Co-branding approaches

We discussed earlier that co-branding is not a new concept, and that it remains crucial to consider the strategic objectives of the project and to address all the possible risks before it is launched.

Co-branding can be an asset in nearly all aspects of marketing, from creating initial awareness to building loyalty. There are four main approaches to co-branding that companies should consider.

Promotional/sponsorship co-branding.
Co-branding began with endorsements. This approach can be a good beginning point for organizations; the relationship is simple, but it can result in significant brand enhancement and sometimes even an unplanned opportunity.

Ingredient co-branding.
Partners in ingredient co-branding are usually the company’s current suppliers or largest buyers. Easy access to offerings and a well-established relationship translates into a lower level of investment required than in other forms of co-branding. An ingredient brand’s success relies on being distinct, either through patent protection or by being a dominant brand.

Value chain co-branding.
Other players in the value chain can create new experiences for the consumer, which, in turn, can create a level of customer value and differentiation not possible with promotional or ingredient co-branding. There are three types of value-chain co-branding:

  • Product-service co-branding. This approach allows partners to share industry-specific competencies while at the same time opening previously unavailable customer bases.
  • Supplier-retailer co-branding. These relationships can range from the natural to the less obvious—even to traditional rivals, which can help both partners become better positioned against well-entrenched competitors.
  • Alliance co-branding. Globalization and better, broader offerings through cooperation aside, forming alliances with similar companies may be crucial for rapidly consolidating industries.

Innovation-based co-branding.
In this approach, partners create entirely new offerings to provide substantial increases in customer and corporate value. It offers the potential to grow existing markets and create entirely new ones. Because both partners are seeking a high level of value creation, the rewards and risks are often an order of magnitude larger than those created by other co-branding approaches.

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