The Co-Branded Opportunity
programs have proven to be a valuable tool to help brands build equity
while creating new products, but they’re not without risks, wrote Steve
McKee, president of McKee Wallwork Cleveland Advertising, recently in BusinessWeek.
programs are now a fairly common marketing tool, he noted. Examples
include Breyer’s/Hershey in ice cream, Lay’s/KC Masterpiece in snacks,
Kellogg’s/Healthy Choice in cereal, and Cinnabon/Mrs. Smith’s in desserts.
Outside the supermarket, examples include Coach/Lexus in the auto industry,
Bulgari/Ritz-Carlton in hospitality, Disney/Crocs in footwear, Tim Hortons/Cold
Stone in franchising and Southwest/SeaWorld in airlines.
McKee listed four primary reasons brands explore co-branding programs:
- Piggybacking on introductions: This
enables newer brands to tap into the loyalty of a more established
brand. As an example, Mr. McKee points the “Intel Inside” campaign
tied to major computer makers such as IBM and Compaq.
- The “halo affect” of
shared brands: One
example offered was Nike’s alliance with Michael Jordan starting in 1984
that has benefited both sides. Also cited was EconoLodge’s housekeeper-certification
program with Mr. Clean.
- Potential cost-savings: A
Pizza Hut and Taco Bell shared restaurant not only shares real estate
but often counter space and staffing.
- Charging a premium: An
example cited was Ford’s two-decade partnership with Eddie Bauer and
its more recent creation of the “450 horsepower supercharged Ford F-150
Harley-Davidson Super Crew.”
risks of co-branding, according to Mr. McKee, are that they tend to be dilutive
to brand equity “since it spreads the credit for a positive experience
across two brands where normally there’s only one.” Also, a negative
experience created by one brand can also unfairly tarnish the partner
brand. Finally, Mr. McKee said although the co-brand is expected to be
larger than the sum of its parts, “You can’t get away from the fact that
you are to some extent relying on another brand’s equity. That can, in
some cases, make your brand look weak or secondary.”
McKee said it’s important that the two brands “fit” together. These include
sharing similar characteristics and values as well as a similar equity
strength with consumers.
is an often-overlooked strategy by which the whole can truly be greater
than the sum of the parts,” wrote Mr. McKee. “While it should be used
sparingly and judiciously, it could generate a new level of interest
and excitement around your products and services.”
Questions: What do you think are the pros and cons of co-branding programs?
What factors should be particularly assessed when exploring co-branded
opportunities? What are your favorite examples?