Co-branding – brand co­op­er­a­tion with added value

When two or more well-known brands enter a co­op­er­a­tion to establish a new joint product, this is called co-branding. The co­op­er­at­ing companies hope that the col­lab­o­ra­tion will strength­en their reach, increase profits, and improve their re­spec­tive image. In this article we’ll showcase some co-branding examples and explain what you should look out for in a co-branding campaign.

Co-branding, also known as brand co­op­er­a­tion, refers to the temporary col­lab­o­ra­tion of several, but usually only two, brands to market a joint product. The brands involved are already es­tab­lished and clearly rec­og­niz­able in the joint campaign, so that the re­spec­tive brand identity is retained. In addition to better sales figures, both co­op­er­a­tion partners have a greater reach and a more positive per­cep­tion in their target group as their end goals.

Although more than two co­op­er­a­tion partners can also be involved in co-branding, history has shown that the more classic co­op­er­a­tion of two brands is clearly the more popular method. A co-branding campaign is usually not an alliance for eternity but is usually limited to a time frame.

The term co-branding can be dis­tin­guished from other terms that are often confused with it or mis­tak­en­ly used syn­ony­mous­ly:

• Corporate branding refers to marketing a company as a brand as opposed to product and service brands. For example, Google is a brand of its parent company Alphabet, and Coca-Cola (Coke) is part of the globally known Coca-Cola Company.
• Co-marketing or marketing co­op­er­a­tion: Here, two or more or­ga­ni­za­tions also work together, but the co­op­er­a­tive actions are limited to marketing ac­tiv­i­ties and do not involve a joint product. In most cases, co-branding is im­ple­ment­ed through co-marketing.
• Cross-marketing or cross-media marketing: Refers to the marketing of a product on at least three different channels and initially has nothing to do with brand co­op­er­a­tion. As with single-brand marketing, cross-marketing can of course also be used for co-marketing and co-branding.

Ul­ti­mate­ly, co-branding is one of many marketing strate­gies within a balanced marketing mix.

In today’s flood of in­for­ma­tion and media, at­tract­ing and main­tain­ing consumers’ attention is the challenge for any branding efforts. Brand co­op­er­a­tion with a partner brand is an at­trac­tive way to increase attention to one’s own brand and, ideally, to benefit from the partner’s positive image and reach. In addition, the joint venture of the brands can generate its own ad­ver­tis­ing effect if the brands and products involved are in­tro­duced in a com­plete­ly novel way.

The greatest challenge of com­peti­tor brands is to sharpen and position their own brand image. Branding includes

• the pur­pose­ful creation of a brand, including defining its very own unique selling points (USPs),
• the narrowing down to a target group, as well as
• com­mu­ni­cat­ing key feelings and messages to customers.

In addition to these more inward-looking measures, there are also marketing tech­niques that focus on com­peti­tors, the key players, and dif­fer­en­ti­at­ing a brand from the com­pe­ti­tion through worth­while col­lab­o­ra­tions. One of these tech­niques is co-branding.

If you set out on the right co-branding strategy and implement it correctly, you can succeed in standing out among your com­peti­tors’ countless ads and campaigns. Fre­quent­ly used methods include emotional branding or emotional marketing as well as sto­ry­telling.

We have already briefly touched on another reason for co-branding above: co-marketing. When two companies jointly establish and promote a new product via co-branding, they generally require fewer resources in terms of pro­duc­tion, personnel, and marketing. Well-co­or­di­nat­ed and executed co-branding efforts can therefore not only increase reach and sales, but also reduce running costs – a win-win situation. This applies not only to large, globally-known brands, but can also work for local busi­ness­es.

Before brand owners agree to a possible co­op­er­a­tion, internal analyses should have revealed con­vinc­ing benefits. One of these benefits is clear: target group growth. Par­tic­i­pat­ing companies hope, on the one hand, to reach new customers and, on the other hand, to increase revenues and reach through a newly created or expanded existing product. Due to the new, now larger target group, each par­tic­i­pat­ing company is able to con­tribute its expertise and op­por­tu­ni­ties, which in turn creates entirely new ways of nav­i­gat­ing the broader marketing spectrum, and ul­ti­mate­ly benefits the success of the entire campaign.

There are various ways of im­ple­ment­ing brand co­op­er­a­tion. Broadly speaking, a dis­tinc­tion is made between four note­wor­thy types of co-branding, some of which, however, still overlap with other forms of im­ple­men­ta­tion.

In principle cross selling is already a kind of in­gre­di­ent of co-branding within a company or cor­po­ra­tion. A good example are products from the food man­u­fac­tur­er Mondelēz In­ter­na­tion­al, where two brands are combined, such as Milka chocolate with Oreo cookies or Philadel­phia cream cheese with Milka chocolate. However, this does not create a fun­da­men­tal­ly new product as in in­no­va­tion-based co-branding, because the product of one brand forms the basis and is simply sup­ple­ment­ed with the other.

In contrast to in­gre­di­ent co-branding, this co­op­er­a­tion is not logical but arbitrary. Also, the product or service exists solely because of the co­op­er­a­tion – the offer does not exist without it.

A few exciting examples of composite co-branding can be found in product design. The Italian household appliance man­u­fac­tur­er SMEG has been co­op­er­at­ing very suc­cess­ful­ly with the fashion company Dolce & Gabbana for several years. The designers from D&G orig­i­nal­ly designed a hand-painted re­frig­er­a­tor for SMEG, which received a lot of attention and can prac­ti­cal­ly be described as viral marketing. Meanwhile, there are several SMEG product lines in D&G designs, such as blenders and food proces­sors.

This can be compared to regular co-branding campaigns from H&M with designers such as Karl Lagerfeld, Stella McCartney, and Versace. Consumers who prefer designer brands will not buy their clothes from H&M. But due to the co­op­er­a­tion, some of the glamour of the designer brands is carried over to H&M, so that the typical H&M target group – mostly younger people – is able to develop a taste for more expensive clothes.

Special car models might also be well-known, such as the VW Golf collab with bands such as Bon Jovi, Genesis, or Pink Floyd. Sneakers with Pokémon motifs, which are available from many major clothing man­u­fac­tur­ers, are based on a similar principle.

However, co-branding and spon­sor­ship can also damage celebri­ties’ image: For a while, the German Football As­so­ci­a­tion (DFB) co­op­er­at­ed with the con­fec­tionery company Ferrero. Among other things, the national team’s players were seen in com­mer­cials eating breakfast with the chocolate spread Nutella. The criticism was not only that Ferrero was promoting sweets as a sports diet. When national players who were less suc­cess­ful were kicked off the team, people spoke mockingly of the “Nutella boys” who were suffering from the “Nutella curse”.

The ambition to col­lab­o­rate with well-known per­son­al­i­ties is also widely known as in­flu­encer marketing. These kinds of campaigns also tie in with content marketing, for example in the form of celebrity guest posts on YouTube, in blogs, or magazines.

For co-branding to be perceived as co-branding by ad­ver­tis­ers at all, the brands involved must demon­strate a certain market strength. This means that they have operated in­de­pen­dent­ly up to the time of the co­op­er­a­tion and are es­tab­lished on the market. This also means that the brands must be able to operate in­de­pen­dent­ly again after the possible end of the co­op­er­a­tion.

Co-branding strate­gies are not suitable for making quick profits in the short term. Suc­cess­ful co-branding is based on long-term co­op­er­a­tion, even if it’s usually time-limited. At least two brands are involved and have the goal of jointly creating a new service. To finish, pre­vi­ous­ly-defined joint goals should be achieved.

The processes of or­ga­ni­za­tion, pro­duc­tion, and marketing must be precisely co­or­di­nat­ed between the companies involved. Con­sid­er­a­tion should be given to whether room for maneuver with regard to the company’s own brand policy could be re­strict­ed. Changes in ownership of partner brands can also have an impact on co-branding.

Whether you choose a partner from the same business, the same industry, or a com­plete­ly different sector is not initially decisive for the success of the co-branding strategy. The following aspects are more important:

• Brand strength: The partners or their brands should have roughly the same size and awareness as well as pop­u­lar­i­ty and ex­pe­ri­ence.
• Com­ple­men­tar­i­ty: Both brands have com­mon­al­i­ties and com­ple­ment each other well in their dif­fer­ences. Their target groups also overlap to some degree.
• Brand fit: Both brands fit together. Company philoso­phies can also play a role.
• Product fit: The new product is similar to the previous products and the target groups are very familiar with the brands.

Once partners have been found for co­op­er­a­tion, it is essential to com­mu­ni­cate this co­op­er­a­tion ap­pro­pri­ate­ly across all relevant products, to demon­strate trans­paren­cy to customers. From a legal point of view, it should be noted that the co­op­er­a­tion is being initiated by all par­tic­i­pat­ing parties.

Re­gard­less of how suc­cess­ful your co-branding strategy may be, risks should be con­sid­ered in the planning phase. In other words, the co­op­er­a­tion agreement must always cover the worst-case scenario. This could be a total product flop or a sudden image scandal.

The rep­u­ta­tions of the brands are basically mutually in­flu­enced in co-branding. If the co­op­er­a­tion can increase the pop­u­lar­i­ty of the brands, a digital frenzy against one brand can have just as negative an effect on the brand that is not actually being crit­i­cized.

Planned marketing measures can also harbor risks, e.g. if the campaign is set to include guerrilla marketing. It’s important that the measures chosen fit all brands involved.