Brand Management of Virgin Group: A Comprehensive Analysis

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BRAND MANAGEMENT
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INTRODUCTION
The brand is the identifying mark, symbol, logo that is used by the company to differentiate
their products or services with others. Brand image is considered as the ultimate asset for
the business organization that provides an additional profit to the company (Burmann et
al., 2015). The process of managing the promotion of a brand of the company is referred to
as brand management. Managing brand of the company is a very important activity for the
business organization as it shows how productivity is the brand of the company.
The learner chooses Virgin Group for the assignment as it is the best suitable company to
understand the concept of brand management. Virgin group is a British multinational
company founded by Sir Richard Branson and Nik Powell in the UK. The Virgin Group is a
private company that covers the worldwide area for its business activity. The company has
a very good human resource as it has 71,000 employees working for it.
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LO1
“BRAND IS POWER”
INTRODUCTION
Brand: A brand can be a name, logo, symbol for the product and services that differentiate
products or services from other products. The brand is very useful in the marketing activity
for the business organization that influences the decision-making of the customers for their
purchase activity (Burmann et al., 2015).
Brand Equity: Brand equity refers to the value of the brand of the business organization. It
is the value that gained from the customer’s perception from the brand name rather than
product or services itself (Boon et al., 2016). For example, Apple generates additional
revenue through its brand name and attracts the customer through its brand rather than its
products.
Importance of Brand: Brand is very important for the business organization as it
significantly helps in the marketing activity of the business organization as well as the
impact on the decision-making activity of the customers in their shopping activity. Also,
effective and positive brand generates additional revenue of the organization and
significant benefits in competitive advantage (Erdem and Swait, 2016).
Stages of Brand Building
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Figure: Figure of Brand Building
Source: Ekinci, 2018
There are 5 steps included in creating a successful brand for the business organization
which are:
Brand Description: It is the first step in the brand-building process in which business has
to describe its brand to the target customer of the business. A brand can be described
through the product description, logos, packaging etc. Brand description plays a very
important part in creating brand equity for the business organization (Ekinci, 2018).
Differentiation & Positioning: once a product is a manufacturer, it is very important to
launch it in the market with a unique name or logo that differentiate products from others
and provide a strong message to the people that can attract them. Brand positioning is a
very important part of building a successful brand.
Brand Promotion: Brand promotion is very helpful to create brand awareness amongst
people. Advertisements are very helpful to promote the business brand and increase the
business reach that significantly helps in building a successful brand (Ekinci, 2018).
Personalize the Brand: Brand should focus on providing satisfaction to the customers
through its name or logo as well as the customer should feel connected with the brand.
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Business organizations should innovate their thinking and create a brand that sends a
positive strong message to the people.
Evaluate the Brand: The last and important stage in creating a strong brand image is
evaluating the brand. The business organization should continuously monitor the
performance of the brand as how effectively it manages to attract customers and provides
additional value to the business organization (Boon et al., 2016).
Role of Marketing in Creation of Brand Equity
Marketing activity plays a crucial role in creating brand equity of the business organization
as it increases business reach and creates brand awareness in the market that helps in
attracting customers. It is necessary to create positive brand awareness as a brand is
directly related to the profit of the business organization (Hafiz et al., 2018). Through
marketing business can effectively communicate with the customers and make them aware
of the brand of the company. To creating brand equity, a business can initiate various
marketing programs that are specifically designed to create or increase brand equity.
Marketing activity is directly related to the brand equity of the business organization and
marketing can lead to an increase or decrease in brand equity.
MAIN BODY
CASE STUDY- OVERCOMING THE BRAND CRISIS
In February 2018, an incident occurred in which more than half of 900 stores located of
KFC in the United Kingdom had to close by the KFC because of a shortage of Chicken. The
company had to face embarrassment as people take the route of social media to troll the
KFC business (Liu et al., 2015). The main reason for the crisis is a delivery problem that is
switched to the DHL which is seen as an administrative problem as the number of
deliveries was called off or delayed.
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The business managed to reopen restaurant even while struggling to some extent and
manage to switch the narrative entirely. The business also runs an apology statement
through advertisement saying it was extremely funny and accepting the problem. The
company widely appreciated by the customers and the media for handling such crisis
smartly and maintains brand equity for the company (Shay et al., 2019).
It is very important to strengthen brand equity that helps the business to gain additional
profit. To strengthen brand equity of the business organization, Aaker's brand equity
model is very effective and helpful.
Aaker’s Brand Equity Model
Aaker's brand equity model is a very good tool to strengthen brand equity. It is introduced
by Professor David Aaker. The model combined 5 important aspects that show brand
equity as a whole (Boon et al., 2016). The five aspects are brand awareness, brand loyalty,
brand associations, perceived quality and other proprietary assets.
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Figure: Aaker’s Brand Equity Model
Source: Boon et al., 2016
Brand Loyalty: Brand loyalty refers to the extent to which consumers are stick to the
brand and be loyal to the brand. Retaining old customers are easy and less costly compared
to attracting new ones (Erdem and Swait, 2016). Loyal customers are also helped in
attracting new customer by word of mouth marketing strategy as well as they do not
switch to the different brand easily.
Brand Awareness: Brand awareness refers to the extent to which customers knows the
brand and aware of the brand in the market. It can be measured by conducting a survey,
continuous purchase activity, commitment to the brand; familiarity and liking etc. increase
brand awareness significantly helps business organization in gaining new customers
(Burmann et al., 2015).
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Perceived Quality: It shows the perception of the products and services sees by the
consumers. It is beneficial for the company in providing additional provide other than
actual features.
Brand Associations: It is the process of creating an image of the brand in the consumer's
mind. Brand association is very effective in increasing sales of the business and company
must focus on it as creating a positive and satisfying brand image in the customer's mind
results in long term profit (Burmann et al., 2015).
Other proprietary Assets: Other proprietary assets include trademarks, copyrights,
patents etc. that can be used for security brand and protect it from other so that the brand
name or logo of the company can be used by them only.
CONCLUSION
The brand image of the company is a very important factor for the business perspectives as
it considers as the face of the company that provides trust and assurance of the product
quality. It is very necessary to business organization to focus on the branding and promote
it by using effective techniques because positive and powerful brand ultimately uses as a
marketing tool that very helpful in attracting customers (Gill-Simmen et al., 2018). The
brand also positively influence customer's decision-making for their purchase activity as
well as it differentiates the company's products and services from others. The ultimate
benefit of the powerful and positive brand is that it increase business sales and profit and
very helpful in overcoming from the crisis.
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LO2
BRAND PORTFOLIO STRATEGY
Brand portfolio refers to an umbrella in which multiple brands are linked and worked
under the main brand. Brand portfolio is of various types and the company chooses
portfolio according to their strength of the brand and product variety (Gill-Simmen et al.,
2018). Following are the strategies of brand portfolio:
Branded House
Branded house is the brand portfolio in which business organization launches products
under the same brand name, for example, virgin group introduce all the products and
services under the same name such as Virgin Atlantic, Virgin mobiles etc. this is less risky
option as company already aware of the main brand and based on the popularity of the
main brand-customer reach to try out new products and services launched by the business
organization (Tran et al., 2015). Companies' use of this portfolio usually has a very
powerful brand recognition that attracts customers through its brand name alone.
Figure: Brand Portfolio of Virgin Group
Source: Tran et al., 2015
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Advantages: Brand is already recognized by the people that create more chances of new
products being successful and also, the company have to spend less money on marketing.
Disadvantage: If the main brand’s popularity reduces its impact on the products of all the
products such as if Virgin brand name shows negativity customers avoid the products and
services of Virgin (Kunkel et al., 2017).
House of Brands
House of brands is a brand portfolio in which business organization launches products
under a different brand name or sub-brand name. This is a very risky approach as the main
brand name is not highlighted properly and customers are not aware of the new brand
name. This brand portfolio is best suitable for brands that are not powerful and effective
(Kunkel et al., 2017). All the brands are managed and operated by 1 main company. Under
this portfolio company have to spend additional cost on the marketing activities as a
business have to promote each brand differently, for example, P&G is a company that has
launches products under various sub-brands such as Tide, Gillett etc. but these all brands
are managed by the P&G itself.
Figure: Brand Portfolio of P&G
Source: Hämäläinen, 2016
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Advantage: Company can launch various products despite the bad reputation of one of the
sub-brand the other brands cannot be affected by it.
Disadvantage: it is risky to approach and costly too, also managing brand is difficult.
ILLUSTRATION OF THE HIERARCHY
Virgin group has very wide product range such as business deals in travel and tourism,
music, mobiles, cinemas etc. all the product varieties are managed and operates by virgin
Group.
Figure: Brand Hierarchy of the Virgin Group
Source: Redpath et al., 2017
As the above figure shows that the Virgin Group has various products and services that are
launched under the name of the Virgin group. Virgin group covers the market share of the
entire world with these products and services.
STRATEGY FOR MANAGING BRAND EQUITY
Keller’s customer-based brand equity (CBBE) model is a very effective model for managing
brand equity for the business organization. The CBBE model has four stages which are
identity, meaning, response and relationship that significantly helps in creating or
enhancing brand equity for the business organization (Tran et al., 2015). The Virgin Group
business organization uses the CBBE model to manage and improve its brand equity.
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