Magazine article Marketing

Virgin Goes for Bust

Magazine article Marketing

Virgin Goes for Bust

Article excerpt

Virgin Cola made its mark through bubbly PR. Now it has [pounds]5m for marketing.

Promoted on a diet of free PR, relying heavily on the support of the grinning face of its bearded founder, but with distribution of just 30%, Richard Branson's Virgin Cola has been viewed as little more than an irritant to Pepsi and Coca-Cola over the past two years.

When it launched in the UK in November 1994, Coke sent a can of Virgin Cola to every employee labelled 'The Enemy'. It has since spread abroad selling, albeit in limited amounts, in Australia, France, Japan, Ireland, and on test in Philadelphia. But critics say Virgin Cola has been more a PR success than a threat to the cola giants.

Now it's getting serious. Last year it spent just [pounds]500,000 (MEAL) on ads. This year it claims it will spend [pounds]5m through Rainey Kelly Campbell Roalfe, which will be predominantly TV. This puts it within reach of last year's Pepsi spend ([pounds]6.9m, MEAL September 1996).

Virgin is also in talks with major multiples, and will break its exclusive deal with Tesco by seeking distribution through other supermarkets. In January, the European Commission outlined restrictions on Coca-Cola & Schweppes Beverages which will make it easier for smaller players to compete. Virgin is the first soft-drinks firm to take full advantage of this with plans for rapid expansion until distribution levels match Pepsi's in the UK.

This is Virgin's entry into the big league. Its distribution and ad budget will be on a par with rivals. Virgin claims that its sales can be too.

Each cola maker is able to produce favourable, if widely varying market research sales figures, but Virgin's latest suggest its rivals should be nervous. Although its national share is only around 3%-5%, Virgin claims that where its cola is sold in direct competition with Pepsi, it outsells the boys in blue. …

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