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What is Co-Branding?
Simply put, using two or more brand to create a new product or brand is called co-branding. In a co-branding arrangement individual brands complement each other and help each other achieve their aims. Also, there should be proper synchronization between the individual brands and the new brand, otherwise the ingredient brands run the risk of diluting their existing brand image. An example for co-branding would be Nike and Apple bringing music and sports together by developing the Sports Kit, a wireless system that allows shoes to talk to an iPod.
Types of Co-Branding
Broadly speaking there are two types of Co-Branding:
- Ingredient co-branding: this is an arrangement where a popular or well known brand is utilized as an ingredient in another well known brand’s product. For example, Dell has a co-branding strategy with Intel processors. Gillette M3 Power comes bundled with Duracell batteries. Ingredient co-branding improved the quality of the resultant product. But the ingredient brand should be either well known or protected by adequate patents, or else, it runs the risk of being overshadowed by the primary brand.
- Composite Co-Branding: Where two or more brands come together to create a completely new product using the capabilities of both. 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.