As a new business holder trying to establish credibility as a brand, you probably hear the term “co-branding” thrown around a few times. Usually, other brands may advise that partnering with another brand opens the door for sufficient business growth and will help tremendously to break into a competitive market. It seems like a great idea, but you have no idea what brand partnership is and how to start utilizing it for your own brand.
Well you are in the right place! This article provides all the information you need to understand co-branding, how it can benefit your brand, and how to begin a partnership between your business and another, to help establish your position in the market.
What is Co-Branding?
Co-branding is a marketing strategy that involves a strategic alliance between multiple brand names to collaborate with each other to create a new product or service. While the actual definition of co-branding – also named “brand partnership” – may appear complex and daunting, it is an incredibly familiar concept in marketing. In fact, it should be safe to assume that most Americans are exposed to brand partnership marketing daily.
To be more specific, co-brand marketing allows at least two different brands to work together to create and launch a new product or service, no matter how unlike the two original brands are. Anytime you see a collaboration between two or more companies to release a new service or product, you are witnessing an example of brand partnership – like the Nike+ product that arose from the collaboration between Apple and Nike brands.
There are many reasons why brands decide to team up to create a new brand identity, but the biggest factors involve the generation of new consumers and to increase sales. Through working on a shared project, brands can greatly increase their brand awareness to extend positive associations for both parties and may compel consumers to pay a higher premium for the new release product or service.
A quote from the website Investopedia, elegantly sums up the essence of brand partnership — “Simply put, cobranding as a strategy seeks to gain market share, increase revenue streams, and capitalize on increased customer awareness.”
The Benefits of Co-Branding
Now that you are aware of what a brand partnership is, we can start to dive deeper and look at a few reasons as to why you should consider a partnership with another brand. With that being said, here are a few notable benefits to collaborating with another brand for your next product.
Establish credibility in a new or unfamiliar market place
As a new brand in the highly competitive consumer market, the opportunities to establish an adequate foothold can be rather limited and hard to come by. For a new company trying to establish their brand identity, cobranding can be a crucial gateway for the new company to establish credibility within their market. From a successful partnership with a larger brand, a smaller company will increase their reputation simply by their association with the larger brand.
Using partnerships as a means to gain leverage in the market place is not limited to the lesser known brands, however, even well-known brands can benefit from this marketing strategy. For well-known brands, cobranding can provide the perfect opportunity to build on their established corporate identity by experimenting with an unfamiliar, more specific consumer population.
For brands of every size, collaboration with another company can open the door to greatly enhancing a product’s appeal and, hopefully, creating more interest and sale generation for the product. This gained interest then produces an opportunity for each franchise to gain traction in their respective business ventures.
Increases your return on investments
Obviously, teaming up with another party to collaborate on a product would allow for a higher budget than if only one company was managing it. When you enter a partnership with another business, you can expect the budget to double, and the various digital marketing costs, like advertising, will be split between the two parties involved. Coupled with reduced costs, your company will be able to focus more of the budget on the quality of your product or service, instead of worrying about future marketing costs.
Essentially, utilizing this digital marketing strategy provides you with the perfect opportunity to make your budget stretch further to ensure that your product has great quality and durability. Henceforth, enhancing the product’s appeal to your expanded target audience. A larger budget also provides the possibility of creating a larger quantity of advertisements that target a specific niche of consumers that are outside of your brand’s usual audience.
Expand the marketing reach for your product or service
Continuing with the idea of expanding the reach of your product to consumers, co-branding can automatically increase your target audience without you lifting a finger. Because you are entering a partnership with an established brand, the product’s reach will vastly increase to include both your partner’s usual audience and your own.
This increase does not only affect the confines of your prospective target audience, but the actual size of the market. When the market size for a product is broadened, you should expect to see more interest towards the product and an increase in sales.
Vastly improve your digital marketing presence
Collaborating with a brand that has a strong digital market presence can help your company establish a strong social media and digital marketing presence. This benefit originates from the idea that consumers will automatically expect the smaller brand to follow the same behavior and characteristics associated with the more established company. These positive associations can propel your smaller brand to gain traction in the digital market and establish your own place in the market.
Surprisingly, there is a specific subtype of co-branding that emphasizes the importance of digital marketing, appropriately named “digital co-branding”. In essence, digital co-branding usually involves two parties – an advertiser and publisher – that share the same target audience and have a similar brand identity. Usually, an advertising brand will partner with a well-known digital publisher that has the same target demographic as their own, in hopes to attract more responsive and engaged users to the website containing the ads, thus, effectively increasing traffic for both the publisher and advertiser brand and generating higher profits.
Double the number of talented employees
Because there are two companies working on a shared project, the quantity of highly qualified employees will also increase, allowing the new product to be designed, made, and advertised by the best employees possible. When the dedicated team for your new service is filled by your best employees, you should see higher quality designs and possibly, a much smoother execution of your project plan.
Keeps fans loyal to your brand
One of the most crucial aspects of creating your own corporate identity involves having a fiercely loyal fanbase. In turn, the loss of a fanbase will be devastating for any size business, and often comes because of consumers becoming bored with your merchandise or service. Because having a loyal fanbase is so critical to the successfulness of any brand, the first step taken to prevent the loss of loyal consumers involves the launch of a new service or product that will keep their brand relevant and their fans interested.
While releasing a new product is a more common approach to keep fans loyal and interested, it can also be incredibly expensive and time consuming. Ultimately, launching a new product to prevent boredom is also risky, considering the lack of guarantee that the product will be successful in the first place.
It may come as a surprise that co-branding has the benefit of being able to present new and even risky ideas to their fans, under the guise of a completely new development – even if its simply a product that was rebranded. With the addition of a partnership, most will believe that product released through the collaboration will be a new addition to their favorite brand, keeping them interested in and loyal to your business. To put it simply, cobranding is a cost efficient solution to keeping your fans interested in your brand, and opens the door for new customers to become loyal to your business.
Steps to Make Your Co-Branding Successful
After reading about what co-branding is and, why it is beneficial to smaller brands, you are probably wondering how you can get started creating your own successful co-branding partnership. Thankfully, here is a brief list of some of the more crucial steps you need to take to begin your partnership, and how to make sure it is successful.
Identify the perfect partner for your brand.
The first step in embarking on your journey to cobranding involves figuring out the best brand to partner up with. You should start with a very extensive list containing potential partners and why you believe they would benefit from your brand. When you make a running list, you will be able to go back and analyze each potential business partner listed to find out which brand is the right fit for your business.
Once you narrow down your list to your top choices, make sure to do as much research as you can on each brand. Through research, you may find it easier to remove brands from your list for reasons that you were not already aware of. You may also find resources on the brand’s past collaborations, to get a feel for what they usually look for in a partnership.
Outline your brand’s goals
Now that you have narrowed your list down narrow it down even more to your top choices, you should map out a few brand goals to find which partner brand aligns closely to your values. Your goals could represent which product you believe is most likely to succeed and how that product would be distributed in both the physical and digital market. It is also a good idea to write down any goals about your corporate identity and how you want your brand to be presented in the digital market.
Create the perfect proposal
The final step comes after you have decided your perfect business partner, what product you want to present and how it will be distributed. The proposal is how you will get your potential brand partners on board with your plan and accept your offer to co-brand. Because having your proposal accepted is critical to starting your partnership, you need to put yourself in the mind of your potential brand partners.
Think about what features your product has that will be most appealing to the other brand and how they will benefit from co-branding with you. Emphasize what makes your product or service unique and how it will add value to the other brand’s identity.
Make sure you and your business partner are on the same terms
Making sure yourself and your business partner are on the same terms is one of the best ways to make sure your alliance is well-received. Sit down with your partner and explicitly go over and all marketing terms, goals, and end-game results, to prevent any misunderstandings from arising later on in your project.
Find your target audience
Once all terms for the collaboration have been settled, you can then begin identifying the intended audience for co-branding. To do this, you should analyze your brand’s target audience and your partner’s target audience to find any similarities or differences between the two. Once you identify the intended audience for the co-branding, you should make sure that all marketing strategies, including digital marketing advertisements, are targeted specifically at the intended audience.
Start advertising to get the news of your collaboration out there
It is always a good idea to make your decision to collaborate with another brand public. There are plenty of ways to go about making your announcement; you can use newsletters and press releases, social media announcements, or events, to name a few. Of course, you can also use any method that you and your partner see fit – including using multiple methods to reach as many people as possible.
Map out shared goals for both your brand and your partner’s
Much like the other tips listed, you should sit down and discuss some common goals with your brand partner. These goals can be broad and relate to the number of sales generated, or narrowed down to focus more on a specific niche of consumers or even a specific area.
Launch your product
The last step in your co-branding journey involves the actual launch of your product or service. When you are in this final step, it is important to stay on track by making a to-do list, a detailed outline of the launch itself, and going over all needed resources to be sure you have enough to successfully launch your product. Once you are able to mark all things off your to-do list, and have gone over all areas of your outline, and made sure you have enough resources, you are then ready to launch your product.
Examples of Successful Co-Branding Marketing
Examples of co-branding successes are all around us in society and are often extremely well-received products that have become a staple to each brand. Here is a quick brief of one successful example of co-branding:
Bonne Belle and Dr. Pepper
The collaboration of the brands Bonne Belle and Dr. Pepper is a classic example of two completely different brands uniting to create a truly unique product. Bonne Belle is the creator of Lip Smacker, the first ever flavored lip balm that debuted in the early 70s. A couple of years after their launch, they decided to collaborate with the soda powerhouse Dr. Pepper, to create Dr. Pepper flavored lip balm. Directed towards young girls and adolescents, this co-branding was so successful that you are still able to buy Lip Smacker’s Dr. Pepper flavored lip balm in 2018.
To sum; up the information in this article, co-branding is a pivotal asset for smaller brands to increase sales and optimize their business growth. Entering a partnership with an already established brand allows for an increase in credibility and reputation for newer businesses by aligning themselves with the characteristics and behaviors that are associated with the well-known brand. This in turn, can help any smaller brand to build their own corporate identity and place themselves in an optimal position to continue establishing their brand.