So, in the world of branding, cobranding is like a partnership, but it’s not a ’till death do us part ‘kind of deal. It’s more like a ‘let’s work together on this one thing’ arrangement.
Cobranding is not just a partnership but a productive way to boost sales and grow your brand. By teaming up with another brand, you can scale your business, grab more attention, and attract more eyes, increasing brand awareness and sales.
Let’s evaluate what is involved in cobranding and preview the cobranding strategy.
What Is Cobranding? Define Cobranding
Cobranding is the association between two well-known brands. Together, they create a product that benefits both companies.
They provide harmony and are a powerful way to grow your business and boost brand awareness.
It is a powerful strategy in which both can obtain resources, form identities, and create a brand story to create new products with logos, colors, and more.
Basically, cobranding involves sharing resources, technologies, expectations, and client base.
Benefits Of Cobranding For Business
Cobranding can benefit both businesses by increasing visibility capability and awareness.
It Helps To Expand Reach
Cobranding has proven to be the most effective way to expand a brand’s reach. It merges the audience of both brands, thus opening the slot for more businesses.
It Helps To Increase Exposure
Cobranding is most effective in increasing brand exposure because experimentation and entering a new industry eventually boost the brand’s exposure.
It Helps To Make More Buzz
Nothing creates more buzz than a partnership. Cobranding creates a lot of noise, and that noise transforms into sales.
It Provides Expertise and Market Size
When you perform cobranding, you eliminate the hassle of attaining and employing an expert team. Cobranding leads you to collaborate with the experts of the other brand.
It Helps To Build Loyal Customers
Cobranding is a long-term friendship; if your partnership proves helpful, you could even lure customers and build loyalty among them.
It Helps To Establish Credibility
When you associate yourself with another reputed brand, your brand flourishes because its reputation and authenticity resonate with you and favor your credibility.
It Helps To Reduce Risk And Cost
Cobranding reduces the cost by half because you don’t need to promote your product from the beginning, and it reduces the risk because you don’t start from the beginning or are alone in this.
If you somehow fail, you won’t be alone in carrying the loss, and it will impact your reputation and be divided on both sides.
By cobranding, you save a ton on marketing because you have a unique position and identity. Also, all the costs are divided between the two companies.
Drawbacks Of Cobranding On Business
Apart from the numerous benefits of cobranding, there are also many drawbacks.
It Gives Birth To Financial Conflicts
While cobranding can save a lot on marketing, it can also become the root of financial conflicts because the partnership is uncertain.
The chances of the product failing are more significant than the chances of success, and working with another reputed brand can cost a lot of money.
Mainly because they are already established and have revenue to spend, unlike you, you might have a limited budget for the product.
Also, profit sharing is controversial and can get dirty, so it’s advised to protect your contract through legal means. Ensure straightforward negotiations and reread the terms before signing the contract.
It Reeks The Lack Of Synergy
Many cases of cobranding fail because the product is a success. Everything is aligned and suitable, but there is a tassel or awkwardness between the companies.
Many try to cover it, but eventually, the negative energy comes over the product and impacts the product’s and service’s vibe.
Also, many present-day companies have a dark, controversial, or disastrous past, so it is advised to research the background of the other companies.
Because their bad reputation might not impact themself broadly but it will surely tarnish yours.
It Might Shade Your Brand Identity
The purpose of cobranding is to benefit both companies mutually. If it favors only one company and not both, it’s a flawed collaboration.
It Will Confuse The Audience
While it’s great to experiment, if you both have different audiences, there is a chance that the audience might get confused and end up leaving the brand.
It Disturbs The Representation
Every brand has its way of getting customers, engaging them, and communicating with them. A fluctuation in tone could disturb the brand’s representation.
It Ends Up In Loss Of Values And Interest
Ensure the values and interests of both companies are aligned; otherwise, you both will lose the brand’s primary motive and values.
Levels Of Cobranding
The levels of cobranding are basically the purpose or intention of cobranding. We call them levels because they state the limitations of the partnership.
Level 1: At this level, you associate yourself with other companies to explore more industries and gather more customers for your brand.
Level 2: In this level, you partner with another brand to expand your market share, form a lasting friendship, and elevate brand loyalty and equity.
Level 3: At this level, you can gain a global strategy, promote an international cause, and build a history.
Strategies of Cobranding
Let’s preview the types of cobranding strategies.
Joint Venture Cobranding: In this, multiple brands come together to form a distinct entity that helps them develop, produce, and market.
Cooperative Cobranding: In this, multiple brands only work together and promote their offerings.
Geographical Cobranding: In this, brands partner globally, coming from different regions across the globe. This way, they can market in each other’s industries.
Ingredient Cobranding: In this, you form a partnership based on compatible ingredients or components to match with your fellow company.
National to Local Cobranding: In this, significant brands partner with small local brands. This funds local businesses and loyalty and praise to the big-scale brand.
Composite Cobranding: Well-established brands combine to create a strong marketing strategy that helps retain old customers and engage new ones.
Multi-Sponsor Cobranding: In this, one or two companies come together to share knowledge, technology, sales, and promotional events. I boost reputation and recognition.
Sponsorship: In this, both companies sponsor events, meetups, teams, and projects to leverage the combined resources and exposure.
Product Endorsement: In this, the company hires or asks celebrities or influencers to market their product.
Critical Tips For Cobranding
Cobranding is a daunting task that requires a great deal of energy and resources. These tips will help you strengthen the branding process.
- A clear brand message can rule out all misunderstandings.
- Create complete campaigns that could promote the visibility of both brands and their collab.
- Communicate realistic expectations and standards.
- Practice brand management to ensure a practical and beneficial agreement.
- Target your audience.
- Analyze the level of competition.
- Understand the need for your product in the market.
- Monitor brand size and scale and perform branding according to it.
- Enhance the brand appeal to elevate visibility.
How To Find Brand Partners?
You can easily find cobranding partners by searching for complementary brands. You can analyze the audience, spot their interests, and choose the brand accordingly.
List potential brands that spark your audience’s interest and approach them differently. You could also approach a partner for your brand.
Make a legal agreement that enlists the benefits for both companies and thoroughly read the contract before signing it.
Difference Between Cobranding And Co-Marketing
Cobranding is a branding strategy to launch new products or services together. The main motive of cobranding is to introduce an alliance between two brands.
Co-marketing is a marketing strategy that helps to market a product by running multiple marketing campaigns, boosting the halo effect.
Forms Of Cobranding
Five primary forms of cobranding are the most used and most effective.
- Cobranding vs. joint product
- Communication-based cobranding
- Cobranding vs. content marketing
- Cobranding vs. co-marketing
- Product based cobranding
Cobranding Examples
Some famous examples of cobranding are given below
- Taco Bells and Doritos made Doritos Taco Shells.
- Apple and Nike made Nike+.
- Cover Girl and Lucasfilms promoted Star Wars in 2015.
- Starbucks and Spotify made custom playlists for Starbucks.
- Apple and Mastercard made Apple pay.
Conclusion
In short. Cobranding is a fantastic tactic for boosting a brand’s visibility, awareness, business, sales, and reputation.
What’s fun about cobranding is that it, at the time, did not benefit only one company but two of them.
For further consultation, you can contact us!
Explore More:
Types of Branding and How It Works for Your Brand?
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