The Pros and Cons of Co-Branding
There are a number of reasons companies embark on co-branding programs. To begin with, they’re a powerful way of introducing one company’s products and services to the loyalists of another.
Co-branding also enables one brand to benefit from the “halo of affection” that belongs to another. That was the rationale behind Nike’s (NKE) original 1984 alliance with Michael Jordan, and the effort has done wonders for both.
Co-branding is not just for giant national or international brands. While a small business may have difficulty linking up with Nike or Procter & Gamble, there are an increasing number of off the shelf co-branding opportunities of which many businesses can avail themselves. Programs have been developed by credit-card companies such as Visa and MasterCard, retailers including Starbucks and Barnes & Noble, and even shipping companies—the U.S. Postal Service offers a service by which you can add your company logo to its priority mail packaging.
Beyond these, there are bound to be dozens of custom co-branding partners for just about any type of small business, whether you serve a local geographical area or a national vertical market. The key is to think creatively about products or services that complement yours in some way and that will enhance the appeal or credibility of your offering.
Develop your own guidelines
Be careful, however—co-branding is not without its risks. First, it tends to have a dilutive effect, since it spreads the credit for a positive experience across two brands where normally there’s only one. And if the experience isn’t positive—even if it’s the other brand’s fault—it may reflect negatively on you. Further, while in a well-conceived co-branding program the whole should be greater than the sum of the parts, you can’t get away from the fact that you are to some extent relying on another brand’s equity. That can, in some cases, make your brand look weak or secondary.
It’s important, therefore, to carefully consider your own co-branding principles before you enter the fray. Develop guidelines that are right for your business that will enable you to objectively assess opportunities that arise.
Create a proposal and reach out
Your criteria may differ based on what’s most appropriate for your situation, but “fit” should be a prime consideration. While many brands share similar characteristics, no two are exactly alike. Co-branding ice cream and root beer is a natural; co-branding sports cars and computers less so (though that didn’t prevent Ferrari from linking up with Acer). Ecco Shoes co-branding with the World Wide Fund for Nature makes intuitive sense; Chanel and Hello Kitty is a bit more of a head-scratcher. Look for brand fit not only from the perspective of attributes and benefits but also with respect to core values and corporate philosophies.
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