Nakedi Phala discusses three points that can help improve your co-branding relationships.
Co-branding offers many benefits and is a great way for brands to integrate their business’s marketing forces together (and as we all know, two heads are always better than one
For example, Mondelez International, Inc. (a business that trades foods and beverages) has a knack for co-branding its products — such as the merging of Oreo with Cadbury chocolate to give consumers the Cadbury Oreo Dairy Milk Chocolate. While Oreo was great on its own already, and Cadbury chocolate has always been a classic favourite, when combined, these two treats are unbeatable!
So, you can see where we’re heading with this.
Before you jump on the co-branding train, there are two main types of co-branding relationships that you should take note of. They are:
- Composite co-branding — two individual brands collaborate to collectively provide a unique service or product, and
- Ingredient co-branding — prolific brands merge to make use of one that is more prominent to produce the product.
In essence, both of these co-branding relationships are beneficial, as both can contribute to the other's production or reputation — either way, it’s a win-win! With that in mind, it’s time to dive deep into three of the benefits of co-branding:
1. Co-branding allows you to divide your costs
One of the greatest benefits of a co-branding partnership is the sharing of costs. A co-branding relationship can save the companies involved a lot of money by spreading the direct costs between both brands’ marketing budgets.
The introduction of a co-branding product or service by the brands will still require marketing efforts to achieve great sales.
The best thing to consider in a brand partnership is the drafting of an agreement that is put together by a legal practitioner or someone with great knowledge in finance.
Here are some tips to take into account:
- Before things kick into action, decide how the profit ratio will be split to avoid disputes during the marketing campaign.
- As a marketing manager, make it a habit to revisit the agreement on a regular basis to ensure everything stays on track.
- Consider whether the budget enough to run the entire campaign.
Whatever you decide, it’s convenient to create a profit-sharing agreement, which can be used in future campaigns.
2. Co-branding creates greater consumer loyalty
In a co-branding partnership, the brands involved have the advantage of gaining a larger audience or consumer base. But how? Ola
and Barbie recently partnered up, and in their partnership, Barbie offered its branding (via its image).
Ola, on the other hand, offered the production of ice cream. In this partnership, Barbie’s loyal consumers are bound to buy the Barbie Ola ice cream and vice versa; this leads to both brands gaining loyal consumers.
In this scenario, you will see there are now three brands: Barbie
, Ola and Barbie Ola Ice Cream (the co-branded product). If the co-branding objectives are not reached, the partners can go back to the drawing board to make changes to the co-brand product or service In this particular scenario, they would only make changes to that particular product, without hindering their other products.
In essence, co-branding has the power to raise awareness about the brands involved and penetrate into a new market, improving the value of the product’s perception in the minds of consumers.
3. Co-branding creates leverage
If your brand is in a growing phase, co-branding can be the solution to finally beating your competitors. You now have access to more resources, which can help your brand improve its reputation amongst competitors — and possibly become the new, preferred brand.
More brains working around the co-brand equals to a bigger marketing team and a better workforce to attract sponsorship without the high expenses of promotions and costs of traditional advertising. The co-brand service or product can also sponsor events or services, which will generate media exposure.
For example, if your co-brand product is an energy drink that sponsors a soccer club, your brand logo can be put on the soccer gear of that club as well its transport. And on match days, you can put forward your advert to be included in the side billboards. Fans will get the opportunity to see your services or product, and you can capitalise on media presence such as sports channels, newspaper reporters and sports bloggers online publishers.
Here are three important points about brand leveraging:
- It carries a positive brand attitude into a new product category.
- The cost of the introduction of a co-brand is less than introducing a whole new product.
- Brands involved do not compete for market share. For example, audiences.
All-in-all, co-branding is a clever way of uniting brand loyalties and making your brand significant amongst competitors.What are the other benefits of co-branding? Let us know in the comments section below.
Co-branding partnerships are commonly practiced by brands of all sizes to achieve marketing goals. For a deeper understanding of marketing partnerships, read about the Five ways to keep a co-marketing partnership fruitful.
*Image courtesy of Ola