Co-branding is a
marketing strategy
Marketing strategy allows organizations to focus limited resources on best opportunities to increase sales and achieve a competitive advantage in the market.
Strategic marketing emerged in the 1970s/80s as a distinct field of study, further build ...
that involves
strategic alliance A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations.
The alliance is a cooperation or collaboration which ai ...
of multiple brand names jointly used on a single product or service.
Co-branding is an arrangement that associates a single
product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
or
service
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a pu ...
with more than one
brand name
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
, 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
A private label, also called a private brand or private-label brand, is a brand owned by a company, offered by that company alongside and competing with brands from other businesses. A private-label brand is almost always offered exclusively by th ...
manufacturers, or to combine the different perceived properties associated with these brands with a single product.
An early instance of co-branding occurred in 1956 when
Renault
Groupe Renault ( , , , also known as the Renault Group in English; legally Renault S.A.) is a French multinational automobile manufacturer established in 1899. The company produces a range of cars and vans, and in the past has manufactured ...
had Jacques Arpels of jewelers
Van Cleef and Arpels
Van Cleef & Arpels is a French high-end luxury jewelry company. It was founded in 1896 by the Dutch diamond-cutter Alfred Van Cleef and his father-in-law Salomon Arpels in Paris. Their pieces often feature flowers, animals, and fairies, and h ...
turn the dashboard of one of their newly introduced
Dauphines into a work of art.
Co-branding (also called brand partnership) as described in ''Co-Branding: The Science of Alliance,'' is when two companies form an
alliance
An alliance is a relationship among people, groups, or states that have joined together for mutual benefit or to achieve some common purpose, whether or not explicit agreement has been worked out among them. Members of an alliance are called ...
to work together, thus creating marketing synergy.
Digital co-branding
Digital co-branding is a
digital marketing strategy which follows the basics of co-branding, but aligns an advertiser's brand with a digital publisher that has the same target audience. Publishing platform would have to give up some editorial control to activate content for advertiser's brand. Travel websites are more open to building co-branding programs. They engage their audience in every process throughout the booking process. For example, snow update website features its ad on ski resorts website. If the co-branding ad placed is relevant and engaging, it is more effective than a normal internet ad. It helps the advertiser to connect and interact with more consumers.
For example,
The Huffington Post
''HuffPost'' (formerly ''The Huffington Post'' until 2017 and sometimes abbreviated ''HuffPo'') is an American progressive news website, with localized and international editions. The site offers news, satire, blogs, and original content, and ...
have partnered with
Johnson & Johnson
Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company i ...
on topics like ''woman and children'' written by Huffington Post independent reporters.
Digital co-branding
Digital usually refers to something using discrete digits, often binary digits.
Technology and computing Hardware
*Digital electronics, electronic circuits which operate using digital signals
**Digital camera, which captures and stores digital i ...
should be carried out along with Programmatic buying to be more efficient and effective in Digital Media Marketing Campaigns.
Types of co-branding
![Classification of Co-Branding](https://upload.wikimedia.org/wikipedia/commons/e/ec/Classification_of_Co-Branding.jpg)
The two types of co-branding are Product-based co-branding and Communications based co-branding.
Product-based co-branding
Product-based co-branding is a marketing strategy that involves linking of multiple brands from different companies in order to create a product indicative of their individual identities. Product-based co-branding maybe categorized into Parallel and Ingredient co-branding.
Parallel co-branding
''Parallel co-branding'' is the marketing strategy where multiple brands come together and create a combined brand.
Ingredient co-branding
''Ingredient co-branding'' is a marketing strategy carried out by a supplier where an ingredient of a product chooses to position its brand.
Advantages of product-based co-branding
* Value addition and differentiation
* Access to new customers
* Better integrated communication
*
Positioning
* Reduction of product introduction cost
Disadvantages of product-based co-branding
* Loss of control
* Poor performance of co-brand
Communications-based co-branding
Communications-based co-branding is a marketing strategy that involves linking of multiple brands from different companies in order to jointly communicate and promote their brands.
Advantages of communication-based co-branding
* Endorsement opportunities
* Sharing advertising costs
* Resource sharing
* Enhances
awareness
Awareness is the state of being conscious of something. More specifically, it is the ability to directly know and perceive, to feel, or to be cognizant of events. Another definition describes it as a state wherein a subject is aware of some inform ...
Disadvantages of communication-based co-branding
* Difference of opinion
* Negative co-brand image
* Poor performance of co-brand
Intent
According to Chang, from the ''
Journal of American Academy of Business
A journal, from the Old French ''journal'' (meaning "daily"), may refer to:
*Bullet journal, a method of personal organization
*Diary, a record of what happened over the course of a day or other period
*Daybook, also known as a general journal, a ...
'', Cambridge, there are three levels of co-branding:
market share
Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a ...
,
brand extension
Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off.
Organizations use this ...
, 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 of co-branding
There are many different subsections 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 locally 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
Betty Crocker is a brand and fictional character used in advertising campaigns for food and recipes. The character was originally created by the Washburn-Crosby Company in 1921 following a contest in the '' Saturday Evening Post''. In 1954, ...
’s brownie mix includes
Hershey’s Chocolate Syrup
Chocolate syrup is a sweet, chocolate-flavored condiment. It is often used as a topping or dessert sauce for various desserts, such as ice cream, or mixed with milk to make chocolate milk or blended with milk and ice cream to make a chocolate mi ...
*
Pillsbury Brownies with
Nestlé
Nestlé S.A. (; ; ) is a Switzerland, Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest publicly held food company in the world, measured by revenue and other me ...
Chocolate
*
Dell
Dell is an American based technology company. It develops, sells, repairs, and supports computers and related products and services. Dell is owned by its parent company, Dell Technologies.
Dell sells personal computers (PCs), servers, data ...
Computers with
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
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
The second incarnation of Kraft Foods is an American food manufacturing and processing conglomerate, split from Kraft Foods Inc. in 2012 and headquartered in Chicago, Illinois. It became part of Kraft Heinz in 2015.
A merger with Heinz, arra ...
Lunchables
Lunchables is a brand of food and snacks manufactured by Kraft Heinz in Chicago, Illinois and marketed under the Oscar Mayer brand. They were initially introduced in Seattle in 1988 before being released nationally in 1989. Many Lunchables product ...
and
Oscar Mayer
Oscar Mayer is an American meat and cold cut producer known for its hot dogs, bologna, bacon, ham, and Lunchables products. The company is a subsidiary of the Kraft Heinz Company and based in Chicago, Illinois.
History Early years
German immigr ...
meats
*
Courtyard by Marriott
Courtyard by Marriott is a brand of hotels owned by Marriott International. One of Marriott's mid-priced brands, the hotels are primarily targeted to business travelers, but also accommodate traveling families. Rooms have desks, couches, and fre ...
, a hotel brand (Courtyard) operating under
Marriott International
Marriott International, Inc. is an American multinational corporation, multinational company that operates, franchises, and licenses lodging including hotel, residential, and timeshare properties. It is headquartered in Bethesda, Maryland. T ...
's signature brand (Marriott)
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.
Examples:
*Visa co-branding credit cards with local retailers
*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
British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a populati ...
and
Citibank
Citibank, N. A. (N. A. stands for " National Association") is the primary U.S. banking subsidiary of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, and later became First National City ...
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
Citibank, N. A. (N. A. stands for " National Association") is the primary U.S. banking subsidiary of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, and later became First National City ...
/
American Airlines
American Airlines is a major airlines of the United States, major US-based airline headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex. It is the Largest airlines in the world, largest airline in the world when measured ...
/
Visa credit card
Visa Inc. (; stylized as ''VISA'') is an American multinational financial services corporation headquartered in San Francisco, California. It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded cred ...
partnership
Relationship between brand equity, brand association, and co-branding
Brand name indicates the customer about their connection with the brand based on information or experience.
Brand equity
Brand equity, in marketing, is the worth of a brand in and of itself – i.e., the social value of a well-known brand name. The owner of a well-known brand name can generate more revenue simply from brand recognition, as consumers perceive the prod ...
defines the association of consumer towards a brand name. The original brand name is familiar among the customers, whereas the co-branded brand is still new. There are plenty of associations of consumers towards co-branded products. Therefore, the customer’s use constituent brand information when there is absence of new brand formed by co-branding. When there is a negative image caused by one of the constituent brand, it also affects the other constituent brand. Brand equity can be damaged by pairing up with a brand which may have negative image in future.
Brand association is developed over the years by repeated experiences and exposures. It helps customers gather information, differentiate it and come to a buying decision. Co-branding can either improve or destroy customer’s perception of each constituent brands and create a new perception for the co-branded product. Research suggests that the dissimilarity between co-branding organizations (company size, company origin country, industry scale) negatively affect the performance of co-branding organizations.
See also
*
Brand
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
*
Business partnering
Business partnering is the development of successful, long term, strategic relationships between customers and suppliers, based on achieving best practice and sustainable competitive advantage. In the business partner model, HR professionals work c ...
*
Colocation (business)
Colocation (or co-location) is the act of placing multiple (sometimes related) entities within a single location.
Examples
* In an organization, it refers to placing related roles or groups in a single room, building or campus.
* In business, ...
*
Cross-promotion Cross-promotion is a form of marketing promotion where customers of one product or service are targeted with promotion of a related product. A typical example is cross-media marketing of a brand; for example, Oprah Winfrey's promotion on her televi ...
*
Marketing co-operation A marketing co-operation or marketing cooperation is a partnership of at least two companies on the value chain level of marketing with the objective to tap the full potential of a market by bundling specific competences or resources. Other terms ...
*
Store brand
A private label, also called a private brand or private-label brand, is a brand owned by a company, offered by that company alongside and competing with brands from other businesses. A private-label brand is almost always offered exclusively by th ...
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, pp. 623–634.
* Litvinov, Nikolai.
Hi-level Cobranding // Identity. — 2007. — №13(4). — pp. 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, pp. 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.
*Jose Ignacio Monrabal
"When should you Co-Brand? Seven Questions to Help Determine In Which Cases Co-Branding Is Right for Your Organization,"Ad Age, July 2016.
*Inkbot Design
"Co-Branding: Benefits, Strategies and Examples,"ID, February 2022.
References
{{reflist
Brand management
Promotion and marketing communications
Types of branding