What Is Co-Branding?

Co-branding is a process of creating a service or product that unites several brands. It becomes increasingly difficult for businesses to stand out from competitors in the market with a diversity of offers. Learn more about Co-branding in this blog.

Category: Business     Written By: Eva William

What Is Co-Branding?

It becomes increasingly difficult for businesses to stand out from competitors in the market with a diversity of offers. Advertising, which has remained the main promotion method for a long time, can no longer provide 100% effectiveness. More often, consumers stop perceiving 'aggressive' direct advertising and make choices based on their emotions or rational arguments. So, even successful, strong brands have to look for new ways and innovative solutions to win and maintain consumer loyalty. That is the moment when businesses start wondering what is co-branding.

It may be surprising for someone, but today, it is much more profitable not to be in enmity with competitors but unite with them. Co-branding is a process of creating a service or product that unites several brands.

turned off laptop computer on top of brown wooden table

It is interesting that initially, co-branding was meant to be joint advertising and appeared solely for reasons of economy. It happened in the United States, during the Great Depression, when manufacturers did not have the financial capacity to promote their products alone.

Modern alliances have a different goal — expanding the audience by attracting consumers of a partner brand, changing positioning, and improving the image. Sometimes, the result of such cooperation is a truly unique product that continues to exist even after the end of the advertising campaign.

Why Do You Need Co-Branding?

The main result of co-branding is a synergistic effect, combining the competitive advantages and capabilities of the two brands.

Main advantages of such solutions:

  • Opportunity to expand the audience of the product since the union of the two brands arouses interest from the consumers of each of them. This does not happen in the form of intrusive advertising but naturally.
  • Reducing the advertising budget. The financial and human resources of partner companies are combined. Due to this, it is possible to obtain a marketing effect at a lower cost for each of them.
  • Strengthen emotional connection with consumers. The collaboration of brands makes it clear that they share the interests of customers and demonstrate commonality with them.
  • Stimulation of purchases through the offer of a complex product that covers several needs at once.
  • Creation of a unique selling proposition, the value of which exceeds the offers of both competitors and each brand separately.
  • Opportunity to strengthen or update the image by looking at the company or its product from a new angle. This is relevant not only for young companies but also for large ones, which find it difficult to make adjustments to the already established image in other ways.

three men sitting while using laptops and watching man beside whiteboard

Cooperation Formats

There is no one clear co-branding plan, this method of cooperation can be adapted to any union. The most popular co-branding formats are:

  • Mutual advertising
  • Joint events
  • Combining personal brand and product
  • Release of a product with a new name or combining the names of two companies
  • Loyalty programs
  • Joint investment

How to Choose a Partner?

Any brand merging without a well-thought-out strategy will not have a result. For the method to work, it is important to choose the right partner and think through the cooperation down to the details.

When choosing a partner for co-branding, consider such factors:

  • Target audience clear definition.
  • Partners should be equal in terms of recognition in the market.
  • A joint offer should be beneficial for consumers in terms of the opportunity to save money or get a higher level of service.
  • Partners should be representatives of adjacent or completely opposite markets.
  • The reputation of the partner company is very important because any scandal that erupted around it will certainly affect the second brand.

In addition, it is necessary to consider the chosen cooperation format because some of them can successfully work with certain companies but will not work with others.