Co-Branding / by Mike Takahashi

I recently read how Saturn dealers were proudly associating themselves with the Penske Automotive Group shortly after the announcement of the planned acquisition of Saturn by Penske. One Saturn dealer was quoted as saying there was a 35% sales jump in June over the prior year after the announcement was made. The apparent reason had been due to the power of co-branding. Co-Branding has been in existence for a long time. Have you ever noticed that most Barnes & Noble bookstores have Starbucks coffee shops in them? Or how about when you get those little ketchup packets from In-N-Out and they’re from Heinz.

If done effectively, co-branding can combine the strength of two brands to help bring enormous benefits in growing new market share and awareness. However, it can also have its share of weaknesses as well.

One major hurdle in co-branding can be the differences in values that each brand imposes, and trying to find the right balance to complement each other. Take for example Tim Hortons and Cold Stone.

If you’ve ever been to Canada, you’ll know that Tim Hortons is huge over there. They have a cult like following and are virtually on every street corner. They’re like the Starbucks of the United States. Cold Stone is an ice cream parlor that is now in almost every major city and town in the United States.

This article from BusinessWeek entitled "Tim Hortons and Cold Stone: Co-Branding Strategies" explains some of the challenges, issues, and criteria that the two companies faced when deciding whether to initially partner.

Of course, co-branding can come with risks as this article from BusinessWeek entitled "The Pros and Cons of Co-Branding" helps highlight.

In the end, it's important to remember that co-branding is about picking a partner who closely matches your brands value, strategies and image.