What is co branding

What is co-branding? A complete co-branding definition

What is co-branding? More importantly, what can it do for your business identity? Today, we’re going to explore the various types of co-branding and provide the complete co-branding definition. Let’s get started…

In an increasingly cluttered marketplace, companies are always searching for new ways to connect with their customers and generate loyalty. Co-branding supports this by giving organizations a way to leverage the appeal of another company and connect it to their business.

Co-branding strategies involve bringing two companies together (often with a similar target audience), to achieve a specific goal. With co-branding, companies can expand their reach to various new markets and environments, or simply improve their chances of sales.

A good partnership could even have a direct impact on your reputation and growing brand awareness.

Sometimes known as brand partnerships, co-branding (or co branding), encompasses a huge selection of branding collaborations and strategic partnerships. It could include the creation of brand-new products, or the development of unique bundles.

So, when is co-branding a good idea?

What is co-branding? Your co-branding definition

Let’s define co-branding.

The definition of co-branding might vary slightly depending on who you ask, but generally, it’s a strategy used to combine the synergies of two well-known brands, to create a new product, offering, or event.

Co-branding brings companies together with complementary services, solutions, or even brand personalities, to achieve better brand awareness and growth.

Used correctly, co-branding is a valuable tool for brand reach and awareness. Each company accesses the existing audience of the other, while the combined brands help to reach a wider selection of people.

With co-branding, you can generate higher incomes, better trust or brand reputation, and you even get to share the risks and costs of a new product launch with another business.

However, co-branded products are generally more “niche” when it comes to the kind of audience you can attract. These efforts are usually highly focused, which means it’s important to do your research before you jump in with a new idea.

A restaurant engaging in a co-branding strategy with a lobster farm will only appeal to local customers who like lobster, for instance.

Crucially, co-branding is not the same as co-marketing, which involves working in partnership with another company to market a product. With co-branding, two companies build and promote a product together. With co-marketing, each business maintains its own individual offering.

What is co branding

Understanding the types of co-branding

Organizations interested in working with partnership companies on a co-branding strategy can explore different methods of taking their idea to market.

Most experts agree co-branding falls into one of two categories in most cases:

  • Ingredient co-branding
  • Composite co-branding

Ingredient co-branding is one of the most common types of co-branding. With this strategy, a new or emerging company will collaborate with well-established partnering companies to gain recognition and develop brand equity.

For instance, the Casper bedding company partnered with West Elm, a high-end furniture company, to ensure users could try out their preferred mattress options before making a purchase. This helped the bed-in-a-box brand gain more credibility.

For ingredient co-branding to work, the partnering companies need to include at least one well-known company to help boost the smaller business. More often than not, the ingredient brands (the smaller business), will work with the larger solution already, buying or using their products or services.

Ingredient co-branding is a popular option because it helps companies to build higher-quality products and leverage new avenues for distribution. The smaller brand also gains the credibility of working with the bigger brand.

Simultaneously, the larger company can benefit from showing its audience it’s “down-to-earth” personality, and willingness to work with new pioneering companies.

Composite co-branding is a little different, as it involves two partnership companies with the same level of fame. These organizations or groups already have a market impact, but they work together to offer a unique product or service.

For instance, Kanye West and Adidas were two very well-known entities before their cobranding campaign.

Creating the “Yeezy” line of Kanye shoes allowed Adidas to benefit from Kanye’s incredible cultural impact, while Kanye benefited from a high quality of shoe manufacturing. The collaboration even helped Adidas’s net income to accelerate to around $1.9 billion in 2019

Co-branding strategy: Opportunities in co-branding

Co-branding strategies vary depending on the kind of co-branding partnership you choose. In general, an ingredient co-branding campaign will focus heavily on improving market penetration, and brand reach.

Companies with limited impact on their audience can partner with larger businesses to improve their chances of finding new customers, while the larger company has access to new niche clients.

In a composite co-branding strategy, the opportunities often range from brand extension to global brand reinforcement. Two popular companies working together can amplify their reach, serve more customers, and even improve brand reputation.

Co-branding can also deliver new distribution and sales revenues to brands. For instance, Dell Computers often advertise with the “Intel” Company – a specialist in computer chip technology.

Intel can advertise chips separately to computer building professionals and technology experts, but it reaches a much wider audience by embedding its chips into Dell Computers.

Other examples of co-branding strategies include:

Conglomerate co-branding

A larger company or conglomerate brand can create products which combine two of their existing offerings. For instance, Coca-Cola could promote a mixed pack of Fanta, Sprite, and Cola, because it owns all of the sub-brands.

Multi-company co-branding

The most common method of co-branding involves two organizations coming together on one product. However, it’s also possible for multiple companies to work together on the same offering.

As an example, Wendy’s, Burger King, and McDonalds could all work together to promote a food festival.

Retail co-branding

This is when retailers combine multiple existing products into a package to achieve better sales. For example, Starbucks may sell coffee mugs for the holidays which come with Starbucks coffee beans, and Teavana tea.

Co-branding strategies

Each co-branding strategy needs to adapt to suit the needs of the company, while appealing to a specific audience.

One of the things which makes the Starbucks brand so compelling as a coffee provider, is its ability to offer an “experience” in every Starbucks café. To build on this experience, Starbucks engaged in a co-branding strategy with Spotify.

The partnership gave all Starbucks employees access to Spotify’s premium service so they could create tailored playlists for their coffee shops. The Starbucks team also advertise their use of Spotify around the café, driving more business to the music streaming service.

What is co branding

The pros and cons of a co-branding agreement

There are tons of different strategies today’s companies can use to build their brand identity and reach new customers. Co-branding is just one option of many, and it has various pros and cons to consider.

With co-branding, small businesses can leverage the impact of larger organizations, without spending a fortune on growth opportunities.

Large companies can also work together to reach new customers or expand to new markets. On the other hand, combining two companies in the production of a new item also creates additional risk. If the item fails to reach the right audience, both brands suffer.

Additionally, a small brand entering into too many co-branding agreements will end up diluting themselves to the point where their own brand essence isn’t evident.

Pros of a co-branding agreement:

  • Access to shared resources for both brands.
  • Opportunities to expand, extend, or improve brand reach.
  • Enhanced credibility or brand personality growth.
  • New marketing opportunities for each brand.
  • New sales or distribution opportunities for both brands.
  • Stronger customer relationships built through affinity.
  • Financing can be easier when two brands are connected.

Cons of a co-branding agreement:

  • If anything goes wrong, both brands will struggle.
  • Brand alliance might not have the right impact on brand image.
  • One brand can risk diluting its image with too many alliances.
  • Consumers may prefer the bundled product over the individual offering.
  • Consumers might lose focus on the individual brand.

Co-branding examples: The best examples of co-branding

If you’re not sure whether co-branding is right branding strategy for you yet, it might be worth looking into some of the stories of other companies using this method.

There are tons of examples of co-branding strategy out there – here are some of our favorites…

1. BMW and Louis Vuitton

Probably one of the best-known co-branding examples for luxury brands, BMW and Louis Vuitton worked together to attract some of the big spenders of the world.

While a car manufacturer and design brand might not seem like the most obvious partnership at first, they both appeal to a specific kind of customer.

What is co branding
Credit: Louis Vuitton

In this co-branding partnership, BMW created a new sports model car and Luis Vuitton designed an exclusive four-piece luggage set to go into the car’s parcel shelf.

The collaboration between the two brands allowed them both to build their own products and showcase their individual benefits, while still creating an aligned offering for their customers.

2. HP and Bang & Olufsen

One of the better-known Danish brands in the world, Bang and Olufsen already has a strong reputation among its target audience. However, like most brands, the sound pioneers are constantly searching for new ways to bring their solutions to customers.

Since 2015, Bang and Olufsen and HP have built computers together with a Bang and Olufsen sound system already installed.

What is co branding

The co-branding partnership is set to continue all the way up to 2024 at a minimum, depending on the number of unique sound-enhanced computers HP wants to sell and create.

The combined strategy means HP can continue to shine as a cutting-edge technology provider, while Bang and Olufsen shows customers what it can do withs sensational sound.

3. CoverGirl and Lucasfilm

Makeup and fashion companies are some of the most regular members of the co-branding community. Makeup producers like CoverGirl can easily upgrade their product portfolio by leveraging the latest trends in the market.

When the Star Wars “Force Awakens” movie came out in 2015, CoverGirl partnered with Lucasfilm to capture a wider audience, and get new fans excited about the movie’s release.

What is co branding
Credit: Covergirl

The co-branding strategy involved the creation of a new makeup pallet designed with the help of Pat McGrath. The pallet was available in two styles, a dark side, and a light side.

The strategy took advantage of the building hype around the new movie, while ensuring CoverGirl had something new to bring to their audience.

4. McAfee and Visa

Some examples of co-branding make perfect sense, because the two companies align so perfectly. McAfee, a leader in digital security, recently announced a partnership with Visa, the payments company.

The co-branding strategy allows Visa business card holders to get a two-year subscription for McAfee security at a discounted price, ensuring business users can feel more protected when they’re handling their operations online.

What is co branding

The McAfee solution is designed specifically for business users already accessing Visa’s services. The security can cover multiple computers and accounts at once, so business leaders can share their security offering with any employees or colleagues they’re working with.

5. Toyota and CaetanoBus

An excellent example of an ingredient co-branding strategy, Toyota and CaetanoBus joined forces to create Toyota busses fuelled by electric.

By working with Toyota, CaetanoBus had a unique opportunity to access some of the best cell technology in the world, as well as gaining extra credibility as a growing brand.

What is co branding

At the same time, Toyota could also benefit from the partnership by demonstrating its commitment to making the world a more sustainable place.

The long-standing partnership between the two companies is helping to pave the way for a future where more public transportation systems can run on sustainable energy and electricity, rather than fossil fuels.

Co-branding guidelines: Points to remember for your campaign

If you’re keen to get started with your own co-branding ideas, it’s worth ensuring you have the right plan in mind first. As mentioned above, there are tons of successful examples of co-branding out there.

However, it’s also easy for companies to damage their reputation, or have the wrong impact on their audience when they approach co-branding the wrong way.

The following co-branding guidelines should help you to make the right impression.

1. Know your brand first

One of the biggest risks of co-branding is diluting your own identity by taking on too much of another company’s personality. The best co-branding examples are effective because they harness the unique benefits of both companies, giving customers the best of two distinct organizations.

It’s important to make sure you have a clear image of your brand and vision before you begin.

If you don’t have a distinct set of brand guidelines yet, start by building these. Make sure you know what your business stands for, what your unique selling points are, and what your vision of the future should look like.

Why do your customers choose you over the competition, and how can you bring this into your co-branding ideas?

2. Choose your partnerships carefully

The right brand for your co-branding agreement will depend on a few things. First, you’ll need to think about your goals for this campaign.

Do you want to reach a wider audience in a new market? Then you’ll need to work with a company relevant to this new group of potential customers.

Are you just looking to improve your credibility? Then you’ll need to work with a business bigger than yours.

As you may have noticed in the co-branding examples above, the best co-branding ideas don’t have to come from companies in the same industry. The company you choose to collaborate with should complement your new product, however.

If, for example, you’re trying to find new customers for your mattress brand, you could consider partnering with a black-out blinds company to advertise a solution for the best night’s sleep.

3. Get creative with co-branding ideas

The best branding strategies are creative, specific, and well planned. Don’t just rush into a partnership without thinking about what you can really do to make your new offering stand out.

When Nike and Apple collaborated, they didn’t just give customers a way to pay for Nike products with Apple Pay. The co-branding partnership brought music from Apple to Nike customers during their workouts.

Nike and Apple worked in tandem on fitness trackers, clothing, and sneakers which track activity, while connecting people to their favorite songs.

The partnership leveraged all the benefits of Apple technology, while still allowing Nike to shine as a brand bringing athletic experiences to people from all kinds of backgrounds.

As the market continues to advance and more competition evolves, brands need to think carefully about the kind of collaborations likely to deliver the biggest benefits to clients. Don’t be afraid to think outside of the box when deciding how you’re going to work with another organization.

Is co-branding right for you?

Co-branding strategies are an interesting way for businesses of all sizes to accomplish incredible goals. With the right co-branding campaign, you can align your brand identity with the credibility and reputation of another major company, improving your chances of sales.

Companies can work together in a co-branding strategy to expand to new markets and address various pain points for customers.

Successful co-branding does require careful planning – however, just like any branding strategy. Today’s leading brands should consider their options for co-branding carefully.

Think about your target audience and what they need from you. Look at the complementary benefits your chosen co-branding partner can bring to the table. How can you work together in a way which resonates with customers and generates market hype?

As the digital world continues to evolve, brands will no doubt continue to discover new ways of co-creating products and combining campaigns to push the envelope for their audience.

What could a co-branding campaign look like for you?

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