By Bill Chiaravalle, Barbara Findlay Schenck

You may be considering cobranding as a next move. Cobrands capitalize on the benefits of two compatible brands that present similarly desirable attributes to consumers with similar profiles. Cobranding advantages include:

  • Both brands benefit from the opportunity to appeal to a greater customer base than either may be able to reach on its own.

  • Each brand stands to enhance its esteem by borrowing on the strength of the partner brand.

  • The brands share marketing costs, resulting in cost savings for each.

  • Each brand benefits from the perceived endorsement of the other.

Following are the potential dangers of cobranding:

  • Brand management is complicated by the need to integrate the separate operating systems and management approaches of each brand.

  • The cobranded offering can confuse consumers unless the link between the two brands is immediately obvious, sensible, and easy to understand.

  • One brand can be diminished in stature if consumers consider the partner brand to be an incompatible match.

Cobranding efforts may involve strategic alliances in which two brands unite to reach common goals or cobranded promotions in which two brands team up to achieve short-term sales objectives. Efforts may also involve cobranded product introductions in which two brands bring their production and marketing efforts together to achieve a greater market impact than either could achieve alone.

Examples of cobranded product introductions include the Coach Edition of Lexus, the AT&T Universal MasterCard, and the Eddie Bauer Edition of Ford Explorer. Each leverages the esteem and attributes of both brands through a partnership that’s a good fit in consumers’ minds because the brands appeal to similar markets, offer similar quality, and represent similar benefits.

Before joining a co-branding partnership, be sure you can answer a strong “yes” to each of these questions:

  • Are your brands compatible without directly competing with each other?

  • Do your brands appeal to the same or very similar customers?

  • Will both brands enhance their reputations through the partnership?

  • Do customers, media, investors, and others respect both brands equally?

  • Are the management and marketing styles of both brands compatible?

  • Do you trust each other?

  • Are all the details down on paper and signed by both parties, including the cobranding marketing plan, budget, timeline, and responsibilities?

  • Can you explain the cobranded product or promotion in a sentence that will make sense to employees, customers, and others? Are both brands explaining it in exactly the same way?