Co branding is an advertising technique that involves the strategic association of several brand names on a single item or service. It is generally used for brand protection in the market. It helps brand-name recognition at an affordable cost and creates a competitive edge over other similar products in the market.
In some cases, these brands may represent the manufacturer’s name but not the product name. These businesses that engage in co branding marketing have come to be regarded as high profile and are a force to be reckoned with in the market.
What are co branding types?
- First, it can be a part-time business strategy where you would want to become a part of a brand related to your primary business while promoting your product or services.
- Second, it can be a long-term business strategy of registering a domain name and web hosting for multiple affiliated products or services.
There are two sorts of co branding: ingredient co branding and composite co branding.
Ingredient co branding
It refers to the practice of incorporating a well-known brand into the production of another well-known brand. This relates to the development of brand equity for materials and components used in other products. The brand for the ingredient/constituent is secondary to the principal brand. For instance, Dell laptops use Intel chips in a co branding plan. The brands that are ingredients are typically the largest buyers or current suppliers of the company. The brand of the ingredient should be distinctive. It should either be a well-known brand or be patent-protected.
Composite co branding
It is the combination of two well-known brand names in order to deliver a unique product/service that would not be available alone. The effectiveness of composite branding is contingent upon the popularity of the ingredient brands and the degree to which they compliment one another.
What Is Co Branding?
Co branding marketing is a strategy that entails the strategic alliance of numerous brand identities for the purpose of promoting a single product or service.
Co branding can be defined as an arrangement in which a single service or product is associated with multiple brand names, or the association of a product with third parties other than the primary producer, where the success of one brand benefits the partner brand as well.
Additionally, co-branding can be referred to as brand partnership, which is the Science of Alliances when two businesses join an alliance to generate marketing synergy. Typically, a co-branding agreement involves two or more organizations cooperating to associate one or more logos, color schemes, or brand identifiers with a certain product, which is designed for this purpose under the contract between them. The objective of this activity is to link the strength of two brands to influence premium consumers and compel them to pay.
Co branding’s Advantages and Disadvantages
There are several benefits to co-branding including the following four major factors:
Advantages
1.Expand market share
The primary objective is to increase market share for both franchises. As a result, the co branded brand will be able to appeal to a broader audience. For instance, a co-branded franchise can attract people looking for sandwiches and is likely to attract those looking to try pasta as well.
2.Consolidation of business
Due to the fact that co branding enables individual franchises to share promotional and operational costs, national franchise brands can truly benefit from this. For example, there are numerous buildings where Taco Bell and Pizza Hut businesses share the same premises, or even the same staff, counter, and kitchen.
3.Distribute reputations
As you can see, co branding enables franchises to share a reputation. If one brand is less well-known than the other due to a successful co branding arrangement, the struggling brand can benefit significantly from this marketing effort. Additionally, consumers might form positive associations with their favorite brands, which can be transferred to the co-brand.
4.Maximize worth
By collaborating, each firm or brand may assign their best employees to this type of project, lowering staffing costs and reducing the need for outsourcing. This approach maximizes the value of two teams by allowing them to collaborate and generate a single consistent marketing product.
Disadvantages
However, there are several disadvantages to co branding that brands may encounter:
1.Financial difficulties
Given that co branding is a requirement for sophisticated joint venture and profit-sharing agreements, achieving a co branding agreement is likely to be a time-consuming and complicated procedure. It may take brands time to conclude lengthy talks and complex legal agreements, and most franchisees desire a financial advantage over their competitors. Meanwhile, the other brand may feel as though they are being taken advantage of. Thus, they can attain balance only if there is a clear fit between the two brands.
2.Co branding strategy
Some companies use co branding strategy which is a marketing strategy. This strategy is beneficial for companies that do not have a firm brand name. For this reason, they can use co-branded products to gain an early foothold on the market. They can then use their firm brand name or create a customized logo using a free logo creator to make the public more aware of their products. The publicity gained through co branding will make the public more aware of the effects of a particular company. The public will then be more inclined to buy the products or services of that company because of its association with a well-known brand.
Factors To Consider for Co Branding Business
There are some factors to consider before getting into what co branding is. First, it would help if you found a business partner who has a common interest or background in your product or services and will use the same branding strategy on the site. Second, there must also be an understanding between the company and the co marketing organization. Some of these are how the partnership works, what the cost will be, and what the partnership’s primary goal will be. These factors are crucial to the success of the venture.
What factors contribute to the success of co branding businesses?
As you may already know, a Co branding project does not happen overnight, and it is far from straightforward to accomplish. Thus, the fundamental factor is about the collaboration of two businesses that can deliver a unique value proposition to customers in order to succeed. Additionally, these brand partners must share similar cultures, values, and client bases, as collaborating with two diametrically opposed businesses might result in disaster.
Consider the previous merging of Shell, a Dutch petroleum firm, and Legos, a Danish toy company. Shell benefited specifically from having its name imprinted on Legos’ toy sets, while the Shell brand benefited from having its items authenticated.
However, in 2011, an environmental organization called Greenpeace called attention to the dissonance of children playing with toys sponsored by a petroleum firm that was aggressively exploring for oil in the arctic. Following that, a lengthy Greenpeace campaign forced the two corporations to cease their co-branding relationship. This demonstrated that Shell and Legos’ aims and ideals were too dissimilar to interact properly.
The Various Co-branding Examples
Following are the various co-branding examples:
Apple and Nike
When Nike determined that their clients are primarily runners who enjoy listening to music while exercising and tracking their progress. Apple, on the other hand, is the company that can enable these customers to do both.
As a result, they formed a partnership. During that period, Nike also produced footwear under the Nike brand, while Apple developed a chip that can be embedded in shoes to track the user’s progress. This chip may be triggered via the user’s iPhone or iPod and will display information such as time, distance, and speed, as well as the number of calories burnt.
MasterCard and ApplePay both accept
MasterCard and Apple collaborated on the endeavour to make transactions cashless, with MasterCard being the first credit card issuer to offer Apple Pay. As a result, Apple would gain a sizable consumer base while also modifying its service. Then, MasterCard’s revolutionary new feature and function would be available only to its clients. Subsequently, Apple formed an association with a number of other credit card firms in order to diversify their consumer base.
Betty Crocker and Hershey’s
Hershey’s chocolate and Betty Crocker baking company are two well-known brands that teamed up to create the extra-delicious treat. They created a baking mix and chocolate syrup that naturally combined and provided the conventional brownie mix a little additional kick. The cooperation has remained strong to this day, as the two companies also produced a number of new goods in 2013.
Conclusion
How can you use co branding to your advantage?
As we have seen, co branding can be a valuable way to build a recognizable name that customers recognize and trust. However, it requires careful planning, sound branding, and understanding of co marketing strategies’ advantages and disadvantages. The first step in implementing co-branded offerings is creating a name for your company.
The second step is to build the reputation you will need for your product or services, which will depend on the type of consumer your business targets. Co branding can be an excellent approach to grow a business without having to invest heavily in resources or launch costly marketing efforts. However, co branding is not a flawless solution, and businesses should proceed with caution when using it.
Hopefully, you’ve discovered a wealth of useful information in the content above that will assist you in making business decisions about your eCommerce store in general, and specifically about Shopify. Additionally, please do not hesitate to ask us any questions about the issue today; we are always happy to assist you.
