BRANSON SEES AMERICA AS HIS VIRGIN TERRITORY: TAKING RISKS: CHARISMATIC U.K. ENTREPRENEUR MAY RELOCATE TO U.S.

By Published on .

Most Popular
[london] So popular with the working class in his native England, Richard Branson, founder of the ever-expanding Virgin brand, was picked in a newspaper poll as top choice for unofficial mayor of London.

In the U.S., Mr. Branson and his cheeky company don't enjoy the same recognition. But with marketing activity imminent in the U.S., the brash Brit said he intends to change that-possibly by relocating to America to give Virgin the boost only he can.

Known for his public relations stunts, Mr. Branson, 46, regularly risks his life skydiving and hot-air ballooning (he hasn't learned to fly a plane, saying he doesn't "trust" his restless mind's ability to concentrate on the task); later this year, he plans another attempt at his failed around-the-world balloon trip.

COLA SET TO EXPAND

Such antics may provide a well-needed push for upstart Virgin Cola, now set to move beyond its Philadelphia test market and into new areas of the U.S.

They can also help in the public battle against British Airways and its potential partner American Airlines for London-bound Americans. This summer, Virgin Atlantic Airways will double flight frequency in its current seven markets, and potentially add service to Atlanta, Chicago and Las Vegas.

Virgin Megastores is expected to increase from seven to 50 retail locations by 2000, and Mr. Branson is building a new record label called V2.

"In America, we have a ways to go, and the only way to do that is to go live there once my children have grown. That way I can attack Coca-Cola in its home base," said Mr. Branson in an interview with Advertising Age, flashing a smile framed by his trademark goatee and sparkling eyes.

The move would be a few years off; daughter Holly is 14, son Sam, 12.

BATTLING GOLIATHS

With the company so reliant on its founder's energy and enthusiasm, U.S. consumers have had little exposure to Mr. Branson's infectious spirit. While Virgin Group has not yet done any U.S. brand awareness studies, in the marketing world Mr. Branson is known for David-vs.-Goliath battles.

From his white townhouse office on a quiet residential street in Holland Park, Mr. Branson slowed down just a bit-in between taking phone calls and posing for a photo shoot-to talk about marketing, publicity and his plans to increase Virgin's presence in the U.S.

On his uncluttered desk sits a tall, unopened bottle of Evian, a large notebook and an airplane model for new European budget carrier Virgin Express. It's hardly his only model; his office tabletops and shelves are cluttered with awards and model planes, trains, a boat and a helicopter, all bearing the Virgin logo.

These days, Mr. Branson has his hands in most forms of transportation and entertainment, as well as products and services from book and software publishing to cola, clubs and hotels in 15 countries.

He attracted a lot of attention in 1984 when he launched the airline Virgin Atlantic, a seemingly illogical extension of the record label that first made him successful. That label was sold in 1992 to Thorn EMI for $1 billion.

HIGH-FLYING ENTERTAINMENT

"When we went into the airline business, airline chiefs around the world said, `What on earth is an entertainment person doing launching an airline?'*" Mr. Branson said. "That summed up what's wrong with the airline business, a lack of entertainment."

His oft-stated position, "If you can run one business well, you can run any business well," seemed to fly with Virgin Atlantic, which traded on its up-against-the-big-guys status and innovations. Virgin was the first airline to introduce such amenities as massages and manicures in first class, and technological innovations like individual videos in coach.

An ever-increasing number of products carries the Virgin name-Virgin vodka, the Virgin Bride retail store, Virgin Direct insurance-and more still want to; Mr. Branson obviously does not approve all the suggestions brought to him. Still, the use of one brand name across so many incompatible categories is rather staggering.

Some wonder, though, if Mr. Branson's wisdom is running out with Virgin Cola, introduced in the U.K. two years ago and which he concedes lacks an innovation.

`NOT AN OBVIOUS MOVE'

"Soft drinks are something we couldn't necessarily bring something radically different to, and in that sense it's not an obvious move," said Mr. Branson, who also said there was "hardly any competition" for Coca-Cola in comparison to the number of major players in his other areas of business.

The main differentiation the cola offers, he said, is "better margins to retailers-to sell it for slightly less to consumers."

Perhaps just as important a reason for the cola to exist could be for Virgin to keep an overall youthful appeal.

"As we move into pensions and life insurance, the question is, `Can we still be vibrant with kids?' We think that will help us," he said.

Still, discussing the coming market expansion in the U.S., Mr. Branson added, "We just pressed the button to roll out in a big way."

He declined to give specifics, except to reveal a three- to five-year rollout plan. No advertising or promotion details were made available.

In England, ad spending behind the cola last year fell 55% to around $1 million, according to A.C. Niel-sen Register-MEAL, though a new TV campaign is planned to start in May.

In the U.S., the combined products of the Virgin brand had an ad budget of $8 million in 1996, mostly for the airline, via Culver Moriarty Glavin, New York.

MARKETING SPENDING ON RISE

In the U.K., all Virgin products spent a total of just $28.6 million in 1996, although that was more than double the previous year's spending. A Virgin spokesman said overall marketing spending is slated to rise 36.4% this year from $56.1 million to $76.5 million

When asked about challenging the $200 million-plus ad budgets of Coke and Pepsi-Cola Co., Mr. Branson said: "We'll have a lot of partners to make Virgin Cola a major brand name."

Since the launch of Virgin Atlantic, Mr. Branson's unusual reliance on publicity-rather than paid media or other traditional marketing methods-has been his main tactic for brand building.

"There aren't many things I haven't dressed up as," Mr. Branson said, referring to various publicity stunts in which he has appeared in costume. "Believe it or not, before that I was a really shy person. I've had to train myself out of that. My parents had always advised me that becoming a public figure was something best to avoid. I would refuse interviews and avoid speeches."

That changed after a conversation with Sir Freddie Laker, president of Laker Airways, a few weeks before the Virgin Atlantic launch.

"He said if you're going to take on British Airways and-in those days, Pan Am and TWA with their large advertising budgets-you're going to have to use yourself to go out and sell your product, since you won't have the advertising spend that they'll have and you'll have to outdo them using your personality."

The philosophy worked so well that a poll in 1994 by British trade magazine PR Week showed Mr. Branson had a 97% recognition rate among Britons and Virgin, 93%. Only 17% thought he was overexposed.

Nonetheless, Mr. Branson surprisingly said he hoped that "as time goes by, it will less and less be relying on my personal charisma-it's incredibly time consuming. The biggest part of that job has been done."

THINKING ABOUT SURVIVAL

But Mr. Branson, who seems to attract the limelight almost by his very nature, may not be able to fully give it up-at least as he continues his efforts to become the first to go around the world in a balloon.

"Most trips go horribly wrong," Mr. Branson said, describing his thoughts as he floats through the air. "I think about survival and whether I'll get home. It's challenging in that you're not completely in control of where you're going-kind of like Virgin."

In this article: