Marketing Principles and Practices: A Virgin Group Case Study

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MARKETING PRINCIPLES
AND PRACTICE
Virgin Group
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TABLE OF CONTENTS
INTRODUCTION............................................................................................................................. 3
KEY MARKETING CONCEPTS.......................................................................................................... 4
PRODUCT STRATEGY............................................................................................................4
NEED, WANTS AND DEMANDS.............................................................................................4
VALUE, SATISFACTION AND QUALITY...................................................................................5
BRANDING...........................................................................................................................5
PROMOTIONAL STRATEGY...................................................................................................6
ROLE OF MARKETING STRATEGIES AND PROGRAMS IN ACHIEVING ORGANISATIONAL
OBJECTIVES.................................................................................................................................... 7
ETHICAL PERSPECTIVE OF OBJECTIVES ACHIEVED.................................................................8
EFFECTIVE USE OF 7 Ps AND STP IN VIRGIN GROUP’S DAILY ORGANISATIONAL OPERATIONS......9
7Ps OF SERVICE MARKETING MIX IN CONTEXT OF VIRGIN GROUP.......................................9
SEGMENTATION, TARGETING AND POSITIONING...............................................................11
RELATIONSHIP OF MARKETING FUNCTIONS TO THE FUNCTIONAL AREAS IN ORGANISATIONS..12
CONCLUSION............................................................................................................................... 13
REFERENCES.................................................................................................................................14
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INTRODUCTION
The marketing principles of business involve the sustainable and robust framework which is
designed and developed to provide the best service or product experience to the customers.
Marketing strategies are often formed upon the complexities of businesses, for example a
conglomerate like Virgin Group with a number of multibillion subsidiaries works on a unique
marketing and branding strategy, using one name for all of its subsidiaries, they implement a
general marketing framework with added and corrected entities specified according to the
nature of different subsidiaries. The group was founded by Sir Richard Branson, initially started
as a record making company called Virgin Records, which also was the first subsidiary of Virgin
group to reach billion dollars market cap (About us, 2018). This report has been designed to
sequentially analyse and discuss the marketing strategy and principles utilised by Virgin group
under the leadership of its founder Sir Richard Branson, and its brand management and
strategy. With his ambitious plans and innovative approach, Sir Richard Branson has himself
appeared as the brand statement of Virgin Group (Niphadkar, 2017). The Virgin group is known
for its highly diverse fields of operations, as they have their business in Tourism, airline,
cosmetics, financial service, music and soft drinks. No other business conglomerates have
known to operate within such diverse business sectors. So a thorough discussion and critical
analysis based on standard business marketing models and techniques are conducted in this
report to bring the light on Virgin Group’s key marketing principles and values which drives such
large empire with untouched efficiency and success.
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Figure 1: Virgin Subsidiaries: Logos

KEY MARKETING CONCEPTS
PRODUCT STRATEGY
Product strategy of any business is the framework around its products in synchronisation with
market needs and demands, with a keen focus on quality, cost and availability aspects from
consumer's perspective. The product strategy discussed here is in regards to Virgin Cola, the
soft drink subsidiary of Virgin Group. It is a carbonated soft drink produced by Silver Spring as a
subsidiary of Virgin Group with the name of Virgin Cola. The product strategy of Virgin cola has
always been inclined towards the quantitative sell and branding. It is evident from the fact that
Virgin Cola managed to step in international offshore markets in its first year of inception
(Niphadkar, 2017). The promotional tactics were quite ambitious and company user name and
personality figures of many famous celebrities at the time such as Pamela Anderson. Sir Richard
Branson himself was completely involved in its US launching and many other launching events
throughout the world. Virgin cola has suffered tremendous competition from its similar
segment drink Coca-Cola and Pepsi and this resulted in its decreased popularity in the UK and
US. The product strategy was focused majorly on brand promotion and little attention was
given to the product quality and variety, where Coca-Cola and Pepsi took the upper hand and
managed to establish a firm customer base.
NEED, WANTS AND DEMANDS
These are the three most basic yet most essential elements of marketing planning in a business
environment. A critical study of customer’s need wants and demands gives outputs which built
the foundation of an effective marketing strategy (Wirtz and Lovelock, 2016). Customer need is
segmented in three basic categories, physical, social and individual needs and these needs can
be best understood with an example of Virgin Atlantic. It is a British airline and a multi-billion
subsidiary of Virgin Group (About us, 2018). The airline has been through many ups and downs
throughout its tenure but still is one of the top airlines in the world and the reason behind this
is often considered as the regular changes in its pricing and promotional strategy in accordance
with customer’s demands. The basic customer requirements in airlines are low fare, fast
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booking, best travel facilities, cordial and supportive behaviour of staff and time to time
attractive promotional offers and Virgin Atlantic has somehow managed to counter all these
requirements in proportionate ways.
VALUE, SATISFACTION AND QUALITY
In same regards of Virgin Atlantic, customer value is customer gain in terms of what he pays
and what he gets in return. A right customer value should always try to give the customer a feel
of profit from his perspective and that's what Virgin Atlantic has been trying to do for the last
10 years. Virgin Atlantic care for people for their service satisfaction as well as their economic
satisfaction by providing fare offers and discounts for middle-class travellers (Lohmann and
Spasojevic, 2018). The aim, according to Sir Richard Branson for his airline subsidiary is to
enhance air travel experience of people from their conventional standards and reach to the
vast customer base in the middle-class region which still don't use air travel because of it being
expensive than other means of public transport. The Virgin Atlantic is known for its quality
standards and considered as a premium airline with high-class facilities among the frequent air
travellers. The main reason behind their quality stature is Sir Richard Branson’s major pull
towards the best quality service by establishing new and improved quality standards.
BRANDING
As discussed earlier, Sir Richard Branson, the founder of Virgin group is himself a brand
statement for the group. People recognize Virgin Group as much as they recognize its founder.
The brand focus in the Virgin group has always been a matter of utmost importance and
sometimes they have to seem compromised with other important aspects in its wake. Personal
involvement of Sir Richard Branson in various promotional activities shows the uniqueness and
importance of their branding strategy (The Guardian, 2018). The leadership approach of Sir
Richard Branson can be understood from his personal incidental involvement is his brand-
related activity and his ambitious plans in different business sectors. Using a single name to all
his vastly diverse subsidiaries has been impactful in brand promotion but it also has brought
negative effects in some sectors such as Virgin Rail, as the name was identified with many high-
class premium services and products and its association with up to no good rail network of UK
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proved disastrous (Lessem, 2016). However, it didn’t affect its global image at all and Virgin
Group is still an ideal name in much high-end service and its entrepreneurial culture along with
ambitious plans of its founder.
PROMOTIONAL STRATEGY
Promotional strategies are the one where brand awareness is created wrapped around a
specific product and service with proper utilisation of digital and conventional advertisement
methods (Boon, et al., 2016). Virgin Group has its distinct promotional strategy like of which
can often be seen in Fashion industry. The major part of its promotion activities involves
gathering public attention with involvement of famous public figures such as movie stars and
sports celebrity. Also in recent years, a series of changes in promotional tactics of Virgin Group
can be seen, since they started to promote their subsidiary brands in an entrepreneurial
environment, especially by keeping them in limelight by proposing their innovative idea in
different fields such as public transport and space travels etc (About us, 2018). Involvement of
Sir Richard Branson himself can also be noticed in such promotional activities, as he managed to
get the attention of the whole world when he announced public space travel at enormous cost
and launching of latest transport technologies such as Hyperloop (The Guardian, 2018).
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ROLE OF MARKETING STRATEGIES AND PROGRAMS IN ACHIEVING
ORGANISATIONAL OBJECTIVES
Evidently, Virgin group works in a very versatile business environment, from airline to soft
drinks, there is no other company in its competition which portfolio of such a diverse range of
products and services. The marketing strategy of Virgin group is said to have a unique and
similar throughout framework in its different sectors of operations but since such diversification
cannot be addressed with the same approach, there has to be distinctness in its marketing
strategies according to the service and product sector. In simple word, this basic structure of
marketing which was being implemented throughout the Virgin subsidiaries was based on the
economic background of customers and their quality requirements.
The following points emphasis more on effect of such marketing strategies on organisational
goals:
 Virgin Group can be understood to have a summarized goal to provide high-end
products and service to customers throughout the world with a single name Virgin as an
indicator of quality standards. The marketing strategies of the Virgin group is as
diversified as its products and service sectors, but some part of marketing environments
such as promotional methods and brand awareness was done jointly for its all
subsidiaries.
 Virgin Group’s founder Sir Richard Branson’s involvement in its business functions and
promotional activities has also been a matter of distinctness from other conglomerates.
His ambitious plans and view about his company became the front image of the group in
international market.
 The remarkable trait of not compromising with quality has been a flagship endeavour of
the Virgin group and in that, the founder Sir Richard Branson has played an important
role. The market strategy is considered best if a business keeps quality and customer
satisfaction as their imperative task. Also, the diversity of business operation itself
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became an element of brand awareness and brand promotion in its marketing
environment.
ETHICAL PERSPECTIVE OF OBJECTIVES ACHIEVED
In Sir Richard Branson's own word "There is no secret formula for delightful company culture,
you just have to treat others as you like to be treated" (Dubner, 2018). These values and moral
framework set by the founder is what made Virgin group a globally recognized name for best
company culture. The major area of focus and attention should be the people, according to the
founder; the people are the key to a successful and nurturing business environment. Keeping
the employees happy and well-cared is what gives Virgin Group this unmatched efficiency in
business operation. The idea behind getting best productive efficiency from people according to
Sir Richard Branson is by encouraging the entrepreneurial spirit lying under employees heart's
and creating a similar environment in the company that promotes and treats employees as an
entrepreneur. These ethical traits make the employees more extroverts and an environment of
effective communication is established which ultimately helps customer in giving the best
support and care (Wirtz and Lovelock, 2016).
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EFFECTIVE USE OF 7 Ps AND STP IN VIRGIN GROUP’S DAILY
ORGANISATIONAL OPERATIONS
7Ps OF SERVICE MARKETING MIX IN CONTEXT OF VIRGIN GROUP
The marketing mix is a set of conventional market analysis elements which are being used from
more than 200 years in the marketing environment and still are completely relevant and
effective in same for the organisation of all sizes and sectors. The analysis scheme is based on
initially 4 Ps' i.e., product, price. Place and promotion when the market was mostly production
driven and there was no independent concept of service sector, so after the inception of the
service sector in the market as an autonomous entity, three more Ps were added in the
marketing mix, making is 7 Ps of service marketing Mix (Lovelock and Patterson, 2015). These
three added Ps are people, process and physical evidence.
All the elements of the marketing mix have been explained here in context of the Virgin Group.
PRODUCT/ SERVICE: Virgin group has a great and highly diverse portfolio of products and
services. Some of its biggest subsidiaries are Virgin Atlantic which is an airline service, Virgin
Galactic, an aerospace industry, Virgin connect, a media company and many others with the
same name in publishing, tourism, healthcare, finance, transportation, entertainment, business
services etc (About us, 2018). With such as large and versatile product and service base, Virgin
Group has to deal with plenty of marketing and brand management issues, since most of these
companies are holding companies and are not fully operated by the group. A synchronisation in
brand and marketing management is needed which ensures cumulative growth of its all parts
with the same rates.
PLACES: Virgin group has its products and service in more than 70 countries throughout the
world. It has a fairly large customer base in its every sector, especially Virgin Atlantic, of which
51% is owned by Virgin group and is among the largest airline in the UK with different subsets
based in big developed countries. Virgin Atlantic, in the year 2012 carried 5.4 million passengers
making it the seventh largest in terms of passenger volume in the UK. One of the major reasons
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for the success of its new ventures and product is its presence and established customer base
throughout the world which gives its new products an immediate boost.
PRICE: Pricing strategy of Virgin group has always been centric to economic class diversification
in the UK. With its global reach, this strategy has taken different forms adopting the economic
requirements of different countries of operation.
PROMOTION: Promotional tactics of Virgin group has already been discussed above and the
basic idea that could be taken from it is, that it basically revolves around Sir Richard Branson
and his involvement along with his entrepreneurial and innovative approach to reach
customers.
PEOPLE: People have always been the centre of business culture development of Virgin Group.
According to the founder, the relationship between people within the organisation (Employees)
and outside the organisation (Customers) should always be like a family. This approach creates
a nurturing and caring environment and ultimately increases operative efficiency (Niphadkar,
2017).
PROCESS: The business process is quite complex in virgin group because of the involvement of
such diverse business categories and at the same time because of efficient management in
place, it is robust and efficient. Sure, there are ups and downs in every business but it does not
show process failure.
PHYSICAL EVIDENCE: Physical evidence of marketing mix refers to the customer testimony and
trust proof that makes a real-time perception of the brand in the market. Virgin group has a
distinct way of achieving this trust, i.e., by a perfect mix of quality and class.
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SEGMENTATION, TARGETING AND POSITIONING
Market segmentation and targeting is a sequential process which defines customer approach
according to their economic class, quality standard requirements, age group and gender-based
choices in a separate cultural and social environment (Wirtz and Lovelock, 2016). These are the
implementation phases of marketing strategy where customers are addressed based on their
differences and their combined demand statistics in a different environment according to the
country of operation. Virgin Group is a British company and the UK has its cultural impact on
most of the countries in the world since their colonial expansion. Virgin Group has evidently
used that image and transformed into a quality and class signature for its products and service.
In terms of company’s daily operational environment, they have to deal with different people
worldwide on daily basis and a successive data collection on people’s demands and expectation
can provide a clear and decent idea about strategy formation for efficient market segmentation
and targeting (Lovelock and Patterson, 2015). The positioning part is up to the above-discussed
process as this is a sequential phase and are highly depends on each other.
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Figure 2: 7 P's of Service Marketing Mix
Source: [Claessens, 2016]

RELATIONSHIP OF MARKETING FUNCTIONS TO THE FUNCTIONAL AREAS
IN ORGANISATIONS
The variation of functional areas in an organisation depends on the sector of the organisation,
however, marketing functions only differ in case of product and service segment. The following
table presents a distinct insight on relationship of such organisational functions with marketing
functions:
Different Functional
Areas
Their Relationship with Marketing Functions
Finance Department Finance department works in a closed loop with the marketing
department, the liquid asset requirements in marketing activity and
market trends in the pricing of a particular product are also
determined by the marketing department and upon successfully
analysed report it is conveyed to finance department (Lovelock and
Patterson, 2015).
Production
Department
The production department is, in a way is directed by R&D department
regarding product quality and functionality and these requirements of
quality and functionality are suggested by marketing team on
successful market research (Wirtz and Lovelock, 2016). In the case of
the Virgin group, marketing strategy is oriented around product
quality and service and these factors are controlled by production
department.
Human Resource
Department
This is the most vital function of an organisation. As discussed earlier,
Sir Richard Branson has this company culture to keep people at top of
the priorities, so the face of the brand in terms of Virgin group is lies
within its employee which are governed and cared by an effective
human resource team in place. This ultimately results in availability of
efficient and skilled workforce to overcome different marketing
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