Co-Branding | Advantages & Disadvantages

COBRANDING

In late 1990s and early 2000s, many of us had this thought of a cricket team with Indian batsmen and Pakistani pacers. The thought of how brilliant a team would it be if it had Sachin, Sourav, Sehwag and Wasim, Waqar & Shoaib Akhtar.

So what we were hoping for was a “new product“ – the Indo-Pak cricket team which was created by “two different brands” – the Indian Cricket Team and the Pakistan Cricket team thus creating a strategic alliance which benefits both. This is exactly what “Co-Branding” is!

Cobranding is the coming together of 2 or more brands in a partnership to create a product or to have a common promotional event.

E.g. OYO Hotels partnering with Unilever for hygiene post Covid19.

As the Brand Matters puts it – the main purpose is to create the value equivalent to 1+1=3, that is to increase the cumulative market strength , profitability, cost savings and perceived value.

Advantages & Disadvantages of Co-branding:

Advantages:

• Increasing Customer Bases

• Creating New Audiences

• Creating Unique Experiences. For Example: Nike+Ipod Sports Kit.

• Increased brand awareness and TOMA – Top-of-the-mind-awareness.

• Sharing Risk or Losses.

Disadvantages:

• Cross Contamination; Association of Nike with Lance Armstrong’s Livestrong brand suddenly jeopardized due to doping allegations.

• Too many co-branding alliances can result in brand dilution.

Examples:

• PepsiCo-owned Lay’s has partnered with brands like Cadbury, KFC, Urban Company, Zomato, Spotify for special co-branded packs with a custom gratitude message thanking the brand and the unsung heroes. The name of the campaign is “HeartWork”.

• Music-streaming app Spotify partnered with ride-hailing app Uber to create "a soundtrack for your ride." This is a great example of a co-branding partnership between two very different products with very similar goals -- to earn more users.

Few more example of Co-branding: