Co-branding is a

marketing strategy Marketing strategy refers to efforts undertaken by an Organizational structure, organization to increase its sales and achieve competitive advantage. In other words, it is the method of advertising a company's products to the public through an est ...

that involves

strategic alliance A strategic alliance is an agreement between two or more Legal party, parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aims for a synergy wh ...

of multiple brand names jointly used on a single product or service. Co-branding is an arrangement that associates a single product or service with more than one

brand name A brand is a name, term, design, symbol or any other feature that distinguishes one seller's goods or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create and ...

, 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 objective for this is to combine the strength of two brands, 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 Renault S.A., commonly referred to as Groupe Renault ( , , , also known as the Renault Group in English), is a French Multinational corporation, multinational Automotive industry, automobile manufacturer established in 1899. The company curr ...

had Jacques Arpels of jewelers Van Cleef and Arpels 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 sovereign state, states that have joined together for mutual benefit or to achieve some common purpose, whether or not an explicit agreement has been worked out among them. Members of an a ...

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'' (''The Huffington Post'' until 2017, itself often abbreviated as ''HPo'') is an American progressive news website, with localized and international editions. The site offers news, satire, blogs, and original content, and covers p ...

have partnered with

Johnson & Johnson Johnson & Johnson (J&J) is an American multinational pharmaceutical, biotechnology, and medical technologies corporation headquartered in New Brunswick, New Jersey, and publicly traded on the New York Stock Exchange. Its common stock is a c ...

on topics like ''woman and children'' written by Huffington Post independent reporters. Digital co-branding should be carried out along with Programmatic buying to be more efficient and effective in Digital Media Marketing Campaigns.

Types of co-branding

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 In philosophy and psychology, awareness is the perception or knowledge of something. The concept is often synonymous with consciousness. However, one can be aware of something without being explicitly conscious of it, such as in the case of bli ...

* increase the competitive advantages

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'', Cambridge, there are three levels of co-branding:

market share Market share is the percentage of the total revenue or sales in a Market (economics), 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 ...

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 created by the Washburn-Crosby Company in 1921 to give a personalized response to consumer product questions. In 1954, Gener ...

’s brownie mix includes Hershey’s Chocolate Syrup * Pillsbury Brownies with

Nestlé Nestlé S.A. ( ) is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Switzerland. It has been the largest publicly held food company in the world, measured by revenue and other metrics, since 20 ...

Chocolate Chocolate is a food made from roasted and ground cocoa beans that can be a liquid, solid, or paste, either by itself or to flavoring, flavor other foods. Cocoa beans are the processed seeds of the cacao tree (''Theobroma cacao''); unprocesse ...

Dell Dell Inc. is an American technology company that develops, sells, repairs, and supports personal computers (PCs), Server (computing), servers, data storage devices, network switches, software, computer peripherals including printers and webcam ...

Computers A computer is a machine that can be programmed to automatically carry out sequences of arithmetic or logical operations ('' computation''). Modern digital electronic computers can perform generic sets of operations known as ''programs'', ...

with

Intel Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California, and Delaware General Corporation Law, incorporated in Delaware. Intel designs, manufactures, and sells computer compo ...

Processors * Kellogg

Pop-Tarts Pop-Tarts (stylized as pop•tarts) is an American brand of toaster pastries (not tarts) produced and distributed by Kellanova (formerly Kellogg's) since 1964. The pastry consists of a sweet filling sealed inside two layers of thin, rectang ...

with Smucker’s

fruit In botany, a fruit is the seed-bearing structure in flowering plants (angiosperms) that is formed from the ovary after flowering. Fruits are the means by which angiosperms disseminate their seeds. Edible fruits in particular have long propaga ...

Taco Bell Taco Bell Corp. is an American multinational chain of fast food restaurants founded in 1962 by Glen Bell (1923–2010) in Downey, California. Taco Bell is a subsidiary of Yum! Brands, Inc. The restaurants serve a variety of Mexican-inspired ...

Doritos Doritos () is an American brand of flavored tortilla chips produced by Frito-Lay, a wholly owned subsidiary of PepsiCo. The concept for Doritos originated at Disneyland at a restaurant managed by Frito-Lay. In 1966, Doritos became the first ...

Locos

Tacos A taco (, , ) is a traditional Mexican dish consisting of a small hand-sized corn- or wheat-based tortilla topped with a filling. The tortilla is then folded around the filling and eaten by hand. A taco can be made with a variety of filli ...

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 Kraft Foods Group, Inc. was an American food manufacturing and processing conglomerate (company), conglomerate, split from Kraft Foods Inc. on October 1, 2012, and was headquartered in Chicago, Illinois. It became part of Kraft Heinz on July ...

Lunchables and

Oscar Mayer Oscar Mayer is an American meat and cold cut producer known for its hot dogs, bologna sausage, bologna, bacon, ham, and Lunchables products. The company is a subsidiary of the Kraft Heinz, Kraft Heinz Company and based in Chicago, Chicago, Illin ...

meats * Courtyard by Marriott, a hotel brand (Courtyard) operating under

Marriott International Marriott International, Inc. is an American multinational corporation, multinational company that operates, franchises, and licenses lodging brands that include hotel, residential, and timeshare properties. Marriott International owns over 37 ho ...

'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 also knowns as composite branding, where two or more well known companies go for a strategic alliance to present a product or service that neither business could successfully launch on its own to the target audience. Example: *

British Airways British Airways plc (BA) is the flag carrier of the United Kingdom. It is headquartered in London, England, near its main Airline hub, hub at Heathrow Airport. The airline is the second largest UK-based carrier, based on fleet size and pass ...

and

Citibank Citibank, N.A. ("N. A." stands for "National bank (United States), National Association"; stylized as citibank) is the primary U.S. banking subsidiary of Citigroup, a financial services multinational corporation, multinational corporation. Ci ...

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: *

American Airlines American Airlines, Inc. is a major airlines of the United States, major airline in the United States headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex, and is the Largest airlines in the world, largest airline in the ...

/ Visa credit card 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 pro ...

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 A brand is a name, term, design, symbol or any other feature that distinguishes one seller's goods or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create and ...

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.

References

{{reflist Brand management Promotion and marketing communications Types of branding