Keys to Successful Co-branding

Communication

Communication is the glue that keeps a successful co-branding initiative together. It allows both companies to identify key issues and offer solutions before problems arise. Reebok and CrossFit executives must work cohesively to create a product or service that meets the needs of the established target market and generates equitable returns on behalf of each company. Poor communication may lead to unmet requirements causing a breach of contract, and can have a significant impact on management, operations, production and financial components of the alliance.

During our conversation, Mitchell mentioned a miscommunication between Reebok and CrossFit regarding an advertisement design. Figure 1 depicts an advertisement that displays the names of both companies on a single line. CrossFit management did not like this design because they thought it made CrossFit appear as a subsidiary of Reebok, instead of its own company with its own brand.

“To avoid conflict later on, the appearance and positioning of the respective brands should be discussed at length during the initial contracting stage. Additionally, sophisticated companies usually have trademark use policies, and it is important to ensure that the policies that your company has developed to protect the legal integrity of corporate marks are strictly followed in connection with a co-branded product or service” (2).

Performance Analysis

In order to have records of performance measures, both companies should track the progress each step of the way. This allows companies to identify what they are doing right or wrong, and can act as a benchmark for future performance goals.

Figure 2 defines four co-branding strategies:

• Reaching in to achieve greater market penetration by choosing a partner that adds significantly to the co-brand’s core bundle of benefits.
• Leaching out to tap new markets by choosing a partner that adds significantly to the co-brand’s core bundle of benefits, while bringing in a new customer base.
• Reaching up to achieve greater market penetration by choosing a partner that contributes positive brand image and associations that, while not essential to the core functioning of the co-brand, nevertheless significantly elevate the co-brand’s image and value.
• Reaching beyond by choosing a co-branding partner that brings both a strong image and greater access to new customers (10).

Analyzing the effectiveness of each of these strategies will determine whether brand equity is reflected in market response – sales, profits, and market reach.