Co-Branding Costco Style

Discussion
Jul 08, 2003
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By Warren
Thayer


A visit to Costco these days can turn up Kirkland Signature/Starbucks coffee, Kirkland Signature/Jelly Belly jelly beans, Kirkland Signature/Quaker cereals and, well, you get the idea.


Costco is taking co-branding to new levels, with partners including not only those just named but also Tyson chicken, Newman’s Own juices, Hanes underwear and even Whirlpool washing machines.


While the concept isn’t totally unique, it’s still fairly rare. And it seems to be below the radar of many in the industry. One manufacturer who turned down the opportunity to co-brand with Costco says he feared ticking off his existing accounts by making such a deal with Costco.


Moderator’s Comment: Is Costco’s co-branding strategy
the beginning of what will eventually become widespread practice by retailers?
What does it mean to the brand equities of both the retailer and the manufacturer?


Finding compatible brands is the key. Starbucks may be
quite comfortable co-branding with Costco because it guarantees business without
having a negative impact on the manufacturer’s brand. Would that same level
of comfort exist for the manufacturer if the retail partner was a dollar store?
We doubt it.
[George
Anderson – Moderator
]

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