Cobranding Framework PDF

Group 7: Matteo Comi 10727487 Maria Dotti 10737170 Jihan El Zahir 10709267 Maria Sofia Giordano 10765324 2 + 2 = 5? A FRAMEWORK FOR USING CO- BRANDING TO LEVERAGE A BRAND By Lance Leuthesser, Chiranjeev Kohli and Rajneesh Suri IND...

Group 7: Matteo Comi 10727487 Maria Dotti 10737170 Jihan El Zahir 10709267 Maria Sofia Giordano 10765324 2 + 2 = 5? A FRAMEWORK FOR USING CO- BRANDING TO LEVERAGE A BRAND By Lance Leuthesser, Chiranjeev Kohli and Rajneesh Suri INDEX 01 Definition of co-branding & why it exists 02 Elements of co-branding 03 Theories for customers’ perceptions 04 Co-Brading strategy game 05 Framework for co-branding strategies 06 Conclusions 2/25 WHAT DO WE MEAN WITH CO-BRANDING? Paper definition It is the combination and retention of two or more brands to create a single product or service. Why is this definition used? Co-branding involves the creation of a single product using two brands. It presents an alternative line and brand exstentions for achieving growth through new product development. 3/25 WHY DOES CO-BRANDING EXIST? It’s an alternative for developing new products. It is difficult to estabilish a unique position for new Successful brands provide quality 01 03 products. assurances to consumers and can be leveraged to introduce new products. 02 The risks inherent in estabilishing new brands are high. 4/25 WHAT CAN YOU NOTICE HERE? 5/25 ELEMENTS OF CO-BRANDING The product may be owned by Adequate reward for both 1 3 parties to keep the one or both brands. relationship going. Usually a primary brand The market response to a co- contains the secondary brand. 4 2 brand depends on consumer perceptions rather than the In some cases the secondary legal or financial structure brand is an ingredient. This behind it. means that is not marketed as a separate product. 6/25 7/25 IT’S YOUR TURN! 2716 9470 https://www.menti.com/altxmqdz1wqa 8/25 THEORIES FOR CUSTOMERS’ PERCEPTIONS Customers’ perceptions of a co-brand are influenced by their perceptions of the two parent brands and vice versa. How consumers reconcile their attitudes towards co-branded products? Cognitive consistency Information integration It implies that consumers align their It suggests that when new attitudes toward a co-brand by information is received, it is averaging their perceptions of the processed by the consumer and parent brands to maintain internal integrated into existing beliefs and harmony. attitudes. 9/25  CO-BRANDING STRATEGY GAME Pick-up your company!. Jaguar: A luxury automobile brand known for its elegant design, premium quality, and high-performance vehicles, symbolizing status and sophistication Coca-Cola: One of the most iconic beverage brands in the world, renowned for its refreshing drinks, strong brand equity, and universal popularity. Godiva: A luxury chocolate brand renowned for its high-quality, rich, and indulgent confections, symbolizing sophistication and elegance. Delta Airlines: A major global airline known for its extensive network, exceptional customer service, and commitment to providing seamless travel experiences. Toyota: A global leader in reliable and affordable automobiles, recognized for its innovation, efficiency, and broad market appeal. Slim-Fast: A leader in weight-loss solutions, offering meal replacement shakes and snacks designed to help customers achieve their health and fitness goals. NutraSweet: A sweetener brand that became widely recognized for its use in low-calorie beverages and its association with health-conscious alternatives. American Express: A premium financial services company offering high-value credit cards and exclusive rewards programs for affluent and business customers. Why did you choose that company as your co-branding partner? What are the potential synergies between the two brands? 10/25 HOW CO-BRANDING CREATES VALUE Key Mechanisms in Co-Branding Fit as a Critical Success Factor Brand Equity Transfer: Product Fit: Stronger brands can enhance the credibility and appeal of The features and attributes of the two brands must lesser-known or newer partners, increasing consumer trust complement each other for the co-branded product in the co-branded product. to deliver clear value. Complementarity: Co-branding leverages the unique strengths of each partner Market Fit: brand to create a product that combines desirable attributes The target audiences of both brands should be from both, offering enhanced value to customers. complementary to maximize the partnership's effectiveness and ensure synergy. Market Expansion: Partnerships allow brands to access new customer bases or market segments that might have been previously out of reach. Any change in your previous Co-Branding strategy? 11/25 EXAMPLES OF THEORETICAL CONCEPTS Godiva + Slim-Fast Jaguar + Toyota Product complementarity Cognitive consistency Combines Godiva's indulgent image The pairing combines Toyota’s reputation for with Slim-Fast’s health-focused reliability, efficiency, and affordability with reputation, creating a product that Jaguar’s image of luxury and prestige. inherits desirable qualities from both Consumers align these contrasting qualities to brands (e.g., rich flavor + low calories). perceive the co-brand as a unique offering. American Express Coca-Cola + NutraSweet + Delta Airlines Brand equity transfer Market expansion Coca-Cola endorsing NutraSweet (a less Co-branded credit cards enable Delta familiar brand) transfers trust and Airlines to access American Express’s credibility to NutraSweet by association. affluent customer base, while American This boosts NutraSweet’s market Express benefits from Delta’s frequent acceptance. flyer program. 12/25 RISKS OF CO-BRANDING What risks do you foresee for each brand in your partnership? 2716 9470 https://www.menti.com/altxmqdz1wqa 13/25 RISKS OF CO-BRANDING EXAMPLES 01 Brand dilution If Godiva + Slim-Fast fails, Godiva’s premium Stronger brands face greater reputational harm if the co-branded luxury image could suffer more than Slim- product fail. Fast’s, as it is perceived as a stronger and more The weaker partner typically experiences fewer long-term effects. distinctive brand. 02 Competition risks Coca-Cola’s endorsement of NutraSweet A strong co-branding partnership can unintentionally elevate a boosted NutraSweet’s reputation to compete weaker partner into a competitor. in the beverage industry, potentially Ingredient-based or technology-sharing partnerships are especially threatening Coca-Cola’s market leadership. vulnerable. 03 Customer confusion Combining Godiva’s indulgence with Slim- When the brand identities or product messaging are misaligned, Fast’s health-conscious positioning might leave customers may struggle to understand the product’s purpose or customers unclear if the product is meant for value. luxury or health purposes. 14/25 A FRAMEWORK FOR CO- BRANDING STRATEGIES The matrix considers two key variables, Target market from which four strategies emerge: 01 REACHING IN Existing New 02 REACHING OUT Complementarity Extended Reaching up Reaching beyond 03 REACHING UP Core Reaching in Reaching out 04 REACHING BEYOND 15/25 Variables COMPLEMENTARITY Complementarity refers to how each brand contributes value to What it is: the co-branded product, assessed based on the overall benefits offered to the customer. Core complementarity Both brands contribute significantly to the essential benefits of the product. Target market The attributes of both brands are critical for the product’s core functionality. Existing New Requires a careful analysis of the attributes that customers perceive as both essential and meaningfully distinct from competitors. Complementarity Extended Reaching up Reaching beyond Extended complementarity Core A brand contributes value primarily through its image or reputation rather than Reaching in Reaching out directly enhancing the product's core benefits. Used to improve quality perception or prestige of the co-brand, especially when one partner is less well-known or perceived as weaker. 16/25 Variables TARGET MARKET The target market refers to the audience for the co-branded What it is: product, which may overlap with the existing markets of one or both partners or expand into new segments. Target market Market penetration The co-brand aims to strengthen its position in the existing market, Existing New targeting current customers of one partner. Complementarity Extended Reaching up Reaching beyond Market development The co-brand enables access to new markets for one or both partners. Core Reaching in Reaching out 17/25 Strategies Target market REACHING IN Existing New Complementarity Extended Reaching up Reaching beyond Core Reaching in Reaching out Increase market share in the existing market of the partner(s). High core complementarity, where both brands significantly contribute to the core benefits of the co-branded product. Focuses on penetrating deeper into the current customer base by adding value through the co-brand. Often involves ingredient or component co-branding, where one brand enhances the perceived quality or functionality of the product. Risks include dependency on the partner's brand, which may overshadow the primary brand if it lacks its own strong identity. 18/25 Strategies Target market REACHING OUT Existing New Complementarity Extended Reaching up Reaching beyond Core Reaching in Reaching out Access a new market by leveraging the partner’s strengths and extending the co-brand's reach. High core complementarity, where the co-brand combines complementary strengths to appeal to a broader or different audience. Often involves entering new customer segments or geographic regions that one partner has not previously served. Co-branded products target an expanded customer base by uniting two distinct brands' value propositions. Particularly effective in retail co-branding, where combining two services/products can cater to diverse customer needs. 19/25 Strategies Target market REACHING UP Existing New Complementarity Extended Reaching up Reaching beyond Core Reaching in Reaching out Achieve greater market penetration with an image-enhancement strategy. Extended complementarity, where the co-brand contributes with positive brand image, values and associations. Leverages brand image of parter, usually more affirmed, to enhance brand perception. Adds distinctiveness, but may lead to loss of control over it. Gaining widespread use online, as sellers rely on trusted branded services to ensure secure transactions. 20/25 Strategies Target market REACHING BEYOND Existing New Complementarity Extended Reaching up Reaching beyond Core Reaching in Reaching out Access new market while also leveraging partner’s positive brand image. Extended complementarity with the purpose of reaching both up and out. Partner operates in a different industry and is chosen for its strong brand. Particularly widespread in credit card brands (40-50% of credit cards are co- branded). Cross-industry collaborations allow expansion of target market for both brands. Accessing customer lists of partners is a strategic advantage to promote other products/services. 21/25 IT’S YOUR TURN! 2716 9470 https://www.menti.com/altxmqdz1wqa 22/25 TAKE AWAY POINTS Co-branding involves combining two or more brands; There are two different theories for customers’ perceptions: cognitive consistency and information integration; Strong brands boost trust in partnerships; Co-branding expands reach into new audiences; Complementary attributes attract diverse consumers. 23/25  THE 4 CO-BRANDING STRATEGIES REACHING REACHING REACHING REACHING IN OUT UP BEYOND Achieve greater Enter new markets by Achieve greater market By choosing a co- market penetration choosing a partner that penetration by choosing a branding partner by selecting a partner significantly enhances partner that brings a positive that brings both a that significantly the co-brand's core brand image and strong image and enhances the core value proposition and associations that, while not access to new value proposition of brings in a new essential to the core function customers. the co-brand. customer base. of the co-brand, significantly enhance the image and value of the co-brand. 24/25 THANK YOU FOR THE ATTENTION! 25/25