Marketing  Excellence

>>Virgin Group

Virgin  roared  onto the British stage in the 1970s with the innovative      Virgin Records, brainchild of  Richard  Bran- son,  who  signed unknown       artists and           began    a marathon of pub­ licity that contin­ ues to this day.

The flamboyant Branson sold Virgin Records o Thorn-EMI for nearly $1 billion in   1992)   but

went   on   to create            over

200   compa­ nies              world­ wide   whose combined  rev­

enues exceeded €11.5 billion {about

$16.2 billion) in 2009.

The Virgin name-the third most respected brand in

Britain-and the Branson personality help to sell such diverse products and services as planes, trains, finance, soft drinks, music, mobile phones, cars, wine, publishing,

and even bridal wear.Branson can create interest in almost any business he wants by simply attaching the “Virgin” name to it. Hasupplies the brand and a small initial invest­ ment and takes a majority control, and big-name partners come up with the cash.

The Virgin Group looks for new opportunities in mar­ kets with underserved, overcharged customers and com­ placent competition. Branson explained, “Wherever we find them, there is a clear opportunity area for Virginto do a much better job than the competition. We introduce trust, innovation, and customer friendliness where they don’t exist.”

Some marketing and financial critics point out that Branson is diluting the brand, that it covers too many busi­ nesses. There have bean soma fumbles: Virgin Cola, Virgin Cosmetics, and Virgin Vodka have all but disappeared. But despite the diversity, all the lines connote value for money, quality, innovation, fun, and a sense of competitive challenge. And then Virgin’s vaunted marketing expertise kicks in.

A master of the strategic publicity stunt, Branson knew photographers have a job to do and they’d turn up at his events if he gave them a good reason.Hetook on stodgy, overpriced British Airways by wearing World War I-era fly­ ing gear to announce the formation of Virgin Atlantic in 1984. The first Virgin flight took off laden with celebrities and media and equipped with a brass band, waiters from Maxim’s inwhite tie and tails, and free-flowing champagne. The airborne party enjoyed international press coverage and millions of dollars’ worth of free publicity.

When Branson launched Virgin Cola in the United States in 1998, he steered an army tank down Fifth Avenue in New York, garnering interviews on each of the network morning TV shows. In 2002, he plunged into Times Square from a craneto announce his mobile phone business. In 2004, introducing a line of hip techie gadgets called Virgin Pulse, Branson again took center stage, appearing at a New York City nightclub wearing a pair of flesh-colored tights and a strategically placed portable CD player.

Although he eschews traditional market research for a “screw it, let’s do it” attitude, Branson stays in touch through constant customer contact. When he first set up Virgin Atlantic, he called 50 customers every month to chat and get their feedback. He appeared in airports to rub elbows with customers, and if a plane was delayed, he handed out gift certificates to a Virgin Megastore or dis­ counts on future travel.

A nonprofit foundation called Virgin Unite has started to tackle global, social, and environmental problems with an entrepreneurial approach. A team of scientists, entre­ preneurs, and environmental enthusiasts consult with Virgin about what it needs to do on agrassroots and global level.The goal is to change the way·businesses and the

social sector work together-driving business as a force

for good.”

Clearly, Branson cares about Virgin’s customers and the impact his companies have on people and the planet. That’s why he recently made corporate responsibility and sustainable development (CR/SD) a key priority for every one of his companies. Each must act socially responsible and lower its carbon footprint. Branson stated, “I believe that in the future, we will be able to enjoy healthy and ful­ filling lifestyles whilst minimizing the negative impact we have on the world.”

Virgin categorizes its businesses into eight socially re­ sponsible and sustainable groups: Flying high, We’re all going on asummer holiday,Staying in touch, Watching the pennies, Getting from A to B, My body is a temple, Out of this world, and Just get out and relax. Each is to do excep­ tionally good things in its industry as well as helpto allevi­ ate the bad things that come with the category. Virgin Wines strives to purchase only from small farms and pay fair prices while promoting responsible drinking. Virgin

MANAGING A HOLISTIC MARKETING ORGANIZATION FOR THE LONG RUN

Games, an online gambling Web site, promotes responsi­ ble gambling and helps identify and alleviate gambling ad­ diction. Virgin Money focuses on fair lending, and the list goes on.

Virgin Aviation is perhaps the toughest challenge; it represents 7 million of the 8 million tons of C02 Virgin emits each year.Branson, however, has turned the problem into an opportunity. In 2006, he announced that all dividends from Virgin’s rail and airline businesses “will be invested into renewable energy initiatives …to tackle emissions related to global warming.” That effort has evolved into the Virgin Green Fund, which invests in renewable energy opportu­ nities from solar energy to water purification and is esti­

mated to reach $3 billion in value by 2016.

But Branson hasn’t stopped there. In 2007, he estab­ lished the Earth Challenge to award $25 million to any person or groupwho develops a safe, long-term, commer­ cially viable way to remove greenhouse gases from the atmosphere. Submitted inventions are now being reviewed by a team of scientists, professors, and environment professionals.

Once known as the “hippie capitalist” and now knighted by the Queen of England, Sir Richard never does

anything small and quiet. Whether looking for a new busi­ ness, generating publicity in his characteristic style, or en­ couraging research to helpthe planet, Branson does it with a bang.

Questions

1.                 How is Virgin unique in its quest to be a socially re­ sponsible and sustainable company?

2. Discuss the pros and cons of Virgin’s “green” mes­ sage. How do you feel about the company’s having such a negative environmental impact on the world (via air and rail) and the message it communicates through efforts like the Earth Challenge?
3. If you were Richard Branson, what would you do with Virgin’s holistic marketing strategy?