What is Co-Branding?

Co-branding is a business strategy that involves the establishment of some type of working relationship between two or more brands. In some cases, the application of this type of branding activity has to do with the creation of different brands in the same company. At other times, co-branding is focused on creating a connection between two well-established brands that are owned and produced by two different companies.

When most people think of co-branding, the first thing that comes to mind is a situation where two different brands of products are associated with one another. This type of relationship can then be used to jointly market both products to the same consumers, effectively attracting the loyal customers of one product to the other. For example, the producer of a particular ice cream brand may work with the producer of a particular soft drink to entice consumers to purchase both products as a way of making the perfect ice cream float.

Establishing connections between products that can work together in some manner is a promotional strategy that has led to all sorts of innovations in co-branding. Soup companies have paired with dairy producers to encourage the creation of party dips using dried soup mixes and sour cream. Fast food chains have forged ongoing promotional campaigns that spotlight the availability of specific soft drinks. Even furniture manufacturers sometimes choose to use a co-branding strategy by teaming up with producers of household textiles like carpeting and draperies. In all instances, the goal is to associate the two brands in the minds of consumers in such a way that the sales of each brand are increased significantly.

Along with this type of joint venture co-branding activity, the same general principle can be employed within a single company. Same-company co-branding can involve a process where the business creates two or more brands that are sold within its retail outlets, but appear to be products by different companies. This is sometimes done in order to circumvent the perception by some consumers that store or house brands are inherently inferior to name brand products. As an example, a supermarket may carry two apparently different brands of canned green beans, when in actuality the supermarket chain owns both brands

Fast food chains have also begun to use co-branding, as well as sharing retail space. By employing co-location as part of the strategy, the two chains can share facilities like dining rooms and help minimize some of their joint business expenses. At the same time, they attract customers who enjoy the ability to order food from two different menus under the same roof, increasing the possibility of groups of customers choosing them rather than a chain operating alone.

Co-branding can take place on a local level, or involve two or more national brands. It is even possible to make use of this type of branding strategy on an international level. Increasingly, electronics and telecommunication firms are making use of this type of marketing approach, making it possible to pool resources and reach consumers that otherwise would have never been interested in either brand.