What is it called when two brands make a product together?

Co-branding can be a very powerful way for companies to spur growth and build brand awareness by pairing strategically with other brands. Truth be told, we all develop loyalties to different brands — and a willingness to pay more to get the brands we love comes with it.

By forming strategic partnerships, brands can capitalize on that loyalty in order to convince consumers to buy, try, and form new opinions of other brands that they may not have previously consider.

This article will explore the concept of co-branding and illustrate how some of the world’s biggest brands have formed successful co-branding partnerships to capture new markets and grow their businesses.

What is Co-Branding?

Co-branding is a branding & marketing strategy that utilizes two or more brands to promote or produce a shared product or service.

Also known as a brand partnership, co-branding can involve a number of different kinds of strategic collaborations — with each brand contributing its own brand identity to create a blended product or service, with a unique or combined name, logo, color scheme, and message.

The purpose of co-branding is to combine and leverage the strength, awareness, and positive associations of multiple brands. By transferring certain qualities between brands, each participant in the co-branded campaign benefits from the others.

Co-branding can involve the creation of a new and specialized product, range, or product variant — which can involve the sharing of manufacturing resources, technologies, and expertise. Alternatively, brand can partner up for a co-branded event or campaign.

Finally, co-branding can be undertaken due to the merger or acquisition of a company, or simply due to a project that makes sense to all parties.

In theory, the copmanies taking part in a co-branded partnership could have almost nothing to do with each other. However, the most successful co-branding partnerships have some kind of shared valuse or attributes that tie them together.

How is Co-Branding Beneficial to Brands?

A well-chosen co-branding initiative can have a wide range of benefits for each of the brands involved. By teaming up, brands can leverage each other’s strengths and successes and grow their business by accessing each other’s markets and audiences.

Transference of positive brand associations from one brand to another can have a lasting impact even beyond the co-branding partnership itself.

1. Reach New Markets

A multi- or co-branded product or campaign increases exposure for your brand to the target audiences of your co-branding partner due to audience overlap.

Loyal consumers of one brand may be willing to try the new co-branded product or service, even if they never would have considered the second brand on its own. This allows the second brand to leverage the value of the first brand to reach new markets.

Co-branding also has the potential to cause a buzz that extends beyond existing audiences — generating publicity and allowing brands to get in front of audiences that are new to all the brands involved in the campaign.

2. Utilize One Brand’s Strength to Overcome Another’s Weakness

When planned and executed well, a good co-branding exercise has the potential to help each brand overcome a weakness by leveraging the other’s strengths.

For example, if one brand is known for technical know-how but lacks a sense of fun or creativity and another brand has oodles of creativity but serious tech limitations — a collaboration can work to overcome the weaknesses of each brand and allow the other’s strength to transfer across.

This can be particularly handy for companies who’ve been through a recent rebranding. For example, a brand trying to shake an old-fashioned or traditional brand identity might try partnering with a more youthful and daring brand to help reinforce the message that things have changed.

3. Reduce Risk and Cost

Releasing a new product, entering a new market, or taking on a new category can be a big risk for a brand. By partnering with a brand that’s already established in your desired new market or category, you can minimize the risk and test the waters without putting too much on the line.

Piggy-backing off another brand’s existing and established associations, values, and ideals can also be a cost-effective and convincing way to communicate a change within your own brand.

Powerful brand campaigns don’t come cheap, and it can be even more effective to show a change by association rather than spelling it out to people. Instead of telling people “we’re more family friendly now!”, a brand might look to engage in co-branding partnership with a brand whose core identity is centred around family values.

4 Brands That Have Benefited From Co-Branding

There are plenty of examples of great co-branding partnerships that can illustrate how useful an endeavour it can be. Below, we'll take a look at four different brands and some of the ways they have created successful co-branding partnershpis with other brands.

1. Nike

One of the biggest and most-recognizable footwear and athliesure brands around, Nike is famous for its successful, well-aligned co-branding partnerships. Let's take a look at a couple.

Nike x Apple

Tech giant Apple and athletics brand Nike boast a longstanding co-branding partnership, having first worked together in the early 2000s with the launch of the Apple iPod for the Nike+iPod co-brand.

Having now evolved into Nike+, a partnership that was initially centered around helping people listen to music while working out now also focuses on using the latest tech to track activity through fashionable — yet functional — wearable tech, clothing, and exercise gear.

Nike+ products feature built-in tracking transmitters, allowing them to sync automatically with Apple products and giving consumers the ability to instantly check things like heart rate, steps, distance, and calories burned.

A match made in heaven, the two brands each benefit from the partnership. Both parties can provide an improved experience to their customers — as Nike gains an association with one of the world’s largest tech brands and Apple benefits from being associated with one of the top sports brands.

The partnership makes sense, as each company has a brand image and set of values that complements the other.

Nike x Michael Jordan

No strangers to striking gold with a strategic co-branding partnership, Nike have also benefited in the past from an extremely lucrative partnership with Michael Jordan.

Initially having favored Adidas, Jordan was reluctant to sign on with Nike — as, back then, it was just an up-and-coming sports brand. However, the legendary Air Jordan line of basketball shoes have been a monumental success, with sales smashing the initial goal of $3 million over 3 years and achieving $126 million in the first year alone.

The partnership quickly helped transformed Nike from an underdog to one of the most sought-after brands around, and, over time, has earned Michael Jordan $1.3 billion.

The power of Jordan’s brand helps Nike even now, as the two brands retain strong associations with one another. Nike projected $3 million in sales of the Air Jordan in the first four years of the deal — but ended up selling $126 million of the shoes in the first year alone. Now that's what we call a lucrative partnership.

2. Adidas

Partnering with celebrities can result in cult-like followings for brands, allowing them to develop a sense of exclusivity and build loyalty through the association.

Just take a look at what strategic brand partnering has done for German sports brand Adidas. Having partnered with some of the world’s most powerful celebrity brands, Adidas’ net income increased 19.5% to $1.7 billion in 2019.

Adidas x Kanye

Adidas first collaborated with Grammy award winning rapper, producer, and personality Kanye West with the launch of the co-branded Adidas x Yeezy range in 2015.

Producing sneakers and other fashion leisure wear, the combination of Kanye’s personal brand & celebrity appeal with Adidas' street and leisurewear segment has garnered strong brand growth since it was introduced.

Buzz and excitement was created through a sense of exclusivity — with each new line priced strategically higher with limited production runs. Even consumers who couldn’t afford these co-branded products found them aspirational, and the impact and brand associations still resonate strongly — with regular Adidas products suddenly cooler to fans of Kanye West.

Adidas x Ivy Park

Another instance of Adidas leveraging celebrity power to enhance its own brand appeal is its co-branded line of athleisure products in collaboration with Beyoncé’s own brand, Ivy Park.

First launched in 2016, the Ivy Park brand is associated with pushing the boundaries of athletic wear, supporting and inspiring women, and the belief that beauty goes beyond physical appearance. These are all notions and associations with which Adidas strategically chose to align its brand — not to mention the immense power of Beyoncé’s personal brand in and of itself.

In turn, Ivy Park benefited from the association with Adidas, with Beyoncé stating that the brand “has tremendous success in pushing creative boundaries” and that the two brands “share a philosophy that puts creativity, growth, and social responsibility at the forefront of business”.

The Ivy Park x Adidas range sold out within minutes of its launch in January 2020.

3. Milka

Chocolate brand Milka is one of the world’s leading chocolate brands and has graced shelves since 1901. Famous for its wide variety of flavor combinations, the brand boasts some expert co-branded products with companies from within its parent company, Mondelēz International.

Milka Oreos, Daim, & Philadelphia

What does an American cookie, a Swiss chocolate bar, and a cream cheese spread have in common? They’re all owned by the umbrella company, Mondelēz International — which also happens to own the Milka chocolate brand. Thus, we have the co-branded Milka Oreos and Milka Daim varieties of chocolate.

While cream cheese flavored chocolate doesn’t sound too appealing, chocolate flavored cream cheese certainly does — and, thus, we now have Philadelphia Milka Cream Cheese. Whether these products were created to drive sales, expand the range, or bring one or more of the brands into new markets, these in-house partnerships have succeeded and stuck around.

Philadelphia Milka capitalized on a significant growth opportunity by combining two of the most consumed snacks in the UK and saw great success across most European markets.

Source: Milka.de

It’s not unusual for parent companies and their subsidiaries to engage in strategic co-branding collaborations to produce new and different varieties of products, lines, and flavors. With shared resources and an existing alignment thanks to their shared parent company, it’s a straightforward way for companies to test brands in new markets and retain full control should anything go awry.

Interestingly, Philadelphia Milka did not succeed in Italy and was withdrawn after a few years — which just goes to show that even within European markets, diversity of cultural preferences needs to be taken into account.

Chocolate, potato chips, and other snack foods are frequently updated with flavors that involve co-branding, often with polarizing or controversial reception. When the Mondelēz International launched a co-branded line of Vegemite flavored Cadbury chocolate in Australia, the product itself didn’t last long — but the co-branding exercise certainly achieved its purpose of creating buzz for both brands.

4. GoPro

One of the most renowned co-branding partnerships is that between GoPro and Red Bull — both incredibly strong, well-established brands that align with each other in many ways.

After having worked with Red Bull on co-branded events and promotions, GoPro announced in 2016 that the two brands would form a strategic multi-year, global partnership that includes content production, distribution, cross-promotion, and product innovation.

GoPro x Red Bull

While portable cameras and caffeinated drinks couldn’t be more different, both brands are about high energy action and adventure, fearless fun, and daring risk-taking. So, when it comes to the brands partnering in co-branded collaboration, it requires no stretch of the imagination to see the fit. It just makes sense.

As part of their co-branding agreement, Red Bull received equity in GoPro and GoPro became Red Bull’s exclusive provider of point-of-view immersive footage for Red Bull’s media productions and events.

Perhaps the most famous co-branding event was the 2012 stunt dubbed “Red Bull Stratos”, involving Felix Baumgartner. Pushing limits and breaking records, the co-branded stunt involved Baumgartner jumping from a space pod more than 24 miles above Earth.

With GoPro cameras strapped to his space suit, Baumgartner’s 4 minute freefall and parachute landing were filmed and livestreamed to a record-breaking audience of 8 million people. The stunt easily fits both brand slogans of “Be a hero” and “Red Bull gives you wings”.

In the six months following the stunt, sales of Red Bull rose 7% to $1.6bn in the US, while GoPro credits the partnership with its ability to scale content its strategy and distribute across individual networks in new ways.

Should You Consider A Co-Branding Opportunity in 2022?

Co-branding is a useful strategy for businesses looking to increase their brand awareness, boost their reputation and brand image, or increase sales and market share — and you don’t need to be Nike or Beyoncé to find co-branding success.

A co-branded partnership needs to be strategic and logical. Both brands or businesses need to have shared values or some similarity to their brand image or identity, otherwise you risk eroding brand integrity.

If you’re considering a co-branding opportunity for your own brand, make sure that you have a full understanding of the values and image of the other brand. Identify what makes the two compatible and evaluate any potential risks. Understand what benefit the partnership brings to the other brand, and make sure it aligns with your own strategic goals and campaigns. With the right match you can make a big splash — just like some of these wacky co-branding partnerships did.