Virgin Cola is an inferior drink which deserved to fail, says Winston Fletcher. Richard Branson ignored traditional marketing, relying on Virgin's image instead.
All serious business people - and most certainly all serious marketing people - should greet the decline and fall of Virgin Cola with loud hosannas and a fan-fare of trumpets. No doubt that sounds rather uncharitable.
But Virgin Cola did not deserve to succeed, and its stumbling progress reveals a great deal both about the Virgin brand and about the healthy nature of marketing in a highly competitive economy.
Virgin may find the truth unpalatable but nobody with taste buds worthy of the name believes Virgin Cola to be as good as either Coke or Pepsi.
In addition to the forceful and unyielding opinions of my own palate, there is copious evidence from all around the world that the Cott recipe on which the Virgin brand is based is less acceptable than its two great competitors. (Both of which, make no mistake about it, are ambrosial drinks: nobody gets to be that successful selling fizzy puddlewater.)
Brands that guarantee value
Naturally the supermarkets, eyeing the sales and profits of the two great colas, wanted to have a share of the action. And they hoped that there would be a significant segment of customers either willing to sacrifice quality to save money, or with tongues so furred up they couldn't discriminate between the good, the bad and the wishy-washy. They have been proved modestly right - though far fewer customers are willing to buy colas on price than might have been expected.
But brands called Sainsbury or Tesco carry a particular kind of value guarantee. When customers choose a retailer's brand, they know what they are getting. Virgin, however, is something else. The Virgin brand does not carry the same connotations as a retailer's brand. And strange though this may sound, in my view, branding is something that Virgin does not understand that well.
A taste for publicity stunts
Virgin's confusion about its own brand name probably stems from two sources.
First, Virgin began life in the pop music business. Second, it has been established by means of 19th century publicity stunts rather than by 20th century marketing.
First, Virgin's origins. In the music business - as in the publishing and movie businesses - manufacturers' brand names don't mean a lot. Sales follow artists. It must be very galling to publishers that book buyers choose authors rather than imprints, and deeply hurtful to movie magnates that cinema-goers favour stars and directors rather than production companies.
But that's the way things are. (Walt Disney and Steven Spielberg are not exceptions to this rule. They made their names as directors, and their brands are still expected to reflect their particular directorial skills.).
Branson never made music. He was a record publisher who picked well and managed adroitly. Virgin built itself a certain reputation. But the punters were buying because of the artists, not the record company. Unfortunately, if you own the record company, you can easily get seduced into believing the opposite - especially if you have a taste for fame and for 19th century stunts.
There is nothing wrong with 19th century stunts. They were, and often are, spiffing fun. The Glasgow retailer, Thomas Lipton, the Branson of his day, was a maestro. He once packed the city's streets with skinny men carrying 'Going to Lipton's' placards and fat ones saying 'Coming from Lipton's'; and he famously sent Queen Victoria a cheese 'weighing not less than five tons'. The monarch was not amused. She could not, she sniffed, accept gifts from people she had never met.
But when it comes to communicating what we boring, 20th century marketing folk call 'brand values', stunts are rather blunt. Ballooning makes you famous, there's no question about it. But what does it communicate about your brand?
Doubtless Virgin's research shows that it communicates no-frills, no-bullshit honesty - scared of nothing and no one. (I wanted to add 'down-to-earth' to that adjectival list but restrained myself.
Well, almost.) For a new airline targeting an emerging, younger market, those were exactly the right brand image qualities (ex-cluding down-to-earth again). But Branson knew that having the right image would not be enough. So he added value with wonderful (and at that time unique) in-flight entertainment - entertainment that was specifically designed for his target market.
Where Branson got it right
In other words, he got the entire marketing package right. He identified his market, developed a superior product to appeal to them and - perhaps fortuitously - communicated the appropriate image.
Similarly, in financial services, he developed a no-frills, no-bullshit (down-to-earth) product, the tracker fund, which was right for his particular target market and reflected Virgin's values.
But from these successes, Branson appears to have drawn the wrong conclusion.
He began to think it was the Virgin image - the Branson image - people were buying. They were not. They were buying excellent products enhanced by the Virgin image. And it was a mistake that he might not have made had he relied less on stunts - to which 'product benefits' are irrelevant - and more on traditional marketing.
Richard Branson is an enchanting buccaneer. But Virgin Cola is an inferior, me-too brand and the public has sussed it. Image is essential but, in the long term, image is not enough. To win consumers' loyalty in a highly competitive modern economy, you need to do better than that. That's why all serious business people - and certainly all serious marketing people - should be singing hosannas.