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Brand Threats

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When Brand Power Threatens Brand Extension
There are two brands that I deter my MBA students from referring to in class. The first is CocaCola. Quite simply, Coke is the alpha of branding. And any reference to Coke usually ends up ridden with cliché’s and strategically void. If anyone ever begins a presentation on brands by talking about Coke you are in for a dull ride. The second unmentionable brand is Virgin. Inevitably the Virgin name comes up as soon as the topic of brand extensions and portfolios is mentioned, primarily because Virgin has been involved in more brand extensions than any other major brand in the past 20 years. The resulting portfolio of more than 200 different corporate entities breaks every established strategic guideline for extension and my students love nothing more than asking: "But how do you explain Virgin's success?" The simple answer is that I do not have to, because although Virgin does indeed extend its brand a lot, it rarely does so successfully. Fortunately for Virgin, Sir Richard is a consummate showman. Most business journalists confuse prevalence and proliferation with performance and power. Superficially at least, a brand portfolio that includes radio, beverages, cosmetics and airlines is a testament to the power of the Virgin brand. The launch of Virgin Mobile USA as a joint venture with Sprint PCS merely extended this remarkable track record while further obscuring the sad truth at the core of the Virgin brand. The purpose of brand extensions is not to exist but to generate value for the customer, the organisation and its stakeholders. Virgin rarely clears the latter hurdle. For every Virgin Atlantic or Virgin Music Group there have been numerous failures such as Virgin Cola or Virgin Mobile Singapore. Unfortunately the successes in music or flights are sold off to support the failed ventures. The foray into the US telecoms

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