Co-branding, also known as "brand partnership" is the strategic use of two or more brands to achieve mutual marketing benefits and to 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 points and to increase lead generation. An effective approach to accomplish this could be 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; and Apple and Nike brought sports and music together with the Nike+Apple products.
When done effectively, co-branding can yield three main benefits for the brands involved. These benefits, outlined below are to establish credibility, extend reach and, in effect, double the Company's marketing budget. These three benefits of co-branding can have a positive and powerful impact on 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 partnering with another respected business. Two brands coming together 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 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 to which they may once not have had access.
Double Marketing Budget - Businesses understand that marketing products can be a costly expenditure. A huge bonus of co-branding is that the costs are typically split between both parties. This benefit allows for more creative ideas and opportunities to better market a product or service, and therefore can potentially result in a greater return on investment (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(s) wisely as you run the risk of damaging your own credibility and reputation.
Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding the specific application of the information to your own plan.
Editor’s Note: This post was originally published in August 2013 and has been updated for freshness, accuracy, and comprehensiveness.