Do Branson’s F1 talks mean the Virgin brand is mature?
If Sir Richard Branson’s empire was still quoted this would be the time to sell the shares. He’s seriously talking about taking on a Formula 1 racing team.
The British entrepreneur, who has created airlines, retailers, music labels and even cola drinks that bear the Virgin name, wants to buy the team that Honda is unable to support during a recession. Not content with mere sponsorship, Branson wants to be an owner.
Has he lost his marbles or is he yet again ahead of the curve?
The wrong reason for business sponsoring sport is to indulge the chairman’s hobby at the shareholders’ expense. As a marketing tool it is as legitimate as any other form of promotion however; the simple test is whether it generates extra sales whose profit exceeds the cost.
Formula 1 has a potential further dimension however: there can be a technology interchange. Whether Honda’s F1 team benefited from making ordinary cars or whether its Civic and Jazzes (or its lawnmowers) incorporated features developed for the racing cars, there was scope for synergy.
However, Virgin has no technology to lend to a motor team and none to borrow from it. Branson’s test has to be based on marketing therefore.
On the plus side he has a reputation as a dare devil keen on breaking records. He operates airlines and upmarket hotels and holidays that share the jet-set image of motor racing. There is a good degree of overlap in images.
But on the negative side, racing is environmentally unjustifiable while Branson’s own exploits in balloons have enhanced his green, counter-culture, image. He talks of wanting to see F1 made more environmentally acceptable – and to make it economically viable – but it is a sport associated with excess.
Most worrying to the image consultants should be that Branson wants to piggyback on the reputation of motor sport. He has created one of the strongest brands in the world and his skill has been to lend the Virgin image to a diverse range of products – not to borrow other people’s status.
You could imagine Bernie Ecclestone seeking to use the Virgin brand to enhance F1 but Branson should not be paying to associate Virgin with the sport.
Branson breaks moulds – he creates a music business, smashes airline monopolies, challenges Coke and popularizes ballooning. He does follow fashions like F1 – especially one that the recession is making look like yesterday’s fashion.
Is the eternally-young Branson finally getting old? Is the Virgin brand mature? If there were shares to sell, sell them now.
February 23rd, 2009 at 6:36 pm
I found parts of this post, including the quote ‘However, Virgin has no technology to lend to a motor team and none to borrow from it’ mildly amusing, mostly because you’ve totally ignored some of Mr. Bransons largest investments - Virgin Atlantic, Virgin America, and Virgin Blue.
Yes, you might say, these businesses utilise airplanes and not cars, but both share a common need - fuel. As one focuses increasingly on the price of fuel, the environmental impact of burning it, and developing re-usable fuels, one can certainly begin to see links between an F1 programme and Richard Branson’s quest to source environmentally friendly fuels for all types of vehicles.