In today’s article, we will discuss co-branding arrangements, which involve associating a single product or service with more than one brand name or principal producer. Co-branding is ubiquitous in today’s marketplace, and can involve arrangements between all different types of partners.
Some arrangements involve brands directed to the same consumers – such as co-branded Disney Croc shoes, which feature Mickey Mouse-shaped holes, and Hello Kitty Band-Aids. Ingredient co-branding, such as Kellogg Pop-Tarts with Smucker’s fruit filling, creates brand equity for materials, components or parts that are contained within other products. Sponsorship co-branding involves a more commercial brand providing financial support to another entity, such as a non-profit or sports team, in return for marketing exposure.
Co-branding can also take place within an organization, such as Kraft Lunchables with Oscar Mayer lunch meats, or the locations where Yum! brands Pizza Hut and Taco Bell restaurants share facilities and even employees.
Co-branding can also help combine the different perceived properties associated with the two brands, to extend the reach of both brands into new markets. In some cases, this can involve the introduction of a new product via an arrangement with an older, more established brand. If done well, such an arrangement can help expand the reputation and market share of both parties. A textbook example of this type of initiative done successfully is the now-legendary “Intel Inside” campaign, which launched a brand that few consumers had ever heard of by marketing it in connection with some of the biggest computer manufacturers, such as IBM and Compaq. Within a year of the program’s launch, Intel was co-branding with hundreds of computer manufacturers.
In all cases, the goal of co-branding arrangements is to combine the strength of the two brands in order to increase the cache of the shared product, and make the product or service more resistant to copying by third parties. In many cases, the co-branded product can also be sold at a premium, such as Ford’s Eddie Bauer Explorer and Subaru’s Limited Edition LL Bean Outback SUVs. When considering co-branding opportunities, think creatively about products or services that complement your brand, and that will enhance the appeal or credibility of your offering.
Although there are many benefits to co-branding, as with any arrangement that could impact the value and reputation of your brand, these agreements need to be entered into with caution. Ahead of exploring any co-branding opportunities, companies should develop their own branding guidelines that will allow them to objectively assess opportunities as they arise. Factors to consider include
- The reputation of the potential partner brand
- Current market position of the companies vis-à-vis one another
- The degree of control over use of the brand
- Financial strength of the potential partner
- The marketing opportunity presented by the arrangement
Instituting guidelines ahead of evaluating any marketing opportunities can help make the process more objective. Companies should also avoid the overuse of co-branding, which could dilute the effectiveness of the programs.
Finally, keep in mind that the best co-branding efforts match companies with similar core values and corporate philosophies. When entered into strategically, co-branding can help build equity in your brand by enhancing reputations by association, helping solidify market position and differentiating offerings from those of competitors.