Co-Branding

Definition: The Co-Branding is the marketing strategy wherein two or more well-known brands combine to facilitate the sale and marketing of a joint product.

In other words, when two or more brands join hands with the objective of increasing the market share by producing the joint product and carrying the marketing activities jointly is termed as Co-Branding.

Co-Branding is also called Dual Branding or Brand Bundling, implying the combination of brands.

Following are the ways in which Co-Branding can be practiced:

1. Ingredient Co- Branding- In Ingredient Co-Branding, the well-known brand is used as a component in the production of another renowned brand. Generally, this type of Co-Branding is done with existing suppliers or large buyers.
   E.g. Intel Processors are used in the Dell computers.

2. Promotional/ Sponsorship Co-Branding– This type of Co-Branding is very much seen in Entertainment Industry and Sports leagues where renowned brands sponsor the film award functions, sports, social events, etc. with the objective of creating the brand image.
   E.g. The official sponsors of IPL league are DLf, Pepsi, Kingfisher, Vodafone, Set Max, ITC Group, Hero Honda, Citi Bank.

3. Value Chain Co- Branding
   • Product Service Co-Branding– Air India and American Express Co- Brand Card offer several reward points and tailored benefits to the flyers of Air India.
   • Supplier Retailer Co-Branding-Barista Lavazza offers free Wi-Fi services at its cafe through the tie-up with spectra net, the Shyam Group.
   • Alliance Co-Branding- Alliance of Etihad Airways and Jet Airways.
     
4. Innovation Based Co-Branding-Nike and Apple have come together through the invention of Nike+ footwear in which iPod can be connected with shoes that will play music and will tell the time, distance covered, calories burned and heart pace of an athlete.

Co-Branding can be fruitful in following ways:

• New sources of finance will be available.
• Risk sharing capacity will increase.
• More income can be generated because of increased customer base.
• Customer trust can be gained through its prior experience with any one of the brand.
• Technological benefits can be unveiled.
• Image of the brand can be improved due to its association with some renowned brand.

Co-Branding can result into a failure if:

• Brands are different and cater different market segments with the entirely different product range.
• Conflicts between companies due to different mission and vision of each.
• The customer had a bad experience with any one of the brand it will have a negative impact on the other.
• Lots of liabilities on one brand will impose pressure on the co-brand.
• Any one brand files bankruptcy the image of other will also get adversely affected.

Thus, two or more companies come together to capitalize on the brand image of each and offer a product jointly with the intention to boost sales by attracting the individual customers of both.