Whether as a large international brand or a smaller medium-sized company — one of the most important goals is always to increase brand awareness and convince even more people of your own products and services. Working with another brand can help with that. By choosing the right partners, all parties involved can benefit from the reach and strengthen their reputation and market share. This tactic of merging two or more companies is known as co-branding.
What is co-branding?
Co-branding (German: cooperation marketing) is a popular marketing measure to expand the brand. Two or more companies or brands join forces and use common resources (costs, reach, image, etc.) to market a product or service. As a customer, it is clear that the purchased product was created in collaboration with the participating brands. The companies hope not only to improve their image, but also to increase demand and thus more profit. In co-branding, a joint product is created, which is promoted and distributed using all participating brand names and a joint design.
In addition to the joint creation and marketing of a product using co-branding, there are also strategies that only relate to joint marketing. In so-called co-marketing, existing products are promoted with a joint brand strategy and marketing activities.
Pros and cons of co-branding
Joining two or more companies together to create a new product offers companies several advantages for their own brand. With the right cooperation partners, not only can brand recognition and market share be combined, but positive emotions and trust in brands can also be transferred to the product and thus to the partner brands. Especially when the participating brands address a similar target group, they can grow together and open up new markets through co-branding products. In addition, brands also benefit from the shared risk of production and marketing. The merger not only combines the brand names, but also divides production costs and marketing resources. In this way, the individual brands can launch new products on the market with a comparatively lower expenditure of resources and benefit from joint profit.
In addition to the many benefits for your own brand, there are of course also risks that must be considered when planning such a co-branding campaign. In particular, choosing the right cooperation partners is a decisive step that can make the difference between success or failure. Cooperation should not be entered into if the target groups of the brands are too different or the missions and visions of the companies do not match. This could quickly lead to conflicts between the individual brand identities. In addition, negative connotations of partner brands should also be investigated and understood in order to prevent them from being transferred to one's own brand and own products.
Use co-branding correctly
Regardless of whether you decide to offer an existing product in combination with that of other brands (such as a McDonald's McFlurry with Smarties chocolate beans) or create a completely new product together (e.g. Milka-Langnese ice cream), choosing the right partners for cooperation is one of the most important steps towards successful co-branding. Cooperation marketing will only be successful if you manage to agree, set common goals and pull together. When all of this is in place, you and everyone involved can benefit greatly from this co-branding collaboration.