We usually only look at other brands as competitors but as a marketer or entrepreneur, you should also consider other brands not simply as rivals, but as potential partners in mutually beneficial projects.
Consumers, the media and retailers are intrigued when they encounter two brands working together. Positive brand associations are perceived by consumers who encounter a co-branded offering and this effect spills over to the two brands as well.
As a content creator, we do collaborations all the time, but these activities are actually co-branding initiatives as our audiences get exposed to different type of brand or content. Music artists has been doing it long ago through song 'features' as another example.
What is Co-Branding really?
Co-branding is a marketing partnership between at least two different brands which are independent providers of goods or services. This effort can result in various type of promotions such as sponsorships or advertisements. The association will benefit both the brands more when they come together, rather than when they are promoted individually. (via Investopedia)
Examples of Co-branding
A chip company, Intel co-brands a lot through different computer brands such as HP, Dell, Asus, Lenovo..etc.. The same with big retailers like Walmart partnering with Welch's ad campaigns.
In these examples, the products are complementary to one another. If advertised alone, will have lesser advantages as compared to when advertised together.
Various forms of co-branding
* Ingredient – When one brand is renowned but the other is not. The objective here is to get the latter brand renowned (Companies with multiple brands do this a lot – Pharma, Food, Banks).
* Composite – where both the brands are renowned and the composite result of combining the branding exercise is better than advertising the brand on its own.
* Same company – Products from within the same company are co-branded.
* Joint venture – Giving discounts on selective Debit cards being used with a brand.
* Multiple – Wherein Multiple companies form an alliance to promote their products. This could be for a PR exercise or any form of promotion.
* Retail – When retailers tie up with each other to utilize resources better.
Co-branding Advantages:
* Shared resources, which can also mean reduced costs and hence higher margins
* Branding boost for one brand or if both brands are renowned
* Financing becomes easier as two brands are intertwined
* Better potential sales and better customer relations
* The risk is Shared
Co-branding Disadvantages:
* Brand dilution if one brand enters into too many co brand exercises, which affects the other
* Uncertain consumer perception of the brand alliance - might be positive or negative
* Consumers may not focus on the individual brand altogether
* If anything goes wrong, both the brands are affected
* (It’s also possible that I may have missed some)
Having those advantages and disadvantages in mind, it is always better to consider the right decision and direction when doing co-branding initiatives. The brands need to be aligned in the right manner to give a positive impact in the market. This can be done through proper communication and planning stages before the implementation of the co-branding exercise.
So why consider it at all?
"The number one reason for doing any sort of marketing is to enhance brand and get sales."
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Vernon Joseph Go is an RFP®–Registered Financial Planner | Licensed Real Estate Broker | Content Creator | Podcast-on-the-go Producer & Host