extension theories. Most of the literature has expressed doubts regarding how far the Virgin group can go with its brand.The persona of this research is to explore those doubts mentioned above and determine how justified they are. The researcher will conduct a survey from consumers point of view to make the answer. The findings will show the awareness of the virgin brand and its products/services, and the attitudes of consumers towards those extensions in Virgin.Of course, all these aspects are just starting points for further research. It was impractical for the present research to obtain a panoptic overview of Virgins extensions in general, nor was it practical to consider all active documents, initiatives and early(a) related cultivation.Chapter 1 Literature Review1.1 IntroductionIn this chapter, various perspectives of brand extension theories have been reviewed as the basis of the further research. Firstly, the researcher clarifies the general concepts of brand equity. Then brand extension, one of the brand management strategies, is explained in details. The chapter ends with a summery of the literature review.1.2 What is a Brand?1.2.1 Definitions of BrandKeller (1998) explained the origin of the word brand by using the research of Interbrand group. The word brand is derived from the Old Norse word brandr, which means to force out as brands were and still are the means by which owners of live production line mark their animals to identify them. The various accesses to defining brand partly stem from differing philosophies and stakeholder perspectives, i.e. a brand may be defined from the consumers perspective and / or from the brand owners perspective .In addition , brands are sometimes defined in terms of their purpose, and sometimes described by their characteristics(Wood,2000).The American merchandising Association (1960) proposed the following company orientated definition of a brand asA name , term , sign, symbol, or design , or a crew of them , intend to identify the goods or services of one seller or group of sellers and to variousiate them from those of competitors.The definition has been criticized for universe too product - orientated, with tenseness on visual features as differentiating mechanisms (Arnold, 1992 Crainers, 1995).Despite the criticisms, the definition has endured to contemporary literature, albeit in modified from .Aaker (1991) adopt this definition. A brand is a distinguishing name and / or symbol (Such as a logo, trade mark, or package design) intended to identify the goods or services of with one seller or a group of sellers, and to differentiate those goods or services from those of competitors.Ambler (1992) takes a consumer oriented approach in defining a brand asThe bode of the bundles of attributes that someone buys and provide satisfaction.The attributes that make up a brand may be real or illusory, rational or emotional, tangible or invisible.These attributes emanate from all elements of the market mix, and are subject to rendering by the cons umer. They are highly subjective. Brand attributes are essentially what are created through brand verbal description (one interpretation of brand equity) mentioned previously.Many sweet(prenominal) brand definitions and descriptions focus on the methods used to achieve differentiation and/or emphasize the benefits the consumer derives from purchasing brands. These include definitions and descriptions that emphasize brands as an image in the consumers minds, brand personality, brands as value systems, and brands as added value (Wood, 2000)It is possible to draw together many an another(prenominal)(prenominal) of the approaches to brand definition, An integrated definition can be achieved that highlights a brands purpose to its owner, and considers how this is achieved through consumer benefits. Added value is implicit to this definition (wood, 2000) that isA brand is a mechanism for achieving competitive advantage for firms, through different (purpose). The attributes that differe ntiate a brand provide the customer with satisfaction and benefits for which they are willing to pay (Mechanism).According to Philip Kotler ( 1984) , A product is anything that can be offered to a market for attention , learnedness , use , or utilisation that might satisfy a need or want. Thus a product may be a physical good, service, retail store, person, organization, seat or idea. A Brand is a product , then , but one that adds some other dimensions to differentiate it in some way from other products designed to satisfy the same need, These remnants may be rational and tangible related to product performance of the brand of more symbolic, emotional, and intangible related to what the brand represents ( Keller,1998)1.2.2 Functions of BrandsBrands play different roles to consumers and firms (Keller, 1998). To consumers, brands identify the arising of maker of a product and allow consumers to assign responsibility as to which particular shaper or distributor should be hel d accountable. Most importantly, brands take on special(a) meaning to consumers. Because of past experiences with the product and its marketing program over the years, consumers run crosswise about brands. They find out which brands satisfy their needs (Keller, 1998). Thus, Brands Provide a short hand device or means of simplification for their product decisions (Jacoby et al., 1971). From an economic perspective , Brands allow consumers to humiliate search costs for products both internally (in terms of how much they have to think ) and externally ( in terms of how much they have to look around) brands can serve as symbolic devices, allowing consumers to project their own self images. Certain brands are associated with being used by certain types of people and thus reflect different values or traits (Keller, 1998).Brands also provide a number of expensive functions to firms (Chernatony and William, 1998). Fundamentally, they serve an identification purpose to simplify product handling or tracing for the firm. Operationally, brands help to organize inventory, accounting, and other records. A brand also offers the firm legal protection for unique features or aspects of the product. A brand can retain intellectual property rights, giving legal human activity to the brand owner (Bageley, 1995). The brand name can be saved through registered trade marks, manufacturing processes can be protected through patents, and backpacking can be protected through copy rights and designs. Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again ( Erdem ). This brand loyalty provides predictability and certification of demand for the firm and creates barriers of entry that make it tough for other firms to enter the market. Thus, to firms, brands represent enormously valuable pieces of legal property, capable of influencing consumer behavior, being bought and sell , and providing the security of sustained future revenues to their owners ( Bymer , 1991).1.2.3 Brand ArchitectureA company that wants to get behind its incarnate brand and use it more proactively mustiness decide on the most appropriate brand architecture for its business or businesses (Mottram, 1998). There are three alternatives* A massive organise* An endorsed brand architecture* A hybrid structure (Mottram, 1998).A monolithic structure has the corporate brand right at the center. All products and services are branded with the same name, identity and set of brand values. The advantage of this behavior of structure include a seamless transfer of grace of God to the center, cheaper brand building and instant believability when launching fresh products or extending into parvenue markets. The difficulty with the monolithic approach is that the corporate brands personality has to be flexible enough to cover different products and markets while being skillful enough to compete with specialist brands in each segment. When a company us es an endorsed brand architecture, it aims to add the higher values of the corporate brand to the special values of product and service brands in its portfolio in the interest of competitive advantage. Thus the corporate brand can add security, trust and credibility to the positioning of the product or service brand. Brand owners have adopt a number of hybrid approaches. For instance, Nestle has pulled all of its products under ten global banner brands. Each banner brand is marked at a specific market or closely connect markets but, crucially all will continue to benefit from the Nestle corporate endorsement as well. early(a) companies have adopted the name of one of their brands as the corporate brand, in the hope of leveraging specific product brand attributes across the group and increasing the intangible value of the entire business in the process (Mottram, 1998).1.3Brand Equity1.3.1 From Brand Image to Brand EquityBrands have been a major aspect of marketing reality for ov er a hundred years. The theory of branding came sometime later (Feldwick, 1996). David Ogilvy was discussing the importance of brand image as early as 1951 (Biel, 1993). It was first fully articulate by Burleigh Gardner and Sidney Levy in their classic Harvard Business Review story of 1955. But despite such distinguished origins the concept of brand image remained until recently peripheral to the mainstream of advertizement theory and evaluation (Feldwick, 1996). Although it was endorsed from the 1960s forward by the British Account Planning movement (e.g. King, 1970 Cowley, 1989), it was also seen by many advertisers and researchers as a rather woolly theory the sort of thing advertising agency people talk airily about when they failed to get a hard product message across or to convert prospects or to make sales, as they were supposed to be doing (Feldwick, 1996). Brand image was associated with expressions like the soft sell (Reeves, 1961) and the weak theory of advertisin g (Jones, 1991), which gave it, for many, the air of a whimsical luxury that a businesslike advertiser could hardly afford (Feldwick, 1996).In the nineteen -eighties, the hardnosed business people began to happen that brands appeared to be changing hands for huge sums of money. As take-over fever spread, the difference amid balance sheet valuations and the impairments paid by predators was substantially attributed to the value of brands. Suddenly, the brand stopped being an obscure metaphysical concept of in question(p) relevance. It was something that was worth money (Feldwick, 1996).This shift of perception was reflected in the way that the tralatitious expression brand image was increasingly displaced by its solid financial equivalent, brand equity. It is not clear who invented the expression, but few uses of it have been traced in advance the mid- eighties (Ambler and Styles, 1995). It achieved respectability when it was taken up by the prestigious Marketing Science Instit ute, which held a major seminar on the subject in 1988 and has been leaving strong ever since (Feldwick, 1996).1.3.2 Definitions of Brand EquitySince the term brand equity emerged in the 1980s (Cobb- Walgren et al, 1995), it is regarded as a very important concept in business practice as well as in academic research because marketers can gain competitive advantage through successful brands (Lassar et al, 1995). However, thither are a number of alternative methods have been suggested for defining the concept of brand equity, which results in some confusion and even frustration with the term(Keller, 1998).Generally brand equity has been viewed from two major perspectives. The first perspective has used the concept of brand equity in the mount of marketing decision-making. The second perspective has focused on the financial aspects of brand equity, more pertinent to determining a brands valuation for accounting, merger, or acquisition purposes (Pitta and Katsanis, 1995).Financial per spectiveThe financial-market-value-based technique presented by Simon and Sullivan (1993) has been quoted in Motameni and Shahrokhi (1998) for estimating a firms brand equity. The stock price is used as a basis to respect the value of the brand equities. Brand equity is defined as the additive cash flows, which accrue to branded products over unbranded products (Simon and Sullivan, 1993). The estimation technique extracts the value of brand equity from the value of the firms other assets. First, the macro approach assigns an objective value to a firms brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions (Motameni and Shahrokhi, 1998). Simon and Sullivan (1993) believe that financial markets do no ignore marketing factors and stock prices reflect marketing decisions.Financial World uses one of the most adver tise financial approaches in its annual listing of worldwide brand valuation (Cobb-Walgren et al,995).They used a brand-earnings multiplier or weights to calculate brand equity, The brand weights are based on both historical data and individuals judgments of other factors. The brand equity is the product of the multiplier and average of the past three years profits (Motameni and Shahrokhi, 1998).Marketing perspectiveWithin the marketing literature, operationalisations of brand equity usually fall into two groups those involving consumer perceptions and those involving consumer behaviour.Keller (1998) offered a perceptual definition of customer-based brand equity the differential entrap that brand knowledge has on consumer response to the marketing of that brand. A brand with arrogant customer-based brand equity might result in consumers being more accepting of a bare-assed brand extension, less sensitive to price increases and withdrawal of advertising support, or more willing to seek the brand in a sassy distribution channel. Customer-based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favourable, and unique brand tie-ins in recollection (Keller, 1998). The latter consideration is critical. For branding strategies to be successful and brand equity to be created, consumers must be convinced that there are meaningful differences among brands in the product or service household. Brand awareness is created by increasing the familiarity of the brand through repeated impression and strong associations with the appropriate product category or other germane(predicate) purchase or consumption cues (Alba and Hutchinson, 1987). Marketing programs that link strong, favourable, and unique association to the brand in memory create a positive brand image. The definition of customer-based brand equity does not distinguish amid the source of brand associations and the manner in which they ar e formed all that matters is the resulting favourability strength, and singularity of brand associations (Keller, 1998).Cobb-Walgren, Ruble and Donthu (1995) introduced Kamakura and Russells approach relying more on consumer behaviour in their article. They used scanner data to come up with three measurements of brand equity. First is perceived value-was defined as the value of the brand that cannot be explained by price and promotion. Second is brand dominance-provided and objective value of the brands ability to compete on price. Third is intangible value-was operationalised as the utility perceived for the brand minus objective utility measurements (Kumakura and Russell, 1993).Aaker (1991) is one of the few authors to turn back both attitudinal and behavioral dimensions in his definition (Cobb-Walgren et al, 1995). He has provided the most comprehensive definition of brand equity to date A set of assets (and liabilities) linked to a brands name and symbol that adds to firms cus tomers. The major asset categories are (figure 1.1) brand name awareness, brand loyalty, perceived quality, brand associations (Aaker, 1996).Competitive Advantage capital of Minnesota Feldwick (1996) has suggested that brand equity seems to be used in three rather distinct senses, and each of these three has several further nuances of meaning. These area = the total value of a brand as a divisible asset-when it is sold, or included on a balance sheet.b = a measure of the strength of consumers attachment to a brand.c = a description of the associations and beliefs the consumer has about the brand.In his point of view, looking for an operational definition of brand equity just likes asking the wrong question. Brand equity is unavoidably a vague concept. It is depending on the brands individual circumstances- and depending, importantly, on the use to which the findings will be put (Feldwick, 1996).Although a number of different views of brand equity have been expressed, they all are generally consistent with the basic look that brand equity represents the added value endowed to a product as a result of past investments in the marketing for the brand. They all point out that there exist many different ways that value can be created for a brand that equity provides a common denominator for see marketing strategies and assessing the value of a brand and that there exist many different ways that the value of a brand can be manifested or exploited to benefit the firm(Keller, 1998).1.4 Brand attachment1.4.1 New growths and Brand ExtensionDeveloping brand extensions is one type of New Product Development (NPD) (Amber and Styles, 1996). Keller (1998) introduced Ansoffs growth share matrix as background of brand extension strategy. As shown in figure 1.2, growth strategies can be categorised as to whether they deal existing or new products and whether they target existing or new customers or markets.When a company introduces a new product, it has three main choic es as to how to brand it* Develop a new brand, individually chosen for the new product* Apply one of its existing brands in some way* Use a combination of a new brand with an existing brand.A brand extension is when a company uses an established brand name to enter a new product category (Aaker and Keller, 1990).1.4.2 Brand Equity and Brand ExtensionOne stream of brand equity research has focused on brand extensions (Barwise, 1993). Ambler and Styles (1996) have stated the reciprocal relationship between brand equity and brand extensions by combining the finding of other researchers. Part of this work has explored the effect of a brands equity on its extendibility, with the general conclusion being that the firm can leverage a brands existing equity in new categories (Shocker and Weitz, 1988). Research within this stream has plunge that brands with higher brand equity extend more successfully (Rangaswamy et al, 1993). Other research has looked at the reverse relationship the impact of brand extensions on brand equity. The findings are that successful brand extensions can have a positive effect on the incumbrance brand, i.e. build brand equity (Dacin and Smith, 1994 Keller and Aaker, 1992). There seems therefore to be a reciprocal relationship between brand equity and brand extensions (Ambler and Styles, 1996).1.4.3 Brand Extension DimensionsBrand extensions can be accomplished in a variety of ways. One of the most obvious differences is whether the extensions is in the same or different products name to a new product in the same product class or to a product category. Thus they can be classified as any vertical or crosswise extensions (Pitta and Katsanis, 1995).Horizontal brand extensions either apply or extend an existing products name to a new product in the same product class or to a product category new to the company. There are two varieties of horizontal brand extensions, which differ in terms of their focus line extensions and certification extensi ons (Aaker and Keller, 1990).Line extensions involve a current brand name, which is used to enter a new market segment in its product class. In contrast, immunity extensions use a current brand name to enter a product category new to the company (Tauber, 1981). Horizontal extensions lend themselves to innate(p) distancing. Distancing is the purposive increase in the perceptual distance of the extension from the core product. Unsuccessful horizontal extensions are less likely to damage the core brand than vertical extensions since horizontal extensions are often in different-and more distant-product categories. Typically consumers will recognise that such horizontal extensions are not closely related. The downside to distancing is that distancing reduces the amount or strength of the brand associations and reduces the halo effect of the extension (Pitta and Katsanis, 1995).Horizontal extensions may suffer if the core and extension are perceived to be too distant from each other. Br and associations cannot stretch forth over too large a gulf. Research indicates that if the core product is perceived to be of high quality, and the fit between the core and extension is high, then brand attitudes toward the extension will be more favorable (Aaker and Keller, 1990). Without the perceived similarity between the parent and extension, consumers find it more difficult to attribute original brand associations to the extension (Pitta and Katsanis, 1995).In contrast, vertical extensions involve introducing a related brand in the same product category but with a different price and quality balance. Vertical extensions offer management the quickest way to leverage a core products equity,. However, since the new product is in the same category, distancing is difficult and the risk of negative information is higher than with a horizontal extension. As a strategy, vertical brand extension is widely practiced in many industries. Vertical new product introductions can extend in two directions, upscale, involving a new product with higher price and quality characteristics than the original or downmarket, involving new product with lower quality and price points. Downscale vertical extensions may offer the equivalent of sampling to a new market segment, and tot up some market share enhancement. Functional products seem to allow downscale but not upscale extension. Conversely, prestige products allow upscale but not downscale extensions (Pitta and Katsanis, 1995).1.5.1Advantages of Brand ExtensionWell-planned and implemented extensions offer a number of advantages to marketers. These advantages can be categorised as those that facilitate new product acceptance and those that provide feedback benefits to the parent brand or company as whole (Keller, 1998).* Facilitate new product acceptanceWith a brand extension, the cost of developing a new brand, introductory and implement marketing programs can be reduced (Keller, 1998). To conduct the necessary consumer research and employ skilled personnel to design high quality brand names, logos, symbols, packages, characters, and slogans can be quite expensive, and there is no assurance of success. analogous or virtually identical packages and labels for extensions can result in lower production costs and, if coordinated properly, more prominence in the retail store by creating a billboard effect. With a brand extension, consumers can make inferences and form expectations as to the likely composition and performance of a new product based on what they feel this information is pertinent to the new product (Kim and Sullivan, 1995). Because of the potentially increased consumer demand resulting from introducing a new product as an extension, it may be easier to convince retailers to stock and set up a brand extension. It should be easier to add a link from a brand already existing in memory to a new product than it is to have to first establish the brand in memory and then also link the new pr oduct to it (Aaker and Carmon, 1992). By offering consumers a portfolio of brand va