8 Advantages Of Co-Branding Strategy!
Co-branding is when a single company gets two or more brands to introduce a single product or service. For example, a single ad can show people buying food from a restaurant and will also be using a certain brand of the credit card to use. It is the same for when someone buys shoes and clothes and so on.
But it is important for the products to highlight its unique selling points and boost lead generation. Co-branding is not for everyone, but when it works, it produces the following goods.
- Extending Reach
One of the best advantages of co-branding partnerships is that each of the brands is automatically the opportunity to gain the interest of their markets. This means each of them can reach out to a wider audience that they never knew of. This will allow them to be more visible to the public as well.
By extending their reach, they can ultimately generate more sales for their brands.
Reinforcement is when a consumer sees a brand more often than when they can form an association with it. This strategy will create a larger and deeper meaning to the public. And with that, a larger range of products can do more to reinforce a brand image than just one product.
- Establish Credibility
Partnering with other business can increase the credibility of both brands. It gives them the opportunity to highlight and reflect each other’s assets and then strengthen their position in the market.
Think of co-branding as two tenets having to share the same room in a rental house. Having to do this does not increase overhead costs like utilities, rent as well as other expenses. Each of the brands’ staff can work to support one another. On top of that, there is no need to hire more staff and there will be an increase in products and services.
Both brands can share marketing and advertising facilities as well. They can reach a broad audience with this tactic. Advertising is usually the more expensive of the two options and having two brands to split the expenses can be a great advantage indeed.
- Multiple Revenue Streams
From a consumer perspective, co-branding provides a greater chance for additional revenue. This creates more frequency of use and allows for stronger relationship building with the customer. It can also create complementary revenue streams.
Simply depending on the partnership, one brand will experience seasonality and the other will balance out revenue.
Brand partnership is also a way of signaling all kinds of information to the customers. By associating with another product, the consumer may be getting the same level of quality in goods and services as the other. The fame and reach that one product has made for itself can be transferred to that of its partner.
If one product is linked with two brands then it means that those companies are both going to receive the same amount of success.
- Less Risk
Usually, there is always a risk in any business venture out there. However, with two companies banding together, there are fewer chances of any risk coming about. The two brands are more likely to start a franchise right away than starting a business from scratch. It’s like one company that may be just a startup compared to another that has proven success.
Still, in spite of everything, there will always be some level of risk, even if that risk has been diversified from the partnership.
With the combined powers of two brands, each brand will have real financial value and represents the money that a company has invested in previous marketing campaigns and advertising. A company can take advantage of previous investments with this.
Co-branding can lessen risks, expand a wider audience reach and share in expenses. What more could you possibly want from this kind of friendship?
Jessica Barden works as a marketing and help with essay analyst for an education consultancy. She is well-versed in the basics of business and knows how to take advantage of an opportunity when it shows. You can follow him on Facebook | Twitter | Google+