Co -branding gains popularity. The concept is used to refer to a type of tactical and eventual alliance between two or more companies . The purpose is none other than to enhance profits and gain positioning. The basis of the success of this technique is based on the power and brand value.
What is co-branding
A historical approach
The years of the economic crisis have hit companies hard. Ingenuity has served as a lifeline for organizations to get ahead. This is the case of Co-branding or Alliance between Brands. This B2B bet is current, although the tactic is not new. In fact, some date back to the 50s of the last century to refer to a very specific case.
The synergy occurred between Renault and the jewelers Van Cleef & Arpels . The result was a luxurious dashboard and gemstone steering wheel for a legendary car: the Dauphine Ondine .
However, since the 1990s, brand association has been practiced with some regularity. Some sectors were pushed by the result of the collaborative experience of the synergistic process of some competing brand .
It highlights the euphoria that occurred after the success of the alliance between two giants in their sector: one of the kings of the NBA, Michael Jordan, and the sportswear brand Nike . You have to go back to 1984, with an efficient and charismatic player... and with an enormous vision for business.
In fact, it didn't take him long to accept Nike's proposal to create one of the most famous shoes on the market, the Nike Air Jordan. They are still setting trends and producing huge profits. The sector was notably influenced. The brand between partners , with the presence of sports shoes , is one of the most productive strategies in the market.
Palpable examples that have managed to move the client to pay more to show off the result: Converse / Coca-Cola, Kangaroos / Jägermeister, Puma / Ferrari, Nike Air Jordan / Levi's or Vans / Nintendo are just some of the successful results of the collaboration between signatures .
The basis of the alliance between brands
It is clear that cobranding is a marketing tactic that involves a strategic alliance of multiple brand names. They must be used collectively for a common purpose. Collaboration allows, under the protection of allied companies, to crystallize the launch of a new product or service.
This collaborative experience has resurfaced strongly at a time of crisis. Added to these macroeconomic circumstances is the enormous competitiveness of a global market.
New Technologies (NNTT) and an increasingly hyperconnected user are some of the battles that companies face on a daily basis. The digital market threatens to engulf any business that is not willing to look for ways to increase its visibility.
At the same time, the number of native users and the ability of regular customers to adapt to NNTT have grown. They know how to find what they want, where and how to do it. At the same time , they demand an excellent User Experience (UX) that is pleasant, comfortable, non-invasive, accessible, effective and efficient. They love to be surprised with custom actions.
These factors, among many others, have fueled a volatile and difficult environment for sellers. One response has been a return to this co - branding effort . It may give rise to various types of actions, such as sponsorships or advertisements. But the association will benefit the united companies more than if they were promoted individually.
In short, the temporary or permanent agreement between two or more partners , aims to solve this critical phase. Your partnership is intended to achieve a significant increase in your profitability .
In addition, the synergistic process will help them consolidate their position. This possibility is reinforced by the strength and brand value of each of the participants. The combination of powers can get several incentives:
- That consumers pay more than they were willing to in principle.
- Promote the resistance of the product or service against white brands .
- Combine, in a single product, the added value of each partner.
In any case, what cannot be forgotten at any time is that it is a win-to-win tactic . The objective is that all associates obtain benefits. To do this, it will be essential that they draw up a joint strategy . This must achieve the necessary visibility among the public or target on which they have focused.
Types of Co-branding
As co- branding was consolidated as a reliable, acceptable and productive practice, the diversification of the methodology began . It was found that the use of a generic typology did not work universally.
Each case required modifications and adaptive processes for its type of product or service. It is necessary for each association to plan its own roadmap. In this way, the guarantees of achieving success and the objectives sought with the alliance are increased.
The first division established the difference between vertical cobranding and horizontal cobranding . The first consisted of one of the companies providing its partner with an element of her production process. The second business implemented that component in its product formula.
The result of the collaboration translated into a completely new article to launch on the market and surprise the public. Over time, and tying up a few loose ends, it would come to be known as co- branding of ingredients.
Continuing with the plot line, it is the turn of horizontal co- branding . The main characteristic is that a product designed by companies with the same scale of values is produced and distributed.
In this case, it should be noted that the result may be intended for a sector with the presence of all the partners. But it may also be the case that only one of them is established in that category or that none has a presence in it.
The formulas most used in current alliances
Contemporary companies have opted for various forms of cooperation. The existing types of co- branding are included in the following classification:
- Co- branding support. In this case, one partner prevails over the other . The main reason is usually related to the fact that one brand has more weight than the other. In general, the predominant invites a secondary to collaborate.
The lesser-known business uses the notoriety of a more recognized business. This opportunity allows you to take action to strengthen your database, your distribution channels and your sales.
It is the appropriate strategy for entrepreneurs and startups that have just entered the market. It is important that the company that starts chooses a consolidated company in its ideal target .
- Complementary co-branding. Perhaps this alliance is the favorite of large organizations. Innovation and technological advances are the great pillars of these collaborations. The idea is to provide elements together, so that the result is a product that has an impact on the market due to its innovative nature.
Each brand participates in this reciprocal relationship with win-to-win as its goal. All parties are involved by contributing the best they have. Not only do they seek new consumers for each participant, each one tries to attract the attention of their collaborators' client portfolio.
- Co-branding of ingredients. Perhaps it is the most popular strategy. Each partner retains their status and identification on the final item. During the collaboration, partners who share values and market work.
In the process they exchange gender, elements and elaboration processes . The intention is to launch new products on the market that preserve the identity of each company. Success is pursued for all parties.
What to consider before assuming an alliance between brands
Synergies have been shown to be a good way to strengthen brand image . It also favors expansion into other markets. However, it doesn't always go well. There are even notorious cases in which co- branding has failed miserably.
This is what happened with the collaboration of two well-known companies: Philadelphia and Milka . The first was listed as hostess and the second as guest. Both companies enjoyed prestige.
However, the first was assimilated to products that took care of the consumer's diet. Milka, despite being recognized for her social background, was a chocolate maker.
The union of both products in a new one was affected by the rejection of the public. The new proposal was perceived as unhealthy. That is why it is necessary to ask yourself some questions before making an alliance.
Study your brand image. Assess whether it would be beneficial for you to undertake a branding tactic with another company.
What will be your position. You will have to pursue the same objectives, under a common strategy. It is not a simple task. It is necessary to maintain a very well coordinated communication. From the beginning, it should be clarified what the role of each one will be and what the communication planning will be .
Analyze expenses and income. Co -branding involves sharing expenses. But, it can also act in the same way on profits. Consider whether the association will turn out to be positive.
Draw up a metric strategy. Define the parameters with which you will constantly evaluate the progress of the process.
Prepare an alternative plan. It is important that you have an outlet. It will help you if the collaboration period ends or if the plan is harming you.
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