The practice of collaboration between brands has been taking place for long. The term "co-branding" is relevantly new in the world of business. Brands or companies are looking for more innovative and creative ways to engage, indulge and grow their audience towards their brand or company to deal with the market saturation and competition.
Co-branding is a marketing strategy or tool where two or more brands companies come together into a partnership or a relationship to share their core values. The layman's terms,. The practice of inculcating the equity, strength, and market of distinct brands under an umbrella product or service is known as co-branding. There have been many theories and ideas to understand and evaluate how this strategy came into existence. One such view is the creation of new business opportunities due to the rapid development in Asia, Western and Eastern Europe, and parts of America in the past few decades. To capture the markets and exploit the opportunity, many companies got together to join resources. Co-branding is the strategy that strives to capture the synergism of combining two well-known brands into a third, unique branded product.
Advantages of co-branding
Co-branding can be defined as a collaboration or alliance between two or more brands or companies to leverage the brand equity, the reputation, and the audience of the other brands in the partnership. Typically, the collaboration is between brands or companies that share similar values or want to adapt or take advantage of the other brand or company's values. These alliances help them to establish their presence in the market and create a market position for themselves. Distinct reasons associated with brands or companies to co-brand are to increase the brand acknowledgement and recognition with the help of other brands or companies' popularity, enhance reputation, and change or modify reputation. This symbiotic relation is undertaken as a marketing tool to achieve brand equity, market share, brand awareness, customer base, customer base and perceived value.
Impact
The co-creation of products and/or services that take the best of both or all the brands or companies involved in the alliance is the essence of these partnerships. These partnerships can prove to be a solution where everyone benefits if they are done the right way. Ideally, the brands in association should be at the same power level for them to benefit off each other. In case where there is disparity in power, the one with more power might end up losing more than gaining from co-branding. The products and/or services involved in co-branding are more often products that have higher production expenditure if done individually by a brand or company.
