Co-branding
Encyclopedia
Co-branding refers to several different marketing
arrangements:
Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:
Co-branding is an arrangement that associates a single product
or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The object for this is to combine the strength of two brands, in order to increase the premium consumers are willing to pay, make the product or service more resistant to copying by private label
manufacturers, or to combine the different perceived properties associated with these brands with a single product.
, brand extension
, and global branding.
Level 1 includes joining with another company to penetrate the market
Level 2 is working to extend the brand based on the company's current market share
Level 3 tries to achieve a global strategy by combining the two brands
One form of co-branding is ingredient co-branding. This involves creating brand equity for materials, components or parts that are contained within other products.
Examples:
• Betty Crocker’s brownie mix includes Hershey’s chocolate syrup
• Pillsbury Brownies with Nestle Chocolate
• Dell Computers with Intel Processors
• Kellogg Pop-tarts with Smucker’s fruit
Another form of co-branding is same-company co-branding. This is when a company with more than one product promotes their own brands together simultaneously.
Examples
• Kraft Lunchables and Oscar Mayer meats
Joint venture co-branding is another form of co-branding defined as two or more companies going for a strategic alliance to present a product to the target audience.
Example:
• British Airways and Citibank formed a partnership offering a credit card where the card owner will automatically become a member of the British Airways Executive club
Finally, there is multiple sponsor co-branding. This form of co-branding involves two or more companies working together to form a strategic alliance in technology, promotions, sales, etc.
Example:
• Citibank/American Airlines/Visa credit card partnership
had Jacques Arpels of jewelers Van Cleef and Arpels turn the dashboard of one of their newly introduced Dauphine
's into a work of art.
A successful example of co-branding is the Senseo
coffeemaker, which associates the Philips
made appliances with specific coffee brand of Douwe Egberts
.
Other examples include the marketing of Gillette M3 Power shaving equipment (which require batteries) with Duracell
batteries (both brands owned by Procter & Gamble
).
Co-branding can be between an organization and a product also. An example of co-branding between a charity and a manufacturer is the association of Sephora
and Operation Smile
: Sephora markets a product carrying the logo of the charity, the consumer is encouraged to associate the two brands, and a portion of the proceeds benefit the charity.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
arrangements:
Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:
Co-branding is an arrangement that associates a single product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The object for this is to combine the strength of two brands, in order to increase the premium consumers are willing to pay, make the product or service more resistant to copying by private label
Private label
Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting...
manufacturers, or to combine the different perceived properties associated with these brands with a single product.
Intent
According to Chang, from the Journal of American Academy of Business, Cambridge, states there are three levels of co-branding: market shareMarket share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
, brand extension
Brand extension
Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off. Organizations use this strategy to increase and leverage brand equity...
, and global branding.
Level 1 includes joining with another company to penetrate the market
Level 2 is working to extend the brand based on the company's current market share
Level 3 tries to achieve a global strategy by combining the two brands
Forms
There are many different sub-sections of co-branding. Companies can work with other companies to combine resources and leverage individual core competencies, or they can use current resources within one company to promote multiple products at once. The forms of co-branding include: ingredient co-branding, same-company co-branding, joint venture co-branding, and multiple sponsor co-branding. No matter which form a company chooses to use, the purpose is to respond to the changing marketplace, build one’s own core competencies, and work to increase product revenues.One form of co-branding is ingredient co-branding. This involves creating brand equity for materials, components or parts that are contained within other products.
Examples:
• Betty Crocker’s brownie mix includes Hershey’s chocolate syrup
• Pillsbury Brownies with Nestle Chocolate
• Dell Computers with Intel Processors
• Kellogg Pop-tarts with Smucker’s fruit
Another form of co-branding is same-company co-branding. This is when a company with more than one product promotes their own brands together simultaneously.
Examples
• Kraft Lunchables and Oscar Mayer meats
Joint venture co-branding is another form of co-branding defined as two or more companies going for a strategic alliance to present a product to the target audience.
Example:
• British Airways and Citibank formed a partnership offering a credit card where the card owner will automatically become a member of the British Airways Executive club
Finally, there is multiple sponsor co-branding. This form of co-branding involves two or more companies working together to form a strategic alliance in technology, promotions, sales, etc.
Example:
• Citibank/American Airlines/Visa credit card partnership
Examples
An early instance of co-branding occurred in 1956 when RenaultRenault
Renault S.A. is a French automaker producing cars, vans, and in the past, autorail vehicles, trucks, tractors, vans and also buses/coaches. Its alliance with Nissan makes it the world's third largest automaker...
had Jacques Arpels of jewelers Van Cleef and Arpels turn the dashboard of one of their newly introduced Dauphine
Renault Dauphine
Renault Dauphine is a rear-engined economy car manufactured by Renault in one body style — a three-box, four-door sedan — as the successor to the Renault 4CV, with over two million examples marketed worldwide during its production from 1956-1967....
's into a work of art.
A successful example of co-branding is the Senseo
Senseo
Senseo is a registered trademark for a coffee brewing system from Dutch companies Philips and Douwe Egberts, a subsidiary of Sara Lee Corporation...
coffeemaker, which associates the Philips
Philips
Koninklijke Philips Electronics N.V. , more commonly known as Philips, is a multinational Dutch electronics company....
made appliances with specific coffee brand of Douwe Egberts
Douwe Egberts
Douwe Egberts is a Dutch corporation that processes and trades coffee, tea, and other groceries. Its full name is Douwe Egberts Koninklijke Tabaksfabriek-Koffiebranderijen-Theehandel NV, which translates as "Douwe Egberts Royal Tobacco Factory - Coffee Roasters - Tea Traders, Plc."...
.
Other examples include the marketing of Gillette M3 Power shaving equipment (which require batteries) with Duracell
Duracell
Duracell is a brand of batteries manufactured by Procter & Gamble.Additionally, Duracell owns the Procell professional-use brand.-Products:Duracell manufactures alkaline batteries in many common sizes, such as AAA, AA, C, D, and 9V...
batteries (both brands owned by Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
).
Co-branding can be between an organization and a product also. An example of co-branding between a charity and a manufacturer is the association of Sephora
Sephora
Sephora is a chain of cosmetics stores founded in France in 1970 and acquired by Paris-based conglomerate LVMH in 1997. The Sephora chain includes more than 750 stores in 17 countries...
and Operation Smile
Operation Smile
Operation Smile is a not-for-profit medical service organization based in Norfolk, Virginia , founded in 1982. A secular NGO, the children's medical charity provides cleft lip and palate repair surgeries to children worldwide, assists countries in reaching self-sufficiency with these surgeries, and...
: Sephora markets a product carrying the logo of the charity, the consumer is encouraged to associate the two brands, and a portion of the proceeds benefit the charity.
See also
- Business partneringBusiness partneringBusiness partnering is "the development of successful, long term, strategic relationships between customers and suppliers, based on achieving best practice and sustainable competitive advantage".- Mission :...
- Marketing co-operationMarketing co-operationA marketing co-operation or marketing cooperation is a partnership of at least two companies on the value chain level of marketing with the objective to tap the full potential of a market by bundling specific competences or resources...
- Colocation (business)
- Store brandStore brandStore brands are a line of products sold by a retailer under a single marketing identity. They bear a similarity to the concept of House brands, Private label brands in the United States, own brands in the UK, and home brands in Australia and generic brands...
- BrandBrandThe American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
- MarketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- cross-promotionCross-promotionCross-promotion is a form of marketing promotion where customers of one product or service are targeted with promotion of a related product. A typical example is cross-media marketing of a brand, for example Oprah Winfrey's promotion on her television show of her books, magazines and website...