Co-branding

Co-branding

 

Definitions

Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy.Co-branding refers to a marketing arrangement where two different brands join forces to create a product or service indicative of both their identities.

 Meaning

Co-branding, co-partnering or dual branding is the act of using two established  brand names of different companies on the same product. It has made inroads into nearly every industry, from automotive and high-tech Internet companies to banking and fast food. Many well-known firms chose this marketing strategy in order to draw new customers, to increase the  brand awareness, to support the customer loyalty or to win some other individual advantages offered by the partnership. The companies are very often following co-branding strategy only after realizing that the traditional marketing practices are exhausted and are no more capable of delivering a distinct brand benefit that they should have. This research paper outlines the most commonly used market phenomena called co-branding and then look in to issues related to strategies and prerequisites for a successful co-branding strategy.

Examples

 Citibank co-branded with MTV to launch a co-branded debit card. This card is beneficial to customers who can avail benefits at specific outlets called MTV Citibank club.

SBI Card and consumer electronics firm LG Electronics India announced the launch of the LG-SBI card. This is the country’s first co-branded credit card for the consumer appliances industry and can be used at more than 2 lakhs.

Andhra Bank and ICFAI (Institute of Chartered Financial Analysts of India ) University are using the strategy of co-branding.

IRCTC(Indian Railway Category and Tourism Corporation limited) and SBI card has launched its first even frequent traveler program and co- branded credit card- the SBI Railway Card.

Types of Co-branding

Co-branding is of two types: Ingredient co-branding and Composite co-branding.

1. Ingredient co-branding implies using a renowned brand as an element in the production of another renowned brand. This deals with creation of brand equity for materials and parts that are contained within other products. The ingredient/constituent brand is subordinate to the primary brand. For instance – Dell computers has co-branding strategy with Intel processors. The brands which are ingredients are usually the company’s biggest buyers or present suppliers. The ingredient brand should be unique. It should either be a major brand or should be protected by a patent. Ingredient co-branding leads to better quality products, superior promotions, more access to distribution channel and greater profits. The seller of ingredient brand enjoys long-term customer relations. The brand manufacture can benefit by having a competitive advantage and the retailer can benefit by enjoying a promotional help from ingredient brand.

2. Composite co-branding refers to use of two renowned brand names in a way that they can collectively offer a distinct product/ service that could not be possible individually. The success of composite branding depends upon the favourability of the ingredient brands and also upon the extent on complementaries between them. For example Citibank tied up with MTV to launch a co-branded debit card. The card offers customers benefits at certain outlets called MTV Citibank Club. This co-branding is successful when the brands coming together really complement each other in the new offering.

Co-branding

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