I’ve talked a lot about branding in the last weeks and one of my favorite people, Gregory Stringer, asked me to talk about co-branding, so here goes.
Many brands use a co-branding strategy, like Cinnabon and Carvel. Think about a few you’ve seen recently.
PC and Intel
Pottery Barn and Benjamin Moore (Paint)
Hershey’s and Betty Crocker (Brownies)
Girl Scout Tagalongs and Dairy Queen Ice Cream
Eddie Bauer and Ford (SUV)
Jack Daniel’s and TGIF (sauced meats)
KMart and Martha Stewart (branded products)
Nike and Michael Jordan (shoes)
Co-branding
So, what is co-branding anyway?
According to Investopedia, co-branding is:
A marketing partnership between at least two different brands of goods or services. Cobranding encompasses several different types of branding partnerships, such as sponsorships. This strategy typically associates the brands of at least two companies with a specific good or service.
A basic definition doesn’t really tell you much about co-branding strategy. Let’s take a look at the pluses and minuses of using a co-branding strategy for your brand.
Benefits of a co-branding strategy
Co-branding is particularly valuable as a means to create a positive image in the minds of folks who might not know much or anything about your brand — it gives you warm fuzzies about the lesser known brand.
If you’re a younger child, you already experienced how co-branding works. Remember when you went to school and people, especially teachers, expected you to act a certain way because of your older sibling? That’s how co-branding works — you expect certain characteristics and behavior from a brand based on the associated brand. Just like in the image that opened this post — you know and love the rich, cinnamon taste of Cinnabon and you transfer that positive image to Carvel.
The Intel partnership with PC manufacturers [Intel Inside] introduced a branded chip that, in its heyday, commanded a 2000% markup for the chip maker and created a loyal following that made the market unappealing for new chip manufacturers for many years until AMD came along to challenge the more established Intel.
Co-branding is also a way to create a positive brand image by transferring emotions related to one brand to the other. For instance, the partnership between Michael Jordan and Nike that made his branded shoes so popular folks stood in line for the chance to own part of the legend. Michael’s cache and athletic prowess created a cult following and led to consumers collecting his shoes, even if they didn’t wear them.
There’s a certain economy of scale that makes sense when you’re looking to get the most bang for your buck. Combining advertising efforts, co-locating operations, even collaborating on digital marketing programs makes sense in some situations.
Dangers of co-branding strategy
Probably the biggest danger is the vulnerability caused by reliance on two brands — if something terrible happens to one brand, both brands might suffer declining market performance. This is the same reason why some companies don’t use a family branding strategy, instead preferring separate branding for each product line — like Proctor and Gamble with Tide, Cheer, Gain, and others just within the laundry detergent market. Damage to one brand might bring down both brands.
Another danger to a co-branding strategy comes from loss of control and burgeoning bureaucracy to manage the efforts that cause a certain frigidity and slow down strategic responses.
Image, for example, you are co-branding with a local firm and that firm does its own advertising. How do you manage that interrelationship. Car manufacturers struggled with just this problem in their relationship and reliance on local dealerships to sell their product. Often, the local dealer advertising damaged the brand image the manufacturer wanted for the automobile. Over time, manufacturers controlled the situation by requiring dealerships adhere to their communication rules, which slows down the advertising process and might damage a working relationship between the two.
