Co-branding is a great way for businesses and companies to integrate their forces; it helps them to lower the risk factor and separate costs, and amplify their profit and brand visibility. It’s such a marketing strategy that companies employ to develop better products and offer them to the customers of other companies. Today, we’ll discuss what is co-branding; its various types of strategies, differences with co-marketing; benefits, and examples.
What is Co-Branding?
Co-branding is the strategic marketing concept that brings two brands together to form an alliance for the mutual benefit of both companies. It also goes by the name of brand partnership. However, it doesn’t mean that you include the names of two brands on the product’s packaging. The brand partnership means both companies integrate their resources and identities to develop the new product; coming up with new logos, color schemes, and brand identifiers.
In order to achieve success, the campaign of brand partnership develops such a product/service that adds value to the lives of customers. The added value could be in the form of improved public image, status symbol, special food items, or better product.
How Co-Branding Works
Co-branding starts when two independent companies join hands in order to develop a new product/service. The most successful co-brand partners have got same cultures, missions, and values. The partners have got access to a lot of resources like funding, advanced technological edge, and in-house professional expertise. When they produce the new product/service, it has a new logo and brands name.
If the campaign of brand partnership becomes successful, then it would reward partners in the form of a large database of customers, positive association, and profitability. If the campaign is not successful, then every partner experiences losses, shared risk, and no profitability.
Co-Branding versus Co-Marketing
Both terms may seem similar, but they’re different from each other. Co-marketing is when two companies join their marketing resources and capabilities, but they don’t produce any type of new product or service. However, the partnership of Spotify with Starbucks and Uber is a great example of co-marketing. It’s a type of alliance where the partners do not always develop new products/services for the customers.
Strategies of Co-Branding
Some of the main types of co-branding strategies are as follows;
Multiple Sponsors Co-Branding
It happens when two companies join hands to promote particular events and share technology. Many business professionals employ multiple sponsor brand partnership strategies in concerts and sports events as attention-catching stunts. Every company involved in the process gets an opportunity for brand reputation, recognition, and higher sales.
Composite Co-Branding/Joint Venture
It’s a type of alliance and venture between two well-established companies with the objective of launching a new product/service that isn’t possible with their individual efforts. It comprises of improving the current product/service and producing a completely new one. For instance, online video streamlining platforms develop a partnership with studies to produce TV shows and host movies.
It is a type when small local businesses make partnerships with well-reputed national brands. The objective of this type of alliance is to amplify brand awareness along with increasing profitability and revenue. Often, Visa and Credit cards join hands with small retailers and departmental stores. Automobile companies partner up with car-dealership retailers.
Same Company Co-Branding
It’s a type when companies plan to promote their multiple in-house brands of the same product. Large conglomerates follow this strategy for the promotion of their own products and services. However, it is a type when the parent company collaborates with subsidiary brands for the promotion of its products.
It is a type of strategy where the professional experts employ the elements and ingredients of one well-established brand in the product development of the other well-reputed brand. In this type of partnership, where every partner is an industry leader with unique traits protected by trademarks and patents.
Benefits of Co-Branding
Some of the main benefits of co-branding are as follows;
- Sharing risk equally among all the partners
- Earning revenue and profit from the mutually developed technology
- Sharing financial expenses for promotional events, tech development, and marketing
- Higher respect and credibility when partnering with the right partner on the right project
- Increased brand recognition
- Enhanced brand and customer loyalty
- Generating royalty income
- Creating better quality products
- Higher sales
- Higher database of customers from the new demographics
Examples of Co-Branding
Coca-Cola & American Red Cross
Coca-Cola and American Red Cross organized a charity event to help disaster relief and promote small healthcare events. It benefited the local Red Cross chapter in terms of reputation, visibility, funds, and volunteers with the help of the recognized Coca-Cola brand.
GoPro & Red Bull
GoPro and Red Bull organized an event, where Felix Baumgartner performed a free fall jump from 128000 on the surface of the earth. The collaboration helped in the form of filming and editing, and managing the tech challenges.
Doritos & Taco Bell
The combination of brands result in the form of a new product “Doritos Locos” and its sale reached 100 million items in the first ten weeks. The partnership is still active and it is giving profits to both brands.
Hershey & Betty Crocker
Hershey’s candy products have been using the mixes and frosting of Betty Crocker for years. The collaboration between brands produced new baking mixes that you can see in the stores.
Dawn & The Bird Rescue
The collaboration of the two brands raised awareness about birds and other affected wildlife due to the oil spill. The Bird Rescue received thousands of bottles from Dawn, and Dawn earned a good reputation in the community.
What is Co-Branding? Strategies, Benefits, Examples
After an in-depth study of what is co-branding; its benefits, strategies, and examples; we have realized that collaboration among brands offers benefits to both partners. If you’re planning for it, then you should keep in mind the abovementioned strategies.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.