Co-branding is a strategy for launching a product, service or joint action in which two or more brands join forces. This strategy is based on the combination of the assets of each partner. The objective is to create an innovative product or service that can surprise and satisfy consumers.
Advantages of co-branding
Co-branding brings to the companies that apply it a better visibility towards consumers. Each company already has its own strengths and specialties in the targeted field. And together, each brand puts forward its assets to accomplish a common project and conquer new targets. The association allows each participant to acquire a larger clientele and a more important market. From a financial point of view, the launch of a project involves significant expenses, but with several participants the cost of financing the project remains relatively affordable. Co-branding allows large companies to acquire a monopoly in a market or small companies to compete with larger firms.
Requirements for the application of co-branding
A partnership becomes successful when the participants have the same desire to unite and the same will to achieve a common goal. Each company must have the motivation to work in partnership. The companies must also work in the same field, but with different specialties. For example, two companies working in the computer field can partner as long as they are not direct competitors. For the association to work, each member must be able to complement and blend together to create a complementary and homogeneous entity. And finally, the brands or companies that partner must have the same level of performance and presence in the market. The partners must be on the same level, otherwise the two brands risk destroying each other.
Different forms of co-branding
The co-branding strategy can take different forms depending on the nature of the activities of each member. For example, diversification co-branding occurs when two brands decide to create a product together that combines their values and experiences. However, multi-sponsor co-branding occurs when several brands or companies come together to create an innovative product or service. Image-enhancing co-branding is much closer to patronage or sponsorship, when several brands come together to donate a portion of their revenues to an NGO or charity.