Successful co-branding partnerships

2021-09-19 by Ronn Torossian
Kanye West

When two brands form a brand partnership, they create mutual marketing and PR benefits. The brands may include retailers, car manufacturers, and restaurants, among others. The brands involved pool their resources, creativity, and existing images in order to build an offering that is greater than the sum of its parts. This leads to better customer reach, publicity, and conversions. Co-branding also boosts revenue streams and decreases risks.

Sometimes, customers who are loyal to their brands do not attempt to try different brands.  In this case, co-branding helps to reach out to them and increases the acceptance and receptivity of a brand. The participating brands also get a dose of innovation and value-addition. As enumerated below, there are different types of co-branding.

a) National to local co-branding – When national brands collaborate with local brands, it benefits both brands in terms of audience. The national brand can reach a local audience and the local brand can reach a national audience. An example of this is local businesses joining into contracts with Groupon to provide special offerings to a wider audience.

b) Ingredient co-branding – Sometimes brands collaborate based on the compatible ingredients shared amongst them. This type of co-branding deals with the development of brand equity for those parts and materials that are included in other products. The underlying constituent brand is generally subordinate to that of the primary brand. For instance, Dell computers utilize a co-branding strategy with Intel processors.

c) Composite co-branding – In this type of co-branding, two renowned brands collectively provide a distinctive product or service which could have been tricky to produce individually. It focuses on value addition and retaining existing customers. Adidas and Kanye West collaborated to create Adidas Yeezy. A premium range of fashion and leisurewear, the combination of Kanye’s celebrity appeal with the Adidas street and leisurewear segment led to strong brand growth. Due to the partnership, the brand associations resonated strongly and regular Adidas products seemed cooler to fans of Kanye West.

Benefits- There are quite a few advantages of co-branding. Other than boosting sales, any risks associated with the brands are always shared. There is increased access to new financial sources. The creative personnel, experiences, and marketing channels of partner brands help both brands work with a wider set of resources. Co-branding helps target a larger customer base. When two brands come together, each of them can target each others’ markets. Therefore it results in the widening of the visibility of a brand to a market that they once may not have had access to. It might also result in increased trust of customers.

Risks- Sometimes, there are unintended negative consequences of co-branding. Companies should consider whether co-branding will be beneficial for them and their customers, as it could also alienate customers who are used to a single product identity. If two companies are different in their missions and values, they might not be able to work successfully together. If both partners do not understand the specific target audience, they won’t reach the right people.

Ronn Torossian: Insights from a Native New Yorker and CEO of 5WPR

Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 250 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities