Brand strategy: co-branding
Co-branding and brand partnerships, when done correctly, have the power to reinvigorate tired brands, open up new revenue streams and introduce brands to entirely new audiences.
By the same measure, co-branding exposes the participants to the risks associated with each brand’s actions and reputations; so the phrase “You’re known by the company you keep” is highly relevant.
Co-branding works best when the partners have a joint offering that benefits the customer and is, at least outwardly, seamless — one such example is the co-branding partnership between Apple and Nike. Based on the simple premise that people like to listen to music when working out, the Nike+iPod launched in 2006.
…the phrase “You’re known by the company you keep” is highly relevant
Nike+ users could listen to music on their iPods or iPhones while working out and at the same time receive workout data such as distance, pace and calories burned using the technology contained in a small transmitter and the Apple devices.
This strong relationship has continued through the more recent advances in technology and changing product ranges and now includes a series of co-branded Apple Watches. The relationship between the two brands continues to widely expose both brands to each other’s incredibly loyal customers.
Other successful examples of co-branding that make immediate sense were projects we were involved in the creation of (see above image). The partnerships between Interfora and both The Co-operative Funeralcare and Vera Wang, for funeral flowers and wedding flowers respectively, helped to create a new dynamic to the product ranges.
Interflora bringing their credibility in floristry to the funeral care market lent the combined offering an elevated sense of quality, while renowned fashion designer, Vera Wang, brought a feeling of exclusivity to her range of wedding flowers.
A further interesting example of note is (RED) which exists entirely to be a co-branding partner. The Global Fund created the brand to generate sustainable income to fight AIDS in Africa and has partners including Dell, Hallmark, Starbucks, GAP and Nike; each able to create their own (RED) products that contribute to the fund’s income.
- Reaching another brand’s ready-made audience and rapid market penetration
- Elevating or improving the perceived credibility of a brand by association with a more exclusive or technically proficient partner
- Creation of entirely new joint ventures
- Extending operational reach through broader alliances such as Oneworld
As mentioned in the introduction, brands, like people, are known by the company they keep, so the main disadvantage of co-branding is the risk of being tied to partner brand that either has a negative development arise or becomes less of an asset and more of a liability.
An excellent example of this is the long-standing relationship between Shell and Lego which dated back to the 1960s. Lego ended the relationship after a high-profile campaign by Greenpeace, who accused Shell of exploiting the Arctic recklessly to drill for oil. Lego could not risk association with a partner that was becoming more toxic as environmental concerns grow to an all-time high.
Nike was also quick to sever its ties with Lance Armstrong and his LiveStrong foundation after he confessed to doping.
If you are considering co-branding or have any questions about this area of brand strategy, drop us a line.