What is Co-branding and what does it consist of?

The Co-branding It is a strategy that consists of associating two or more different brands of products or services in order to group them together to carry out a promotion of a single product or service.

This strategy has a wide marketing popularity, since it manages to position the association of certain brands with the aim of adding value and earning profitability. This strategic agreement influences the business identity of the brands, this happens when a private brand is related to another to create a profitable product.

The Co-branding system It has the advantage of promoting sales and in turn increasing profits. When this strategy is carried out properly, it can be possible to meet the needs of the market, qualify and use the quality of the brands involved and thus benefit both Business.

When this type of strategy is carried out successfully, promoted brands acquire the potential necessary to attract the attention of a large number of consumers who are interested in the product or service.

Existing Co-branding Classification

In Co-branding, each of the brands contributes its own identity that is shown in a unique design, through logos, color schemes and identifications of the different brands.

Although this type of strategy is mostly applied in large companies, today many small companies have adopted this strategy to increase their sales. In this sense, different types of Co-btanding strategies can be established, such as the following:

Co-branding of complementary skills

It refers to the unification of two different brands, which are associated to promote a certain article where Firms that complement each other participate, to offer their clients an attractive product or service and quality.

Knowledge co-branding

It is a strategy where customer information is shared to companies that contribute different articles, so that they are applied in new market segments where they want to apply. In this way, brands will obtain completely secure information.

Ingredient co-branding

In this sense, brand associations are carried out to promote a product that provides greater value in a single product.

Co-branding of promotion of values

The agreement of the brands involved is that the value of both brands is highlighted through the promotion of the image of the different companies, as this helps to position them in the market with greater power.

Main advantages of Co-branding

Any company or brand can achieve satisfactory results with the Co-branding strategy. That is why each of the parties must make their contribution, to create a product or service that generates favorable results. By using this strategy, the following benefits can be obtained:

• Greater reach: By incorporating two or more companies, a better market can be achieved, since many times a single brand cannot.
• Create powerful relationships: You can create relationships with brands that already belong to the competition.
• New financial sources: This is the economic contribution that both mark must invest for the manufacture of the product or service.
• Increase profitability and decrease risks: It is an effective strategy that benefits both brands to lower costs and increase profits by creating a single product.
• Increase customer confidence: It allows to enhance the value of brands, since when associating them it will be seen as an attractive and improved product.

Disadvantages of the Co-branding technique

Despite being an efficient strategy to boost sales and increase profits, when doing this type of Association can also have its risks and harm one or all of the brands that are involved.

To avoid this, both brands must be complemented to obtain better results, some disadvantages are:

• Negative results of the strategy: It arises when brands include different markets and the types of products are very different, This means that if there is a lot of difference in the value of the company, it could affect it and produce losses.
• Negative customer experience: Customers can relate negative experiences about partner brands, which could affect the value of both brands and more so if they are brands with different missions.
• Benefit in only one of the brands: It can happen that customers lean more to one of the brands and not to both, therefore, if one of the brands files for bankruptcy, the other could be strongly affected.

When a company wants to increase its sales and achieve a good position in the market, a good option is to partner with another company to help it achieve it. That is why the Co-branding strategy It has the characteristic of linking different brands to increase sales and benefit companies with a single product.