Strategic Application Co-Branding in Brand Building Process

7/30/2019 Strategic Application Co-Branding in Brand Building Process

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Strategic Application of Dual-Branding in Brand Building Process

AUTHOR DETAILS

Sarvesh Soni

Assistant Professor, Faculty of Management, SSESGI, Rajpur- Kadi, Mehsana

E-mail:[email protected], Tel: +91-9173955831

Falguni Prajapati

Assistant Professor, Faculty of Management, SSESGI, Rajpur, Kadi, Mehsana

E-mail:[email protected], Tel: +91-7383772619

ABSTRACT

Todays market is flooded with products or brands with very identical physical features, attributes and value

propositions. Moreover, with high cost of media and dilution of above the line advertising effect make the marketer to

look for new alternatives for creating an edge over competitors. In attempt to build up a strong brand image marketers

are using Dual-Branding as a strategic option. Consumers attitude towards a particular brand alliance influences their

subsequent attitude towards the individual brands that comprises that alliance. The ability to pair images such as two

brands in co-branding is likely to be more effective when brands have something in common and relate to each other in

mind of the customer. When target customer of two companies is having same characteristics then it may be easier to

formulate association between them. Some of the popular forms of Dual Branding or Co-branding are ingredient co-

branding, corporate co-branding and multiple sponsors co-branding. The paper throws some light on rationality &cognitive principles for using Dual-Branding strategy with advantage & risk of the same for creating a favourable brand

image in the Indian Market.

Keywords: Dual-Banding, Co-branding, Brand Association, Brand Alliance, ingredient co-branding, corporate

co-branding, multiple sponsor co-branding.

. OBJECTIVEThe objective of this study is:

To understand the genesis of Co Branding strategy and to explore how Co-Branding can be helpful for the

partnered firms in their brand building strategy.

. TYPE OF RESEARCHThe methodology employed for research is exploratory in nature and does not include primary data collection.

No survey or response method is used. Data is collected from several secondary sources like journal articles,

research papers, websites and online social media portals.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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. INTRODUCTIONThere are various strategic options available to a marketer for building a strong brand in the market place.

Brand image building is a long term process and the company needs attention to make a brand distinct from

other products or brands in the same product categories. It is difficult to develop a long term one way strategy

for a brand and make it a success in the market place today due to sameness in the market. The market is

flooded with products or brands with similar physical features and value promises and to make the condition

worse for the modern marketer, there is a very high level of media clutter and advertising is fast losing its effect

over the customers. The high cost of media and complexity of consumer response to interactive media makes

the marketer to look for new alternatives for brand management. The three macro strategic issues relates to

building a strong brand include a distinct value offer with a high level of sustainable competitive advantage, a

differentiated positioning statement and a consistent positioning strategy. The three distinct propositions have

remained same for building brands but the approach to build a successful brand is undergoing a change in the

current context.

. CO-BRANDINGCo-branding- also called dual branding, brand alliance or brand bundling-occcurs when two or more existing

brands are combined with into a joint product or marketed together in some fashion (Keller,2005). An existing

brand can leverage association by linking itelf to other brands from the same or different company. It has made

inroads into nearly every industry, from automotive and high-tech Internet companies to banking and fast food.

Many well-known firms chose this marketing strategy in order to draw new customers, to increase the brand

awareness, to support the customer loyalty or to win some other individual advantages offered by the

partnership. The companies are very often following co-branding strategy only after realizing that the

traditional marketing practices are exhausted and are no more capable of delivering a distinct brand benefit that

they should have.

Is co-branding new?

No. Previously detergents were endorsed by white goods brands, and oil brands endorsed by car manufacture.

What is new is todays corporate awareness that strategic alliance is essential to acquiring and maintaining a

competitive edge. Co-opetition, a new word coined by Brandenburger and Nalebuff (1996), illustrates this

new attitude. The idea is sometimes corporation may have to cooperate with and compete against some

companies. From this stand point, co-branding is an alliance made visible. Co-branding involves recognising

that the publics knowledge of an alliance is added value.

Creating or Modifying Identity for each other

A product is identified with a company by its brand, and usually consists of some type of identifier. The

concept of co-branding consists of taking a product developed for one company, and changing the look and feel

to match that of another company. The detailed co-branding process results in a product that is fully customized

to meet the particular needs of a specific company with minimal change to the underlying technology,

processes and modular functionality. Co-branding customization requires the work of both designers and


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developers. Designers modify the look and feel in order match the new company's value offer. Developers add

and remove product functionality modules in order to meet specific needs of the customer segments. The very

base of co-branding marketing strategy is related with brand association phenomenon.

. LOGIC OF CO-BRANDING New product launches clearly identify the brands that cooperated to create and market them. M & Ms and

Pillsbury invented a new cookie concept, and Compaq and Mattel combined their respective expertise to bring

out a line of hi-tech, interactive toys.

To maximise brand extension success rated, many companies seek help from other companies, brands, whoseestablishment reputation in the new market might prove decisive. For example Kelloggs co-branded its cereals

for health oriented adults with Health Choice.

Image reinforcement may also be an objective of co-branding. In the detergent industry, for instance, famouswhite goods brands endorse particular detergents and vice versa. Thus Ariel and whirlpool recently launched a

co-branded advertising campaign, whose claim is The art of washing. By this collaboration, Ariel seeks to

reinforce its market leader status and gain a more affective image. As for whirlpool, the campaign bolsters its

European launching strategy, and creates a caring image.

Co branding appears in sales promotion too. Nokia has partnered with Yatra.com to offer free travel vouchers withselect Nokia Asha phones during Diwali festival in 2012. Customer would get Yatra.com travel vouchers worth of Rs.

4500 with purchase of Nokia Asha 305, 308 and 311 Smartphone The voucher consists of 4 domestic air ticket vouchers

of Rs. 750 each and one Rs. 1500 hotel booking voucher. Yatra.coms brand positioning is to create happy

travelers. Through this tie up with Nokia this Diwali, we are aiming to create happy customers by giving them

an opportunity to travel with a bunch of discount vouchers that will make it easy for them to travel and meet

their loved ones.

Capitalizing on synergies among a number of brands is another co-branding objective. Ra.One the first of itskind landmark film. The films potential and additional revenue streams making the marketing spend on

Ra.One have been subsidized considerably through major brand tie-ups in excess of 25 brands. These include

Sony PlayStation, YouTube, Nerolac, McDonalds, Western Union Money Transfer, UTV Indiagames,

Videocon, Nokia, Coke, ESPN Star Sports and Cinthol amongst others.

The most important aim of co-branding is through combination of two brands in order to attract more customersand to maximize the power and prestige that each brand has to offer. The partnership helps in opening up new

markets and marketing opportunities. Co-branding is a good way to influence customers in a psychological

sense and give them the impression that their favourite brand has a lot more to offer. Co-branding provides two

distinctive benefits. Both companies benefit from the partnership and so also the customers. The Dominos

pizza buyer would receive a two-for-one movie coupon with the pizza or the movie goers would get a Rs.20.00

off on the Dominos pizza order.


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A company gets preliminary benefit of instant brand recognition in markets where there may not be anyconsumer awareness (at the launching stage) or a lesser degree of consumer awareness a company desires.

Other benefit is the financial advantage provided by the alliance. It results from the sharing space, which lowers

operating costs, maximizes marketing dollars through joint promotions and increases marked exposure with one

product carrying both brand names.

. DIFFERENT APPROACHES TO CO-BRANDINGThere are several approaches in trying to define different forms of co-branding. The first of its kind is by the

process of differentiation in co-branding forms. There are four different forms of co-branding as follows:

Ingredient co-branding

According to Kotler & Keller (2011), a special case of co-branding is ingredient branding, which creates brand

equity for materials, components, or parts that are necessarily contained within other branded products,

Ingredient Branding is more recent strategy, which fits under the umbrella of Co branding.This approach

surpasses the limitation and dangers of a too narrow and single sided customer- supplier relationship. The Intel

Corporation demonstrated the marketing possibilities of Ingredient Branding for both component

manufacturers, as well as the manufacturers of finished goods (Kotler,2010). Since then, numerous suppliers

have tried to implement their own marketing concepts modelled on the Intel case in order to escape anonymity

and substitutability of supplying a part or a component. A representative example could be recognized when

Maruti advertises that it usesMRFtires.Same-company co-branding

Another form of co-branding is same-companyco-branding. Sometime a product brand associate itself with

the manufacturer of the same product. It can be seen when corporate brand is enjoying higher prestige &

awareness in the market. A Titan watch from the house of TATAs or VOLTAS ACs advertises as a TATA

product is an example of this kind. Some time for the sake of sales promotion, company also gives free product

of the same company with purchase of other product

Corporate co-brandingJoint venture co-branding is yet another & common form of dual branding. The case of Godrej and Procter and

Gamble is example of this kind. We are going to experience more number of joint venture branding in near

future.

Multiple-sponsors

Finally, there is multiple-sponsorform of co-brands as in the case of HCL computers withhardware alliance of

HP, processor alliance of Intel and software alliance of Microsoft.. Production Company Red Chillies

Entertainment marketed the movieRa-One as an event, and the promotions began 10 months before the launch.


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The objective for all the 25 brands that tied up with the movie was to ride the wave of publicity surrounding

Ra-One. Brands like Volkswagen and Kingfisher chose in-film promotions; others like Coca-Cola andHorlicks

used on-pack graphics of Ra-One to grab eyeballs. Hero Cycles, Sony Play Station and Gitanjali Group

launched special edition products to capitalise on the hype of Ra-One. Then there were brands you would never

imagine would join the fray - like Western Union Money Transfer to calling card Matrix. One of the most

unique tie-ups was with McDonald's. People who bought a Happy Meal filled a coupon which offered them a

chance to meet Shah Rukh Khan.

Silent Co-branding

Even though co-branding has become fashionable, not all alliance has been made visible. In photocopy market,

many products sold by Canon are actually made by Richoh . To conquer the iced tea market, Nestle and Coca-

Coladecided to unite against Unilevers Lipton range. Nestle would create and market the product, and Coca-

Cola would distribute it. The product, calledNestea, is not co-branded, though-Coca-Cola Company gets only a

small mention on the back of the packaging.

. GUIDELINES FOR DUAL BRANDING OR CO-BRANDING STRATEGY

As natural with every marketing strategy, even with co-branding it is difficult to expect only positive results.

There are far too many factors, which can influence either success or dismal failures for the brands.

The partner brand should be reliable and responsible.

Both companies should represent the partnering company without any possible scandals and public relations

problem. The acting of each single partner influences the customer bases very easily. Every business needs

capital and also in creating partnership of two companies, the financial strength is very important. This is

especially important for the future possibility of problems or slow sales periods. To be more precise, before

choosing a branding partner, it is necessary to consider that the existing brand usually awoke some association

in the past. In some cases a problem can occur, and hence that a prior brand association may limit co-branding

possibilities.

Identify the original associations clinched to the brands.

In order to manage the co-branding strategy successfully, it is important to identify the original associations

tight to the brands, which are to create an alliance. There is a wide range of associations, which may be awoken

among customers. Most common are the attributes of the product or benefits from it, but quite often are brands

also associated with the celebrities, events that have been linked to it or even geographical location. The best

example of a brand with a wide network of associations is Pepsi in Indian market. The brand is already


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associated with the celebrities that have endorsed it (from Amitabh to Sachin up to Ranbeer), the Cricket series,

which Pepsi sponsors, the concept of refreshment, certain music that has been used in the advertisements, the

colour blue -red.

There should be a common stimuli shared by both the brands.

The ability to pair images such as two brands in co-branding is likely to be more effective when brands have

something in common and relate to each other in the mind of the customer. When the target groups of

customers of both companies to some extend match together and stimuli are similar, individuals are more likely

to make the connection between them and it may be easier to formulate associations between them. Aside from

simply choosing appropriate stimuli, research shows that it is useful to point out the similarities between these

two brands. The buyers for spices and ready to eat snack is totally different. This is why the association of

Ramdev brand spices with Balaji Wafers has gone failed where Ramdev had tried to give Balaji s ready eat

wafer packet free as a part of its sales promotion tactics in March,2011.

Buying situation for both brands should be same.

Consider the recent ads forApple iPhone 4, in which Aircel and Airtel played respective cameos. Experts saw

this as an opportunistic move on the part of the telecom players as being associated with Apple was deemed to

have a positive rub-off effect on their own brand value. Research on the bundling of products suggests that

products that have similar buying situations and bundled together are more favourable to consumers and

consumers will pay more for them than products that do not belong together. To combine two completely

different partners could cause into failure. If a banking industry tries to associate itself with a cartoon character

might not be successful at all. The explanation of these results could be the fact that financial products are just

not funny and humour is not an appropriate fit.

Exposure of Co-Branding in advertisement

In order to increase the effect it is recommended to repeat the co-branding connection several times by using

co-branding in advertising. Advertisers using co-branding should be aware also of special aspects of this

strategy like timing of the co-branding presentation and ordering of the images in order to achieve maximum

association formulation. Although it is wise to consider the length of the relationship between the two branding

partners, advertisers should also be aware that associations are fairly resistant to extinction . The fact that an

association has not been reinforced does not mean that it automatically disappears over time. Once favourable

stimuli were created, they last. For instance Dells association with intel processors.

Once an association is formulated between two entities, it is difficult to attach the same association to a

different brand. Once a response is conditioned to a particular stimulus, individuals may respond in a similar

manner to similar additional stimuli. It is possible that when you create an association between a target brand

and a familiar positive brand, other brands, either your own similar brand or competitors brand, will also be

associated with the stimuli. As an example we could use the Nike trade mark, which produces high quality

sporting gears. This brand has become very popular among sportsmen across the world. The association which

Nike awakes among the customers is high performance through the Just Do Itcaption. When another brand
http://www.afaqs.com/news/story/30738_Aircel-and-Airtel-bite-into-the-same-Applehttp://www.afaqs.com/news/story/30738_Aircel-and-Airtel-bite-into-the-same-Applehttp://www.afaqs.com/news/story/30738_Aircel-and-Airtel-bite-into-the-same-Apple


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of such similar sportswear (like Reebok, adidas) tries to introduce this image, the association of Nike is

reinforced.

. FINDING AND CONCLUSIONCo-branded communication is usually a complementary meeting of equals and some experts feel that the

disparity between the two in this case is far too vast. "In co-branded communication, one brand may tend to be

slightly stronger than the other, but there should be some synergy between the two in terms of the segments

their target audiences lie in. Co-branding is a dynamic branding strategy and its significance is growing

especially with the increasing importance of Internet as a medium. Although the benefits of co-branding are

immense especially in a complex market like that of India but there are also some risks which are inherent in

the concept.

. LIMITATIONS OF THE STUDYThe research is limited only to the study of journal articles, websites and online resources and as such does not

cover each and every dimension of Co Branding. This paper can be used as a starting point to do more researchin creating Co-Branding strategies to assist brand building process.

0.ACKNOWLEDGEMENTMany thanks to Shree Saraswati Education Sansthan ,Faculty of Management (www.ssesic.org) and its

management for sponsoring me to take part in this conference.

The authors wish to acknowledge the constant support and encouragement of his boss: the Director of Shree

Saraswati Education Sansthan Group of Institutions, Prof. Dr. K. N. Sheth.

Many thanks to Late Shri Manish Parihar, Assistant Professor at Shanti Business School , Ahmedabad and to

their colleagues and friends for providing random but meaningful inputs to the subject.

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Marketing,3 (1), 20-26 .

3.

Brandenburger, Adam M. and Nalebuff, Barry J.; Co-opetition: A Revolution Mindset ThatCombines Competition and Cooperation, (1996)

4. Farquhar, Peter H (1989) managing Brand Equity, Marketing Research,1 ( September) 24-33.5. George S Low and Ronald A Fullerton, Brands, Brand Management and the Brand Manager

System: A Critical Historical Evaluation, Journal of Marketing Research, Vol 31, May 1994 , 173-

190.

6. Grossman, R.P (1997) Co-branding in advertising: Developing effective associations, Journal ofProduct and Brand Management Vol6, No- 3, 1997 (37-45).

7. Johnson, B. and Crumley, B. Euro RSCG acquires global role at intel, March 18,1996 AdvertisingAge (March 18, 1996).

8. K. Keller , M. Pameshwaram, I. Jacob; Strategic Brand Management, Building, Measuring and


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Managing Brand Equity, Third Edition, 2011 (289-298).

9. P, Kotler; G. Armstrong; Principles of Marketing, 1996 (290-92).10.P, Kotler; W, Pfoertsch;Ingredient Branding, Making the Invisible Visible, 2010 (10-11)11.Panda, Tapan Kumar (2001), Strategic Advantage Through Successful Co-Branding, Schoilarly

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12.Winer, Leon(1965) Are you really planning your marketing, Journal ofMarketing 29( January), 1-8.

13.www.afaqs.com/news/story/34548_Lava-gets-Intelligent;-launches-Xolo14.www.bollyspice.com/30529/ra-one-boasts-52-crore-of-tie-ups-with-over-25-brands.15.www.channeltimes.com/story/nokia-adds-colour-to-festivities.16.www.intel.com/pressroom/archieve/releases/rscgre.htm.

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http://www.bollyspice.com/30529/ra-one-boasts-52-crore-of-tie-ups-with-over-25-brandshttp://www.bollyspice.com/30529/ra-one-boasts-52-crore-of-tie-ups-with-over-25-brandshttp://www.intel.com/pressroom/archieve/releases/rscgre.htmhttp://www.intel.com/pressroom/archieve/releases/rscgre.htmhttp://www.intel.com/pressroom/archieve/releases/rscgre.htmhttp://www.bollyspice.com/30529/ra-one-boasts-52-crore-of-tie-ups-with-over-25-brands

Strategic Application Co-Branding in Brand Building Process

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