Why Even Sinatra Sang The Praises Of Co-Branding

Were there any entertainment brands bigger than that of the late, great Frank Sinatra? For over half a century, he put out an incredible number of classic albums and songs (as well as appearing in numerous blockbuster movies) and became known as the greatest pop singer of the 20th century.

However, he achieved his greatest commercial success not on his own, but when he teamed up with some of the leading music stars of the 1990s in his "Duets" album, the only Sinatra album to earn the designation of triple platinum.

This is a prime example of the concept of "co-branding"—when one brand unites with others to hopefully expand its consumer power and earning potential. In this case, Sinatra’s "brand" combined with everyone’s from Barbra Streisand to Bono to take it to heights even Ol’ Blue Eyes had never reached prior to this.

In an ever-more crowded marketplace, the opportunities co-branding offers for further market penetration are attracting more and more companies. That’s why, for example, James Bond in his latest film drinks Heineken beer instead of his traditional vodka martini—because the beer manufacturer thought it was worth paying the producers $45 million to brand their brew with Bond’s.

But you don’t need to go to the movies to experience co-branding in action. Just a stroll through a typical supermarket will quickly uncover multiple everyday examples, such as Lay’s Potato Chips with KC Masterpiece barbeque sauce taste, Hershey candy in Breyer’s ice cream, and even a Kellogg’s Cinnabon breakfast cereal. Co-branding can even make for very strange, but successful, bedfellows—for two decades, the Ford Motor Company teamed up with casual clothing company Eddie Bauer to create a series of SUVs branded with Bauer.

There are actually two ways to co-brand: either you can partner up with a brand owned by another concern, or, if you own multiple brands, you can co-brand within your organization (for example, Proctor & Gamble sells its Downy fabric softener scented with its Febreze Fresh Air aroma). In either case, the logos of both brands will generally be prominently featured in co-branding packaging and marketing. You can find more co-branding examples at Trendwatching’s compilation column of what they call "Branded Brands."

Dan Beem, the president of Cold Stone Creamery, the ice cream parlor chain, has utilized co-branding heavily in his stores, using Oreo, Jell-O and Jelly Belly products in-store, as well as co-branding actual Cold Stone locations with Tim Horton and Rocky Mountain Chocolate Factory stores. He’s a strong believer in the concept because, as he told Forbes magazine, "Co-branding can be an effective strategy to survive down times and even grow. It can create new revenue streams, increase momentum and raise brand awareness as well as reduce costs". Inc. makes a similar point: "If done well, these partnerships are innovative because they are new, unexpected, and they achieve brand objectives."

These benefits are backed up by academic research. Consider these findings from a co-branding study performed by Judith H. Washburn at Bowling Green University:

* Both brands benefit from a co-branding venture. Even when a higher-end brand associates itself with a lower-end brand, both realize positive results – there is no evidence of any negative perceptions in the vast majority of cases.

* Co-branding provides greater benefit to low-equity brands when teamed with high equity brands. While both brands may benefit, the less-powerful brand usually realizes more gains. The exception may be with a dominant brand (say, a Coca-Cola or Microsoft) that has difficulty creating new and viable brand extensions; Co-Branding creates the opportunity to enter new markets and create new revenue streams.

* Co-branding should be used to further exploit a product performance advantage.

In other words, the co-branding venture should reflect the main selling point of each brand. For example, Intel branded itself with various PC companies and successfully promoted itself as being responsible for a computer’s superior performance. Similarly, in the Breyer’s/Hershey ice cream co-branding, Hershey can obviously take credit for the chocolate chips in the ice cream (while Breyer’s gains advantage by featuring a popular brand of chocolate).

Wondering whether co-branding is right for you? Steve McKee, writing in Bloomberg Businessweek, suggests three criteria companies should use when considering co-branding projects:

"First, they will co-brand only with companies that share complementary values. Second, they will co-brand only with products that (as they do) hold best-in-class status. Third, they will co-brand only in situations where they can retain full review and approval rights on all elements of communications. That narrows the company's co-branding possibilities, but it also reduces its risk." 

Co-branding clearly offers more upside than downside. So think about creating some brand duets of your own – you might find, as Sinatra used to sing, "The Best is Yet to Come."

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