Co-branding [3], as described in Co-Branding: The Science of Alliance, is when two companies form an alliance to work together to create marketing synergies. [4] A co-branded product is more limited in terms of audience than a sole proprietorship business product. The image it conveys is more specific, so companies need to consider whether co-branding can bring benefits or whether it would alienate customers accustomed to a single name with a familiar product identity. Communication-based co-branding is a marketing strategy in which several brands from different companies are linked together to communicate together and promote their brands. [14] In many cases, partner companies have a similar audience and, by working together, they can promote their co-branded products to both audiences. In some situations, a joint marketing campaign can help partners tap into a previously unavailable market and create a new audience. Co-branding is a pairing of two or more branded products to form a separate, unique product or brand. the use of different trademarks in combination with market-related products for complementary use, para. B example between a fast food chain and a toy company; or even the physical integration of a product, such as a branded toothpaste in combination with a branded mouthwash.
A co-branding strategy can be a way to gain greater market exposure, fend off the threat of private labeling, and share expensive advertising costs with a partner. In a co-branding relationship, both brands must have an obvious and natural relationship that has the potential to be commercially beneficial to both parties. Legally, co-branding is more of a trademark licensing agreement than a joint venture or partnership. A co-branding structure is different from the simple sponsorships or unilateral user agreements used in supply chain management, as it is based on a multi-brand license where each party grants its trademark(s) to the other. Co-branding can be stimulated by two (or more) parties who consciously choose to collaborate on a specialized product. It may also result from a merger or business acquisition to transfer a trademark associated with a well-known manufacturer or service provider to a more well-known company and brand. Co-branding can see more than just associations of names and brands; There can also be an exchange of technology and expertise that leverages the unique advantages of each co-branded partner. The purpose of co-branding is to combine market strength, brand awareness, positive associations, and the seal of approval of two or more brands to force consumers to pay a higher premium for them. It can also make a product less likely to be copied through private label competition.
The underlying license must be drafted in such a way as to prohibit the use of trademarks that may damage the reputation of a party or in any other way. The parties must retain the right to review and approve the advertising and promotion of the co-branding company and product packaging. In addition, to the extent possible, public advertising should indicate the ownership rights in each of the marks and indicate that each mark is used under license. Ingredient co-branding is a marketing strategy carried out by a supplier in which an ingredient in a product positions its brand. [11] For example, imagine Company A, a well-known designer, working with a high-end retailer to improve brand awareness and reputation. The initial agreement can benefit the high-end retailer by rewarding it with exclusivity, significant royalties and unilateral renewal rights in exchange for the increased presence of Company A`s brand. However, if the importance of Company A`s brand reaches new heights as a result of the agreement, its owners may be bound by adverse conditions and may not be able to work with a more suitable retailer to meet new market conditions or growing demand. The terms “co-marketing” and “co-branding” are often used interchangeably, but can have slightly different meanings. The overall concept is that two companies or brands work together – either for a one-time campaign or as part of a longer-term plan – and combine their marketing efforts to achieve greater visibility and more effective results.
It`s usually about identifying the symbiotic dynamics and complementing each other`s products in some way to gain a larger overall market share than they could otherwise achieve on their own without collaboration. Parties should always be prepared for the possibility that their co-branding businesses may not be as successful as expected and that they may be terminated prematurely due to declining consumer demand, company restructuring, drastic changes in supply chain costs, or unexpected changes in the company`s stock price. Early termination options by both parties may be appropriate, and licenses may include punitive provisions in certain circumstances. Best practices may involve both parties negotiating a defined term for the license, with the ability to renegotiate based on the successes or shortcomings of the co-branding campaign. Co-branding is a useful strategy for many companies that want to increase their customer base, profitability, market share, customer loyalty, branding, perceived value and savings. Many types of businesses, such as retailers, restaurants, automakers, and electronics manufacturers, use co-branding to create synergies based on each brand`s unique strengths. Simply put, co-branding as a strategy aims to gain market share, increase revenue streams, and benefit from increased customer awareness. If a co-branded campaign is not approached carefully and taking into account key brand licensing conditions, it can harm one or more of the parties involved. Possible negative outcomes include: Co-branding activities can be found in several product areas, including fashion, retail, food and beverage, cosmetics and toiletries, electronics and household cleaning, and can be beneficial for service providers in areas such as sports, media, entertainment, finance and transport. A co-branded campaign does not need to be integrated into the typical product or service lines of the brand owner.
.