Gain visibility & market share through co-branding partnerships
In a marketplace where innovation is quickly duplicated by competitors, a co-branding approach that provides a strong point of differentiation can have a dramatic impact on the consumer’s purchase preference at the point of sale.
Co-branding involves a strategic alliance between brands to promote a single product or service together, with such a product or service bearing both the partners’ brand names like Ferrari Signature Credit Card by ICICI Bank or Nissan Micra-Elle cars. Co-branding partnerships can strengthen top-of-mind awareness for brands, boost sales, help capture the attention and interest of non-committed customers, and introduce the brand to a new segment of customers.
Consider the example of the recently launched Ferrari-ICICI co-branded credit cards in India that offered consumers a host of benefits including discount on Ferrari merchandise, an all-expenses-paid trip for top spenders to Italy, discount on entry tickets to Ferrari World Abu Dhabi and a Ferrari watch as a, joining, gift. Here, the guest brand Ferrari brings exclusivity and helps the host brand ICICI attract new customers.
Similarly, Titan partnered with the iconic motorbike brand Ducati for a range of co-branded watches in India. Inspired by Ducati bikes, the watches were designed in collaboration with Ducati’s design studio in Italy and delivered on the brand values of Italian style, superior technology and racing through the use of superior materials. Titan launched the co-branded range at $300-$400 retail price points thus gaining market share and consumer preference in the premium segment of the watch market.
Co-branding in the World of Fashion
Such associations serve several strategic purposes, they help brands break through the competitive clutter, and attract more press coverage and consumer attention. In the business of fashion, several brands have tied up with iconic brands or celebrities to produce limited edition drops to generate media buzz, strengthen brand pull and create a lasting impression. H&M’s collaboration with Karl Lagerfeld, the iconic creative director behind Chanel and Fendi, in 2004 was the first-of-its-kind partnership between high street and luxury, and its massive success led to several such collaborations of a similar type. Recently, Karl Lagerfeld and Indian fashion brand Cover Story have come together to launch a special collection. The collection is a result of an intense collaboration between design teams at both brands and captures the essence and signature DNA of the Karl Lagerfeld brand for Indian fashion enthusiasts.
Another very relevant and recent example would be the collaboration between two powerful fashion houses in their own right- Designer Sabyasachi’s upcoming capsule launch with H&M. This example beautifully explains the idea behind this collaboration for both brands- With H&M, Sabyasachi found inroads into the wardrobes of the young and aspirational consumer while H&M has yet again partnered with an iconic designer, known for his dynamic use of indigenous crafts and textiles, to bring something new for their consumer and strengthen the bond with their fast-growing Indian fanbase.
What does it do for my consumers?
This collaboration, much like H&M’s past collaborations with Alexander Wang, Versace and Balmain, is a win-win-win for the collaborators and their consumers! The idea of two brands collaborating excites the consumers, especially in case of brands with a strong following. Two different audience sets find value in buying a co-branded product which gives these brands a massive boost in their impressions and visibility score. And that is what the fight is about today- Visibility. When Nike & Apple came together to launch the Apple Watch Nike+, which combined Nike Sports Bands with Apple Watch and offered integration with the Nike+ Run Club app, and exclusive Siri commands it allowed these brands to capitalize on the latest trend of wearable devices among the fast growing runner community.
Similarly, Nissan Micra partnered with the leading global fashion magazine Elle to launch a limited-edition range of cars and amplified the collaboration through print campaigns, advertorials, social media and consumer contests. It helped the automobile brand garner additional reach and equity with women on the back of Elle, a strong brand that decodes trends and guides women with their daily choices.
How to find the perfect partner and win?
Co-branding makes it possible for brands to explore a myriad of ideas and venture into new realms. It enables brands to augment their product range with ideas and partnerships that would surprise and delight its current customers along with attracting new ones. Co-branding is a promising marketing tool and when thought through, it can also be carried out with minimal investments, while generating lasting impressions and significant returns. While explore co-branding opportunities, a few things should be kept in mind- Look for partners who share your core values; Pre-define goals for both brands; Determine the target audience and marketing channels in consultation with the partner; and Agree on the sets of responsibilities for each partner, basis the outlined activities. Most of the above-mentioned examples of co-branding partnerships also involve negotiating and signing a ‘brand licensing’ agreement that allows one partner to produce and sell co-branded products bearing the other partners’ brand name. With multiple parties and variables involved, putting together a co-branding partnership can be a complicated and time-consuming exercise and a well-experienced Brand Licensing agency could help brand owners identify suitable co-branding opportunities and design and execute the program as well.
Also published at: Economic Times