Marketing goods or services under two or more brands from different companies is a popular approach to expanding the advertising of a new or existing brand in the market and can be used in many ways.
Although co-branding is not a new idea, it is still important to think about the strategic goals of the project as well as address all potential risks before launch.
To ensure that each and every participant benefits from the campaign, finding the right partner is essential: the compatibility of potential partners plays a key role in the success of the project.
The parties must not be of essentially the same size or reputation. When a major partner joins forces with a lesser business name, the minor partner typically benefits from the belief and trust that connects with the better business name, as the second can use the minor business name to break into new regions From the market.
Co-branding with two or more small partners can be more strategic and innovative.
In these types of circumstances, groups must ensure that the total amount of combined marketing effort results in better brand identification than would have been achieved by individual promotions.
Once a like-minded associate has been met, threats to the co-branding plan need to be thought through and addressed.
It is particularly important that a suitable contractual method is established to ensure that the rights and quality control of your individual marks are maintained. This can be achieved with appropriately drafted mutual brand licenses included in the cooperation contract. These licenses must not only specify what the approved use of the parties’ trademarks would represent, but also what limitations and restrictions are relevant.
A serious threat that all brand owners must guard against is dilution of their brands, where using the brand on products that exclude those for which the brand is registered or will damage their individual reputation.
The threat of dilution is inherent in co-branding, and by the same token, the agreement must provide the participant with the option to terminate the license in the appropriate situation.
Co-branding is not adopted for all companies. However, despite the threats involved, co-branding applicants stand to gain greatly from this type of practice, provided the situation is right and you ensure that it is designed and handled with essential care.
