Guest post by Tim Brown
What is co-branding?
Co-branding is the parternship of two or possibly more brands with the aim of creating a marketing synergy. In order for co-branding to be successful, it is important that both marketing teams and brands work together.
Why is co-branding so popular among business?
Within a short time, co-branding has become a common marketing tool for businesses seeking to increase their profitability while also aiming to widen their competitive moat in their respective market niche. In certain industries that abound with cut-throat competition, businesses make effective use of clever co-branding strategies to expand their clientele and secure a greater share of the target market while keeping marketing costs to a minimum.
Businesses prefer co-branding particularly because it significantly reduces the expenditure associated with marketing a new product. This is mainly because the brand that is being introduced into the market is carried by an existing brand that has already established itself well in the target market. This ensures that the brand gets all the marketing exposure it demands in order to establish its brand value as well as to meet its marketing goals.
Advantages of co-branding
1. Increase in profits and brand image of the company in the market
Co-branding enables a business to market a product more easily, allowing it to reach the target market with the least marketing effort. As a result, the business is able to develop a strong clientele which translates into various benefits such as increased brand value of the company and greater profits.
2. Increased exposure to new markets and increase in new customers
It should be remembered that co-branding seeks to promote a new brand by using a popular host brand that is already well-established. As a result, the new brand is able to reach areas where the host brand enjoys a strong business presence. This saves the business various marketing costs associated with promoting the brand in remote markets.
3. Reduced risks associated with product launch
Launching a new product into a market is always a risky venture and entails meticulous planning and rigorous strategizing. However, by launching the new brand as a protégé of a host brand product, various imminent risks involved in a product launch are comprehensively eliminated. For instance, under the patronage of the host brand, the survival instincts of the brand are significantly increased which is especially useful to businesses that target market niches that are densely populated with direct competitors. Moreover, co-branding also ensures that the time it takes consumers to identify the brand image is significantly reduced.