What is the logic behind Co- Branding?

The 1980s marked a turning point in the conception of brands. Management came to realize that the principal asset of a company was in fact its brand names. Several articles in both the American and European press dealt with the discovery of brand equity, or the financial value of the brand. In fact, the emergence of brands in activities which previously had resisted or were foreign to such concepts (industry, banking the service sector, etc) vouched for the new importance of brands. This is confirmed by the importance that so many distributors place on the promotion of their own brands. For decades the value of a company was measured in terms of its buildings and land, and then in tangible assets. It is only recently that we have realized that its real value lies outside the business itself, in the minds of potential buyers. In July 1990, the buyer of Adidas summarized his reasons in one sentence, after coca cola and Marlboro; adidas was the best known brand in the world. The Logic of Co- Branding: With increasing frequency, companies today are undertaking joint marketing projects. That is, two different companies pair their respective brands in a collaborative marketing effort: - New product launches clearly identify the brands that cooperated to create and market them. Thus Danone and Motta introduced Yolka, a yogurt ice cream with packaging that uses both brands to endorse it. Similarly, M&Ms and Pilsbury invented a new cookie concept, and Compaq and Mattel combined their respective expertise to bring out a line of hi-tech, interactive toys. - Many line extensions capitalize on a partner brands equity. Haagen Dazs, for example, launched a Baileys flavored ice cream. In the same vein, delicious brand cookies now includes a Chiquita banana taste in its line, Yoplait sells a Cote dOr choclate cream and new Doritos ads tout the great taste of Taco Bell or Pizza Hut. - To maximize their brand extension success rates, many companies seek help from other companies brands, whose established reputation in the new market might proce decisive. Hence Kelloggs co branded its cereals for health-oriented adults with Healthy choice. - Co-branding may help usage extension. Ineurope, for instance, Bacardi and coke advertise together. This helps Bacardis market penetration strategy because the ads demonstrate another way to drink Bacardi. Moreover, Bacardis status is a powerful endorsement for Coke as the ideal mixer. Thus the pairing also benefits Coke, which wants to remain the number one adult soft drink. - Ingredient co-branding has now become commonplace. NutraSweet, for example, wanted to bolster its image, so it encouraged and co-financed advertising campaigns by its client brands. In turn, these client brands endorsed NutraSweet and endowed it with connotations of pleasure and affective values, until now sugars exclusive domain. The same holds true for Lycra, Wool mark and Intel, these ingredient brands are eager to promote co-branding, both on the product itself and in advertising and promotion. - Image reinforcement may also be an objective of co-branding. In the detergent industry, for instance, famous white goods brands endorse particular detergents, and vice versa. Thus, in India, Ariel and Whirlpool recently launched a co-branded advertising campaign, whose claim is the The art of washing illustrated by a famous 1914 Renoir painting. By these means, Ariel seeks to reinforce its market leader status and gain a more affective image. As for Whirlpool, the campaign bolsters its European launching strategy, and creates a caring image. Orangina and Renault provide two more examples. To get closer to the youth market, Orangina launched specially designed cans, co-branded with famous youth brands (eg Lee cooper). For its part, Renault launched limited series of its Twingo car, endowing them with famous designer names Twingo kenzo and Twingo Easy.

- Co-branding appears in sales promotions too. Whirlpool, for instance, includes findus or Birds Eye coupons in its refrigerator owners manuals. Similarly, companies find that prizes, such as club Med vacations, work better than cash awards in promotional consumer contests or sweepstakes. - Loyalty programmes, increasingly, include co-branding arrangements. Although co-branded loyalty programmes are not new (GM initiated the concept, with co branded credit cards), a new twist has appeared. That is, corporations are sharing the cost of loyalty programmes between their own brands, for example, Nestle issued a collectors booklet that includes all of its brands (from Kit Kat to Buitoni, Perrier and Findus). - Co-branding may signal a trade marketing operation. For instance, the product may be designe specifically for a distributor and signed by both manufacturer and retailer. Thus Danone created a special yogurt for Quick, the European fast food chain that competes against McDonalds. Yoplait did the same for McDonalds. - Capitalising on synergies among a number of brands is another co-branding objective. Nestle is a case in point, and it has a number of brands that could gain from a joint marketing action (eg Nestles Yoghurts, Nescafe, Nesquik Hertas pork and bacon). To compete against Kelloggs and increase its market shares in the breakfast market, therefore. Nestle launched joint advertising campaigns, showcasing all these brands around a healthy breakfast theme. Is co-branding new? No. There are early classics- detergents endorsed by white goods brands, and oil brands endorsed by car manufacturers. Later, in the 1960s Kelloggs Betty Crocket added Sunkist lemon cake as a line extension. Finally, Grand Marnier flavored ice creams are well known. What is new is todays corporate awareness that strategic alliances are essential to acquiring and maintaining a competitive edge. Coopetition, a new word coined by Brandenburger and Nalebuff (1996), illustrates this new attitude. The idea: sometimes corporations may have to cooperate with and compete against the same company. From this standpoint, co-branding is an alliance made visible; furthermore, co branding involves recognizing that the publics knowledge of an alliance is added value. Even though co branding has become fashionable, not all alliances should be made visible. - In the photocopy market, many products sold by, say, Canon are actually made by Ricoh. - In the car industry, although the rover company is now owned by BMW, at the product level Rover cars show no BMW insignia. Mercedes and Swatch have created a joint venture to produce and market a revolutionary new car, called Smart, to which each company will add its specific expertise. However, Mercedes is unlikely to put its trademark on the smart! - To conquer the iced tea market (depite late entry), Nestle and coca Cola decided to unite against Unilevers Lipton range. Nestle would create and market the product, and Coca Cola would distribute it. The product, called Nestea, is not co-branded, though the Coca Cola company gets only a small mention on the back of the packaging. For decades the value of a company was measured in terms of its buildings and land, and then in tangible assets. It is only recently that we have realized that its real value lies outside the business itself, in the minds of potential buyers. In July 1990, the buyer of Adidas summarized his reasons in one sentence, after coca cola and Marlboro; adidas was the best known brand in the world. The Logic of Co- Branding: With increasing frequency, companies today are undertaking joint marketing projects. That is, two different companies pair their respective brands in a collaborative marketing effort:

- New product launches clearly identify the brands that cooperated to create and market them. Thus Danone and Motta introduced Yolka, a yogurt ice cream with packaging that uses both brands to endorse it. Similarly, M&Ms and Pilsbury invented a new cookie concept, and Compaq and Mattel combined their respective expertise to bring out a line of hi-tech, interactive toys. - Many line extensions capitalize on a partner brands equity. Haagen Dazs, for example, launched a Baileys flavored ice cream. In the same vein, delicious brand cookies now includes a Chiquita banana taste in its line, Yoplait sells a Cote dOr choclate cream and new Doritos ads tout the great taste of Taco Bell or Pizza Hut. - To maximize their brand extension success rates, many companies seek help from other companies brands, whose established reputation in the new market might proce decisive. Hence Kelloggs co branded its cereals for health-oriented adults with Healthy choice. - Co-branding may help usage extension. Ineurope, for instance, Bacardi and coke advertise together. This helps Bacardis market penetration strategy because the ads demonstrate another way to drink Bacardi. Moreover, Bacardis status is a powerful endorsement for Coke as the ideal mixer. Thus the pairing also benefits Coke, which wants to remain the number one adult soft drink. - Ingredient co-branding has now become commonplace. NutraSweet, for example, wanted to bolster its image, so it encouraged and co-financed advertising campaigns by its client brands. In turn, these client brands endorsed NutraSweet and endowed it with connotations of pleasure and affective values, until now sugars exclusive domain. The same holds true for Lycra, Wool mark and Intel, these ingredient brands are eager to promote co-branding, both on the product itself and in advertising and promotion. - Image reinforcement may also be an objective of co-branding. In the detergent industry, for instance, famous white goods brands endorse particular detergents, and vice versa. Thus, in India, Ariel and Whirlpool recently launched a co-branded advertising campaign, whose claim is the The art of washing illustrated by a famous 1914 Renoir painting. By these means, Ariel seeks to reinforce its market leader status and gain a more affective image. As for Whirlpool, the campaign bolsters its European launching strategy, and creates a caring image. Orangina and Renault provide two more examples. To get closer to the youth market, Orangina launched specially designed cans, co-branded with famous youth brands (eg Lee cooper). For its part, Renault launched limited series of its Twingo car, endowing them with famous designer names Twingo kenzo and Twingo Easy. - Co-branding appears in sales promotions too. Whirlpool, for instance, includes findus or Birds Eye coupons in its refrigerator owners manuals. Similarly, companies find that prizes, such as club Med vacations, work better than cash awards in promotional consumer contests or sweepstakes. - Loyalty programmes, increasingly, include co-branding arrangements. Although co-branded loyalty programmes are not new (GM initiated the concept, with co branded credit cards), a new twist has appeared. That is, corporations are sharing the cost of loyalty programmes between their own brands, for example, Nestle issued a collectors booklet that includes all of its brands (from Kit Kat to Buitoni, Perrier and Findus). - Co-branding may signal a trade marketing operation. For instance, the product may be designe specifically for a distributor and signed by both manufacturer and retailer. Thus Danone created a special yogurt for Quick, the European fast food chain that competes against McDonalds. Yoplait did the same for McDonalds. - Capitalising on synergies among a number of brands is another co-branding objective. Nestle is a case in point, and it has a number of brands that could gain from a joint marketing action (eg Nestles Yoghurts, Nescafe, Nesquik Hertas pork and bacon). To compete against Kelloggs and increase its market shares in the breakfast market, therefore. Nestle launched joint advertising campaigns, showcasing all these brands around a healthy breakfast theme.

Is co-branding new? No. There are early classics- detergents endorsed by white goods brands, and oil brands endorsed by car manufacturers. Later, in the 1960s Kelloggs Betty Crocket added Sunkist lemon cake as a line extension. Finally, Grand Marnier flavored ice creams are well known. What is new is todays corporate awareness that strategic alliances are essential to acquiring and maintaining a competitive edge. Coopetition, a new word coined by Brandenburger and Nalebuff (1996), illustrates this new attitude. The idea: sometimes corporations may have to cooperate with and compete against the same company. From this standpoint, co-branding is an alliance made visible; furthermore, co branding involves recognizing that the publics knowledge of an alliance is added value. Even though co branding has become fashionable, not all alliances should be made visible. - In the photocopy market, many products sold by, say, Canon are actually made by Ricoh. - In the car industry, although the rover company is now owned by BMW, at the product level Rover cars show no BMW insignia. Mercedes and Swatch have created a joint venture to produce and market a revolutionary new car, called Smart, to which each company will add its specific expertise. However, Mercedes is unlikely to put its trademark on the smart! - To conquer the iced tea market (depite late entry), Nestle and coca Cola decided to unite against Unilevers Lipton range. Nestle would create and market the product, and Coca Cola would distribute it. The product, called Nestea, is not co-branded, though the Coca Cola company gets only a small mention on the back of the packaging.

Co- branding Advantages 7 Advantages of Doing Co-branding

We have heard a lot of online entrepreneurs mentioning the term co-branding. Most of them have high praises when it comes to co-branding. So, what is the fuss about? What is the exact meaning of co-branding when it comes to online marketing? Co-branding is a form of marketing in which you leverage your referral partners client base. In my opinion I think that co-branding is the most underrated and an overlooked online marketing strategy. Co-branding is a marketing strategy wherein it can be an extremely effective way to generate online business. The best form of co-branding is when it adds value and enhances your partners website by offering valuable tools and added functionality. If you plan on doing co-branding you must remember that you should choose a partner that is closely related to the product or service that you are offering. Think of it as like this, a prospect clicks on a link on your website, then after doing so he is directed to another website with a totally different brand or company, believe me when I say that this will confuse prospects. If your partners products or services are so far-off from what you offer yourself then prospects will be of course be confused why they have been directed to an entirely different web page with unrelated content. When it comes to co-branding you need to choose partnerships that have something in common with the product or service that youre selling. Co-branding can be very cost effective, particularly for small online businesses. However, if you choose the wrong associate, or too many partners, it might be more harmful than advantageous.

Co-branding online can be done by offering your service, the information that you have, as well as your products under a different companys identity, while preserving your own brand in less leading format. The later is made for your own advantage and is commonly the main reason for the entire product or service offering. Co-branding Advantage #1: Less expense to market a new product If you decide to go with co-branding then I am telling you right now that it results to less expenditure. We all have an idea as to how much it will cost to market a new product right? And of course we all know that if you are alone and you market a new product then the expense will be outrageously high. However, with co- branding you need not worry about that because it results in very less expenses because of the already existing brand image of the other business in the market. Co-branding Advantage #2: Boost the companys brand image while increasing profits When you start with co-branding you are able to reach out to more and new prospects with your new products and services. Introducing new products or services creates a buzz and stirs curiosity amongst your target market and this result to an increase in brand value and at the same time it boosts profits. Co-branding Advantage #3: New markets Co-branding enables you to reach people or areas that were out of your reach before. When you were operating the business by yourself you have limited access, but when you start with cobranding, you are able to tap into customers which you were not able to reach before. This results in bringing new customers to your online business. Co-branding Advantage #4: The risks involved would be less If ever you just started your online business then the risks of introducing a new product to the market is higher. It will take some time before you are able to tap into your market, usage and implementation of various strategies is needed. So, it is better for new online businesses to tie up with an established company which have a brand value in the market and this result in reaching the target market easily. Co-branding Advantage #5: Improvement of products with the use of modern technology With co-branding, you get to share with the other companys technology which will assist you to produce better products. This will yield in giving quality products that can be offered at a fair price with advanced features which will of course attract new and existing customers. Co-branding Advantage #6: Introduction of your products or service to the other side

The best example for this is the promotion of Intel. Years ago Intel came up with the slogan Intel Inside, this made consumers realize what was inside their IBM and Compaq computers. Because of this around 300 computer manufacturers started co-branding with Intel. Co-branding Advantage #7: Benefits from the other companys customer base Co-branding can bring in the benefits to a company from its partners loyal customers. Back in 1984, Nike got together with Michael Jordan the world-renowned NBA player with the basis that all Jordan fans would feel affectionate and loyal towards Nike and choose it over its competitors. Why? Because, well their idol is with Nike, so they feel the need that they should also be loyal to Nike.