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Co-branding is a collaboration between two or more brands with the aim of marketing products and services to consumers. These brands form an agreement to release a joint product or service that connects their names and brand image. In order to help consumers identify this partnership, the companies may create a unique logo and use specific colour combinations that reflect both brands. The employees from the participating businesses merge their resources to connect to their audiences and attract a new base of customers. There are pros and cons that come with associating your brand with others and it is important that you first form an alliance with the second brand or company, it is also important to understand how co-branding can influence your brand reputation and financial resources.
Pros Of Co-Branding
Boosts Brand Recognition One of the advantages of associating your brand with another well-known business can boost the awareness of your company among consumers, which can lead to potential customers visiting your website to browse your catalogue or subscribing to your mailing list. With co-branding, you can make the most of the audience your collaborator has already established, helping you target new demographics for customers. On the other hand, your collaborator can also make the most of your already established audience. Increase Brand Loyalty A customer that is loyal to a brand and has consistently purchased products from the company is likely to continue even when you collaborate with another brand, because they look forward to new products. A co-branded product can interest your consumer base, providing something fresh for them to enjoy. Significant Profits With the introduction of a new product on the market, with the unique qualities from each brand, it will generate public excitement and lead to an increase in sales. Since both collaborating brands would have had a significant audience, the new product would have a more far-reaching audience range.Sign up to the Connect Nigeria daily newsletter
Share the Cost of Labor Co-branding marketing requires employees from all involved brands to contribute to making the collaboration a success. With an agreement, you have access to talented team members from companies besides your own, which alleviates tasks from your work schedule, because all hands would be on deck to make the collaboration a success. In addition, collaborating brands can share the risk and cost involved in marketing the product or service, this way both brands would benefit from the marketing process.
Cons of Co-Branding
Complicate Financial Process As the collaboration grows, the profits earned increase as well and as such, dividing the shared profits can be a difficult process. This is because, employees in one company might feel their shares are less significant than their partners’ are, then interpersonal conflict arises. This is why it is important to have in possession, all legal documents that clearly state how every brand involved receives compensation for their work. Contradictory Missions, Visions, and Values Two or more brands may not share the same vision and value and when they collaborate, it becomes a huge problem because each brand would love its values to stand out. If partnering brands share differing ethics, missions, values, and visions, the co-branding idea may fail as they would most likely have entirely different markets, and combining them may affect the brand’s image. Cause Confusion Consumers who don’t understand the branding partnership may be reluctant to make a purchase, which can affect the success of the joint operation. Another reason is that most times, two completely different brands may decide to collaborate, this makes consumers unsure of the purpose of the product, because it challenges their norms. To provide clarification and to have a successful collaboration, you have to be mindful of your brand and partner’s current inventory, and include common goals and values that can engage your customers from every side. Featured Image Source: Sprout SocialGot a suggestion? Contact us: editor@connectnigeria.com