In the context of intense competition on the Internet among ecommerce companies which are looking for new ways to stand out and increase their geographical coverage, co-branding becomes an effective solution. This means that two or more companies can collaborate in such a way that they leverage on their strengths, their resources and consumers in order to co-develop new value propositions that will be appealing to consumers. Co-branding in ecommerce not only enhances the brand awareness and quality but also helps the business to expand its selling into various areas and sectors swiftly and effectively. This approach promotes creativity as it creates a synergy of the combined expertise and market impact of many brands to form products or campaigns that could not be created singularly. Thus, this blog post focuses on the analysis of co-branding as the concept that differs from co-marketing, and a discussion of the multiple advantages that come with its implementation, backed by pertinent real-life examples demonstrating the business opportunities that can be opened up if co-branding is employed for the purpose of expanding its market horizons.
What is Co-Branding?
Co-branding is a popular strategic venture where two or more individuals, organizations, or companies collaborate to launch a novel product, service, or marketing campaign, which benefits from the complementary capabilities and hegemonic positions of each participant. This type of cooperation enables brands to reach the desired audiences from the other brand, increase brand awareness, and perhaps develop a valuable product or campaign that would not have been possible to achieve if the two brands did not join forces. Thus, co-branding is not necessarily the mere uniting of logos or names, but rather the combined elements as values, advantages, and recognition of brands that joined together to produce a new value proposition which is unique and desirable. Therefore, co-branding partners can attain improved resource utilisation, operational efficiencies and risk management, increased market access, and customer appeal by combining their resources and consulting skills which eventually results in stimulating immense business growth while discovering new markets.
What’s the Difference Between Co-Branding vs. Co-Marketing?
Co-branding and co-marketing are terms that are used interchangeably but they have different connotations. Co-Branding entails establishment of a new product or service which is branded jointly between the two organizations. Both brands are equally involved as the owners of the offering share their logos, names, or identities as featured. Such kind of cooperation is characterized by the higher extent of synergy between the brands and the commitment to cooperation within a long term horizon. Co-branding is sometimes used interchangeably with co-marketing, which is a partnership between two firms with the purpose of marketing specific products or services. Such cooperation could be in the form of ad promotions, providing content to each other or providing products at a single promotional price. Co-marketing, on the other hand, is not the development of a new product but rather the use of each brand to promote the other.
Benefits of Co-Branding in Ecommerce
Co-branding is an ideal partner strategy where two or more brands work in unison to harness the synergy of their strength, resources and customer database. This approach is especially useful in e-commerce, where the competition is high and businesses are always searching for new strategies to address more consumers. Below are the key benefits of co-branding and how they can help e-commerce businesses tap into new markets:
- Expanded Reach:
Co-branding helps firms reach out to an even larger pool of consumers through the existing customer network of the other brand. Whenever two brands are associated with dissimilar customer base targets, they present an opportunity for one brand to pitch its products or services in another segment. For instance, a premium fashion brand can cooperate with the popular brand of fitness to appeal to each other’s customers, meaning that the market area of sales will extend and there will be more opportunities to sell. This increased exposure is especially useful for e-commerce businesses seeking new geographical or demographic territory without having to start the process from square one.
- Enhanced Credibility:
By relating with another strongly-credited brand, it is possible to increase the credibility of one’s own brand. It is common for consumers to consider that co-branded products are of higher quality or tend to be more trustworthy than those branded individually due to reputability of both respective brands. For instance, if two reputable brands come together and engage in a partnership, consumers’ attitude towards the brand will transfer especially if the two brands are compatible and consumers will have more confidence in other products from that brand. This added trust can be especially valuable for emerging or less-known e-commerce websites with the aim of gaining customer confidence.
- Shared Resources:
Perhaps the most tangible benefit of co-branding is the potential for sharing assets like marketing funds, tools, and knowledge. Through forming the partnership, the companies are capable of implementing larger and efficient promotional activities than they would do on their own. Such partnership can lead to relative control of costs which will benefit both the brands by achieving much more with less risks. This could mean joint advertisements on social media, promotional campaigns whereby two businesses contribute funds or jointly produce content taking advantage of what the brand can offer.
- Innovation:
One important benefit of co-branding is that it promotes the creation of new products or services that are a synthesis of all the skills inherent in the brands of the cooperating companies. This collaboration thereby enables the development of services and products that can be differentiated and therefore better positioned in the marketplace. For instance, a silicon valley based tech company getting into a deal with a fashion house will be capable of producing smart clothing range that consumers can simultaneously use while being fashionable, expanding the core consumers’ market. Thus, co-branding as an innovation strategy may help a business stand out from others and attract consumers’ attention, and their patronage.
- Risk Mitigation:
Co-branding benefits both brands in terms of risk as it ensures that brands divide the costs and responsibilities of positioning a particular product or entering a new market which entails certain risks for each brand. Through this partnership both brands can explore new concepts and regions together thus eliminating high risk levels of trial new ideas and markets. This shared risk can be especially helpful for e-commerce companies that need to expand to new geographic or product markets when they cannot afford to invest a lot of money for a definite outcome.
Examples of Successful Co-Branding
Such a relationship is one of the most successful marketing strategies for many large firms since, in addition to expanding into new segments and increasing brand awareness, it is easy to create new products that are attractive to the target audience. Below are three standout examples of successful co-branding initiatives that highlight the power of strategic partnerships:
Nike and Apple: Nike + iPod Sports Kit
Nike and Apple is a good example of how two different companies in two different industries can join together to bring one complete product. Nike and Apple introduced the Nike+iPod Sports Kit in 2006: a product which aimed at improving performance during exercising. It was an innovative iPod accessory that provided Nike shoes wearers with an opportunity to link iPod with a shoe sensor and monitor the run distance, pace, and calories consumed. This partnership was successful since Nike had knowledge of athletic performance, and Apple has knowledge in producing technologically advanced devices for people involved in fitness. The product was not only useful but also aimed at popularising both brands as the leaders in using technology in sports with the ever-increasing focus of population on healthy living.
GoPro and Red Bull: Expanding the Enchantment
Go Pro and Red Bull are two brands tied to action and adventure; the brands collaborated in what has become the gold standard of co-branding content marketing. Unlike other brands, this partnership included consistency in both product-placement, as well as co-branding of events, and products, that wouldn’t betray the adventurous nature of both brands. For example, Red Bull brand associated with such events as the Red Bull Stratos space jump, where the actions were captured with GoPro cameras and shared in social media accounts of both brands. Finally, this collaboration was successful as both the brands catered to similar client base – the adventure lovers. Thus, teaming up was very beneficial both for GoPro and Red Bull as their target audience engaged with well-implemented and very relevant content.
Starbucks and Spotify: Improving Customer Relations
To combine music with the coffee-house atmosphere, Starbucks collaborated with Spotify and introduced a program that allows customers to participate in selecting the music played inside the store. In a way, people purchasing Starbucks products could use the app to find out what music was being played in the retail outlet and contribute to a Starbucks store-specific playlist. This partnership offered a clear added value for both parties; contributing to the appeal of the stores as well as to the advertisement of Spotify streaming service. Starbucks and Spotify alliance worked well mainly because it offered a single packaged offer of music and coffee that enticed the consumers. The purpose of this initiative was beneficial for Starbucks as this constructed it as a place which is not just for consuming beverages but a place to live for and Spotify got popular with more people actively using it. The partnership brought out how co-branding could help in providing better human and customer experience that would help in brand loyalty in this strategic market.
Wrapping Up
Co-branding in ecommerce is a strong tool for companies who seek a further penetration of a new market. Thus, partnering with brands in related industries allows businesses to build on one another’s successes and support each other, as well as come up with fresh products that will appeal to the same audience. No matter the size of your company or the scale of your operations, co-branding is always a great leap forward in your market penetration strategy. At e:command, we focus on establishing a co-branding model that helps businesses develop effective co-branding marketing strategies to increase their sales and gain access to new markets. Apart from that e:command specializes in development of ecommerce platform for businesses so contact us today to learn how e:command assist your e-commerce business to expand through partnerships and brand solutions that organise and differentiate.
