Last week, in “Brand + Brand = Success?” I began discussing co-branding and its benefits. This week, I’d like to bring some of last week’s theory to life by sharing a couple of co-branding stories with you.
Some years ago, the American Marketing Association produced a study with an interesting result. In a consumer survey on co-branding, 80 percent of respondents said they would be likely to buy a digital-imaging product co-branded by Sony and Eastman Kodak. However, only 20 percent of respondents claimed they would buy the product if it were branded by Kodak alone, and only 20 percent said they would buy the product if it carried only the Sony brand.
The Kodak/Sony example indicates the weakness, or lack of credibility, in each firm’s brand when considered separately. What it also illustrates is a brand synergy of potentially staggering dimensions. There’s no doubt in my mind that technology sector is where the really enduring and valuable co-brands of the future will develop.
Unfortunately, not all examples are as promising as the Kodak/Sony one. Take AT&T and British Telecom’s recent alliance, Concert. Launched on July 26, 1998, it was backed by $10 billion and two of the world’s most respected telcos. The alliance failed in less than two years and closed only months ago, leaving everyone doubtful about the value of co-branding and alliance ventures.
But before drawing any drastic conclusions, let’s review the three co-branding ground rules I discussed last week: The relationship has to provide equal value for all parties; the values of both brands must match; and your brand relationship has to be easily understood by you and your customers. In fact, your customers need to be able to understand your alliance or co-brand instantly.
Bearing this in mind, let’s consider the AT&T/British Telecom alliance. Do you understand what that alliance was all about? I don’t. Was it an attempt by AT&T to create a global telco network? Was it British Telecom’s way of creating a new global brand? Or was it a way to create new global products, such as global phone numbers? The answers you receive to these questions would depend on whom you asked. Everyone will have a different take on the alliance’s purpose. The reality, however, was that only a few products ever appeared on the global scene that would have indicated what the alliance was all about.
By now you probably would agree with me that co-branding has nothing to do with budget, the strength of the brands individually, or the size of the businesses concerned. But it has everything to do with synergy between the brands. A co-branding strategy or an alliance strategy needs to exhibit fundamental shared values at three levels:
- The functional value level: What does the brand partnership offer the customer?
- The expressive value level: What does the brand partnership says about its customer?
- The central value level: What do the brand partnership and the customer share?
If you’ve been able to forge an alliance for which you can find satisfactory answers to the above questions and if you believe the partnership achieves the three ground rules discussed last week, you’re way ahead of most co-branding attempts around the globe.
Co-branding might sound simple, because we’re familiar with and understand each of the brands involved in partnerships. But the wedding of successful brands doesn’t necessarily guarantee that the partnership will grow as a successful marriage. In many ways, brands are like people: They represent values and viewpoints. You know from the real world how difficult it is for married couples to reconcile their values and viewpoints and to stay together. Half of the world’s marriages break down, and all but 10 percent of brands fail to maintain their co-branding partnerships. So, without any doubt, there’s space for substantial improvement. And, needless to say, you’ll see substantial savings in your marketing budget if you marry the right brand the first time.
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