What Is Co-Branding?
As part of a strategic partnership, co-branding is known to be a marketing technique that uses several names of brands on an item or service. Co-branding (or “cobranding”), often known as a brand partnership, refers to a variety of branding collaborations that generally involve the brands of at least two firms. With the aid of distinct logos, brand identifiers, and color schemes, each brand in such a strategic partnership adds its own identity to form a merged brand.
Co-branding combines the market power, brand recognition, positive connotations, and cachet of two or more brands in order to persuade customers to pay a higher price for them. It can also reduce the likelihood of a product being copied by private-label competitors.
Many organizations find co-branding to be an effective approach for growing their client bases, profits, customer loyalty, market share, perceived value, brand image, and cost savings. Co-branding is used by a variety of organizations, including shops, restaurants, carmakers, and electronics manufacturers, to generate synergies based on each brand’s particular characteristics. Simply defined, the goal of co-branding as a strategy is to enhance market share, income streams, and consumer awareness. Two (or more) parties intentionally agreeing to work on a specific product might spark co-branding.
It may also occur as a consequence of a corporate merger or purchase as a means of transferring a brand associated with a well-known manufacturer or service provider to a company and brand that is more well-known. More than simply name and brand connotations may be seen in co-branding. There may also be a pooling of technology and knowledge, allowing each co-branding partner to capitalize on their own advantages. A co-branded product has a smaller target audience than a corporate product with a single name.
Because the image it transmits is more particular, businesses must decide if co-branding may assist them or if it would alienate customers who are accustomed to a single name and a well-known product identity. Companies should carefully select co-branding partners. A company’s partnership with another brand might be beneficial, but it can also be risky. Slowly rolling out a co-branded product or service before advertising and promoting it is a solid approach since it gives the market time to assess it.
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There are four distinct co-branding techniques, according to branding and marketing experts:
- Market penetration strategy: A cautious strategy aimed at preserving the existing market share and brand identities of two combined or partnered companies.
- Global brand strategy: Attempts to service all consumers under a single global co-brand that already exists.
- The introduction of a new brand name is an example of a brand reinforcement technique.
- The development of a new co-branded name that will only be used in a new market as part of a brand expansion plan.
Co-Branding vs. Co-Marketing
Co-branding and co-marketing are similar ideas in that they both entail brand alliances to boost marketing efforts, but they differ in how they are carried out. Co-marketing unites two partners’ marketing efforts but does not result in the development of a new product or service. By definition, co-branding is focused on the development of a new product or service.
Co-branding is all over the place. Consider the following examples:
- Doritos Locos from Taco Bell Yum! Brands, Inc. and PepsiCo subsidiary Frito-Lay, Inc. collaborated on the development of tacos, a specialty food item.
- “Your favourite music is only a touch away”: Uber and Pandora Media have teamed together to allow Uber riders to build Pandora playlists to listen to while on the road.
- Citi AAdvantage cards are credit cards that allow you to earn American Airlines miles when you make eligible transactions.
- Pillsbury baking mixes with Hershey’s chocolate; Kellogg’s cereal with Jif peanut butter from Smucker’s.
- Nike+ is a collaboration between Nike Inc. and Apple Inc. that connects activity monitoring technologies in sports gear to iPhone applications and the Apple Watch.
How Is Co-Branding Advantageous To Brands?
For each of the companies involved, a properly formulated co-branding project may provide a variety of benefits. Brands may benefit from each other’s strengths and accomplishments, as well as gain access to each other’s markets and audiences, by collaborating. Positive brand associations transferred from one brand to another can have a long-term influence, even after the co-branding collaboration has ended.
1. Reach New Markets
Due to audience overlap, a multi- or co-branded product or campaign enhances your brand’s visibility to the target audiences of your co-branding partner. Loyal customers of one brand will try the new product or service, even if they would never consider the second brand on its own, allowing the second brand to expand into new markets by leveraging the first brand’s value.
Co-branding has the ability to create a buzz that reaches beyond current audiences, creating awareness and helping companies to reach audiences that are unfamiliar with all of the brands participating in the campaign.
2. Utilize One Brand’s Strength To Overcome Another’s Weakness
When properly designed and performed, a successful co-branding effort may help one brand overcome its weaknesses by utilizing the strengths of the other. For example, if one brand is recognized for technical expertise but lacks a sense of fun or imagination, while another brand is known for creativity but has technological constraints, collaboration can help one brand overcome its flaws and allow the strengths of the other to transfer.
This is especially useful for companies that have just rebranded. To assist reinforce the idea that things have changed, a business attempting to shake off a more traditional brand identity may collaborate with a more youthful and adventurous brand.
3. Risk And Cost Reduction
A brand might take a huge risk by releasing a new product, entering a new market, or joining a new category. You may reduce the risks involved and without putting too much on the line test the waters by working with a company that is already established in your targeted new market or category. Using another brand’s current and established associations, beliefs, and ideals to convey a shift inside your own brand may be a cost-effective and compelling strategy.
Brand campaigns aren’t inexpensive, and showing a shift through association rather than telling people about it may be much more successful. Instead of proclaiming, “We’re more family friendly today!” a company may consider collaborating with a company whose fundamental identity is based on family values.
Co-branding is a good technique for companies who want to raise brand recognition, improve their reputation and image, or enhance their sales and market share. A purposeful and logical co-branded collaboration is required. Otherwise, you risk compromising brand integrity if the brands or enterprises have common principles or some similarities in their brand image or identity.