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MARKETING: Co-branding or not?
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Co-branding or not?

Can co-branding prove to be lucrative for your business?

By Anne Shore

BT 201709 MARKETING 06      什么?范思哲(Versace)做服装了?保时捷出手机了?没错,这些并不是大牌在“耍大牌”改变自己的发展步调,而是通过品牌联合为广大消费者推出新的品牌与产品。2011年,H&M推出其与奢侈品品牌范思哲联合打造的一个新的服装系列。联合品牌在服装产业并不新鲜,自2004年与Karl Lagerfeld合作开始,快时尚品牌H&M便展开了其联合品牌的传统,那一年,其销售额直线上升。身兼Lavin艺术总监及LVMH(路易酩轩)高级顾问的Jean-Jacques Picart相信,联合品牌同样能使顾客更熟悉了解奢侈品品牌。即使有人质疑联合品牌可能会损害奢侈品品牌的形象,H&M联合品牌创举的成功却有力地回应了这一质疑。





BT 201709 MARKETING 07With the advent of a plethora of marketing strategies, the name of co-branding is gaining increasing popularity in the market. In co-branding, two or more brands come together to be associated with a single product or service.

Hence, co-branding can be defined as the association or partnership of a minimum of two different brands. The different brand names come to be associated with a single product or service which they jointly provide to the buyers.

The relationship between the brands is a symbiotic one where the brands mutually benefit from the association. Such an association can be effectively used to market, promote, sponsor and advertise products and services with which all the participating brands are associated.

Co-branding often proves quite profitable for the participating brands since the joint promotional efforts give a boost to the overall sales and profits. Hence more and more brands today are considering co branding.

hl marketingTypes of co- branding

Co- branding can be of different types:

- Ingredient co-branding: This kind of co-branding involves an association where the primary brand product has an ingredient, component or part of the other associated brand. The best example of this co-branding is the association of Dell Computer and Intel processors. All Dell Computers have processors from Intel.

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- Same company co-branding:
A company with more than one product can go in for this type of co-branding. The products can be promoted simultaneously by co-branding. The co branding of Proctor and Gamble to promote all their products is an example of same company co-branding.

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- Joint Venture co branding:
This kind of co-branding happens when two or more businesses come together to form an alliance and promote their shared goals through a product. An example of this type of co branding would be the alliance of Citibank and British Airways to provide a credit card to users. All users of the card would become members of the British Airways executive club.

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- National to local co branding:
Small business ventures can also associate themselves with a national brand to reach out to their target audience. The collaboration of automobile manufacturers with local dealers is a good example of this type of co-branding.

- Retail co-branding: In this form of co branding retailers form a tie up which is mutually beneficial. The Yum Brands tie up is the best example of retail co branding.

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However, just like any other business initiative, co-branding too has its own share of advantages and disadvantages. Hence, all businesses should definitely think and weigh all the pros and cons in detail before going in for a co branding venture.

Benefits of co-branding

A co-branding partnership does prove to be beneficial for all the participating brands in more ways than one. With such collaborations, brands can pool in their resources and talent and give something better to buyers. The brands can be effectively promoted and marketed. This in turn gives a boost to sales, profits and improves their overall standing and reputation in the market.

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Let us learn about the benefits in detail.

- Brands can create a larger pool of ideas: An alliance of different brands means the involvement of more people. With more people being involved, a lot more ideas can be pooled in. All the partners will pool in their ideas and brainstorming sessions can be more productive. Some of the ideas can click and really prove profitable for the success of the products or services offered by the co-branding venture.

- Resources can be shared: With more than one brand being associated with a product, the resources of all the brands can be shared. One brand can provide the other with a resource which it doesn’t have and vice versa. All the partners benefit in this manner.

- Risks are shared: A collaboration of different brands means that the risks of the business are also shared equally by all. Thus, one brand doesn’t have to bear the entire risk.

- Businesses can expand their market: The target market can be expanded with co-branding. One brand can reach out to the market of the other brands with which it has formed the partnership. This will mean an increase in the number of customers and improved customer relations for all the partners. This will definitely have a positive impact on the overall sales.

- Financing becomes easier: Financing the business venture becomes a lot easier with co branding. All the partners pool in their finances and hence no one brand has to bear the burden of the entire financing.

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Drawbacks of co branding

- Any adverse situation affects the total brand equity: If anything goes wrong or if customers are not happy with the product, then the reputation of all the participating brands are adversely affected.

- A co branding exercise might fail if the brands have different target markets and visions: For a co-branding venture to succeed, it is very important that all the participating brands are aligned in terms of their vision and their target market. If the partners have different visions and goals, and the target market is different for each brand, then the co branding exercise might fail miserably.

- Customers may take interest only in the co branded products and not the individual brands: Businesses enter into co-branding with the ultimate objective of promoting their individual brand. However, this might not be achieved always. Customers might like the co branded products which the brands are providing. However, after the co branding venture gets over, customers might not like the products which the individual brands have to offer.

If we look into the entire concept of co-branding as a whole; the entire exercise surely has a whole lot of advantages and is definitely worth undertaking. However, all businesses should keep in mind the drawbacks before entering into co branding. All essential steps should be taken to avoid adverse situations and make the collaboration successful.

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