A Quick Dive into Co-Branding

co branding
co branding

Co-branding is a common marketing tool for brand extension. A marketing partnership is made between two or more different companies to combine advertising resources. As we'll see, Co-branding can be an extremely beneficial strategy.

Co-Branding: Basic Types

There are various co-branding types, but the most common ones are ingredient co-branding and composite co-branding. Let's take a closer look at those two forms of collaboration.

1. Ingredient co-branding

With this form of co-branding, advantages are created through partnering with companies whose products are used in your products. For example, Intel is the ingredient brand to Dell, a computer technology company that uses Intel’s Core processors.

2. Composite co-branding

This involves a partnership between two or more companies to invent and produce a new product or service for their target audiences. For example, British Airways and Citibank partnered up to release a credit card that automatically registers members to the British Airways Executive Club.

What are the benefits of Co-Branding for Brands?

1. Improves credibility

If your small brand meets a popular, more well-known one, the audience is likely to trust you more due to the credibility of that bigger brand. It also raises your brand awareness which will help grow sales in the long-term as the audience will have you in mind if they look for a particular product or service category. 

Media monitoring tools can measure the sentiment of the buzz on social media and in news, giving insight into whether people trust the brand or not. We can dig deep into what people are saying about your brand, if they have positive associations or if they generally approve your marketing content.

If there is negative sentiment surrounding a particular brand, it would be better not to start a brand partnership as that negative buzz or press could get reflected back onto your brand.

2. Injects cash 

A top benefit of co-branding is that there is more money available for marketing purposes. If both companies spend their usual marketing budget each on a joint campaign, then the campaign is likely to be much bigger and better than an independent campaign. However this is dependent on the agreement between the two businesses. Especially for new products or markets this cash injection can be rewarding strategy as you are able to unlock content seeding campaigns on a new scale. More people will become aware of your product and turn into customers.

PR budget

3. Boosts visibility

Co-branding also increases reach. Two partnered brands advertise one product or service to both of their audiences, therefore increasing the number of people that the message is communicated to. It might be possible that you find completely new co-markets thanks to you strategic partner's outreach. In any case, you should monitor your cooperation at anytime to spot potential growth for your Branding as eary as possible.

Co-Branding Examples

There's more co-branding around than you would guess. We'll present two examples to point out the advantages of mutual branding.

1. Apple Watch Nike

The Apple Watch Nike is a good example of composite co-branding. Based on the Apple watch, Apple and Nike developed custom Nike-Apps that make the watch an exclusive gadget for athletes who want to track their exercising results. It's kind of rare that two world famous brands combine their corporate design to create something new. In this case, the partnership pays out. There are several types of Nike-designed wrist bands exclusively for the Apple Watch Nike and there are many more examples of how effective this co-branding of Apple's elegance and Nike's dedication to power and accomplishment is.

co branding

2. Versace and H&M

The fashion industry is especially famous for its co-branding partnerships. Usually it's about a branding between a well-known fast fashion company and an exclusive, luxury design brand. H&M kind of invented this strategy by introducing unique pieces of well-known designers in a limited store edition. Most customers bought them on the first day and emptied the stock immediately. This raises exclusiveness and brand awareness. One famous example is the partnership between H&M and Versace.

co branding

Two Things to Consider Before Partnering Up

1. Size matters

Large companies are better able to compete with small businesses as they can transfer their successful and popular brand names to their new products. However small businesses that haven’t fully established themselves in the market aren’t able to do this. Therefore it’s important for small businesses to partner with other small business, or focus on areas with little competition. We can use media monitoring tools for social listening to find which brand names of a particular product category are popular and have a positive buzz. If they’re being mentioned frequently and positively on social media and in the news, it gives us a good indication as to whether they’re recognised in the market and might be worth co-branding with.

2. As in real life, finding the right partner is tough

A customer will be put off buying if they are unaware of the company you’re partnered with. In order to create a product that will lift off, it is important to make sure that the two companies complement each other in terms of recognitionbrand image, and values. Media monitoring tools such as Meltwater can be used to determine aspects such as the partner’s key messages, their brand perception, and if they are known in the geographic market where we want to set up shop. We can use this information to assess whether or not a partnership with that company would be advantageous.

That’s it for co-branding. For more information on how you can use media monitoring tools for research and development, read our blog.