Co-Branding is a combination of two brands that work seamlessly together to market and sell products for both companies. This brings together the reputations, audiences, values, and brand identities of participating brands. Before a partnership can be formed, companies must agree on these points.

Brands must think creatively to win the loyalty and attention of customers in the highly competitive world of digital marketing agencies in New York.

To stand out, many turn to brand partnerships to help them get more brand awareness and build a positive reputation. Co-Branding can be a successful type of partnership, provided that the partnership is well established.

What is co-branding?

Co-Branding is a strategic partnership strategy that involves two brands joining together to market a product or marketing service in Miami under their respective brand names.

In an ideal world, co-branding partnerships allow both brands to share the risk. This allows them to expand their audience, increase consumer trust and generate more sales.

Consumers (71%) love it when companies offer products with co-branded names. This encourages businesses to try partnerships.

Consumers who support co-branding cite the benefits of having new product options. Consumers surveyed also supported co-branding as new products could serve unique purposes.

Our findings

• 71% of consumers are positive about co-branding partnerships. This makes partnership opportunities attractive to potential brands.

• 61% of consumers will avoid products with negative brand reputations at least occasionally. This highlights the importance of choosing a co-branding partner.

• 50% of consumers recognize Dorito’s co-branded products with Taco Bell, demonstrating the benefits of aligning with target audiences before a product launch.

• CoverGirl and LucasFilm were not known by 5% of consumers, which shows the limitations of targeting distant audiences.

• 43% of consumers are likely to try a co-branded product from a company that they already like, which makes cobranding an excellent opportunity to reengage existing customers.

• 41% of consumers believe that a brand’s values make a difference in their purchasing decisions. This means that co-branding partners need to spend time talking about value alignment.

Positive Brand Reputations

Companies must assess the brand reputations of potential partners and themselves when evaluating the success of any co-branding partnership.

A co-branding partnership involves sharing reputations and taking on the risk of marketing products in unison.

Companies that collaborate to market themselves rely on each other’s positive reputations to succeed. Negative reputations can hurt the performance of both companies in a brand partnership.

Nearly two-thirds (61%) of consumers avoid products with negative brand reputations at least once.

When selecting a company to partner with, brands must be careful and selective. A potential partner company may have a good reputation but it might not be the right fit for your business.

Forever 21 and Atkins, for example, entered into a brand partnership because they were two well-respected companies. But, customers thought Forever 21 was fatphobic and encouraged people to lose weight when they started shipping Atkins weight loss snack bars online.

Forever 21’s reputation was damaged by this. apologized and stated that it did not intend to offend anyone with the campaign. The reputation differences between the companies meant that the partnership couldn’t continue in any meaningful way.

Jerry Han, the CMO of Market Research and Reward Company PrizeRebel stresses the importance of evaluating the impact of brand partnerships on audiences. 

Han stated, “Before we join up with a company to offer discounts or rewards on their behalf we make sure that the customer’s experience will be positive and they would feel excited [to have our services].”

Han values relationships with companies that have a positive reputation and align with their business goals. Before entering into a co-branding partnership, businesses should carefully consider the reputation of potential partners.

Audience Alignment Between Brands

Brands must work together to co-brand. Before engaging, they must align with their target audiences.

Audiences must also come together when two brands are merged. To make the partnership a success, audiences must purchase products from co-branded brands.

Samuel Klein, operations manager at Astor chocolate, believes that creating shared audience segments helps companies share risk and co-brand.

Klein stated that a co-branding partnership should share common goals for the types of people it wants to reach. “There should be a shared target audience so neither party is putting too much at risk by selecting this business arrangement.”

Marketing co-branded products require proper audience alignment. Target audience groups are a great way to build a partnership and keep your audience in the loop.

Taco Bell and Doritos are both successful in Audience Alignment

Taco Bell and Doritos joined forces in 2012 for the creation, marketing, and sale of the Doritos Locos Taco. The product remains a staple on Taco Bell’s menu, thanks to this co-branding effort.

Half of the respondents know about the partnership between Doritos & Taco Bell. This makes this co-branding effort one of the most well-known among those surveyed.

Because their late-night snack-food lovers could easily connect through the co-branded product, Doritos & Taco Bell were able to form a lasting partnership.

Both companies have significant overlapping audiences and missions, so their cobranding efforts worked seamlessly.

Audiences Alignment Failure: CoverGirl, LucasFilm

CoverGirl’s makeup partnership with LucasFilm did not work as well as Taco Bell or Doritos.

In 2015, the two companies formed a co-branding partnership and launched a 19-piece makeup line based on the movie franchise.

Their Star Wars-themed makeup line was a hit with sci-fi lovers but only 5% of the consumers were able to recognize it when they were asked.

The limited edition of the products could explain this lack of awareness. Its small, niche following could be due to a lack of agreement from the public.

CoverGirl’s primary target audience is women interested in makeup and beauty. Although many Star Wars movie fans are women, this is not the main audience for CoverGirl. Women are about twice likely not to have ever seen Star Wars movies.

This enabled the co-branding partnership to appeal strongly to niche audiences. Due to the different target audiences, however, the partnership did not enjoy the same popularity and widespread acclaim as other partnerships.

Attract Loyal Customers

Although co-branding offers opportunities to attract new customers for branded products, partnerships should aim to retain existing customers.

The co-branding approach is likely to bring in new customers. When co-branding, remember to consider your existing customers.

Your loyal customers already pay attention to you, so they are more likely than ever to be excited about the possibility of co-branded products that will help them.

43% of consumers would consider purchasing a co-branded product made by a company that they support.

Customers should be embraced by companies as much as they are looking to attract new customers with co-branded products. Research has shown that increasing customer loyalty by just 5% can lead to a 95% increase in profits.

John Li, co-founder, and CTO at loan provider Fig Loans believes that co-branding is a great way to retain loyal customers with new products.

Li stated that co-branding could help loyal customers try new products and venture out. They are more likely to trust recommendations if they have already shown loyalty and trust in you.

Your co-branding partnership should be planned with your loyal customers in your mind. This will ensure your success.

Brand Values Agreement

Co-Branding does not require that all companies share the same values. To avoid inconsistent marketing messages, however, each company must agree on its values.

Your brand’s values are important to customers. More than forty percent (41%) of consumers believe that brand values, mission statements, and other information can help them make informed purchasing decisions.

Terri Rockovich is the co-founder and CEO at Jinx. She stresses the importance of co-branding partnerships that include complementary brand values.

Rockovich stated that co-branding projects should have value alignment because both brands will be interconnected. If you concentrate on connecting a growing audience to a co-branding initiative, it can make the partnership feel inauthentic and strained for both the partner brand’s audience and their current audience.

Co-branding projects should focus on value alignment, as both brands will be interconnected.

Contrasting values can lead to business partners who send mixed messages to their customers and appear ingenuine. This could have serious consequences and make a strong partnership in co-branding unworkable.

Lego and Shell, for example, had a long-standing partnership. However, they ended it in 2014 after environmental pressure.

Shell icons and logos were printed on toy sets for children during the partnership. Shell offered Lego authentic toy design possibilities, and the partnership made Shell’s brand more friendly and broad-reaching.

Greenspace, an environmental activist group, criticized the partnership. Greenspace, an environmental activist group, criticized Shell’s Arctic drilling plans and highlighted the brand’s past questionable drilling practices.

After this controversy, Lego pulled from the partnership. Although the co-branding partnership was mutually advantageous for a long period, the companies held different views on energy and drilling. Their values overcame the need to continue the partnership.

Rockovich supports partnerships that complement and emphasize the values of both parties.

Rockovich stated that the best collaborations bring mutual benefit to both parties, elevating their respective values and complementing each other’s offerings with something new.

Your co-branding partnership will not be strained if you agree on brand values before the engagement begins.

For brands that work together, co-branding can be very effective

It is not easy to create a successful co-branding partnership. It can be difficult to link company values, audiences, and reputations together. It is important to get to know your partner in co-branding before you enter into a relationship.

To ensure a successful partnership, make sure you understand how your brands are aligned with desired market audiences, values, reputations, and the market.