3 Reasons Why Co-Branding Is A Bad Idea

Co-branding is a partnership formed between two brands which have complementary audiences and profiles (or that’s the idea).  The jist is that each brand will reinforce the other’s favorable attributes and bolster their respective weaknesses.  The two superpowers will collide and rise to the top of the consideration set, acting in cooperation for the sake of differentiation.

There are many cases in favor of joint venture co-branding; it can introduce a mature brand to new markets, help brands further penetrate existing markets and rejuvenate the lagging interest of fickle consumers.  Co-branding programs can be designed for flights of time in an effort to grab short term sales gains as with a promotion or limited time offer.  Programs can also be set up as part of a longer term integrated marketing strategy designed to build loyalty.  The former is more of a tactical execution of a marketing idea; the latter is a strategic business undertaking.  Both require months of work and a lot of cash, from R&D to packaging to merchandising and on.

There are plenty of valid business reasons to explore a co-branding partnership of either short or long form.  Sometimes the perfect balance can be struck between header and subservient brand, making the new association feel like a true marriage rather than curious tactic.  Co-branding is used extensively in grocery and food service (restaurant) industries, and I think food marketing practitioners see success there because of the close association between the ingredient brands (pun not intended) and the highly emotional triggers pulled by consumables in general.  I mean, Duncan Heinz brownies and Hershey’s syrup naturally go together (you can eat them both), and yummy chocolate makes me happy.  Check, check.

But I’m not still convinced that co-branding is a good idea.

Case in point:  When I say “Accenture,” you say ___________? Gotcha, I heard you answer “Tiger.”  Tiger Woods’ personal indiscretions earlier this year cast a long shadow over a long-standing prominent strategic partnership with Accenture.  Theirs wasn’t a celebrity endorsement; it was a co-branded positioning campaign (no, I don’t think “campaign” and “sustained” are mutually exclusive) for professional services.  Tiger’s dalliance forced Accenture to decide if “High Performance Business” could carry forward under its own steam, or if the message had fallen victim to a double entendre.  Theirs was a six year investment which abruptly ended on a low, very public negative note rather than strategically timed graceful separation.

More on why co-branding shouldn’t be entered into lightly:

Reason #1 To Say No To Co-Branding

There’s just too much risk.  A great many brands just aren’t mature enough to survive negative publicity or a drop in consumer sentiment unscathed. Sure, there are contracts and clauses, agents and intermediaries. Things lawyers can do to help protect a brand’s interests (on paper).  But so much just can’t be controlled, and the sorting out happens behind the skirt, anyway.  At the end of the day, each brand has its own corporate board and interests to maintain.  Risks include:

• Risk of poor management by the partner brand, and the myriad downstream effects (crisis planning, anyone?).
• Risk of striking the wrong tone or being an ill fit (did anyone think of the consumer viewpoint on this?)
• Risk of brand depreciation (what if Brand X were to take a nose dive?  who wears the egg?) and the effects on brand equity.
• Risk of diluting both brand images as consumers struggle to distinguish the relationship (cognitive consistency).
• Risk created by falling out of bed, getting the finger, and cutting and short-changing an investment.
• Risk of brand power inequity, in exchange for other asset (like distribution channel).
• Risk of a divergence between consumer expectations and experience with the co-branded product; the double-whammy let-down.

Reason #2 To Say No To Co-Branding

Consumer-to-consumer influence (h/t @mackcollier) trumps celebrity endorsement for the long haul.  Simply put, there are better options available than hitching your brand star to another.  Note I didn’t say “more visible options” or “faster options,” because, well, peer influence is earned.  And it takes awhile to bubble up.  That’s why it carries so much weight – its tied to something of personal value, and earned the hard way through investment.  Your reputation.

Reason #3 To Say No To Co-Branding

Many co-branded products and services struggle with authenticity and effective alignment.  Try as the brands might, the wrong chord gets struck or there’s no discernable added value with the partnership. The consumer can end up feeling gamed or “sold to.”  After the newness of Orbit Whitening Gum Powered By Crest chewed off, did anyone see any difference in the whiteness of my smile?  Huh.  Guess it was just regular gum.  So why the special package?  Did I pay extra for that?  Bottom line – some brands will forsake a customer-centric perspective for a bigger slice of the pie.  Consumers are intuitive enough to  feel the wrongness, and the brand image may suffer.

And what about the convergence of the two visual identities themselves in packaging?  Are design attributes (dominance of the space) determined by the contract?  How does the final heuristic representation affect consumer perception of the product?  Does it loose some appeal?  Simply put, can the darn logos work together, or do they fight, further leading us down that path to wrongness?

Those are my thoughts on the matter.  What are yours?  What co-branded product really worked for you, from a marketing perspective (and hopefully in terms of experience, too)?  Was there one that didn’t work for you?

Leave a comment

Name (required)

Email (required)

URL

Message (required)

  Cancel Reply

Add your Twitter handle. No http or @. Twitter

Click to cancel reply