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Co-branding strategies - Opportunities and Pitfalls
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CO-BRANDING SOLUTIONS:WHAT, WHEN & WHY?
February 18, 2011 1
WHAT IS CO-BRANDING?
February 18, 2011 2
WHEN TWO OR MORE PARTIES COME TOGETHER,
FOR A WIN-WIN END GOAL…
WIN-WIN Partnership Between Countries….
February 18, 2011 3
WIN-WIN Partnership between Companies: 1 + 1 > 2 Formula
February 18, 2011 4
TYPES OF CO-BRANDING PARTNERSHIPS..FIVE BROAD CATEGORIES OF CO-BRANDING
February 18, 2011 5
1. CO-BRANDING FOR PROMOTIONS
February 18, 2011 6
Best Western & Harley Davidson
February 18, 2011 7
Best Western runs an exclusive rewards program for Harley Davidson
enthusiasts. Riders who participate get special treatment at the hotel
including a clean wipe-down towel at check-in.
South-West + SeaWorld Promotions
February 18, 2011 8
SeaWorld - Southwest
Southwest Airlines has three Shamu planes in
its fleet.
Passengers are occasionally visited by penguins
before take-off.
February 18, 2011 9
Fiat - Mattel
To celebrate Barbie’s 50th anniversary, Mattel and Fiat created the 500 Barbie.
The car comes in nail-polish-pink and features lip gloss in the glove
compartment.
2. CO-BRANDING WITH VENDORS/ SUPPLIERS
February 18, 2011 10
Intel’s Presence Can Add Value ….
February 18, 2011 11
Alliance with supplier gives easy access to offerings and long lasting
relationships which leads to low level of investment.
Distinctiveness is very important for such co-branding which is possible
through patent protection.
3. CO-BRANDING FOR ALLIANCES
February 18, 2011 12
Meeting Diverse Needs of the Air Traveler…
February 18, 2011 13
It aims to give customers altogether new experience and enhance
customer value. Members in a distribution channel both horizontally
and vertically linked form alliance.
Hotels
Travel Agents
Car Rentals
Insurance
4. CO-BRANDING INNOVATIVE SOLUTIONS
FOR EXISTING CONSUMERS
February 18, 2011 14
Shoes that Sing!
February 18, 2011 15
Apple - Nike
Nike and Apple brought
music and exercise together
when they developed the
Sports Kit, a wireless
system that allows shoes to
talk to an iPod.
Clothes That Are Health Trackers…
February 18, 2011 16
Adidas - Polar Electro
Adidas and created Project Fusion, which
integrates heart rate and speed and distance
monitoring equipment into sports apparel.
5. CO-BRANDING FOR EXPLORING
NEW TARGET SEGMENTS
February 18, 2011 17
Exploring the Un-banked Segment…
February 18, 2011 18
MasterCard - Virgin
Virgin & MasterCard prepaid card targeted at individuals who don’t
have a bank account or have a low credit score.
WHY CO-BRANDING?
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What Motivates Co-Branding?
► Expanding customer base – reaching out to new customers
► Improved sales and profits for both companies
► Fulfil expressed and latent needs of customers
► To strengthen Brand Equity of partners
► New product innovation and introduction
► Innovate in enhancing customer perceived value
► Achieve scale benefits : production, supply chain, marketing & advertising
February 18, 2011 20
The Traps – Things to Watch Out
• True sense of partnership & give and take. Suspicion and greed can spoil the party.
• It is a long term commitment: how easy will it be for Hero now to dismantle from
Hero Honda?
• Lack of synergy in any aspect could be a potential trap: consumer group, appetite
for risk, growth ambitions, etc..
• Equity of both brands should leverage each other to make a stronger co-brand.
• Equity changes in one partner brand could impact Co-Brand image.
• Legal requirements: What happens upon merger or acquisition takes place?
February 18, 2011 21
