Able to borrow needed expertise Loss of control
Leverage equity you do not have Combining incompatible corporate personalities
Reduce cost of product introduction Overextension
Expand brand meaning Partner repositioning
Source of increased sales and additional revenue Loss of distinctive features
Provides access to cutting edge technology Risk of brand equity dilution
Premium prices Negative feedback effects
Customer reassurance Lack of brand focus and clarity
Increased market place exposure Organisational distraction Source: Adapted from Blackett and Boad (1999)
Many of the advantages mentioned in Table 4.2 can be accrued through CARE, for instance NPOs can provide societal expertise to firms, additional sales can be generated and a price premium can be charged for cause-linked products. Whilst few of the potential disadvantages of co-branding typically apply to CARE from a firm’s perspective, these can act as advice to NPOs who choose to enter into alliance with for-profit brands. For instance, NPOs who partner with firms should still retain focus on their core purpose and not be distracted from it due to corporate demands.
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4.5.4.1 Co-branding definedCo-branding – also called brand bundling – has been described in various ways, for instance co-branding is a form of brand leveraging that occurs “when two or more existing brands are combined into a joint product or are marketed together in some fashion” (Aaker, 2002:360); “the pairing of two or more recognised brands within one space” (Boone, 1997:34); and a relationship that should not be confused with strategic alliances and/or joint ventures (Ilicic & Webster, 2013; Grossman, 1997).
For the purpose of this study the widely accepted Interbrand definition of co-branding will be used: “co-branding is a form of co-operation between two or more brands with significant customer recognition, in which all the participants’ brand names are retained. It is usually of medium- to long-term duration and its net value creation potential is too small to justify setting up a new brand and/or legal joint venture” (Blackett & Boad, 1999:7-8). Legally the parties concerned in a co-branding relationship are “independent entities and their intention is to create something new … the scope of which falls outside their individual areas of capability or expertise” (Blackett & Boad, 1999:18). In practice, various type of co-branding can be identified.
4.5.4.2 Types of co-branding
A broad interpretation of the concept of co-branding results in the identification of various co- branding types, including joint promotion, joint advertising, physical product integration (i.e. ingredient branding), sponsorship, joint ventures and alliances (Blackett & Boad, 1999). The broad spectrum of what is viewed as co-branding has resulted in some confusion in the past. However, Blackett and Boad (1999) emphasised two facets as the regulators of this co- operative arrangement and therefore need to be addressed in greater detail, namely (1) the expected duration of the co-operative relationship, and (2) the nature and amount of value that can be created through sharing or co-operating (Blackett & Boad, 1999).
4.5.4.3 The duration factor in co-branding
Co-operative relationships have varied from three months (e.g. McDonald’s and Disney in a joint promotion venture, etc.) to up to ten years (e.g. airline alliances; Mercedes-Benz and Swatch in an urban vehicle-related alliance) depending on factors such as the characteristics of the markets and/or the lifecycle of the products involved (Blackett & Boad, 1999).
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Co-branding can be found between these extremes. Many co-branding relationships do not have fixed endpoints and some researchers view this as detrimental to the success of the co- branding venture, as the lack of fixed endpoints increases the difficulty of planning the brand’s exit from the co-branding relationship, an aspect regarded as a vital part of co- branding planning (Cunha, Forehand & Angle, 2015; Blackett & Boad, 1999). Throughout co- branding planning and implementation, timing is a key factor and considerable analysis must be conducted to determine the optimal desired time-frame for the co-branding strategy – ventures that are too short, for instance, may lead to confused consumer positioning and the dilution of the co-brand and the brand associations formed (Cunha et al., 2015; Abratt & Motlana, 2002; Prince & Davies, 2002).
The duration of the co-operative relationship most often has an important influence on the extent of sharing assets and expertise, with the potential of generating more shared value. Figure 4.1 provides a graphical illustration of the interaction between duration and shared value creation as a means for understanding the relative position of co-branding in relation to other forms of co-operative ventures
Figure 4.1
Duration/Shared value creation interaction
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As shown in Figure 4.1 co-branding is viewed as a medium-term approach that focuses high levels of shared value creation. The role of shared value creation will subsequently be discussed.
4.5.4.4 The shared value creation factor in co-branding
The basis for co-branding is “the expectation of synergies which creates value for both participants, over and above the value they would expect to generate on their own” (Blackett & Boad, 1999:6). This basis, however, is not unique to the case of co-branding and is relevant also for promotions, alliances and joint ventures. According to Blackett and Boad (1999) a hierarchy of types of shared value creation opportunities, linked to the nature of the co-operation can be distinguished:
Reach/awareness co-branding: This represents the lowest level of shared involvement and occurs in situations “where co-operation enables the parties rapidly to increase awareness of their brand through exposure to their partner’s customer base” (Blackett & Boad, 1999:9)
Value endorsement co-branding: This co-operation is specifically designed to include endorsement of one entity and/or the other’s brand values and positioning (Blackett & Boad, 1999) and often includes considerable similarities with traditional corporate sponsorship, relating it to marketing concepts such as reputation, image and publicity.
Ingredient co-branding: Ingredient co-branding is the “only distinct sub-category of co- branding that has been defined in the marketing literature” (Blackett & Boad, 1999:12). In ingredient co-branding there is usually an identifiable physical component and the rationale behind this category of co-branding is that “a brand noted for the market- leading qualities of its product supplies that item as a component of another branded product” (Blackett & Boad, 1999:12).
Complementary competence co-branding: The highest level of co-branding is when two powerful and complementary brands combine to produce a product that is more than the sum of the parts and relies on each partner committing to a selection of its core skills and competencies to that product on an ongoing basis.
Generally, the co-branding that takes place during CARE campaigns can be classified as reach/awareness co-branding or value endorsement co-branding. An exception is when non- and for-profit brands engage in a process of joint product creation for the purpose of selling the product as part of a CARE strategy to generate proceeds for the NPO. In such case complementary competence co-branding occurs.