Go Together!

Co-branding can be profitable when the two brands share similar business philosophies.

“Starbucks and Uniqlo brand co-branding” Starbucks and UNIQLO collaboration: An image of the model is printed on the cup and can be “dressed” by three different outfits on the coffee sleeves. It gives off the impression of dressing the model and combines the conservative, calm image of Starbucks, with the young, and energetic UNIQLO. (http://blog.naver.com/hs963135Redirect=Log&logNo=20171771069) (http://www.yeongkeun.com/works) (http://www.behance.net/gallery/AD-sleeve/3806483)

What is Co-branding?

Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy.

“The term ‘co-branding’ is relatively new to the business vocabulary and is used to encompass a wide range of marketing activity involving the use of two (and sometimes more) brands. Thus co-branding could be considered to include sponsorships, where Marlboro lends it name to Ferrari or accountants Ernst and Young support the Monet exhibition.”

If you read the textbook, you know there is information regarding co-branding of Samsung phone and Armani. Giorgio Armani, Samsung Electronics Co. Ltd., and Microsoft cooperated the new Giorgio Armani-Samsung smartphone, the most elegant and functional mobile on the market. This phone outstands due to the innovative blend of Giorgio Armani’s sophisticated style and Samsung Electronics’ cutting-edge technology. As Armani commented, a smartphone which is not only an elegant tool but also functional and useful, perfectly suited to every moment of one’s business and private day.

Other Co-branding examples: http://images.businessweek.com/ss/09/07/0710_cobranded/3.htm

Do you guys believe Co-branding is always efficient? Do companies always make a huge profit using this strategy?

Like everything in the world, Co-branding has both merits and demerits……

The Advantages and Disadvantages of Co-branding

Advantages

Disadvantages

Reinforcement: By co-branding multiple products a company can create a deeper impression on the public. A wider range of products can do more to enhance a particular brand image than just one product.Signaling: Co-branding is a way of signaling various forms of information to consumers. If a single product is associated with multiple brands, that signals the two companies have invested their good names in its success.Value: By combining multiple products under a single brand, a company is able to take advantage of its previous investment.

Increased Market: Co-branding can increase the visibility and market share of both franchises

Share Costs: Co-branding allows individual franchises to share promotional and running costs. This can be especially important with national franchise brands.

Share Reputation: Co-branding can allow franchises to share a reputation. Consumers generally develop positive associations with their favorite brands, and these can transfer to the co-brand.

Competition: A significant disadvantage for smaller businesses that have yet to fully establish themselves in any market. Larger competitors are able to leverage already popular brand names to new products and compete in a way that new businesses may not be able to answer.Confusion: For brands that are less well known, co-branding may create confusion. A consumer may be familiar with one brand and inclined to buy it, but then be put off by its mix with another that he or she is not as familiar with.Financial Issues: The need for a intricate joint-venture and profit-sharing agreement. Reaching an agreement on co-branding can be a time-consuming and complicated process, generally involving lengthy negotiations and complicated legal agreements.