Brand + Brand = Success? Part 1

Is co-branding hype, or can it forge a path to brand stardom?

A McKinsey study saying co-branding ventures have grown over 40 percent indicates that co-branding is as much practice as it is theory. Do co-branded ventures really achieve the positive synergy participants seek? Or does only one brand end up the winner in these partnerships? Have any brands been winners at all?

Before sharing my opinion on what I believe works and what doesn’t, let’s briefly define the topic. This article doesn’t presume to make you a co-branding master in five minutes. Its purpose is to signal that there are dozens of co-branding categories, each representing challenges, experiences, and guidelines you should be aware of before developing your own co-branding strategy. “Co-branding” means more than joint promotion. The term covers several areas of branding. It also refers to joint ventures, alliance programs, ingredient co-branding, value endorsement co-branding, and complementary competence co-branding. Without wanting to deter you from reading on, it’s important to determine which category your brand promotions belong in. Here’s a quick introduction to two of the most popular categories.

In its purest form, co-branding embraces a collaborative venture designed to advance the interests of two or more parties in a considered, strategic fashion. Legally, the parties concerned are independent entities and their intention is to create something new — a product, a service, or an enterprise — the scope of which falls outside their individual areas of capability or expertise. The IBM/Intel, Diet Coke/NutraSweet, and BP/Mobil deals are good examples of pure co-branding. Don’t confuse alliances with co-branding. British Telecom and AT&T’s Concert, Star Alliance, and OneWorld are alliances. These collaborations all create new “master brands.”

Over 90 percent of co-branding ventures fail. Half go under because three simple rules were not observed. If you’re considering a co-branding relationship, take heed of these three ground rules. Successful co-branding must achieve equal value for all parties in any relationship; partner brands’ values need to match each other; and the resulting strategy must be easily understood by consumers.

Equal Value for All Parties

If the potential relationship doesn’t represent clear value for both parties, forget it. What’s more, forget everything about trying to fashion a better deal out of the arrangement than your partner’s deal. No relationship in which one of the two parties has a better deal has survived. This doesn’t mean one brand can’t be very well known and the other totally unknown. It means the benefit to both parties from the relationship must be equal.

Brand Value Match

The idea of two brands working together might seem perfect at the board meeting, but the reality may be impossible to implement if the participating brands don’t share values with each other. A co-branding partnership representing brands that are too different, that have no values in common, or that contradict each others’ brand images will be over before it’s started.

Easy to Understand

The brand relationship must be easily understood by you and by customers. If you can’t explain the value of the relationship in two lines, forget it. How would a customer understand the relationship if you can’t explain it simply?

If you believe you and your prospective branding partner can accomplish these three basic criteria, you’re on your way to a productive co-branding experience. There’s more to the co-branding story than just the beginning. Stay tuned. Next week, I’ll share real-world co-branding successes… and failures.

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