While the Virgin Group is now an $18 billion global brand operating a far-flung empire of airlines, trains, mobile phones, health centers, music, bridal wear, vodka, cars, bank accounts, cosmetics — and, yes, spaceships and submarines — it is still viewed as the same scrappy upstart that began 41 years ago as an indie record label that took on the majors. Even as the company continues to expand, Virgin has become particularly adept at maintaining its brand message as consumer champion and corporate jester across a disparate product universe. The reason is fairly simple. Virgin has remained steadfastly consistent to its set of core values: “value for money, quality, innovation, fun, and a sense of competitive challenge,” and translating that vision into the businesses it brands red.
According to Joe Lynch, account director at Nunwood, a British-based firm that advises Virgin on its brands, the company has leveraged its distinct identity with the flamboyant Richard Branson at the helm swatting at large corporate piñatas to its advantage. “Within that consistency the brand is able to be the same across geography even if it is a different industry,” he says. “You have a ‘Virgin’ experience whether you fly or take the train or use a mobile.” And that he says is what is at the core of all brand decisions. “What is the essence?” says Lynch. “There is a regard for the product or service. Does this actually break the mold? Does it benefit the consumer? Does it improve its industry? Ultimately does it shake things up? It can be challenging in different categories and geography,” but he says these are the fundamentals that permeate at every level of the company.
Not surprisingly, Virgin receives countless submissions for consideration. Lynch works with senior Virgin executives helping to filter through them. Recently they came up with a framework to approach new business ideas. One of the first things assessed is the scope of its appeal. Will it hit lots of people or is it a niche idea? Once it passes the first layer of assessment, the question then becomes does it fit the brand? At its crux the Virgin label stands for innovation and shaking things up. “Some people say we could launch anything,” he says. “But if you look back historically there is a rich landscape of dozens of companies Richard launched that don’t exist today. I do believe there are some categories and industry that are not meant to be Virgin brands.”
For starters, a Virgin brand would likely not enter a fledgling industry. Lynch says something could be a great idea but it might not be environmentally friendly or it only appeals to a small segment of the population.
A case in point, he notes, is Virgin Cola. Famously Virgin took on global soda giants Coca-Cola and Pepsi Cola with its own Virgin Cola in 1994. It was launched with great fanfare in New York: Richard Branson rode a British tank crushing cans of its rivals’ colas in Times Square. In the end however it was Virgin Cola that was crushed. While many say the product itself was excellent, it did not have broad appeal, nor was it particularly innovative. While Virgin Cola did go up against the big players, its opportunities for taking market share proved to be rather limited.
In America, where Virgin is still a relative newcomer, the company is taking a more deliberate approach to growth “We have to be more choiceful here,” says Julie Cottineau, vice president, Brand at Virgin Management USA. “The U.S. is so much bigger than the U.K. We have found that it takes more resources to launch here. So we’ve decided to do a few things very well.”
Currently there are 14 Virgin-branded companies and the company is currently exploring the hotel business in North America. “We are looking to build contiguous businesses that spur customers to say, ‘hey, I loved flying Virgin America — I think I’ll stay in a Virgin hotel,’” she adds. “We are not a homegrown brand here so it is important to launch things that makes sense to consumers. Our strength is areas like airlines, music and travel where there is a heavy consumer orientation and there are several points of contact.”
What connects them all, says Cottineau — “We are an experiential brand, the consumer’s champion.”