Brand Management - Co-branding

Co-branding is now no more a new strategy used by companies for generating higher level of interest and excitement about the products and services. As every single strategy of branding comes with benefits and risks, co-branding is not an exception. Let us see all about co-branding in detail.

What is Co-branding?

When a company uses multiple brands together to introduce a single product or service, the practice is called Co-branding. It is also called Brand Partnership, piggyback franchising, or combination franchising. There can be two or more than two brands in alliance to achieve an appeal to the consumers that an individual brand could achieve.

Co-branding provides a way for companies to integrate the marketing forces from each of the brands such that they work cooperatively to associate any of the logos, color schemes, or other brand identifiers to a specific product. The objective of co-branding is to combine strengths of multiple brands for business growth.


Types of Co-branding

There are various types of co-branding as follows −

  • Ingredient Co-branding − Multiple brands provide distinctive ingredient or component to the carrier brand. For example, Intel chip inside all computers.

  • Product-Service Co-branding − It is a co-branding between a product and a service. For example, Best Western International, Inc. owns and operates a chain of hotels with state-of-the-art amenities and services to its customers. It runs an exclusive rewards program for Harley Davidson owners. The participating riders get lavish privileged treatment at the hotel.

  • Alliance Co-branding − Multiple brand serve the same target audience. For example, Etihad Airways Partners, is a new brand which brings like-minded airlines together to offer customers more choice in flight schedules and enhanced frequent flyer benefits.

  • Supplier-Retailer Co-branding − Starbucks Wi-Fi started from AT&T in the most number of metropolitan cities in USA since 2008.

  • Promotional Co-branding − It is an alliance of a brand with persons or events.

Situations for Co-branding

There are various situations when companies go for co-branding. They are −

  • When introducing one company's product or services to the loyal consumers of another company. For example, the “Intel Inside” campaign. Within a year of the campaign, Intel started co-branding with around 300 computer manufacturer companies.

  • When a company wants to leverage the effect of one established and affectionate brand for marketing another brand.

  • When companies want to save costs on branding and other resources in this age of economic competition. For example, the businesses such as fast-food restaurants share the same place of working, counter, menu pamphlets, or sometimes the staff.

  • When one brand is providing complementing products or services that other brand requires.

Points to Note before Co-branding

Co-branding comes with inevitable risks. Before the brand managers of brand A go for co-branding with brand B, they must consider the following points −

  • If brand A is well established and generating excellent revenue, brand B would get the benefit of A’s positive perception and experience. In such case, brand A’s perception gets diluted.

  • There is a risk of any of the brands A or B underperforming or failing. In such case, the underperforming brand negatively impacts the over-performing brand and destroys its reputation for none of its mistake.

  • If brand B is to some extent depending upon brand A’s equity, then brand B may be taken as weak or secondary.

    Brand A and B should be fit or compatible from the perspective of attributes and benefits. For example, co-branding of ice cream parlor and dry-fruit shop is natural so is co-branding of clothes brand with footwear brand.

  • Brand A and B both should have common core values and corporate philosophies. This is beneficial for both brands and reduces the risk of negative reputation if one of them fails.

Rough Criteria for Co-branding

Here are basic rough guidelines for co-branding −

  • Know your partner in co-branding. Go for co-branding only with the companies that share complementary values.

  • Co-brand only if the company has same ethics, core values, and common vision.

  • Choose co-branding only with brands whose products are best-in-class status.

  • Co-brand if the partner and company’s brand share the same target audience.

  • Co-brand only if the company can retain full review and approval rights on all elements of communications.

These guidelines bring down the opportunities of growth of the company but the good news is, it reduces the risks associated with co-branding.

Co-branding for Business Growth

Apart from creating additional appeal to the consumers, the objective of co-branding is increasing revenue. The ultimate goal of co-branding is one plus one = more than two. If the co-branding is done using innovative ideas and effective strategies with the right partner, it can prove to be very beneficial for business growth.

Benefits of Co-branding

Co-branding helps to −

  • Make the product or service under the brands resistant to imitation by local or private brands.

  • Combine various perceptions about multiple brands.

  • Increase the credibility of the product or service in the market.

  • Increase revenue of both businesses, if done effectively

  • Save costs of the company for launching a new brand, advertising, and promoting the brand through shared resources.

  • Bring benefits from all brands and helps all brands participating in co-branding to prosper.

For example, Coca Cola, the soft drinks giant has paired itself with McDonalds and made it sure it is associated with the brand that is consumed by millions of consumers around the world. Just by being together, both giants in restaurants and beverage industry respectively are earning billions of dollars revenue every year.

Celebrity Endorsement

The consumers follow their favorite celebrity and they wish to look, appear, and conduct the way the celebrity does. The companies grip this nerve of consumer behavior to brand their products with celebrity endorsement. The companies use the success and status of the celebrity to brand its products.

The product alone cannot achieve consumers’ awareness and recognition as far and wide as a celebrity can help it to achieve.

Celebrity Endorsement

In India, Artist Booking India is a celebrity management and celebrity brand endorsement agency powered by B-Town Entertainment Pvt. Ltd. It has a strong network of TV serials, movies, writers, directors, and musicians in Bollywood. It provides solution right from selecting a right celebrity for the brand, applying strategies for optimizing the celebrity’s association with the brand to logistics.

Problems with Celebrity Endorsement

  • The contemporary celebrity endorsers can be overused by endorsing too many varied products.

  • There must be a reasonable fit or match between the product and the celebrity endorser to appeal the consumers.

  • Celebrity endorsers can get into controversies, which can affect the brand adversely.

  • Celebrity can distract the consumer’s focus from the brand by overshadowing the brand.

  • A number of consumers do not connect with the brand because they think that the endorsing celebrity is doing it just for money and do not necessarily believe in the brand they are endorsing.