Co-Branding

Co-branding involves combining two or more brands into a single product or service. Companies engage in co-branding to leverage strong brand. It is becoming a popular business practice to strive for a positive association between different brands that can develop synergy. A well executed co-branding strategy can lead to win-win situation for both co-brand partners and can help in realizing unexplored markets or untapped opportunities. Concisely, it is instrumental to handle almost every marketing matter from creating initial awareness to building customer loyalty.
Companies form co-branding alliance to fulfill following goals:
► Expanding customer base
► To make financial benefits
► Respond to the expressed and latent needs of customers
► To strengthen its competitive position
► Introduce a new product with a strong image
► Creating a new customer perceived value
► To gain operational benefits
Benefits of Co-branding
► Increased sales revenue.
► Exploring new markets with minimum expenditure.
► Appropriate approach when company seeks quicker response.
► Access to new source of financing.
► Technological collaboration between two companies give better results than what could be achieved by single company's efforts.
► Royalty income.
► Sharing of risk.
► Companies can fetch higher price for value added by additional brands associated with it.
► Improved product image and credibility with another brand association.
► Increased customer confidence on product.
► Increased coverage and exposure from joint advertising.
► Prospects to develop working relationships leading to future joint undertakings
Problems with Co-branding
► Proper understanding between co-brand partners is must. Greed to fetch too much in short time may spoil the relations and even result in failure.
► Once a co-brand take position in market, it becomes difficult to dismantle co-brand and even more difficult to reestablish the brand alone.
► Companies having different visions