Co-branding is one of the most common marketing strategies in which two or more companies with different brand names and even different business areas merge with each other and under an independent name or a subset of each other. They work together to increase market share, marginalize competitors, and specifically increase productivity and sales.

In this strategy, each brand shares its identity with other brands to create a hybrid brand with the help of logos, brand identifiers, and brand slogan and purpose. The main goal of co-branding is to combine market power, increase brand awareness, positive associations, increase market share, etc. It can also make a product less prone to copying and thus strengthen the product’s foothold in the market.

Important points of Co-Branding

Co-branding is a marketing strategy in which multiple brands team up to achieve common goals. Co-branding can increase the reputation and credibility of two or more brands depending on the strategies employed. Four distinct strategies such as market penetration, global branding, and brand strengthening and brand expansion are among the goals that usually compel companies to co-brand.

Understanding Co-branding

Co-branding is a useful strategy for many businesses looking to increase potential customers, profitability, increase market share, promote customer loyalty, improve brand image, perceived value, and save on visible and hidden costs. Many different types of businesses, such as retailers, restaurants, automakers, and electronics manufacturers, use co-branding to create synergies based on each brand’s unique strengths. Simply put, co-branding as a strategy seeks to gain market share, increase revenue streams, and capitalize on increasing brand awareness for customers.

Co-branding can be created by two (or more) parties who consciously decide to collaborate on a product. Also, the merger of companies can be used as a way to transfer the brand name associated with a well-known manufacturer or service provider to a company and brand.

A co-branded product is clearly narrower in terms of audience than a broad, single-brand corporate product. A product derived from co-branded companies presents a more specific picture.

Companies should therefore consider whether co-branding can bring benefits or alienate customers who are used to a single name with an independent identity!

Accordingly, companies should carefully select their business partners for co-branding. As much as a company can benefit from a relationship with another brand, it may also be exposed to significant risks. An ideal strategy is to slowly roll out a co-branded product or service, thereby giving the market time to consider it.

Co-branding strategies

According to senior branding and brand management experts, there are 4 common strategies for joint branding.

Market Penetration Strategy: A conservative strategy that seeks to maintain the existing market share, brand names of the two merged companies.

Global brand strategy: seeks to serve all customers with a common global brand.

Brand Strengthening Strategy: Using a new brand name to increase brand strength and marginalize competitors.

Brand Development Strategy: Creating a new brand for use only in a new market.

Co-Branding vs. Co-Marketing

Co-branding and co-marketing are almost similar concepts, as both involve partnerships between brands seeking to enhance marketing activity, but differ in form and execution. Joint marketing aligns the marketing activities of two organizations but does not lead to the creation of a new product or service. But co-branding is based on the design and manufacture of a new or developed product.

Disadvantages of co-branding

Organizations must be aligned with each other’s goals, strategies, vision and public profile. Otherwise, collaboration can become too complicated and result in a product or marketing campaign that is confusing and ineffective. If the organizations cannot cooperate well with each other, or if the brands and members of the organization do not cooperate, this integration will fail.

Another disadvantage of joint branding, especially between organizations that are in the same industry and do not have many competitors. Eliminating market drivers, reducing creativity in product production, concentrating power, not creating opportunities for new competitors to enter, and monopoly production. Although some organizations may want this integration, the control policies that are usually announced by the government should prevent this work or associate it with executive restrictions.

The most important co-branding in the world

In 2016, Apple and Nike introduced Apple Watch + Nike. The integration of exclusive Nike sports bands with the Apple Watch Series 2, which has GPS, a twice as bright screen, water resistance and a powerful dual-core processor, was the output of this co-branding. In 2012, Red Bull and Gopro They teamed up during an event called Stratos, in which Australian skydiver Felix Baumgartner jumped from a helium balloon 24 miles above the Earth. During the event, Baumgartner broke three world records and received numerous media recognitions. The event was considered a success for all teams.

In 2020, in a special collaboration with Ferrari, ICIC Bank introduced the exclusive Ferrari credit card. This card offers special discounts on the goods of people who are loyal Ferrari customers through the Ferrari online store. In addition, users can access a 15% discount on the entrance ticket to Ferrari World in Abu Dhabi.

The co-branding of Harley-Davidson and Ford from 2000 to 2011 was highly praised. However, there is a clear reason why this merger makes so much sense. Both brands have male personas who are over forty years old and have a significant income level. That means they could buy both new trucks and motorcycles for transportation. In addition, Harley-Davidson and Ford are both big names that have been trusted in the automotive world for decades.

In 2013, the famous American singer Kanye West signed a contract with the sports brand Adidas to create a line of shoes. The result was a billion-dollar business that became world famous under the Yeezy co-brand.


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