CO-BRANDING

. When two or more existing brands

come together to form a joint product
or are marketed jointly in any fashion it
is called Co-branding. Example:
Nike+ipod.
 Advantages and disadvantages of co-
branding:
 Advantages

 Collaborative marketing: new

marketing opportunities, a bigger
playing field, greater reach.

 Reaching new audiences that

previously were only familiar with
one of the brands.

 Bigger budget due to collaboration.

 Potentially greater gains.
 Reduced resourcing costs.
 Positive image of one brand can be
transferred over to the other.
 The brands share any incoming risk.
Disadvantages

 When brands fit together, but the business goals

are not aligned, co-branding does not work.

 When brands i.e. products don’t fit together or

are popular among different target groups then
the campaign will not be a success.

 High degree of coordination required for

participating companies.

 If the product fails, both companies suffer the

consequences.

 One of the brands involved may not

experience an increase in value, is diluted, or
disappears altogether.
 Possible existing or emerging negative image of
one brand is transferred to the other (e.g.
negative PR, scandals, crumbling share prices).
Co-branding approaches and examples
 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.

Ingredient co-branding

Ingredient co-branding is probably one of the best-known

forms of brand cooperation. In this case, the products of other
companies are an ingredient or component of the company’s
own (end) product. It is not uncommon for ingredient co-
branding to be referred to as “the brand within the brand”,
because products of one brand can only be obtained as an
integral part of products of other brands.

This is usually relatively simple for example with popular

foods. The fast food chain McDonald’s has for many years,
for example, offered various toppings for its McFlurry ice
cream brand, most of which are made up of other popular
candy brands.

Co-branding example: McDonald’s ice cream with toppings from popular candy brands.
Ingredient co-branding: McDonald’s ice cream brand McFlurry with toppings from Oreo
(Mondelēz) and M&Ms (Mars). Source:
https://www.mcdonalds.com/us/en-us/full-menu/desserts-and-shakes.html.

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.

Composite co-branding.

 Composite co-branding can also be referred to as

“value-based co-branding”. The approach is similar
to ingredient co-branding, but differs in some details.
Rather than combining two products into one new
product, this approach is more about partnering with
the goal of creating new products and services that
could not exist on their own.

 The best example of this form of co-branding

includes offers by credit card providers who present
these to customers through cooperation partners.
Consumers with credit cards from a particular bank
can regularly enjoy new discounts at various
shopping portals, hotels, or travel providers.