Co-branding is a marketing theory
by combining multiple brand names of products/services to compliment participating
company’s weaknesses. When effectively done, it’s a marketing effort that works
in synergy.
On online businesses, co-branding can
increase company’s products/services exposure to its target audiences when
smartly combined. It is an effective way to broaden an existing or new brand on
the Internet or offline marketplace. A McKinsey study has shown that
co-branding companies has proven growth in terms of revenue by 40%. Another result
by American Marketing Association some years ago also shown 80% consumers
responded that they are more likely to buy a digital imaging product co-branded
by Sony and Eastman Kodak. This has indicated co-branding practices are as good
as theory.
The objective of co-branding may
differ from companies, while one company may be interested to increase revenue,
the other may be interested to broaden brand recognition; to penetrate a new
market; or to introduce a new product/service. Whichever objective may be,
co-branding can be applied only in particular situation, with involved
companies should absolutely certain that his objectives coincide with the
co-branding opportunities or marketing campaign strategies suggested.
Also, this is true that not all co-branding
arrangements are economically and operationally feasible. There is no guarantee
that co-branding will succeed. The right mixes of synergetic partners are
crucial to a co-branding success.
A brand’s values are often
imprinted into the mind of consumers. Effective co-branding marketing execution
by leveraging on each other strengths and loyalty will eventually boost brand’s
confidence.
The ability to share and access to
broader customer base without business conflict will form a new relationship,
which may not be seen as a competition threats. In return, companies would
benefits by accelerating co-branded images and revenues.
Concept behind co-branding
strategy is to generate additional market share, it is ultimately to increase
revenue stream through consumer awareness by co-branding multiple brands.
Duration of a co-branding
promotion or strategy may vary depends on its marketing planning. It can last
as little as a few weeks or it can be strategically long-term. It is always
easier to gauge the success of short-term promotion as it is normally aimed for
short-term sales gain. However, long-term co-brand loyalty will be harder to
say.
As a
conclusion, to
paraphrase the power of co-branding, one plus one equals to three. We have
been hearing co-branding exist between business giants; can smaller players be more creative
and more strategic in terms of co-branding arrangement and promotion. In
theory, co-branding can be used as a new marketing channel for smaller online
companies to promote
their products online. But the question remains, has it been effectively
executed by smaller online players?
