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Co Branding

Co Branding

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Published by Labbrand
In the market, there are many brand names that are coupled with other brand names in the process of marketing in a strategy known as "co-branding." While not new, co-branding was rediscovered recently after being neglected in the past decades. As the companies in complementary industries increasingly resort to co-branding after forging business alliances, Labbrand research shows the benefits and problems associated with the practice.
In the market, there are many brand names that are coupled with other brand names in the process of marketing in a strategy known as "co-branding." While not new, co-branding was rediscovered recently after being neglected in the past decades. As the companies in complementary industries increasingly resort to co-branding after forging business alliances, Labbrand research shows the benefits and problems associated with the practice.

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Published by: Labbrand on Apr 23, 2009
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04/25/2013

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Co-branding, a 1+1>2 formula
Adidas + Yohji Yamamoto, Intel Inside + Compaq Personal Computer, D&G + Motorola,British Airways and Citibank, Adidas + McCartney, Mercedes and Swatch, Bacardi andCoca Cola, Danone and Quick, GOME and Motorola, Industrial and Commercial Bank of China and American Express...these are only few among the most famous examples of co-branding we have seen emerging in the latest years.Is co-branding a new phenomenon? Not really. There are classic examples of this sort of  branding strategy adopted by detergents and white goods brand as well as by oil brandsand car manufacturers starting in the early nineteen sixties.Until the eighties, however, since the value of a company had just been measured on the bases of its revenues and tangible assets, not many companies had really paid attention toany sort of branding strategy, not to mention co-branding strategy. It is only in the lastthirty years that companies have understood that the real value of a business resides in theminds of its consumers: in the brand.But how can co-branding enhance this value? Why do brands invest in interlocking their identities to create co-branded products?Co-branding, as it has been defined by Tom Blackett and Bob Boad in their book (Co-Branding: the Science of Alliance, St Martin’s Press, 1999) is:
“…used to encompass a wide range of marketing activities involving the use of two (and  sometimes more) brands. Thus co-branding could be considered to include sponsorships,where Marlboro lends its name to Ferrari or accountants Ernst and Young support theMonet exhibition.”
 The ultimate objective of any co-branded strategy would be to combine the strengths of involved parties to increase respective brands value.In order to be successful, the co-branding effort needs to be directed to:
1. Increase brands distinctiveness by capitalizing on the values embedded in thecooperating brands.
 Product and services life cycle shorten by the day, and distinctive products and servicesfeatures and innovations are easily copied among brands in the same industry. This is areality of today’s business that co-branded products can withstand to. By merging valuesand identities of brands originally engaged in different industries, co-branded productsand services can gain consumer choices, loyalty and ultimately make the brand uniqueand distinctive.In this category Labbrand includes:
 Loyalty programs co-branding,
where the involved parties share the cost of customer 
 
loyalty programs or other CRM marketing programs to deliver extra benefits andeventually strengthen the relationship among consumers and the two brandsBritish Airways and Citibank, for instance, co-branded a credit card allowing the owner to automatically become a member of the British Airways Executive Club.
Trade marketing co-branding,
where the involved parties cooperate in designing co- branded products made specifically for a certain distributor or facility. Danone provides agood example in this sense as it has produced a special yogurt for Quick, the Europeanfast food chain.By increasing their distinctiveness, involved brands get to occupy a unique place inconsumers minds and eventually gain customer loyalty by providing them with merged benefits.
2. Deliver consumers greater value by creating highly relevant products or services:
 Due to the increasing amount of choices available and in order to cut through all other offerings brands have to custom design added value products and services to meetvariable individual needs.As brands research and uncover these specific customers’ needs, they also find that asingle brand may not be able to meet the demands of such profoundly segmented market.In this category Labbrand includes:
Usage extension co-branding.
Bacardi and Coca Cola, for instance have co-brandedBacardi Mixers range to demonstrate and spur other ways to consume the two brands.
 Multiple sponsors co-branding,
where more than two companies unify their effort toform a strategic alliance and create a specific co-branded technologically enhanced product.
 Market niche co-branding.
 Take for instance the cooperation between Adidas and Stella McCartney. This broughtabout a women-oriented, stylish and casual sport design collection: Adidas by StellaMcCartney. This co-branded line manages to satisfy the demand of female buyers lookingfor sportswear that blends functionality and style while being able to deliver “productsthat both perform and look great”1Moreover, having a high end designer create a sport range for women translated into practical benefits for both the collaborating parties: new consumers, willing to pay a premium to get the “special” sportswear, and buzz advertising around a range of productsthat was, back in 2004, the first ever sportswear collection signed by a high-end designer.Look also at Smart car: a joint creation of Mercedes and Swatch designed especially for 
 
young consumers of big metropolis. In this case signatures of cooperating brands do noteven appear on the car but in fact this is the result of each company’s specific expertise.
3. Increase the esteem consumers have toward participating brands
 As consumers became ever more environmental and social aware it becomes essential for  brands to create new touch points and build images consistent to the brand promise inconsumer’s mind while aligning participating brand values.In this category Labbrand includes:
 Image reinforcement co-branding 
. A very good example to explain this form of co- branding can be seen in companies getting involved with NGOs to direct a percentage of their revenue toward a worthy cause. P&G and the National Association for Blinds,Starbucks and the African Wildlife foundation are just a few examples of companiescooperating with charities and fundraising organizations to align their brand values inconsumers mind.Co-branded in the luxury industry, Motorola mobile phone designed by D&G merges theimage of the Italian luxurious brand with the high quality technological brand promise of the American mobile phone manufacturer.
Complementary brands co-branding,
refers to brands in the same or complementary

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