What it is. Co-branding: *is a form of co-operation

Apple, 2012. [Online]. Available at: < http://www.apple.com/ipod/nike/run.html>[Accessed 10 March
Fendi, 2012. [Online]. Available at: <http://www.fendi.com/#/en/foreverfendi>[Accessed 07 March
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HTC, 2011. [Online]. Available at: <http://www.htc.com/us/press/htc-and-beats-by-dr-dre-set-tointroduce-new-era-in-mobile-audio/41> [Accessed 08 March 2012].
L.A. TIMES BUSINESS, 2011.HTC invests $300 million in Beats by Dr. Dre. [Online]. Available at: <
>[Accessed 10 March 2012].
Maserati, 2012. [Online]. Available at:
07 March 2012].
Park, C.W., Jun, S.Y. and Shocker, A.D. (1996), “Composite branding alliances: an investigation of
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[Accessed 09 March 2012].
What is
Enemy or
Pros &
Zhimeng, Han 019958
Hui, Liu
Rui, Zhao
Jinyi, Zhou
Siying Zhu
Group 56
Why is
so popular?
Editors’ talk...
he Special Topic this week is
“Co-Branding”, which is
worldwide popular since 21st
century. Different types of cobranding, the elements which
influence consumers decision
making, the corporations
between companies and the
advantages and disadvantages
of co-branding will be discussed
in this magazine. We will
combine the academic theories
with the real examples, in order
to present the concept, “cobranding” , to you easier.
“it involves that pairing two or more branded
products (constituent brands) to form a separate and
unique product (composite brand), which is a strategy
currently popular for introducing new consumer
------Park, Jun and Shocker (1996).
Co-branding is an increasingly popular strategy, which is used
by companies to add products’ value and increase sales. There
are four types of co-branding, which are ingredient cobranding, same-company co-branding, joint venture cobranding and multiple
sponsors co-branding.
Firstly, ingredient
co-branding means that
using a well-established
brand as a component of
the production of another
well-established brand. A
well-known example is Gateway computer with Intel chips.
Secondly, same-company co-branding means that, a
company makes two or more brands’ products and
promotes those different products together; for
example, consumers get freebies Anna Sui perfume,
when they purchase Boss perfume, while both of those
brands belong to Procter& Gamble.
Another form of co-branding is joint venture cobranding, which means two or more companies create
a “strategic alliance” to produce a product to target
customers. McDonald's and Disney’s “happy meal” is
an example.
The last one is multiple sponsor co-branding; this
refers to different companies working together to form
a “strategic alliance” in technology, promotions, sales,
etc. For instance, HCL computers integrate HP
In this case, as Nike has chosen the
right partner, it reached a peak in its
business life. This was a typical
example of win-win scenario.
Nike was the first company, which realised the value of
co-branding. Therefore, the company cooperated with
Michael Jordan in 1984, and created a production line of
shoes which named as Air Jordan(s). Air Jordans was first
released in 1985; and it updated new designs every year.
Nowadays, Air Jordans is still one of the most
popular products
in the shoes
industry. The
success of Air
Jordans pointed
other companies
that how great the
concept “cobranding” is;
since that, cobranding became
more and more
popular day by
Nowadays, co-branding becomes a
highly popular concept in business area.
Companies corporate with others, try to
reach a win-win target and gain a high
profit and market share. The two
companies could be in the same
business area or in different areas,
while some of the companies used to be
competitors. However, business is
always a complicated world, isn’t it?
Most of H&M’s co-operations are “joint-venture
co-branding”, as we have mentioned earlier. It
usually seems that co-brand with a lower level
brands would damage the brand images of the
luxury brand, while H&M’s history of co-branding
with luxury brands tells a different story.
The Amsterdam-based
fashion house, Viktor &
Rolf is H&M’s third high
fashion partner, which
rose a big hit for H&M.
Lanvin , which is one of
the first fashion house in
Paris co-brand with H&M,
and designed the Lavin
for H&M; the must-have
collection sold out within
hours of going on sale.
Karl Lagerfeld is
one of the most
fashion designers,
who cooperated
with H&M in 2004 .
With all the designers
pairing up with lowerpriced stores, there
has been a bit of
high-low fatigue
lately but this
collaboration of
Jimmy Choo for H&M
has been a hot seller.
With the reveal
collection of Versace for
H&M, the hit goes on
sale began in 300
stores worldwide.
Marni for H&M is going to
release in March, 2012. It
has generated a worldwide
attention before it launches.
The attractiveness of it can
be imagined.
- 10 -
Different from H&M and other companies,
HTC and Beats’ cooperation is “ingredient cobranding”. In 2011, HTC Corporation, a global
designer of mobile devices announced to work
with Beats Headphone Company.
The aim of the cooperation is to redefine the
Smartphone and audio industry. They will
focus on bringing high performance sound
to HTC phones. Customers will feel the
high quality and superior mobile audio
- 11 -
That is a win-win strategy: for HTC corporation,
it gains a powerful arm to fight with its rivals
(Apple and Samsung), while Beats organisation
conducts a new revolution: a move of professional
headphone integrating mobile phone refreshes audio
industry and customers’ consumption concept. The
price of the Beats headphone is very high. Most of
those who tend to purchase Beats headphone are
audiophiles or really love the brand. HTC with Beats
headphone(HTC Sensation XL mobile phone) gives
customers a chance to
own a pair of Beats
headphone with a
affordable price. At
the same time, HTC
and Beats attract
each other’s consumer
- 12 -
It seems that, there is no real “enemy” in business
“Their target audiences are those who listen
to the MP3 and those young generations, but
for our middle aged or elderly people who grow
up with CDs are not interested in that. “
area.The main reason of cooperation is to increase sa
les and create new selling points. Profit oriented,
companies could work with their partners or even
The “high performance” is just a way to
promote their products, clamor our
attention and our money. Most people just
blindly buy it to follow the fashion and show
off in the pubic.”
“The cooperation is amazing! Beats
headphone is professional, and HTC
mobile phone is also with smart shape and
large screen. I could watch video with a
high quality version and stereo sound
effect. I am so into it!”
The cooperation is a
move to promote the two companies’
products and increase their sales. Actually,
when I saw the HTC phone intergraded
with beats headphone, I feel so impressive.
That is a reward for funs of HTC and
Beats brand.
- 13 -
- 14 -
For a woman, the most
beautiful words in the
world may not be ‘I love
you’, but
also can not resist the invitation of
exclusive goods.
Believe it or not, the
exclusive items seem to have
better consumption than
common ones.
- 15 -
- 16 -
Jeremy Scott
(man in the picture),
a fashion designer
who has built a
reputation for
outrageous designs
favored by pop stars
and celebrities.
Swatch is a brand
name for a line of
luxury wrist watches
which is popular
among teenagers
for its unique and
interesting designs.
The co-operation between
these two brands are tremendously successful. The
watch collection was exclusive for only 1000 sets all
over the world and they were sold out immediately
once they came into the Swatch shops.
It is not the first time that Swatch co-operates with
a fashion designer, but it might be the most
successful one. Jeremy Scott has also created a
line called Adidas Original X Jeremy Scott, which
is now sold both online and in stores. This line has
a large quantity of production, which perfectly
caters the target audience. However, the
enthusiasm of consumers about it cannot be
compared with Swatch& Jeremy Scott.
Nevertheless, it seems that, people desire
more for exclusive products, rather than
the mass.
- 17 -
However, not all exclusive goods have
better popularity.
- 18 -
he Maserati GranCabrio Fendi designed by
Silvia Venturini Fendi is born from the union of
two iconic brands of the Made in Italy, which
share common values such as craftsmanship and
It is a special edition which
is quantity limited.
Maserati is an Italian luxury car
manufacturer. It is famous for the brilliant appearance
and mechanical characteristics.
Fendi is an Italian high fashion house best
known for its "baguette" handbags. It has covered from
clothes to eye-wears, now even cross over with the car
In spite of the distinctive value of the car, the
co-brand is not sold as much as the companies
have expected. Some argue that it is worthless
for the high price but dissatisfying
functions when others hold the opposite
opinion that it is a symbol of wealth.
- 19 -
- 20 -
With the
of the two
examples, we can
come up with a
conclusion that
exclusive items do
appeal to people,
but in some cases
the disadvantages
may overweigh
Customers consume
based on their ability to
afford and practicability of
goods, not only the allure of
limited quantity.
Companies should take
different factors which
may affect customers into
consideration before they
made a co-branding decision.
- 21 -
- 22 -
In the twenty-first century,
people’s reliance on brands
undoubtedly a small
business strategy for
organisations. Companies
utilise the phenomenon of
people’s preference of
choosing the brands they
are interested in, from
many alternatives, to
consumption. Why is cobranding products so
attractive? It can be
presented intwoaspects.
- 23 -
The reason why customers do
consumption is to satisfy their
needs and wants..The question of
how to maximize the satisfaction
of customers’needs must be well
considered by each company.
The Cooperation between
companies (co-branding) is a
good way to achieve that. For
example, Nike and Apple have
cooperated to release the Rock
and Run to satisfy Sports
enthusiasts. They could put Nike
+ iPod Sensorinto their Nike
shoes and set some data. When
they are running, the iPod or
iPhone will tell them time,
distance, pace, and calories
burnedas well as the details of
urthermore, Customers’needs can be generally separated into
utilitarian need and Hedonic need. The utilitarian need is the basic one,
while the hedonic need is about customers to pursue high quality life
standard. Meanwhile, the hedonic need comes from customers’“selfesteem (ideal self)” and “individual level”.The cooperation of H&M and
Versace satisfy their need. In other words, some customers probably
could not have afforded the Versace luxury products, but to their “ideal
selves”, they are eagerto own those. That is partly because that they think
those luxury brands could reflect their tastes: “you are what you wear.”
The two companies’cooperation makes their dream come true.
- 24 -
Attitude refers to how do people measure or
evaluate the position of an object in their minds,
which in business aspect, means the way people
feel about a product. The cognitive information
processing effect from the famous ABC model
theories about attitudes suggests that a consumer’s
beliefs about a product would influence the feeling
that the consumer has to it; then, those feelings
and beliefs would motivate the consumer to do
something. Companies ingeniously use the
attitudes of people and form a business alliance, in
other words, co-branding, to fascinate customers,
who may not be their customers before. For
example, there is a young man, who might not very
into Converse, is a big fan of the Japanese famous
fashion brand, Comme des Garcons. However, the
beliefs and love he has for Comme des Garcons
leads to his positive feelings for the “Comme des
Garcons PLAY x Converse”, which is the cobranding products of Converse and Comme des
Garcons. In the mean time, the explosive responses
from the market motivate his action of purchasing.
In a word, attitude to a product would affect
people’s decision making when they are going to
buy some products. Co-branding companies catch
consumer’s psychological thinking and make a
brilliant strategy– co-branding!
- 25 -
Customers choose Co-branding products in
order to satisfy their demand in some aspects.
Co-branding is an effective motivation to
stimulate consumption. They can promote
two brands by the new-born product..
Additionally, companies can maintain current
customers and draw new customers through
cooperating withanother brand.
- 26 -
 Share capitals
 Technological benefits
Risks of mis-choosing
 Increase market
Complex profit-sharing
 Brand effect/Share
Dilution of brand image
 Costs& risks sharing
- 27 -
- 28 -
Walt Disney and
McDonald’s ended
up their 10-year
Happy Meal deal
The two companies worked with each other in the
1980s. Both of them gained a handsome profit in the
last ten years. According to market estimates, Disney
gained $100m (£54m) a year in royalties from
McDonald's under the deal. However, Disney ended
their co-operation unilaterally. Even though Disney
denied the reason of broken
relationship was due to the
anxiety of being linked with
junk food and obesity image,
the underneath reason
was just
- 29 -
The separation brings a big loss to both
companies, while McDonald’s decision is
understandable, for the image and goodwill of
are valuable for a company. Even though the
cooperation could bring profits, keeping
company’s positive image is also worth doing.
However, someone may argue that they have
cooperated for ten years and the image was
impressive. Others also hold the idea that if
Disney does not announce that, they have
never thought about linking Disney obesity
image together.
Based on our research, it is unnecessary for
companies to co-brand without comparing the
pros and cons of the movement. They not only
generate profits, but take risk into
responsibility together. Does it worth cobranding? It may be the most consideration
before they collaborate.
- 30 -
What’s more…
H &M and Marni
Vodka & Swarovski
H & M and Lanvin
ASUS & Lamborghini
Disney & McDonald
- 31 -
Veuve Clicquot & DKNY
H & M and Versace
Converse & Music stars
- 32 -
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