Posted by Lorraine Carter on November 09 2015 @ 12:42
Co-branding is defined as a partnership between brands. It typically works best when Brand A partners with Brand B, each with a different set of customers and brand associations of their own. As in the expression, “the whole is bigger than the parts,” co-branding can add value when synergy exists between the brands; it creates an emotional energy, starts conversations and creates buzz around both partners.
Image via www.missvinc.com
What do the experts say about co-branding and the future? According to design experts in the field, co-branding is important as the path for delivering a one-of-a-kind product, for delivering something to the marketplace that is otherwise impossible without the contribution of both brands.
Image of Virgin Mastercard via Bloomberg.com
According to franchising experts, “co-branding offers the best of both worlds” by combining compatible concepts and leveraging efficiencies, often placing two brands under one roof for a win-win. And, according to a trademark expert, “co-branding has great advantages provided there is trust and transparency between the partners,” suggesting a kind of pre-nuptial agreement is the way forward.
Co-branding Means Endless Possibilities
In addition to brand revitalization, co-branding objectives may include getting more bang for the buck, growing market share, building audience reach and altering perceived positioning. Co-branding is primarily used an alliance of two brand partners, although there’s no rule against bringing three or more to the party.
In the definitive book published in 2000, “Co-Branding: The Science of Alliance,” the authors laid out the opportunity on page one:
“...the term 'co-branding' is relatively new to the business vocabulary and is used to encompass a wide range of marketing activity involving the use of two (and sometimes more) brands. Thus co-branding could be considered to include sponsorships, where Marlboro lends its name to Ferrari or accountants Ernst and Young support the Monet exhibition...The list of possibilities is endless.”
Co-Branding Sponsorships and Sport
Examples of co-branding strategy are all around us, particularly abundant in international sporting events. In a longstanding partnership that has kept the ball in play since 1902, Slazenger is an official supplier to Wimbledon, gifting 52,000 tennis balls for each tournament. Huge sums of money, strategically spent, presented Rugby World Cup 2015 Worldwide Partners in a lineup of Heineken, Land Rover, Duracell, Société Générale, DHL, Emirates, Canon, EY (Ernst & Young) and MasterCard.
Image via www.marketingweek.com and www.duracell.com
FMCG Co-Branding and Packaging
Co-branding in fast-moving consumer goods can provide delicious “Aha” moments. On your grocery store shelf, see a perfectly packaged example in Betty Crocker Brownies Mix boxes containing Hershey's chocolate syrup in a pouch.
Image via flickr (CC 2.0, theimpulsebuy)
The partnership unleashed a succession of activities reaching way beyond the supermarket: Betty’s Big Bake Day at General Mills’ headquarters, recipe sharing among Facebook fans, events at Hershey World’s Pennsylvania theme park, cupcakes for the “Good Morning” television presenters to savor on-air and a road tour to launch a new lineup of 12 products for home baking. This multi-tiered co-branded campaign embraces a swathe of what Google marketers term “micro-moments,” from “I want to bake chocolate cookies” to “I want to win a trip.”
Image via www.bettycrocker.com and www.hersheys.com
Nike and Apple Lead the Way
In 2006, the obvious connection between listening to music and going for a run partnered Nike+ iPod Sport Kit, a clever technological advance and a natural fit for both the shoe giant and Apple.
Image via Amazon.com for www.apple.com and www.nike.com
Having cut their teeth on co-branding with a Michael Jordan product line in 1984, Nike is one of the world’s strongest co-partners. And, Apple didn’t stop with footwear; co-branding continues to evolve in their product lines, such as Apple Music’s partnering with UK fashion retailer Burberry and its high-end collaboration with Hermès for the Apple Watch.
Image via www.apple.com
This special edition Apple Hermès watch offers both co-brand partners unique opportunities. For Hermès, it breathes freshness and modernity into a brand founded on tradition and heritage. For Apple it's a clear signal that it now considers itself to be a luxury brand fused with a formidable blend of design and technology, effectively elevating the brand and positioning it even further from its nearest competitors.
Positioning and Fashion Brands
Fashion, accessories, and fragrance are fertile grounds for a co-branding triangle (the third party is the person wearing the item or the scent!) A very interesting collaboration strategy with couture houses is being used by the Swedish mega-chain H&M. Specially created campaigns with Karl Lagerfeld, Versace, Stella McCartney, Alexander Wang and other celebrity designers underpins the chain’s statement, “High-fashion design doesn’t have to be a matter of price.”
Image via www.nytimes.com (Rob Stothard for The New York Times)
These limited capsule collection collaborations are massive brand investments, but H&M have been using them as to create high-street or mass market frenzy, media attention and as ruthlessly effective brand builders. The scene repeated in November 2015, when a Balmain fashion collaboration touched off pre-dawn queues of thousands outside H&M stores from San Francisco to London to Sydney. As a result, couture becomes more relevant and H&M gets a distinctive positioning with serious attitude — definitively separating the brand from its mass market competitors.
A Closer Look at Co-branding Pros and Cons
When co-branding is perceived as successful by consumers, it can drive price points upward. Three stunning examples are cited by Liddell in his article for FastCompany:
“The Doritos Locos Taco earns a 40% premium compared to Taco Bell’s regular taco. The Fiat 500 by Gucci sells briskly at a 52% markup over the base price of a standard Fiat 500. Online pre-orders for the original Nike+Fuelband sold out in minutes, and Nike’s equipment division reported an 18% increase in profits for the fiscal year following the product’s introduction. These are impressive numbers for what are essentially a taco, an iOS-powered pedometer, and a very small Italian car.”
Image via www.fiat.com
Top 7 Benefits of Co-branding
As a marketing strategy, co-branding earns strong recommendations for its scalability. Co-branding for small and medium-sized businesses can be equally productive as for the biggest brand names playing on a global field. Consider these tactical and strategic advantages:
On the plus side, co-branding can:
1. Introduce products or services of one brand to customers of another
2. Represent substantial cost savings on advertising
3. Enhance the appeal of a product or service
4. Reposition brands with a more elevated appeal
5. Broaden a geographical market reach
6. Enable a small brand to punch above its weight and a larger one to focus on a niche
7. Alter brand perceptions permanently amongst a target audience through positive associations in what is known as the ‘spillover effect’
Top 5 Co-branding Risk Management Tips
Just like falling in with the wrong crowd can harm your reputation, co-branding with the wrong partner carries risk by association. Likewise, public perception about brands changes and endorsements can go sour, even without the drama of a superstar and a criminal offense. Readers may recall examples of O.J. Simpson former partnering with Hertz Rent-a-Car (1978) and Lance Armstrong’s former association with Nike.
Without a budget for superstar endorsements or the resiliency of a big brand, small businesses must choose co-branding partners as carefully as they would choose a supplier.
It’s prudent to take these steps to reduce risk when co-branding:
1. Identify partners with deep synergy
2. Collaborate with partners who reflect similar brand values
3. Choose brand partners that are leaders in their sector
4. Create programs with partners who best complement your brand
5. Retain full approval and refusal rights for all communications
Why Co-branding is Often Overlooked
First and foremost, you must protect your own brand. Smaller businesses often overlook co-branding for three main reasons:
1. Fear that the risks outweigh the positive
2. Wrongly thinking that opportunities will simply present themselves and
3. A lack of strategic brand vision
Nonetheless, when co-branding partnerships are strategically and tactically developed, they can be an extremely effective tool.
6 Tips for Co-Branding Success
These recommendations cannot be over-emphasized:
1. Research thoroughly, evaluate carefully and understand your partner’s corporate mission
2. Ensure there’s a win-win for both parties – that both brands will get a beneficial return on their investment
3. Protect brand logo and trademark integrity
4. Identify separate and joint objectives and target the ROI for each campaign
5. Develop a brand strategy plan and assign action plan responsibilities, with deadlines, to individuals
6. Communicate, communicate, communicate
Co-branding in the Digital Age
Our digital world is where storytelling meets online strategy. Have a look at the Facebook page of any small business to see customers who “liked” it. On a micro-level, that’s co-branding at work. Influencers for hire and brand ambassadors, some of whom boast followers in the hundreds of thousands, are the embodiment of contemporary co-branding on platforms like YouTube, Instagram and Twitter.
The ‘always-on’ aspect of social media connectivity provides opportunities for consumer interaction, contests, YouTube videos, Twitter chat rooms and more, often drawing on popular culture for inspiration.
In 2012, the #CokeZero007 campaign challenged commuters as they stepped up to a soda vending machine in an Antwerp train station to “unleash the 007 in you” for the release of “Skyfall,” the latest James Bond film. A music-rich YouTube stunt video, devoid of voice-over, has earned more than 11 million views.
In a 2013 surprise move, Google named their Android operating system KitKat, after a Nestlé brand chocolate bar, stretching even the most imaginative marketing minds about co-partnering possibilities.
Image, Nestlé via www.independent.co.uk
Google-owned YouTube exploited the connection further in 2015 to link the platform’s 10th birthday and the candy bar’s 80th birthday. The message? Break open a yummy KitKat while enjoying YouTube’s most popular videos, curated for viewers’ break time.
For Christmas 2015, Burberry’s YouTube ad connects the dots between the 15th anniversary of “Billy Elliot” and a cast of stars including Romeo Beckham, Sir Elton John, Julie Walters and “Downton Abbey” actor Michelle Dockery performing ballet moves dressed in the trademark tartan cashmere scarves and signature macs. The co-branded message translates as “Cool Britannia.”
• What innovative co-branding partnerships have impressed you lately?
• Are short-term partnerships a good choice for small businesses?
• Could you use co-branding as part of your brand revitalization strategy?
• Do you have potential co-branding partners in mind for your business?
• Do you have clear objectives in mind for a potential co-brand campaign?
• What can be learned from co-branding mistakes such as Southwest Airlines and SeaWorld?
• Can brands insulate themselves from external forces and public opinion, such as the
Greenpeace effect on ending the partnership between toymaker Lego and petroleum giant Shell?
You might also like:
 Devin Liddell, “3 Reasons Why Co-Making is the Future of Branding,” FastCompanyDesign
 Kerry Pipes, “Co-branding Offers the Best of Both Worlds,” Franchising.com
 Ilanah Simon Fhima, “Trade Mark Law and Sharing Names,” Edward Elgar Publishing Ltd