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Co-branding

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Co-branding

Co-branding refers to several different marketing arrangements:

Co-branding, also called brand partnership,[1] is when two companies form an alliance to work together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:[2]

Co-branding is an arrangement that associates a single product or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The object for this is to combine the strength of two brands, in order to increase the premium consumers are willing to pay, make the product or service more resistant to copying by private label manufacturers, or to combine the different perceived properties associated with these brands with a single product.

Intent

According to Chang, from the Journal of American Academy of Business, Cambridge, there are three levels of co-branding: market share, brand extension, and global branding.

Level 1 includes joining with another company to penetrate the market

Level 2 is working to extend the brand based on the company's current market share

Level 3 tries to achieve a global strategy by combining the two brands

Forms

CEJ and Ford co-branding for a gauge block

There are many different sub-sections of co-branding. Companies can work with other companies to combine resources and leverage individual core competencies, or they can use current resources within one company to promote multiple products at once. The forms of co-branding include: ingredient co-branding, same-company co-branding, national to local co-branding, joint venture co-branding, and multiple sponsor co-branding. No matter which form a company chooses to use, the purpose is to respond to the changing marketplace, build one’s own core competencies, and work to increase product revenues.

One form of co-branding is ingredient co-branding. This involves creating brand equity for materials, components or parts that are contained within other products.

Examples:

• Betty Crocker’s brownie mix includes Hershey’s chocolate syrup

• Pillsbury Brownies with Nestle Chocolate

Dell Computers with Intel Processors

Kellogg Pop-tarts with Smucker’s fruit

Another form of co-branding is same-company co-branding. This is when a company with more than one product promotes their own brands together simultaneously.

Examples

• Kraft Lunchables and Oscar Mayer meats

National to local co-branding occurs when a local small business teams up with a national brand or network to target local audiences and interests.[3][4]

Examples:

• Visa co-branding credit cards with local retailers[5] • Auto manufacturers with local dealerships


Joint venture co-branding is another form of co-branding defined as two or more companies going for a strategic alliance to present a product to the target audience.

Example:

• British Airways and Citibank formed a partnership offering a credit card where the card owner will automatically become a member of the British Airways Executive club

Finally, there is multiple sponsor co-branding. This form of co-branding involves two or more companies working together to form a strategic alliance in technology, promotions, sales, etc.

Example:

• Citibank/American Airlines/Visa credit card partnership

[6]

Examples

An early instance of co-branding occurred in 1956 when Renault had Jacques Arpels of jewelers Van Cleef and Arpels turn the dashboard of one of their newly introduced Dauphines into a work of art.[7]

A successful example of co-branding is the Senseo coffeemaker, which associates the Philips made appliances with specific coffee brand of Douwe Egberts.

Other examples include the marketing of Gillette M3 Power shaving equipment (which require batteries) with Duracell batteries (both brands owned by Procter & Gamble).

Co-branding can be between an organization and a product also. An example of co-branding between a charity and a manufacturer is the association of Sephora and Operation Smile: Sephora markets a product carrying the logo of the charity, the consumer is encouraged to associate the two brands, and a portion of the proceeds benefit the charity.

A very unique case is the McWhopper proposal, a co-branding attempt between two direct competitors, Burger King and McDonald's.[8]

See also

Further reading

  • Kalafatis, S., N. Remizova, D. Riley and J. Singh (2012), “The Differential Impact of Brand Equity on B2B Co-branding,” Journal of Business and Industrial Marketing, Vol. 27, Issue 8, p 623-634.
  • Litvinov, Nikolai. Hi-level Cobranding // Identity. — 2007. — №13(4). — P.96-105.
  • Singh, J., S. Kalafatis, and L. Ledden (2014), “Consumer Perceptions of Cobrands: The Role of Brand Positioning Strategies,” Marketing Intelligence & Planning, Vol. 32, Issue 2, p 145-159.
  • Wei-Lun Chang, “A Typology of Co-branding Strategy: Position and Classification,” Journal of American Academy of Business, Cambridge (JAABC), Vol. 12, No. 2, March, pp.220-226, 2008.

References

  1. ^ http://www.schmoozyfox.com/2010/03/brand-partnerships/
  2. ^
  3. ^ http://www.sproutloud.com/resources/newsletter/national-local-new-co-branding-paradigm
  4. ^ http://www.businessweek.com/smallbiz/content/jul2009/sb20090710_255169.htm
  5. ^ http://usa.visa.com/merchants/grow-your-business/marketing-solutions/co-branded-cards/index.jsp
  6. ^ Wei-Lun Chang, “Roadmap of Co-branding Positions and Strategies,” Journal of American Academy of Business, Cambridge (JAABC), Vol. 15, September, pp. 77-84, 2009.
  7. ^
  8. ^
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