Co-branding is a promotion tactic leveraging secondary brand associations, where multiple famous brands work together for a product or campaign. These brands may belong to the same companies, or from different ones. Because consumers adopt the co-branding product faster and set higher expectations of the quality, companies have to evaluate co-branding carefully before they can enjoy a revenue increase. For one, co-branding may allow the company to access into a new channel. Hence, the company gains more exposure and sales. For another, the success of co-branding depends on the fitness between the two brands. The more complement they are, the more likely they are to drive sales. However, co-branding also imposes risks for the brands concerned. I take a real-life example from the cancellation of Yale-Peking University Program[1] to signify the opportunity and risk of co-branding.
The co-branding started in 2006 which allowed undergraduates from both universities to study in each other’s campus, generating more applications and tuition revenue. It also allowed both schools to gain exposure in new geographic markets and reduced the cost of product introduction. Moreover, it benefitted both schools to learn from each other’s marketing approach. Nonetheless, unsatisfactory performance (e.g., plagiarism) harmed both parties. Both schools were afraid of losing control over the event. Students set a higher expectation to this co-branding, but became less certain about each of the brands. The co-branding ended in 2012, vividly showing an example of the advantages and risks of aligning with another brand.
[1] Refer to the International Herald Tribune on July 29, 2012, https://nyti.ms/P4YaVG