The hippopotamus doesn’t go it alone as a species. In fact, in order to clean themselves, they partner with a tiny fish called a barbell.
Without the hippo, the barbell wouldn’t find food as easily. Without the barbell, the hippo couldn’t stay clean.
This symbiotic relationship is like co-branding, in which two or more companies team up to create a product or service.
Oftentimes, these unifications seem like no-brainers. Others leave us scratching our heads, as if we had just seen a 3,000 pound hippo let a five pound fish into its mouth for some dental work.
This article will guide you through the concept of co-branding, while giving fresh insight into the process, as well as dynamic strategies.
Even if you’re a scary, large animal, there’s a partner for you somewhere. Let’s find one for you.
What is co-branding?
Co-branding is a strategic agreement between two or more companies. This partnership is beneficial through the use of multiple brand names, logos, jingles and other identifiers. Co-branding often amplifies a product or service through the power of numerous brands.
“Synergy – the bonus that is achieved when things work together harmoniously.” – Mark Twain
Note that co-branding is different from co-marketing, which is an arrangement that benefits from two different brands unifying marketing efforts. Co-branding, on the other hand, aims to introduce a new product or service to the market.
It’s exciting to think of all the possibilities that come with joining up with another company. Here’s a more detailed look at why co-branding is so important.
An in-depth breakdown of why co-branding is valuable
The importance of co-branding isn’t always obvious to those involved. Here are some of the lesser-understood benefits to consider.
Has exponential advertising potential
There’s just something about a multi-branded product that causes a stir. Maybe it’s the fact that fans of both brands get a double-excitement waiting for the release.
Or, it might be because both have their own target markets that are combine in anticipation, amplifying brand awareness.
Whatever the reason, the buzz and self-promotion of these products is phenomenal and requires minimal effort beyond product-production. Being attached to two different brands gives fans and followers a lot more to talk about (twice as much, technically).
Many companies’ most successful ventures are co-branded, and a lot of this success came from customer word-of-mouth advertisement.
Can mask your brand weaknesses with other brand strengths
“Alone we can do so little; together we can do so much.” – Helen Keller
In a basketball game, there are both short and tall players.
The taller players usually have problems dribbling, while the shorter player has problems protecting the basket. However, since they’re on the same team, they mask each other’s weaknesses.
A co-branding, when done correctly, brings about the same potential. For example, if one brand is known for their musical understanding but lacks technical know-how, and another brand has technical skills, a collaboration hides the first’s tech limitations.
Eliminates a large chunk of risks involved
One of the main reasons these relationships are favorable is they cut down on common risks brands face when releasing new products and services.
Here’s an example to illustrate this: Imagine there’s a group of 100 people – ½ of them are familiar with Brand A, while ½ are familiar with Brand B.
If Brand A and B unite to release a product, the familiarity these 100 have with one or the other make it easier to make a purchase.
Similarly, if ‘A’ is known to make mediocre products, but ‘B’ is known to make exceptional products, this again makes it easier for a purchase.
Allows brands to jump into new markets
Let’s face it – some brands aren’t going to capture certain markets no matter what product they introduce. It’s just not possible due to differences in cultural values, location or ideals.
Sometimes, a brand’s customer locations are vastly different from another’s, allowing for a potential target market extension when partnered.
The most common barrier between breaking into a new market is the type of customer-base within a section. However, if it’s within reason (ie, not a candy company partnering with a toothpaste company), a partnership opens up new market possibilities.
There are a lot of positives surrounding these relationships. Let’s look at some of the most successful historical examples of co-branding.
Key examples to examine
1. Doritos and Taco Bell
This one is first on the list because of all the buzz it got (and still gets). As you’ll notice with all the examples I use, these brands already have something in common. In this case, the shared commonality is food products.
The product: If you aren’t already aware, in the 2010s, Taco Bell partnered with Doritos to create the ‘Doritos Locos Tacos’. This item used all the ingredients of a normal Taco Bell taco, only it added the flavorings of a Doritos chip for the shell.
The results: So, how well did this partnership work out? The Doritos Locos Tacos were Taco Bell’s most successful product launch ever, with 100 million selling the first ten weeks.
Other food brands even attempted similar partnerships and eating-synergies to capture the success of the new taco.
2. Michael Jordan and Nike
There are two main similarities between Jordan and Nike: athletics. Nike is committed to athletic gear, and Michael Jordan is a professional athlete.
The product: Almost anywhere in the world it’s possible to see a pair of shoes that have the logo pictured below. This silhouetted athlete is Michael Jordan, and the shoes are called ‘Air Jordans’ or ‘Nike Air Jordans’.
The results: Both Michael Jordan and Nike have made billions of dollars from this partnership. And keep in mind that this only includes direct purchases of the Air Jordan shoes. This doesn’t consider the fact that seeing Nike now makes customers think of Jordan and vice-versa.
3. Bonne Bell and Tootsie Roll
This is one of my favorite pairings in history because of the creativity and subtlety. Sure, it’s easy to pair two different foods together, or a celebrity with a product, but this took outside-the-box thinking.
The product: Bonne Bell creates the Lip Smacker product, a flavored lip balm. Tootsie Roll creates a chocolate bar. They teamed up in the 1980s to offer Tootsie Roll-flavored lip balm. It sounds weird at first, but the sweet flavor of the Tootsie Roll isn’t a stretch from the other Lip Smacker flavors offered.
The results: To this day you can find Tootsie Roll Lip Smacker on certain store shelves and online retailers. This partnership brought great exposure to both and cemented itself into vintage/retro fame.
4. Dairy Queen and Nestle
Dairy Queen is widely popular for their ice cream treats, especially the Blizzard, a cup of ice cream with special flavors. Nestle is also in the sweets business, putting out candy bars such as Crunch and ice cream products like the Drumstick.
The product: Combining the Dairy Queen ice cream with Nestle’s Crunch bar seemed like a no-brainer, creating a Crunch Blizzard. The concept was simple yet brilliant at the same time, putting chunks of the Crunch bar on top of the Blizzard ice cream.
The results: The Crunch Blizzard still exists and has even spawned further treat collaborations, such as the Drumstick Blizzard.
5. Apple and Mastercard
Apple normally sells products like phones, tablets and computers. Upon first glance, Mastercard doesn’t really fit into the equation.
However, Apple decided they wanted to create their own credit card. Mastercard took full advantage of the opportunity to co-brand and be a part of the process.
The product: The no-number Apple Mastercard. This unique payment option was one of the first ways to chang how people paid for things. The innovation and brand loyalty of Apple combined with the experience of Mastercard assured users this product was safe and effective.
The results: This concept gave iPhone users a chance to pay for items in a different way. It also increased security for these types of processes, which is a huge plus comparatively.
Potential downsides to consider
“It is far better to be alone, than to be in bad company.” – George Washington
So far, we’ve talked about the amazing benefits that come along with partnering up. Now it’s time to point out the potential negatives.
Remember that, even though there are some unfavorable aspects, this is true for all methods of branding. I’m not listing the negatives to discourage you. Rather, this gives you a chance to prepare for and avoid any pitfalls.
Watch out for the following co-branding issues.
Company culture clash
The resulting product or service created by a partnership isn’t the only thing to consider. Even if two brands come up with something creative and innovative, it can fall apart if their cultures don’t align.
This happens when brands have opposing values, a different brand image or don’t see eye-to-eye on certain issues. For example, if one felt strongly about the environment, but the other used plastic bottles, a co-branding would be illogical.
Not only could it cause friction between the two brands working side-by-side, it may also send the wrong message to their target markets.
Their baggage becomes your baggage
No matter how strongly you’ve built up your brand, it doesn’t take much for it to get knocked down. A co-branding has this potential, unfortunately.
If one brand is successful and in general good standing with their target market, working with a second brand may hurt them, especially if this other party brings baggage.
Whatever public issues the partnering brand brings to the relationship become yours. This includes things like past failed products and campaigns.
Money, money, money
One of the most complicated aspects of an agreement is the financial issues that come with it. This requires a lot of effort, planning and causes potential future problems.
Before any partnership happens, there are usually extensive hoops to jump through, documents to draw up and financial agreements to be made. This takes time and resources.
Also, just because a relationship is in good standing at the beginning of the process, doesn’t mean it will be later on. Things can get complicated very quickly, especially if one of the brands in the agreement feels like they’re being slighted.
The above downsides are pretty scary, but if you take the necessary precautions, a co-branding has enough upside to make it worth it.
Now let’s move into some helpful strategies.
Beneficial co-branding strategies
I came up with the following strategies to give you a clear path to success when considering your own co-branding.
Remember: Similar but different
“Individually we are one drop; but together we are an ocean.” – Ryunosoke Satoro
First and foremost: these partnerships won’t work if the two brands are too similar or too different – brand differentiation is still valuable here. A nationwide automobile repair brand has no business pairing with a bread brand. Apple has no business pairing with Microsoft. Gatorade shouldn’t team up with Powerade.
Co-branding is only effective when done with similar yet different brands. Here’s an example to consider:
Let’s say Nike decides they want to partner up with another brand to create excitement around their new shoeline. They team up with another athletic-performance goods giant, Adidas. This is a clear example of ‘too similar’, and sometimes leads to brand dilution.
Many Nike fans wouldn’t be interested in Adidas and vice-versa. Also, the product itself would likely fail. Both thrive at making shoes. Having them each create one together is a recipe for disaster.
Instead, imagine that Nike seeks out the brand ‘Cute Laces’ and works with them. Nike could build the shoe while Cute Laces adds a signature design to the laces. This shows why it’s so important to be similar (shoes and shoelaces) instead of the same (shoes and shoes).
Ask yourself, “what would this add of value”?
No one will be interested in buying a product simply because it has two brands they like on the label. There needs to be a reason for every co-branding, and this reason has to give value to the customer.
A helpful question to ask is, how would this improve upon the current product? Make sure your answer is more extensive than a gimmick.
Once you’ve determined the benefits, it’s a lot easier to break down the different factors to see if the idea works in the long run.
Create a structured, clear proposal
This is one of the most necessary parts of the entire co-branding process, as it ensures both parties get what they want out of the agreement.
You might have the most innovative, creative product in-mind, but if your proposal doesn’t relay that vision correctly, the other might decline.
Make sure that your proposal is clear and detailed. Lay everything all out on the table for your potential partner brand.
Next, let them know what you require going forward, and ask them to do the same. Finally, present a potential schedule to give them an idea of how long you plan on the partnership taking.
These strategies only work if you’ve done your research and have the necessary tools in place to succeed.
Taking the next step
Some pairings work, others do not. At the end of the day, your audience expects any brand relationships you form to work seamlessly. If you have to explain the partnership or product, chances are it’s not a good fit.
Consider all the positives that come from a successful co-branding. If you believe your brand has a chance to capture these potential rewards, make it happen!
Check out our complete branding guide to learn more.