What is Co-Branding?
Co-branding is several companies partnering with other brands as a means to generate buzz, force reconsideration or even enter new markets. These partnerships can be a powerful tool to achieve specific brand and business objectives.
When Should You Co-Brand?
But when does co-branding make strategic sense, and what is needed to make sure you are partnering with the right brand? First, you need to have a clear objective. What are you trying to achieve from the collaboration? Here are a few examples of when co-branding could make sense:
1. Do you need help building a different brand image that is more desirable to your target?
Co-branding enables your brand to borrow equity through association with another brand. It can also create new equity for both brands. Think about Go Pro and Red Bull. Their partnership bolstered the images of both companies, and reinforced the idea that they are brands that push boundaries.
2. Do you need to strengthen loyalty by enhancing the user experience in new ways?
Co-branding is an efficient way to introduce a tangible enhancement to your offer. Take Starwood Hotels and Uber, for example. By adding Uber rides as a way to earn points in their SPG loyalty program, Starwood provided a relevant value-add that further differentiated it from other programs.
3. Do you need new customers to consider buying your brand?
Co-branding allows you to showcase your brand in a new light, and convince consumers to discard previous perceptions. Look at companies Huawei and Leica. Through their unexpected partnership, Huawei was able to leverage Leica’s strong brand expertise to overcome negative associations consumers may have had about Huawei’s quality.
How to Find a Right Co-Branding Partner?
Once you have determined that co-branding is right for you, the next step is to find the right brand partner. During this process, you want to create good KARMA. That is, any future co-branding partner needs to be:
- Known– A brand that will be well recognized by your target
- Additive– A brand that brings new equities beyond what you stand for today
- Rare– A brand that is not associated with many others, so you can uniquely benefit from the association
- Matching– A brand that operates at a similar or higher price premium to bolster willingness to pay
- Attractive– A brand that is desirable enough to change your target’s purchasing behavior
It is hard for brands to become and stay relevant to consumers. Co-branding can be a mutually beneficial way to overcome that hurdle, provided you choose the right partner for the right reasons.