Brand MarketingMay 6, 2021

4 Companies That Benefit From Co-Branding Partnerships

May 6, 2021
Maddie Duke
Maddie Duke
Freelance Marketer

Co-branding can be a very powerful way for companies to spur growth and build brand awareness by pairing strategically with other brands. We all develop loyalties to different brands, and along with that, a willingness to pay more to get the brands we love. By forming strategic partnerships, brands can capitalize on that loyalty in order to convince us to buy, try, and form new opinions on other brands that we may not otherwise consider.

This article explores the concept of co-branding and illustrates how some of the world’s biggest brands have formed successful co-branding partnerships to capture new markets and grow their businesses.

What is Co-Branding?

Co-branding is a branding strategy that utilizes two or more brands to promote or produce a shared product or service. Also known as a brand partnership, co-branding can involve a number of different kinds of strategic collaborations, with each brand contributing its own brand identity to create a blended brand, with unique or combined brand names, logos, color schemes, and messages.

The purpose of co-branding is to combine and leverage the strength, awareness, and positive associations of multiple brands, and transferring those qualities across the other brands in the co-branded campaign so each brand benefits from the others.

Co-branding can involve the creation of a new and specialized product, range, or product variant, or even partnering for an event or campaign. It can involve the sharing of manufacturing resources, technologies, and expertise. Co-branding can be undertaken due to company mergers or acquisitions, or simply due to a project that makes sense to all parties.

Co-branding can occur within a larger umbrella brand, or between two or more entirely different brands, companies, and industries. In theory, the brands in a co-branded partnership could have almost nothing to do with each other. However, it makes sense to have some kind of shared value or attribute that ties the brands together.

How is Co-Branding Beneficial to Brands?

A well-chosen co-branding initiative can have a range of benefits for each of the brands involved. By teaming up, brands can leverage each other’s strengths and successes, and grow their business by accessing each other’s markets and audiences. Transference of positive brand associations from one brand to another can have a lasting impact even beyond the co-branding partnership itself.

Reach New Markets

A multi- or co-branded product or campaign increases exposure for your brand to the target audiences of your co-branding partner, due to audience overlap. Loyal consumers of one brand will try the new product or service, even if they never would have considered the second brand on its own, allowing the second brand to leverage the value of the first brand to reach new markets.

Co-branding also has the potential to cause a buzz that extends beyond existing audiences, generating publicity and allowing brands to get in front of audiences that are new to all the brands involved in the campaign.

Utilize One Brand’s Strength to Overcome Another’s Weakness

When planned and executed well, a good co-branding exercise can bring the potential for each brand to overcome a weakness by leveraging the other’s strengths. For example, if one brand is known for technical know-how but lacks a sense of fun or creativity, and another brand has oodles of creativity but has tech limitations, a collaboration can work to overcome the negatives for each brand, and allow the other’s strength to transfer across.

This can be particularly handy for brands who’ve been through a rebranding. For example, a brand trying to shake a more traditional brand identity might like to partner with a more youthful and daring brand, to help reinforce the message that things have changed.

Risk and Cost Reduction

Releasing a new product, entering a new market, or taking on a new category can be a big risk for a brand. By partnering with a brand that’s already established in your desired new market or category, you can minimize the risk and test the waters without putting too much on the line.

Piggy-backing off another brand’s existing and established associations, values, and ideals can also be a cost-effective and convincing way to communicate a change within your own brand. Powerful brand campaigns don’t come cheap, and it can be even more effective to show a change by association rather than spelling it out to people. Instead of telling people “we’re more family friendly now!”, a brand might look to engage in co-branding with a brand whose core identity is centred around family values.

4 Brands That Have Benefited From Co-Branding

There are plenty of examples of great co-branding partnerships that can illustrate how co-branding can be successful. Below, we take a look at 4 different brands and some of the ways they have co-branded with other brands.

1. Nike

Nike & Apple

Tech giant Apple and athletic brand Nike have had a longstanding co-branding partnership, having first worked together in the early 2000s with the launch of the Apple iPod and the Nike+iPod co-brand. Having now evolved into Nike+, the partnership that was initially centred around helping people listen to music while working out, now focuses additionally on using the latest tech to track activity, through fashionable and functional wearable tech, clothing, and exercise gear. Nike+ products feature in-built tracking transmitters, allowing them to sync automatically with Apple products, giving consumers the ability to instantly check things like heart rate, steps, distance, and calories burned.

A match that seems like it was written in the stars, the two brands each benefit from the partnership. Both parties can provide an improved experience to consumers and athletes alike. Nike gains the association with one of the world’s largest tech brands, and Apple benefits from the association with one of the top sports brands. The partnership makes sense, as each brand has a brand image and set of values that complements the other.

Nike & Michael Jordan

No strangers to striking gold with a strategic co-branding partnership, Nike have also benefited in the past from an extremely lucrative partnership with Michael Jordan. Initially having favored Adidas, Jordan was initially reluctant to sign on with Nike, then just an up-and-coming sports brand. The legendary Air Jordan line of basketball shoes was a monumental success, with sales smashing the initial goal of $3 million over 3 years, achieving $126 million in the first year alone. The partnership quickly transformed Nike from being an underdog brand to one of the most sought-after, and over time has made Michael Jordan $1.3 billion. The power of Jordan’s brand helped Nike Even now, the two brands have strong associations with one another. Nike projected $US3 million in sales of the Air Jordan in the first four years of the deal but ended up selling $US126 million of the shoes in the first year alone.

2. Adidas

Partnering with celebrities can result in cult-like followings for brands, allowing them to develop a sense of exclusivity and to build loyalty through the association. Take a look at what strategic brand partnering has done for German sports brand Adidas. Having partnered with some of the world’s most powerful celebrity brands, Adidas’ net income climbed $19.5-1.9 billion in 2019.

Adidas & Kanye

Adidas first collaborated with Grammy award winning rapper, producer, and personality Kanye West with the launch of the co-branded Adidas Yeezy range in 2015. Producing sneakers and other fashion and leisure wear, the combination of Kanye’s personal brand and celebrity appeal with the Adidas street and leisurewear segment has garnered strong brand growth since it was introduced.

Buzz and excitement is created through a sense of rarity and exclusivity, with each new line priced strategically high with limited production runs. Even those consumers who can’t attain the co-branded products find the products aspirational, and the impact and brand associations resonate strongly, with even regular Adidas products seeming cooler to fans of Kanye West.

Adidas & Ivy Park

Another instance of Adidas leveraging celebrity power to enhance their own brand appeal is their co-branded line of athleisure products launched in collaboration with Beyoncé’s own brand, Ivy Park. First launched in 2016, the Ivy Park brand is associated with pushing the boundaries of athletic wear; supporting and inspiring women; and the belief that beauty goes beyond physical appearance, all notions and associations with which Adidas strategically chose to align their brand—not to mention the immense power of Beyoncé’s personal brand in and of itself.

In turn, Ivy Park benefited from the association with Adidas, with Beyoncé stating that the brand “has tremendous success in pushing creative boundaries” and that the two brands “share a philosophy that puts creativity, growth, and social responsibility at the forefront of business”. The Ivy Park x Adidas range sold out within minutes of its launch in January 2020.

3. Milka

Chocolate brand Milka is one of the world’s favorite chocolate brands, and has graced shelves since 1901. Famous for its wide variety of flavor combinations, the brand has had some expert co-branding products with brands from within its parent company, Mondelēz International.

Milka Oreos, Daim, & Philadelphia

What does an American cookie, a Swiss chocolate bar, and a cream cheese spread have in common? They’re all owned by the umbrella company, Mondelēz International, which also happens to own the Milka chocolate brand. Thus, we have the co-branded Milka Oreos and Milka Daim varieties of chocolate.

While cream cheese flavored chocolate doesn’t sound too appealing, chocolate flavored cream cheese certainly does—and accordingly, we have Philadelphia Milka Cream Cheese. Whether these products were created to drive sales, expand the range, or bring one or more of the brands into new markets, these in-house partnerships have succeeded and stuck. Philadelphia Milka capitalized on a significant growth opportunity by combining two of the most consumed snacks in the UK and saw great success across most European markets.

It’s not unusual for parent companies and their subsidiaries to engage in strategic co-branding collaborations to produce new and different varieties of products, lines, and flavors. With shared resources and an existing alignment thanks to their shared parent company, it’s a straightforward way for companies to test brands in new markets and retain full control should anything go awry. Interestingly, Philadelphia Milka did not succeed in Italy and was withdrawn after a few years, which just goes to show that even within European markets, diversity of cultural preferences needs to be taken into account.

Chocolate, potato chips, and other snack foods are frequently updated with flavors that involve co-branding, often with polarizing or controversial reception. When the Mondelēz International launched a co-branded line of Vegemite flavored Cadbury chocolate in Australia, the product itself didn’t last long, but the co-branding exercise certainly achieved its purpose of creating buzz for both brands.

4. GoPro

One of the most renowned co-branding partnerships is that between GoPro and Red Bull, both incredibly strong, well-established brands that align with each other in many ways. After having worked with Red Bull on co-branded events and promotions, GoPro announced in 2016 that the two brands would form a strategic multi-year, global partnership that includes content production, distribution, cross-promotion and product innovation.

GoPro & Red Bull

While portable cameras and caffeinated drinks couldn’t be more different, both brands are about high energy action and adventure, fearless fun, and daring risk taking. So, when it comes to the brands partnering in co-branded collaboration, it requires no stretch of the imagination to see the fit. It simply makes sense.

As part of their co-branding agreement, Red Bull received equity in GoPro and GoPro became Red Bull’s exclusive provider of point-of-view immersive footage of Red Bull’s media productions and events. Perhaps the most famous co-branding event was the 2012 stunt dubbed “Red Bull Stratos”, involving Felix Baumgartner. Pushing limits and breaking records, the co-branded stunt involved Baumgartner jumping from a space pod more than 24 miles above Earth. With GoPro cameras strapped to his space suit, Baumgartner’s 4 minute freefall and parachute landing were filmed and livestreamed to a record-breaking audience of 8 million. The stunt easily fits both brand slogans of “Be a hero” and “Red Bull gives you wings”. In the six months following the stunt, sales of Red Bull rose 7% to $1.6bn in the US, while GoPro credits the partnership with their ability to scale content strategy and distribute it across our individual networks in new ways.

Should You Consider A Co-branding Opportunity?

Co-branding is a useful strategy for businesses looking to increase their brand awareness, boost their reputation and brand image, or increase sales and market share, and you don’t need to be Nike or Beyoncé to have a co-branding success. A co-branded partnership needs to be strategic and logical. Both brands or businesses need to have shared values or some similarity to their brand image or identity, otherwise you risk eroding brand integrity.

If you’re considering a co-branding opportunity for your own brand, make sure that you have a full understanding of the values and image of the other brand. Identify what makes the two compatible and evaluate any potential risks. Understand what benefit the partnership brings to the other brand, and make sure it aligns with your own strategic goals and campaigns. With the right match you can make a big splash.

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