In their book ‘Positioning: The Battle for your Mind’, Ries and Trout argue that the easiest way to get into a consumer’s mind and become established in the market is to be first in a product category, rather than simply being a well-known brand.
This made me think of Virgin in particular, a massive enterprise, which has diversified to great extremes over the years since it was founded in 1970 as a postal order music business. It now covers telecommunications, leisure and travel; operating in over fifty countries and employing over 60,000 people as well as helping Richard Branson to become the first person to build eight different $1bn companies in eight different sectors.
The fact that Virgin has diversified in to so many different markets using the same name would appear to go against the recommendations of Ries and Trout. Their belief was a company should consider having different brands for each different product category they are operating in. However, I realised that by operating under an umbrella brand, the company has been able to use the name and good reputation previously established as a means to launch in to new industries. For example, the Virgin Holidays sector and the Virgin Mobile service will be presented to consumers in very different ways. Both of these areas of the organisation would benefit from when the whole brand receives good publicity, for example, with the starting up of Virgin Unite in 2004.
Source: https://www.bespokeoffers.co.uk/consumer/offers/up-to-10-off-virgin-holidays-when-you-upgrade-flights-to-premium-economy-or-upper-class–a2303
I feel my analysis shows Virgin has a unique and effective approach to positioning. By using some of the pre-established benefits of a brand whilst also differentiating it slightly, companies will be able to save on the costs of branding for numerous brands, which can be highly expensive especially if they are relatively unknown to consumers. This could be highly beneficial to smaller businesses that are beginning to diversify even in local markets.
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