BIG mistakes entrepreneurs make...

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


Something cowritten by the fat balding man in his 30s....