Your company can be very strong on its own, but with the collaboration of other brands your corporate image can improve and become stronger. This is what we mean when we talk about cobranding, the alliance with other brands to add results.
Don't worry if you haven't heard this term before, in this article we will tell you what cobranding is and how important it is to make your business grow. Keep reading so you don't miss anything!
what is cobranding?
Cobranding is a marketing strategy that aims at collaboration between two or more companies to offer a joint service or product for a limited period of time, i.e. related brands team up to introduce a new product or service to the market, in order to improve their profitability and positioning, thanks to the power of combining several companies.
This can be a very effective marketing technique, as it combines the strengths of several brands, rather than acting independently, and cobranding helps to boost sales and attract new customers.
Don't worry, because doing this marketing strategy does not mean that the other company will take customers away from you, on the contrary, thanks to this marketing technique both brands win.
An example of cobranding are the collaborations of H&M with different brands and designers. The Swedish fashion multinational is known for its collaborations with brands such as Kenzo, Jimmy Choo or Lee, where it puts on sale in selected shops a collection with these brands at a much more affordable price than normal.
Advantages of cobranding
As we have explained in the previous point, this strategy means the collaboration between two or more brands to achieve a benefit and launch a product or service to the market. It could be said that each brand brings out the best of itself to obtain better results.
Ideally, choose a brand that complements and enhances your products perfectly. Many companies in the fashion industry make special temporary collections, e.g. Bershka or Adidas.
Some of the main benefits are the following:
- bigger budget and shared expenses. A marketing campaign can be a big financial outlay, but with cobranding the investment is between the collaborating companies. Marketing and advertising expenses are shared, so the investment is not so costly.
If you are just starting out and do not have large budgets, using this collaboration technique with other brands can be a great alternative to grow and promote yourself.
- gain credibility: cobranding will allow you to improve your brand image, as long as the association is with another that is also respected and recognised in the sector. A quality union between companies that are already recognised helps to generate greater credibility among consumers, and strengthen you in the market.
- greater reach: The reach of both companies is increased, as the product or service is given visibility by the collaborating companies. In other words, the audience of your brand will know the other with which you are collaborating thanks to you, and vice versa. Therefore, your potential customers will grow.
- enter or strengthen your position in the market. Thanks to the help of another company you can get the push to enter a specific market or niche, or improve the position you already have in it. This is very important nowadays, as the market is becoming more and more competitive.
- more creativity: "Two minds think better than one". You have probably heard this phrase a thousand times, and the fact is that the union of two or more creative teams helps to generate new ideas and to be more creative when it comes to advertising the product.
The importance of cobranding
Firstly, because we are in a highly competitive market, so we have to find the best ways to compete in it, and one of them is to apply this marketing strategy, because there is strength in numbers.
Cobranding is important to grow your brand because it will help you to get new customers. It benefits you to establish loyal relationships, not only with the company you collaborate with, but also with the customers of both. If your customers already trust you, cooperating with brands that also have a good reputation increases your own, as well as making you known among the consumers of your ally.
Therefore, it helps you to achieve different objectives, not only to reach new audiences, but also to grow in the market or to improve your ROI. It is important to be clear about the objectives you want to achieve with this collaboration, as well as to be clear about the strategy you are going to carry out.
But as you have seen in the previous section, there are many benefits of carrying out a cobranding strategy for your brand. In addition, when you launch a new, exclusive and temporary product, it allows you to increase the price of the product, which helps you to improve your profit margins. Likewise, by creating an exclusive product you will create a need in your customers.
It is very important that you take into account with whom you start this alliance relationship in your business. We recommend that before starting any project you do some research, because a bad collaboration can take its toll and the cobranding can be negative. Look for a brand with affinity to yours or consumers can be disappointed, which translates into distrust and loss of customers.
We encourage you to research the market and observe those companies that are similar to you in order to establish a collaborative relationship.
we hope you have enjoyed this reading!