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Brands are evolving in a more and more competitive environment in which it has become difficult to differentiate oneself and offer more value than competitors’ products. For this reason, co-branding is a practice that has become more and more used by brands looking for more visibility and to find new competitive advantages. Co-branding usually consists of an association of two brands but can also be about cooperation between brands and famous designers (see example below), singers (Madonna and H&M), sportsmen (Zidane and Mango), etc., who are using their own name as a real brand.

 

3 Key objectives:

When two brands decide to collaborate on a co-branding project, they have to know exactly what are the results they want to obtain. In general, there are three main objectives to set:

  • To increase the value of a product. By connecting two names on a single packaging, the objective is to raise the interest of consumers for this product. A brand must think about which other brand it will associate itself with and has to manage to make the collaboration well perceived by consumers.
  • To highlight common values. A co-branding strategy allows two brands from totally distinct sectors to work together. However, it is critical that both share the same values and “brand world”.
  • A co-branding strategy must be profitable for both brands. Therefore it is important for the two sides to think about the interest of the other. The goal is to build a “win-win” relation between two organisations that are complementing one another.

 

Advantages:

A well-done co-branding strategy allows both brands to obtain visibility and enter new markets they could not have entered alone. Consequently, this strategy is also a mean to acquire new clients and to differentiate themselves from competitors..

 

Threats:

Even if co-branding can bring a lot to a brand, it can also represent quite a risky solution. This mode of action has to be part of a global development strategy of the two companies and has to be led with a common objective. It is necessary to find a point of similarity to exploit between both brands. Failures while implementing co-branding strategies are often explained by a bad choice of partner or a bad elaboration of the discourse, which lead the consumer to not understand the product he is watching.

 

H&M x Balmain

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The latest cooperation of the famous designer Olivier Rousteing from the Balmain Maison with H&M is an excellent example of successful co-branding. The short terms economic benefits for H&M have been rather low compared to those of Balmain as H&M only received a small percentage on sales of that very limited edition. However, the low-cost fashion brand benefited from this partnership by reinforcing its brand image and positioning itself as a reference in fashion with affordable prices. The media exposure of the brand reached high peaks during many weeks and some pieces of the collection have been sold for twice their selling price on platforms like e-Bay or even Instagram.

 

OPI x Coca-Cola

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This partnership seems surprising at the beginning but it is on the basis of strong common values that this pop and colourful collaboration has been founded. The baseline “Icon of Happiness” associated to the OPI and Coca-Cola logos reminds a shared preoccupation: putting happiness in a bottle. The nail polish collection called “Nine Shades” has been elaborated as a reminiscence of the best drinks of the Coca-Cola Company and makes the link with the attractive and fashionable women who appeared in Coca-Cola campaigns this last decade. The release of co-branding represents an important source of revenue for Coca-Cola, which has allowed the company to double its turnover thanks to the cession of many licences for the creation of Coca-Cola branded products.

 

Fiat 500 x Gucci

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In order to accentuate it’s trendy side and acquire new clients, Fiat multiplied partnerships with famous brands or celebrities for its Fiat500 model. Gucci has been one of the most important partners for the car brand. A first co-branding was released for the creation of a collection of accessories “500 by Gucci”, signed by the ex Gucci Creative Director Frida Giannini, and then a second one for the 90th anniversary of the iconic Fiat car. With the objective of attracting a premium clientele, this partnership was a real success. More than 3000 models of the Fiat 500 by Gucci were already pre-ordered at its first appearance during the Genève Auto Show.