Blog 8: Co-Branding

Hello, everybody!

How is everything going with you guys? I hope everything is all right. I am very busy lately, and in one of my presentations in my marketing class I decided to show an ad made by Budweiser along with UFC, this ad showed a MMA fighter, Anderson “The Spider” Silva, along with Steven Seagal. I am not here to try to explain why this commercial is so funny and memorable for me, as a huge Ultimate Fighting Championship fan, my goal in this post is to show the technique used in this ad, which is co-branding.

Co-branding has been used a lot as a marketing strategy to increase sales, however what in God’s green Earth is this? Well, you are completely right asking this question, and here I am to answer it. You must have seen some commercial on a TV or in a poster where there were two brands on the same ad, such as the UFC and Budweiser in the video above, therefore you know what is this technique; co branding is a marketing partnership made by two or more different brands to join forces to promote their products or services together. This technique is becoming more popular, because it can help the companies to combine their loyal costumers, their strengths and also share the promotional expenses. Each brand has the opportunity to move outside of their own costumer base, catching the attention of the costumers of other popular and well-known brand.

According to Chang, from the Journal of American Academy of Business, there are three different levels of co-branding.

• ·      Market Share: A company joins forces with another one to penetrate the market.
• ·      Brand Extension: Companies join forces in order to extent the brands’ current market share.
• ·      Global Branding: Companies try to achieve people around the world, by combining forces.

There are also different types of co-branding, companies can use ingredient co-branding, which is to use another companies’ products within your product, such as Dell computers with Intel processor, Pillsbury brownies with Nestle chocolate, among others.

Another type is cooperative co-branding that is when two companies join forces to create a new product, service or brand. One great example is Sony and Ericsson, because they joint forces to create Walkman and Cyber-Shot phones.

The last one is complementary co-branding, which is when two or more companies working together to encourage co-consumption and co-purchases, a great example of these methods is the Apple Store that sells Sennheiser’s headphones.

However, co-branding is not perfect, obviously there are some advantages, such as risk sharing, resource sharing, greater costumer trust in the product, technological benefits, among others. Nevertheless, there are some points that can be negative, such as loss of communication between the companies, negative feedback effects, and risk of brand equity dilution, among others.

Well, that was the post about co-branding; I hope you guys enjoyed this one. Feel free to leave a comment or a suggestion. As Arnold Schwarzenegger once said: “I’ll be back”, sooner than later I expect.

Thanks guys, so long and may the force be always with you,

Leo.

References:

https://www.youtube.com/watch?v=mR0jAp2Z-lE

http://ecx.images-amazon.com/images/I/51cMykFZmkL._SX425_.jpg

http://cdn2.gsmarena.com/vv/pics/sonyericsson/sonyericsson-w810-00.jpg

http://www.managementstudyguide.com/co-branding.htm

https://9to5mac.files.wordpress.com/2013/12/gallery-3.jpg

http://www.businessweek.com/smallbiz/content/jul2009/sb20090710_255169.htm