Name : Tarvinderpal Singh

ID Number : J19031980

Argument Point : Co-Branding leads to the enhancement of Business Enterprises.

1.0 Introduction

Collaborations between two brands definitely has a better product outcome as both
companies are strategically sharing resources, such as technology and manpower. In today’s
modern era, we see more collaborations between big powerhouses as society has become much
more picky as well as price concerned. Hence, companies are coming together to provide the best of
both worlds (Jing, 2019).

2.0 Complementary Competence

One of the benefits of co-branding would be the improvements of services in terms of

accessibility. When we look at the definition of accessibility, convenience comes into play. This
creates the strategic alliance of co location. Co location refers to two businesses done under one
location. This allows the consumer to get what they want in one location with ease (W. Griffin,
2007). An example of this would be the highly successful co branding of the petrol company, Esso
and supermarket store Tesco in UK. Consumers who drive into Esso to fuel up their vehicle are also
able to walk into Tesco’s convenience store to purchase food and drinks.

In this complementary competence co-branding, Esso being the third biggest petroleum
company with great operational expertise and brand strength will be able to see an increase in
consumer volume as other petrol stations are running an in-house convenience store with limited
goods. On the other hand, Tesco being an international supermarket with large market share which
has superior knowledge of consumer lifestyle and buying patterns will be able to further grow their
market share as now they are located in every Esso petrol stations. Furthermore, Esso being a 24
hours petrol station will enable Tesco to operate until late hours, hence increasing customer
awareness. This type of co-branding allows both companies to share their operational advantages
and core competencies, therefore becoming very successful (Blackett and Russell, 1999).

3.0 Joint Promotions

 Another kind of co-branding would be the joint promotion strategy. In this strategy we are
looking at two companies with the same shared market but from different industries coming
together to collaborate on a sale promotion. There are number of advantages for this type of co-
branding such as higher audience reach and relatively lower cost. Joint promotions are able to reach
out to a wider range of audience as two established companies are now promoting in their
respective industries. This would also bring down the cost as it is now being shared by two
companies, hence allowing them to conduct the scheme for a longer period of time (Sonal and
Preeta, n.d.).

We can see this collaboration done successfully by McDonalds and Disney whereby the
food chain restaurant does extended promotions by allowing Disney to use their cartoon character
images on the food labels. Adding on, we also see cartoon figures being sold by McDonalds for
their Happy Meals sets. The co-branding with Disney allows McDonalds to constantly bring in new
kids menu as well as hooking children with the latest advertisements. On the other hand, Disney is
also able to reap full benefits by publicising their latest movies to the wider audience (Elliot, 1997).

Another example of a joint promotion that benefitted both companies would be between
Samsung and Spotify. Buyers of new Samsung mobile phones will be given a 6 months free access
to Spotify music (Ha, 2018). Samsung will greatly benefit from this collaboration with Spotify as
new consumers will be intrigued with this bonus feature that they would receive upon purchasing a
Samsung phone. Whereas, Spotify will be able to reach out to wider audience.

4.0 Channel Expansion

Product channel expansion theory is widely used by companies that are interested in selling
their products in a different means of channel. This can be achieved by selling the product on a b2b
retail, online marketplace or physical stores. When two companies come together to create a new
product with the intention of expanding their sales channel, they would first ought to look at their
targeted market. Once that has been established, both companies can then come together and share
their knowledge and expertise so that the product can be created with zero flaws (Eglon, 2018).

One main example of this would be the famous co-branding between tech giant Apple and
premium fashion brand Hermes. In this successful collaboration, both these companies came
together to create the iconic Apple Watch Hermes Addition. Apple being a technology company
creates state of the art mobile phones and laptops whereas Hermes is in the luxury fashion industry,
mainly selling high ends handbags and lifestyle accessories. This partnership allowed Apple to
penetrate the luxury watch industry with ease whereas Hermes got into the digital watch industry
(Riley, 2018). The creation of this luxury watch also brought its price down as cost was shared,
hence attracting new audience.

Another good example of this would be the co-branding between Apple and Nike. This
collaboration allowed Nike and Apple to tap into each other’s market. Both these companies came
together to create the Apple Sports kit whereby they developed a running shoe which had a sensor
to track running stats. The details are then sent to the watch which allows the consumer to view and
evaluate their running session. Enthusiastic Apple consumer were given a chance to try Nike
whereas Nike enthusiast were enticed to try Apple (Rodrigues, Souza and Leitao, 2007).

5.0 Conclusion

To summarise things up, co-branding definitely has more pros than cons. It brings two
companies together to either provide better service or create a competent product. In this case, it
also leads to expansion of business enterprises. This is achieved through the marketing strategy of
co-location where two companies share one location to service customers, joint promotions
whereby two companies in the same market collaborate by conducting a sale promotion to reach out
to wider audience. Lastly, co-branding also enables both companies to expand their product channel
by collaborating to create a product that would benefit customers.

Word Count : 1009 Words

6.0 References
Jing, L. (2019). Global consumers more picky than ever before, claims report - World -
Chinadaily.com.cn. [online] Chinadaily.com.cn. Available at:
http://www.chinadaily.com.cn/world/2017-01/17/content_27980264.htm [Accessed 1 Oct. 2019].

W. Griffin, D. (2007). Principles of Management. Boston: Griffin, p.163.

Blackett, T. and Russell, N. (1999). Co-Branding: The Science of Alliance. 1st ed. London:
Macmillan, pp.14-15.

Elliot, S. (1997). Disney, McDonald's Plan Joint Campaign. [online] Nytimes.com. Available at:
https://www.nytimes.com/1997/03/19/business/disney-mcdonald-s-plan-joint-campaign.html
[Accessed 1 Oct. 2019].
Sonal, D. and Preeta, D. (n.d.). Joint Sales Promotion: Prospects & Issues. [online]
Citeseerx.ist.psu.edu. Available at:
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.531.7899&rep=rep1&type=pdf
[Accessed 1 Oct. 2019].

Ha, A. (2018). Samsung announces Spotify as its go-to music partner. [online] TechCrunch.
Available at: https://techcrunch.com/2018/08/09/samsung-spotify/ [Accessed 1 Oct. 2019].

Eglon, R. (2018). Why partner collaboration is crucial for channel innovation. [online] Channel
Pro. Available at: https://www.channelpro.co.uk/opinion/10942/why-partner-collaboration-is-
crucial-for-channel-innovation [Accessed 2 Oct. 2019].

Riley, T. (2018). The Apple Watch has a secret weapon that helps it dominate the market. [online]
CNBC. Available at: https://www.cnbc.com/2018/05/03/apple-watch-has-a-secret-weapon-that-
helps-it-dominate-the-market.html [Accessed 2 Oct. 2019].

Rodrigues, F., Souza, V. and Leitao, J. (2007). Strategic Coopetition of Global Brands: A Game
Theory Approach to ‘Nike + iPod Sport Kit’ Co-branding - Munich Personal RePEc Archive.
[online] Mpra.ub.uni-muenchen.de. Available at: http://mpra.ub.uni-muenchen.de/16146/ [Accessed
2 Oct. 2019].