Did you ever hear about co-branding? Certainly. It’s a business strategy where more than one brand creates a new product together.

Rao, Qu, & Ruekert (1999) said that this strategy allows brands to benefit from each other’s market by using the unique attributes of each company that are attractive to new customers.

We can take the example of the association between the brand Adidas and Stella McCartney. They created a new range of sports clothes.

This collaboration gives real benefits for both brand by attracting new customers from Stella McCartney able to pay a high price for these “original” items.
In this co-branding example, the brand Stella McCartney helps Adidas to offer a feminine, elegant and casual collection and Adidas helps the brand Stella McCartney with their notoriety for the technical aspect of the sports products. So Bill Sweeney, a project manager at Adidas said that this collaboration helps to create « products that are both efficient and nice ».

And after the brands can use their social media to promote their range of products, like here on the Instagram page of Stella McCartney as we can see in this post:

And you can find the products on both websites just here:

https://www.stellamccartney.com/fr/adidas_section

http://www.adidas.fr/adidas_by_stella_mccartney

 

Another good example of co-branding is Rolland Garros, the French Open and a French brand of underwear, Le Slip Français. They create together a unique swim short with the colors of both brands. For this product, they even create a new common logo with both names of the brands. The sales went very well because of the trend of the Made in France. And it helps both brands reaching new customers from the other brand.

 

The brands need to be aware that the perceived image fit is really important for the success of the co-branding strategy. This perceived image fit would play a huge role in the consumer evaluation (James, 2005).
Also, the reputation of the new product can be damaged if the alliance is made with a brand that has lesser quality than the other one, in this case, the consumers won’t buy the product even if they usually buy products from one of the brands.

 

For your record you can found here 6 examples of great co-branding:

http://altitudebranding.com/6-examples-great-co-branding/

 

Advantages of co-branding

We can found many advantages to co-branding. For example, the loyalty is shared between the two brands, as a result of their collaboration the loyalty of the consumers to one brand is also extended to the other brands.
The companies also shared their reputation, the costs and the technology to get better products.
Co-branding also helps brands in increasing sales, when entering a new product to the market it has a wider customer range due to the loyalty of consumers from all brands and that leads to an increase in sales.

 

Disadvantages of co-branding

Sometimes when a consumer is used to a specific brand, it can be confusing when the brand is collaborating with the other one. The client is willing to buy a product from the specific brand and if he is not familiar with the other brand it can create confusion or an apprehension and the consumer may fail to purchase this new product.
Also, if a small company is collaborating with a well-known company, the small one may not be noticed and lose the personal image of the brand. Anyway, a big company can be damaged too. Loyal customers of a well-known company can be confused by their collaboration with a small brand and this may affect their buying decision.
Finally, the brands may share the same values, missions, and visions if they don’t want the product to fail.

 

Find out more about the pros and cons of co-branding just here:
https://marketingwit.com/pros-cons-of-co-branding

– Brighton University Student

 

References

 

Akshay R. Rao, Lu Qu, & Robert W. Rueker, (1999). « Signaling Unobservable Product Quality Through a Brand Ally ». [online]

https://archive.ama.org/archive/ResourceLibrary/JournalofMarketingResearch(JMR)/Pages/1999/36/2/1877769.aspx [Accessed 3rd January]

 

Alexandre Bailleul, (2016). « Le Slip Français s’associe à Roland-Garros pour une collaboration « culottée » ». [online]

http://www.sportbuzzbusiness.fr/le-slip-francais-sassocie-a-roland-garros-pour-une-collaboration-culottee.html [Accessed 4th January]

 

DongHun Lee, Michael Cottingham, Demetrius Pearson, Soon-Ho Kim & Jungkun Park (2016). « Collaborative strategy in sports industry: team co-branding ». [online]

https://doi.org/10.1080/02642069.2016.1255727 [Accessed 3rd January]

 

James, D. (2005). « Guilty through association: Brand association transfer to brand alliances ». Journal of Consumer Marketing [online]

 

PR Over Coffee, (2017). « The pros and cons of brand collaborations ». [online]

https://provercoffee.wordpress.com/2017/04/07/the-pros-and-cons-of-brand-collaborations/ [Accessed 5th January]

 

Vladimir Djurovic, (2009). « Le Co-Branding, une formule gagnante ». [online]

http://www.marketing-professionnel.fr/parole-expert/co-branding-marques-strategies-coopetition.html [Accessed 4th January]