4Chapter-4.pdf

Chapter 4 Co-Branding Co-branding (also called dual branding or brand partnership) – occurs when 2 more well known brands are combined in a business offering. Co-branding is an effective way for companies to...

Chapter 4 Co-Branding Co-branding (also called dual branding or brand partnership) – occurs when 2 more well known brands are combined in a business offering. Co-branding is an effective way for companies to combine power, often leading to increased brand visibility and profits and reduced individual costs and risk. Many companies use this methodology to create valuable products and reach new consumer markets. If you're a marketing and business professional, it may be beneficial to understand this essential marketing concept. Co-branding, also known as brand partnership, is a marketing strategy in which two or more businesses join together in an alliance for the mutual benefit of all parties. In this agreement, partners pool resources like expertise, technology and funding to create a new product or service that provides special value for customers. This offering typically has its own unique brand name and logo. It's common for brand partnerships to occur between companies with similar values, missions and target consumer markets. Successful co-branding campaigns may reward partners with increased profits, enhanced reputations and a larger customer base. This strategy can also be more financially feasible than other marketing efforts, as all partners share the risk of loss when entering into this agreement. Co-marketing VS. Co-branding Co-marketing occurs when two firms align their promotional campaigns without necessarily creating a new, physical product or service. For example, a music streaming service might agree to co-market with a vehicle manufacturer. These partners may use a commercial to advertise both the functionalities of the music streaming service and the quality of the vehicle’s sound system. In contrast, co-branding is the process of partnering with other businesses to develop a new brand in the form of a product or service. For example, a candy brand might partner with an ice cream company to create a new candy-flavored ice cream bar. When business leaders decide to co-brand with each other, they share ideas and resources to develop a new product or service and market it effectively to consumers. Brand – according to AMA it is a name, term, sign symbol or design, or a combination of them, intended to identify the goods and services of seller or group of sellers and to differentiate them from those of competitors. Important reasons for a franchisor to develop a brand image 1. Market Identity – Consumers are interested in knowing that the brand represents a certain offering in terms of quality, service, value, price level, prestige and even cleanliness. 2. Customer Loyalty – Individuals have a tendency to identify brands with the product that they enjoy and prefer. 3. Brand Identity - An advantage that may large franchisors have is that they have been able to develop a brand identity among franchisees as well as customers. 4. Customer demand – Customers still have a tendency to repeat their purchase decisions. 5. Values – A brand can stand for the value that is being received. Advantages of Co-branding 1. Brands can share the risk 2. Brand strengths 3. Bigger sales income 4. Customer would trust the product more. 5. Reduced Costs 6. Reduced Administration 7. Common Advertising Disadvantages of Co-branding 1. Brand strengths 2. If the companies don’t share the same missions and visions, composite branding is a no- go. 3. Different Franchisors 4. Costs 5. Royalties /mytcanta2024