Co-branding, also known as "brand partnership" is the strategic merging of two or
more brands to achieve mutual marketing benefits and create strategies on how best to work together. With new products and services hitting the shelves at a rapid pace in today's market, it is crucial for any brand to highlight its unique selling point and increase lead generation. An efficient and effective approach to accomplish this is the idea of co-branding.
The key to this marketing strategy is to choose a brand that will best compliment or enhance your products and/or services. Successful examples include: Hershey combining with General Mills which established a sweet relationship with the Chocolate Giant and Betty Crocker; Best Western and Harley-Davidson teamed up and created Best Western Ride Rewards, an exclusive Harley-Davidson frequent guest program; and Apple and Nike brought sports and music together with the Nike+Ipod products.
When done effectively, co-branding can yield three main benefits for the brands involved: establish credibility, extend reach and double the Company's marketing budget. These three collective benefits of co-branding can have a positive and powerful hold over market penetration.
3 Benefits that are created through a Co-Branded Relationship:
Establish Credibility- Co-branding enables businesses to build or enhance their brand by teaming up with another respected business. Two brands coming together in unison establishes credibility because each company is able to highlight and reflect each other's assets and thus strengthen their position in a given market.
Extend Reach- When two brands come together to form a co-branding partnership, they automatically are given the opportunity to gain the interest of each other's market. This in turn can extend their reach and visibility to a market they may once not have had access to. With the help of co-branding, extending reach can also ultimately increase the chances of generating more sales for each brand.
Double Marketing Budget- Businesses understand that marketing products can be a costly expenditure. A huge bonus of co-branding is that the costs are split between both parties, thus doubling the marketing budget. This benefit allows for more creative ideas and opportunities to better market a product or service and therefore can potentially result in a greater ROI.
Each of these benefits can be an outcome of successful co-branding. It gives any business or company the opportunity to increase their market share. To reap these benefits, it is extremely important to choose your partner wisely as you run the risk of damaging your own credibility and reputation.
As previously stated, an effective partnership is one where each business compliments each other, and in turn experiences the 3 benefits of co-branding.
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