What is Co-Branding: Complete Guide

Last Updated on May 19, 2022 by DesignerPeople

Today as a businessman, when we look around us and see, many brands, products, and services are getting established each day. Now that brings a challenge to highlight its unique selling points and to increase lead generation. They are exploring new opportunities to gain market share and engage with prospective consumers.

Start-ups are growing at high speed hence the growth of Indian startups and investors pouring money into them. Marketing strategists are thinking out the box, and many consider working together with another brand to execute an unusual and influential campaign.

Definition of Co- branding is : The key to this marketing strategy is to choose such a brand that will best complement or intensify your products and services, such as Apple and Nike brought sports and music together with the Nike+Apple products.

WHAT IS CO-BRANDING?

 It is a strategy in which they introduce a new product or service to the market. At the same time, the product or service’s characteristics are then fix in the attributes and core competencies of the two cooperating brands.

Here, there is a partnership where two brands share their brand name, logo and many other things for a specific project, and offers are raised based on both brands’ co-branding power.

There is always Confusion between co-marketing and co-branding, while co-branding is already well said above. At the same time, co-marketing is effective when organizations commit to each other and cross-promote existing products or services.

There are three levels of Co-Branding:

Level 1: Associating with another company with a motive to penetrate the market

Level 2: Associating to extend the brand based on brands’ current market share

Level 3: Associating to gain a global strategy by combining two brands

Also Read: 15+ Branding Statistics every business owner should know for 2021

Why Co-branding?

Co-branding can add value when synergy exists between the brands. It creates emotional energy, starts conversations and creates buzz around both partners. Also it allows creating a possibility of delivering a one-of-a-kind product. Here both companies are compatible and leveraging efficiencies, often placing two brands under one roof for a win-win game.

Example: Co-branded credit cards from LG and SBI, ICICI and HPCL, Air-Sahara and Standard-Chartered Bank, HSBC, and Star India Bazaar displays their wide range of reach across all possible business sectors in India.

Benefits of Cobranding

1.Low cost to reach a high audience 

Here, the brands are involved in sharing the equal marketing costs, making them reach out to a potentially larger audience while lowering their overall expenses.

2.Improves brand reputation 

The brand can improve identity and goodwill in the market with the support of other established successful companies. A struggling brand can get a significant boost to its reputation from other brands marketing effort.

3.Expands the market size 

When two companies come together, their both fan base and loyal customers get associated naturally with them. Here the natural customer base to be attracted to what the other company has to offer.

4.Combined skillsets and expertise 

Here from the workforce to resources are collaborated, which reduces outsourcing assignments as both brands come together with a common objective with consistency.

5.Enhances Leverages 

Here small businesses can begin to leverage their advantages in a world where the giant companies have mature customer relationships in pace, giving them a potential opportunity to compete legitimately.

6.Double Marketing Budget

Marketing can be a costly expenditure where a massive bonus of co-branding costs splits between both parties. Hence, its benefit allows for more innovative ideas and ample opportunities to market a product or service better, resulting in a greater return on investment (ROI).

Drawbacks of Cobranding

1.Observe Financial crises

Co-branding deals with revenue and profit-sharing agreements, bonds and contracts, creating a feeling of insecurity among partners. At the same time, there is a relationship seen with the government by several legal agreements, hence the negotiation cost to consider before this ever gets started.

2.Branding may deviate 

If the two products that the brands use to expand their co-branding strategy are entirely different, co-branding might be a total failure.

If the companies do not share the same missions, visions, values, brand guidelines, then the branding is a no-go.

3.Develops Confusion

When a consumer is loyal to a brand and is ready to buy the product from it, the connection with another brand the customer is not familiar with might create Confusion.

The client may fail to purchase this product due to no clarity of communication and thought.

4.May affect the reputation    

A disparity with a brand that has lesser quality may notably lower the prestige of the other side brand. A new brand in the market will harm if it co-brands with a brand deemed to consumers of lesser quality.

 

5.Conflict of interests and values

 If two companies in the process share different values, ethics, missions and visions with entirely different markets, co-branding may fail. Also, a negative experience with the constituent brand may affect the partner brands and their products.

6.Negative impact on Small scale Businesses

A small scale business may get masked by a reputed brand during co-branding, where the consumers will assume the product is from the reputable brand by not focusing on the small company. Hence may lead to the loss of the personal image of the small business.

Tips for Successful Cobranding

Who don’t like tips? I am sure everybody does love them. Below are few practical tips for successful co-branding which will make sure to deliver fantastic results.

1.Communicate realistic brand standards & expectations

Ensure your brand standards, manuals, and guidelines are created for your business to identify how to use your brand logo, colours, tone and fonts, and brand story.

Hence this will ensure they use your brand correctly through their marketing, operational, branding and distribution network. Don’t be the brand that allows anything to happen. Be clear and precise with your branding expectations with any partnering business.

2.Brand Messaging

Make sure your brand message conveys correct and consistent results on all the platforms. Whether that be specific wording, emotional connect about product or services details or any USP’s, benefits about your product, be clear with the messaging, so they are also apparent when communicating that message to the end-user.

3.Create Complete Campaigns

A campaign allows you to promote your services or products on a network of search results, websites, mobile apps, videos maps, shopping listings, and more.

A campaign type depends on your brand strategy, marketing goals, and how much time you can invest. Each type of campaign has its own set of target audience and marketplace.

4.Evaluation of marketing and branding activities 

Customers today no longer sit and wait for products we decide to produce for them, nor do they settle and look for the best choice. They read and write all online reviews and speak up or on social media.

Attracting customers is altogether just half of the work. Keeping them happy and devoted is what keeps their revenue coming. Customer success includes listening, reacting, and supporting – all of which you can do with a brand monitoring tool.

5.Add Some Branding Extras

After a successful co-branding, there are many more opportunities available to enhance your brand’s visibility, and one is by providing additional branding materials.

Providing business card designs, pens, welcome mats, mousepads, or other collateral with your brand name on it will encourage them to enhance the presence of your business over the competition.

source: behance.net/gallery/77000273/ideafix-Branding-Identity

source: behance.net/gallery/77821903/Personal-Branding-Allyssa-Ellis

source: behance.net/gallery/52667081/Museum-Identity

Successful Co-branding Partnerships

1.GoPro & Red Bull

An energy drink’s company and a camera brand may not have many similarities on the surface, but both brands emulate a sense of adventure and spontaneity. They are appealing to a similar consumer from around the universe with cameras, different types of tools and funding to catch the action through the point of view videos at these events.

The duo’s most approved video titled “Stratos” has garnered more than 21 million views on YouTube. The famous stuntman Felix Baumgartner jumping from a space pod more than 24 miles above the Earth surface, setting three world records with the attached brand names.

2.AirAsia & Kabali Movie team 

In 2016 a fine example was this effort between AirAsia and Kabali, the Rajinikanth movie. The airline primarily connects Malaysia with the rest of Asia operates flights from India to Malaysia.

The movie was extensively shot in Malaysia and Indirectly promoted Malaysia to India and the world, and aimed to boost Malaysian tourism.

If AirAsia promotes Kabali, people watch it. They also want to visit Malaysia. Book a flight, possibly an AirAsia flight. Thus, AirAsia gains more revenues and profits.

With Air Asia flights promoting the movie, more people watch the film across India, Malaysia and other global locations. Kabali’s producers gain more money.

3.BMW & Louis Vuitton

BMW and Louis Vuitton value luxury. And finally, they’re both well-known, traditional brands that are known for conventional quality craftsmanship.

BMW designed a sports car model that is BMW i8, while Louis Vuitton designed a complete, four-piece set of suitcases and bags that fit excellently into the car’s rear parcel shelf. Not only does the luggage provide perfectly size-wise, but its design and appearance fit perfectly with BMW’s image: sleek, masculine, and high-quality.

Hence the collaboration with BMW I epitomizes our shared values of creativity, technological innovation and style.

4.Uber & Spotify

The motive was to develop “a soundtrack for your ride,” a characteristic that gives rise to riders waiting for their Uber ride to associate with Spotify. To encourage the branding, riders in select cities who downloaded Spotify and DJ’d their Uber rides could win a chance for a ride-along or live session with artists ranging from Diplo to Jake Owen.

It creates an intriguing incentive for music lovers everywhere to hail an Uber, even if to ride around the block.

5.Taco Bell & Doritos 

Taco Bell and Doritos have collaborated up to create Dorito-flavored tacos. To encourage the start of Doritos Locos Tacos, Taco Bell took to Twitter favourably to convey a truckful of the tastiest treat to the person with the retweeted tweet featuring the hashtag #DoritosLocosTacos before the creation arrived in the restaurants.

Once a winner had his post, they retweeted more than 24,000 times. Once in stores in 2012, the new menu item became the most famous and thriving in the chain’s history, topping sales of 375 million tacos in a month.

CONCLUSION 

The pros and cons of co-branding talks about the potential benefit of introducing new products to an established marketplace with a transparent message. If both companies can offer a brief note to both the targeted audiences, it will be a solid marketing campaign.

Have you ever participated in a co-branding effort in the past? We’d love to hear about some of the lessons you learned from that experience.

At our branding agency, we believe in creating inspiring branding to empower brands and, most importantly, help you leverage the power of co-branding. Our dedicated experts are ready to assist you once you contact us.

Author: Priyanka Thakkar

Passionate, adventurous and my never-ending learning approach lead me towards the world of content writing after working years in core marketing profile. My experience of working in world-famous MNC motivated me to understand the niche requirement of strategic words to communicate correctly about brand message towards people. My zeal in an informal way of writing articles allows anyone to enrich their knowledge in the world of branding, packaging and digital marketing. Being an MBA in Marketing and HR, my excellence lies in framing marketing strategies as well as relationship building. Do connect me personally my LinkedIn & I love to share my expertise with you.