You probably all know the world-famous companies “Nike” and “Apple”. Both companies have opened their branches in many countries of the world and gained millions of customers. “Nike” and “Apple” companies came together in 2016 and presented their jointly produced product, “Apple Watch Nike+” watches to customers. The difference between these watches was that they combined the features of the “Nike” sports brand and “Apple” smart watches. The main goal of producing these watches was to create an opportunity for athletes and generally anyone who wants to live a healthy lifestyle. So, through smart watches, people receive timely notifications to drink enough water, run, and exercise. In short, these smart watches prepare a healthy life routine for people and play the role of a kind of guide on this path. And thus, as a result of the collaboration between Nike and Apple, these watches presented to viewers have been considered by customers as an effective device for a healthy lifestyle. In this example, the marketing strategy used to create an intercompany partnership is called “Co-branding”.
Now the question arises, what exactly is the “Co-branding” marketing strategy? What are the reasons why world famous brands choose this strategy? Let’s look at the answers to these questions together.
“Co-branding” is a marketing method that has become widespread all over the world recently, especially after 2010. This strategy is also known as “strategic business partnership”. Thus, the main goal of the “Co-branding” business tactic is that two or more companies come together and create a partnership. As a result, those companies appear in front of the audience either with a product they jointly produce or with a new campaign they create together. As an example, let’s look at the partnership of two companies. In 2012, a cooperation agreement was signed between the famous Taco Bell fast food company and the Doritos chips company. The product developed under that agreement combined the delicious flavors of Doritos and Taco Bell products. Thus, this product, created as a result of the Co-branding strategy, sold more than one billion in one year.
I would like to add that as a result of the Co-branding strategy, both companies not only get a lot of income from the joint product, but also manage to increase their profits separately.
Today, there are two main types of Co-branding strategy. The first of these is “Ingredient Co-branding”, and the second is called “Composite co-branding”. One of the companies that created a partnership in the strategy of “Ingredient Co-branding” is well-known, but the other one is relatively less well-known. That is, the main purpose of the partnership here is to promote the second, less well-known company and advertise its products to buyers. For example, let’s look at the partnership between the famous and well-funded computer company Dell and the technology company Intel. While the computer company “Dell” is world famous, the technology company “Intel” is considered a relatively little-known and emerging business example. The main goal of the partnership between “Intel” and “Dell” is to introduce Intel’s services and products to a wider audience and to create a reliable image for “Intel” among buyers. As a result, as a result of its partnership with Dell, the little-known and unpopular Intel company increased its sales several times and gained the trust of customers.
As for the second type of co-branding, i.e. “composite co-branding”, unlike the first type, both companies that create a partnership here are equally popular. In other words, the main goal here is to increase the product sales of both companies at the same level.
For example, the partnership between the well-known taxi company “Uber” and the popular music application “Spotify” can be an example of “composite co-branding”. According to this partnership, you can access the Spotify application and listen to the songs you want for free while using Uber taxis. Especially for people who like to listen to music while traveling, this opportunity is considered unavoidable. Thus, as a result of this cooperation, the equally popular companies “Spotify” and “Uber” managed to significantly increase the number of their customers.
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