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Co Branding

MBA(G)
SECTION-B
3RD SEMESTER
PBM-2

CO BRANDING
CONCEPT

Definition:

The term 'co-branding' is relatively new to the


business vocabulary and is used to encompass a wide
range of marketing activity involving the use of two
(and sometimes more) brands.
Thus co-branding could be considered to include
sponsorships, where Marlboro lends it name to Ferrari or
accountants Ernst and Young support the Monet exhibition.

"Competing for Customers and Capital".Southwest Airlines: Put a Little LUV in Your Logo!. customersandcapital.com

Kotler defines co-branding as, "two or more well-known brands


combined in an offer" and each brand sponsors expect that the
other brand name will strengthen the brand preference or
purchase intention and hope to reach a new audience
Investopedia
Amarketing partnership between at leasttwo different brands
of goods or services. Co-branding encompasses several
different types of branding partnerships, such as sponsorships.
This strategy typically associates the brands of at least two
companies with a specific good or service.
http://www.investopedia.com/terms/c/cobranding.asp#ixzz1X6w9FEOw

INTENT

There are three levels of co-branding:market


share,brand extension, andglobal branding.
Level 1 includes joining with another
company to penetrate the market
Level 2 is working to extend the brand based
on the company's current market share
Level 3 tries to achieve a global strategy by
combining the two brands
Wei-Lun Chang, Roadmap of Co-branding Positions and Strategies,
Journal of American Academy of Business ,Vol. 15, September, pp. 77-84, 2009.

FORMS
Ingredient co-branding: Creating brand equity for materials, components or parts
that are contained within other products.
Examples:
Betty Crockers brownie mix includes Hersheys chocolate syrup Slide 7
Same-company co-branding. This is when a company with more than one product
promotes their own brands together simultaneously.
Promotional CoBranding:. Co-branding with persons or events. Eg Tiger Accenture
Joint venture co-branding is another form of co-branding defined as two or more
companies going for a strategic alliance to present a product to the target audience.
Slide 10
Example:
British Airways and Citibank formed a partnership offering a credit
Multiple sponsor co-branding. This form of co-branding involves two or more
companies working together to form a strategic alliance in technology, promotions,
sales, etc.

Betty Crocker Hershey (Ingredient co-branding)


Betty Crocker, the brand introduced in 1921 and
owned by General Mills (GIS), is the queen of
partnerships. The company has combined the likes of
Hershey (HSY) andSunkistto create easy-to-make
food products.

Adidas - Polar Electro


Adidas (ADDDY) andPolar Electrocreated Project Fusion, which integrates
heart rate and speed and distance monitoring equipment into sports apparel.
http://images.businessweek.com/ss/09/07/0710_cobranded/2.htm

CO-BRANDING IN INDIA

Co-branded credit cards from LG and SBI, ICICI


and HPCL, Air-Sahara and Standard-Chartered
Bank, HSBC and Star India Bazaar, show that
these have spread across to all possible business
sectors in India.
P&G, India, undertook a co-branding exercise
with the National Association for Blind in the form
of Project Drishti ,
"The Power of Partnership", Utpal Bhaskar, "The Brand Reporter", Oct 16-31 2005.
http://www.afaqsreporter.com/perl/tbr/story.html?id=1316

Boots-Piramal and Saregama-Records


jointly producing a series of music
albums of old Hindi songs.

Benefits of Co branding
According to an article written by Juliette Boone about cobranding, at least five reasons exist for forming an alliance:
1.
2.
3.
4.
5.

to
to
to
to
to

create financial benefits;


provide customers with greater value;
improve on a property's overall image;
strengthen an operation's competitive position; and
create operational advantages.

Disney worldwide has an agreement with McDonalds whereby


the characters from its new films are distributed as toys with
McDonalds "Happy Meals".

Disadvantages
- If a brand has too many Brand Liabilities this can be detrimental
to the other brand.
- Customer dissatisfaction
- Environmental problems
- Product or service failures
- Questionable business practices
- Devaluation
- If one partner files for bankruptcy an unexpected challenge
- Threats to operation the partnering organizations may not be
able to work well together
- Conflict of interest if two organizations are looking to attract the
same customer, this can be detrimental to sales of one or both
partners

http://www.managementstudyguide.com/co-branding.htm

DMRC AND CITIBANK


India's first co-branded, '2-in-1'

transit credit card


Launched in May 2008
Citibank credit card
Metro Smart card

Citibank gained through


wider reach while Delhi Metro
gained by greater prospect of
luring in customers who were
looking for bundled benefits.

Source: http://www.business-standard.com/india/news/dmrccitibank-launch-co-branded-transit-credi
t-card/322235/

REASONS FOR SUCCESS

The reward points accumulated on this card can be redeemed for


free Metro rides

2 Reward Points for every Rs.100 spent on the Metro,


1 Reward Point for every Rs 100 spent elsewhere

Offer several benefits - exclusive shopping deals and discounts in


Delhi and the NCR, fuel surcharge waivers
(2.5%) at Indian Oil outlets.

The special "Delhi Delights" feature - unique deals from some of


the biggest brands in Delhi, including Dominos, Fun Cinemas,
Nirula's, Bercos, India Today and VLCC.
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WOODS-ACCENTURE

Accenture entered into an agreement


with Tiger Woods on October 2003.

Tiger Woods' strength, mastery,


discipline and relentless focus on
winning - mirrored the characteristics
of a high-performance business.

Accenture used Woods to personify


its claimed attributes of integrity and
high performance.

Accenture made the brand building


of Tiger Woods an equal part of their
own brand building.

http://www.duetsblog.com/2010/01/articles/irreparable-harm-to-the-accenture

FAILURE
Woods car crash, the revelations of
third parties, marital issues were
key reasons for failure.
Accenture backed out of an
endorsement deal worth an
estimated $7 million a year.
Six year investment ended abruptly
on a low, negative note rather than
strategically timed graceful
separation.

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BACARDI AND COCA COLA


Co-branding may help
usage extension.
Helped to increase
Bacardis market
penetration in Europe
Moreover, Bacardis status
is a powerful endorsement
for Coke as the ideal mixer.
Pairing also benefited Coke,
which wanted to remain the
number one adult soft
drink.
Source: http://www.management-hub.com/branding-co.html

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Both the telecom giants got together in 1998 to serve as Concert


It was 50-50 joint venture with $10 billion in assets
Convergence of applications like information like in the Internet,
communications, such as fax and voice, long distance, and local, and
entertainment
Main focus was to provide global calls at lower rates.
They wanted to capture the telecom market which was exploding at that time
with developments in technology.
Planned to provide telecom services to multinational organizations like global
phones with a single number.
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Reasons For Failure


The decision to end the partnership, had been widely expected as

rising losses,
internal squabbles
increasing competition from rivals
Management problems and a corporate culture clash
prohibited the desired synergy.
A victim of the downturn in tech, collapsing telecom prices
and huge debt levels accumulated to pay for new-generation
mobile-phone licenses, Concert bled cash and was expected
to rack up losses on the order of $800 million this year alone.
Source-http://www.forbes.com/2001/10/16/1016concert.html

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BODYGUARD
Bodyguard is a film starring
Salman Khan and Kareena
Kapoor in the lead.
The movie released on occasion
of Eid.
The movie has in the span of 6
days managed to do collection
of over Rs. 100cr.
Movie makers usually use cobranding to generate revenue
before the movie is released.
In this movie the lead actors are
well known brands.

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BRANDS PROMOTED IN THE MOVIE


AUDI: AUDI SUV Q5 has been used extensively in the
movie.
BLACKBERRY: Blackberry cell phones can be seen being
used by Salman khan in the movie.
SYMBIOSIS UNIVERSITY: Symbiosis Pune campus has
been used.
SONY VAIO: Kareena Kapoor who is the brand
ambassador of Sony Vaio can be seen using it in the
movie.
TIGER SECURITY SERVICES: Salman khan can be seen
wearing uniform of this company.
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IPHONE WITH AIRTEL AND VODAFONE


Excessive marketing was done by both firms, which
focused on iphone as the best phone.
Companies anticipated great sales volume and even
initiated pre-launch booking process.
Launched at price band of Rs. 32000-400000
But the phones prices became a reason for its failure.

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Main reason being it was already available in the grey market at


less than Rs. 27000.
Lack of 3G technology at the time being also hampered sales.
This caused the potential buyers to purchase the cell from grey
market. Damping the expected sales figures.
In the early quarters on 2009 40000 iphones were imported and
only 20000 were sold, the importers were force to offload there
imports to Sri Lanka and other countries.
Were as Grey market managed to sell around 80000 pieces in the
same time fame.
Airtel and Vodafone both failed to analyze the pricing expectation
of the consumer.
SOURCE: http://www.thinkdigit.com/Mobiles-PDAs/Only-20000-iPhones-sold-in-India-distributors_3460.html

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