BIG mistakes entrepreneurs make...

Dien,

Great post w/ insightful comments. But,... aren't most of the Virgin [insertbizhere] "brand" extensions, rather than line extensions? Or, maybe "business empire" extensions? In other words, they are new businesses, sometimes with a product/service similar or related to another (e.g., airline, trains, balloon flights) and sometimes totally different (e.g., cola, energy, money). On the other hand, a true line extension would be, say, starting with liquid soap and adding bar soap, then shampoo, then facial cream, etc. That is, extending the product line.

Or, am I being too narrow in my definition?

Just an observation from another thirtysomething, blessed with a full head of hair but a slight gut from too much pizza & Dr. Pepper (among other things),

Chris

> Hi Mike,

> Your post commented on the topic of line
> extensions....

> Clearly, some line extensions work, and some
> don't.

> Al Ries and Jack Trout rail against the
> evils of line extension in their classic
> marketing book "Positioning". They
> say it dilutes the position you hold in
> people's minds, and dilutes what your brand
> stands for.

> On the other hand, Richard Branson's Virgin
> "empire" is an incredible case of
> taking brand line extension to the maximum -
> and it looks like there's no stopping it!

> Check out some of these "Virgin"
> businesses....

> Virgin Atlantic
> Virgin Holidays
> Virgin Blue
> Virgin Trains
> Virgin Balloon Flights
> Virgin Cola
> Virgin Mobile
> Virgin Publishing
> Virgin Active
> Virgin Megastores
> Virgin Energy
> Virgin Bride
> Virgin Cars
> Virgin Wines
> Virgin Direct
> Virgin Cosmetics
> VirginMoney.com
> Virgin One
> ...and there are plenty more.
> So - why do you think Richard Branson
> succeeded (for the most part) with line
> extensions, where many fail?

> In my opinion, there's no point extending
> the brand when you're not making a profit in
> the first place!

> In the lotion company you mentioned, they
> were not making a profit (or making very
> little). To me, that's a sign they either
> need to do something drastically different
> within their business, or get out of the
> business and do something else altogether.
> Especially if it's taking up a lot of their
> time. If they're not making much profit, and
> if it's not growing, then they can't afford
> to hire others to do the work - which should
> be their aim (in my opinion). That would
> free up their time to focus on growing their
> business further, or focus on building more
> businesses.

> Richard Branson, in contrast - while he was
> always extending - was generally making a
> profit. His first venture,
> "Student" magazine, I think more
> or less broke even. But his next business,
> which was a mail order records business,
> made money. Profits are the bottom line.

> I think what Richard Branson does which is
> different is that the "Virgin"
> brand does stand for something - and I think
> all the Virgin businesses try to fulfil the
> image.... The "Virgin" businesses
> tend to be about

> fun
> reliability
> good value for money So, in this case, I
> think Richard Branson extends his brand in a
> "correct" way - in that all his
> businesses are built around the image that
> his Virgin brand continues to build. He
> won't slap the "Virgin" name on
> just anything.

> Jumping to another topic.... On the theme of
> "specialization" - I think what's
> more important is "specializing"
> your product in the mind of the consumer.
> That's what something such as the
> "glacial silt soap" does.... It's
> a "specialist" product. There's a
> difference between being a
> "specialist" yourself, and having
> a product with a "specialist"
> image in the mind of the consumer.

> In contrast - as far as I can tell - nothing
> in their marketing distinguishes the natural
> lotions of the company you mentioned from
> the thousands of other natural lotions which
> are out there in the market place....

> When you ARE your product (such as in
> service businesses - being a lawyer, an
> accountant, a copywriter, etc.) - then
> "specializing" the product is
> often the same as also being a
> "specialist" yourself. However,
> when you are not the product, then you don't
> need to be a specialist yourself to have a
> specialist product.... "Glacial silt
> soap" will be a "specialist"
> product in the mind of the consumer, no
> matter who owns or runs the business. The
> specialization is within the product and
> marketing.

> Just a few ramblings from a fat balding man
> in his 30s.... :)

> - Dien

That Virgin is the KING of "market extensions."

Record store. Recording studio. Record label.

I believe there is a Virgin Haulage - probably originally created for the distribution of the records and other Virgin related businesses - such as moving food to the Virgin aircraft, and moving Virgin cola around.

So Virgin's business approach could be... whatever our business spends money on is a business we would be well advised to own. Thus we get to keep more of our money PLUS have a business which can be profitable in its own right.

That would be similar to a cleaning business buying a cleaning supply business, and a cleaning equipment repair business, and a cleaning training business.

Or your vacation tour business owning a few buses, restaurants, motel/hotel, duty free store and other stuff holiday makers spend money on. So ultimately your businesses: book the tour (like a travel agent), conduct the tour in buses they own, and take the tourists to shops and sights they also own. The Japanese do this kind of market-extension all over the place.

Michael Ross

Specializing is so important yet for some reason doing it brings up so much fear. (I've been there myself).

I was afraid to let go of the life and career part of what I love to do. I let go of even talking about the career stuff a few years ago. And through some recent work I've done on my business, I realized I had to let the "life" part go, too.

So I tried it for a while... just highlighting the business part of what I do. And you know what? After the first time I introduced myself with just the business peice, people came up to me after the meeting and asked me if I do career coaching or work with teams.

That situation has happened a few times in the past few months. Enough so that now I am interviewing referal partners who just do the career coaching/assessment/resume part -- which I dont' enjoy doing so much. (I prefer doing the "finding your ideal career part)

And I found a team coach/consultant to partner with, too!

So the lesson I've learned is that that specializing helps grow businesses and businesses support bases. I can "grow" my business products later, but I have to start by specializing in something "first". (hit on head) Now isn't that what I've been working on with my clients!?


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