Dual branding vs co-branding?
Dual branding and co-branding - two terms you have likely heard in your career. These closely related concepts are often confused, but they serve distinctive purposes. Both prove to be a win-win when two separate brands form a complementary strategic alliance. Want to learn how your brand can benefit from dual and co-branding? Read on.
What is the difference between dual branding and co-branding?
Firstly, let’s define these two marketing strategies to avoid any mix-ups.
Co-branding is when two brands partner to advertise and promote the brand values of both. The strength of both brands in this partnership combines to be more than the sum of its parts, where both brand names can be used on a new co-branded product or service. While we are at it, we should clarify that co-marketing is also a separate strategy that has a different purpose – where brands or organisation partner together to expand their reach using social media harnessing the power of platforms such as Instagram, LinkedIn, and paid advertising.
Dual-branding involves creating separate brands for the same product or service, allowing the umbrella brand to target new corners of the market.
Now that we have the basics covered, we can drill into the benefits (and potential drawbacks), of both.
Dual branding pros and cons
When done with care and consideration, this approach can offer a masterclass in brand extension and growth. Here are some reasons why dual-branding can be so advantageous…
Brand Image: Dual-branding can have a hugely positive impact on consumer perception of your brand. By offering a wide array of products or services, you can build brand equity, trust, and increase in customer loyalty as you cater to a wide range of consumer needs.
New audiences: Dual branding allows you to meet new target audiences and markets. By housing a range of brand names under one roof, you can offer new products and differentiate your brand from competitors.
Business Resources: It can prove to be very cost-effective in terms of production and marketing budget. Resources, and therefore costs, can be shared and therefore any spare budget can be allocated to other business needs your brand may have.
Sadly, dual branding is not without risk. Unfortunately, there are potential problems that can arise from this approach, including…
Brand Management: Coordinating multiple brands can be complex, with many logistics to juggle. The more brands that you have, the more you risk spreading your resources to thinly across them.
Brand Confusion: You be careful not to cross-pollinate the distinct brand identities in any dual branded setting, otherwise you run the risk of losing customers due to confusion about your product or service and what it offers. You must ensure that each brand has a strong, independent visual identity, marketing strategy, and offering to one another in-order to appeal to different angles of the market.
Brand Success: In an ideal world, success would be shared equally between your brands. However, one drawback is that one brand may perform better than the other, negating the strategy altogether.
Co-branding: pros and cons
Co-branding collaborations can be mutually beneficial, creating an exciting new product and keeping audiences on their toes. Here is a range of ways in which each brand in the partnership can be positively impacted…
Sharing: Is indeed caring in this instance. Co-brands can share in their respective fanbase, exposing each brand to a wider audience and expanding into new markets. Not only this, but partners can share their respective expertise, technologies, and even benefit from sharing costs.
Product image: Partnering with a renowned brand can enhance your brand image, increasing customer trust, loyalty, and ultimately improving associations with your own brand.
Sales boosting: Through your respective audiences and collaborative marketing efforts to promote your product, each business can benefit from an increase in sales. According to data from a Visual Objects survey, 43% of consumers say they would try a co-branded product from a brand they already like. With your increased brand awareness and wider audience, this in theory doubles interest!
As with any strategy, there are potential drawbacks to co-branding projects…
Brand Equity: If customers associate bad traits and experiences with one of the brands in the collaboration, the total brand equity of the partnership can be damaged.
Dilution: In connection to this, co-branding can have a dilutive effect. Essentially, the credit for a positive experience is spread across two brands, where usually the positive brand experience would be associated with just one brand. A prime example of brand dilution is the former brand partnership between Sony and Ericsson. In such a competitive climate, these brands proved to be too similar and could not give a unique offering, so they parted ways to reach more success separately.
Brand compatibility: Having a well-considered strategy is very important. If the two individual brands do not share the same values, missions and vision, then a collaboration is not advisable. Co-branding works best when there are two complementary brands involved, in short, it must make sense!
Co-branding: Inspiring Success Stories
OK, so now it is time to think about real-world examples of co-branding executed superbly. The brands below show that when a co-branding strategy is well-conceived and executed, the results can be memorable and lucrative.
1. Coca-Cola and McDonald’s: It is hard to remember a time when Coca-Cola wasn’t available at McDonald’s. Co-branded promotional campaigns and packaging tie-ins, offering special deals on Coca-Cola beverages at McDonald’s restaurants. Two titans in the food and beverages markets, this partnership makes perfect sense and has stood the test of time.
2. GoPro and Red Bull: A great example of complementary brands joining forces. These two jointly sponsored events and content creation initiatives showcasing extreme sports athletes using GoPro cameras. Red Bull even sponsored the initiatives with its energy drinks. This is a great way to share resources, create marketing content together, and generate excitement for experiential brand experiences.
3. Spotify and Starbucks: This partnership really packed a punch, featuring two very well-known brands bringing their separate worlds together. To create ambience around its customer experience, Starbucks forged an innovative partnership with streaming service Spotify to build a ‘music ecosystem’. The benefits flowed both ways, the partnership allowed Starbucks to have access to Spotify’s expansive music catalogue of playlists, podcasts, and albums, while Spotify were in turn offered greater access to Starbucks customers. Spotify are rather good at finding partner brands, pairing up with Uber to create custom musical experiences for customers during their taxi rides.
4. Pokémon and the Van Gough Museum: not all co-branding partnerships are reliant on two equally famous names. The popular cartoon Pokémon partnered with the Van Gough Museum to celebrate its 50th birthday. Children aged six and above could participate in the Pokémon Adventure at the museum, which introduced them to the Pokémon paintings and the stories behind Vincent van Gogh’s masterpieces.
5. Nike and Apple: Extremely famous to the sporting community, this collaboration exists on the Nike+ running system, combining Nike’s athletic footwear with Apple’s technology for tracking fitness data. This is a fantastic example of two well-known brands forming a successful synergy.
Dual branding: Brands who did it right
These dual branding examples illustrate how more can certainly be merrier, with this strategy proving extremely rewarding for brand growth, loyalty, and market expansion…
1. Nestlé: This giant owns various food and beverage brands like Nescafé, KitKat, and Magg. Each new brand is positioned independently, while homed under the Nestlé umbrella.
2. L’Oréal: Manages a portfolio of beauty brands including Maybelline, Garnier, and Lancôme, each with its unique product lines, brand positioning, and marketing campaigns.
3. Volkswagen Group: You may not know that VW houses several automotive brands including Audi, Porsche, and Skoda, each catering to different market segments while operating under the Volkswagen Group parent company.
4. Unilever owns various brands: This umbrella brand has cleverly branched into various markets. They own Dove for personal care, Ben & Jerry’s for ice cream, and Lipton for tea. Despite being part of Unilever, each brand maintains a unique positioning, offering, and distinct brand goals.
5. Estée Lauder: This group has managed to succeed in virtually every corner of the beauty industry, from hair, perfume, through to luxury skincare and makeup. Brands you may not know live under the Estée Lauder parent company are Clinique, Bumble and Bumble, and Le Labo.
Looking to explore dual or co-branding?
So there you have it, your in-depth guide to the powers of both co-branding and dual branding. Respectively these smart strategies are brilliant ways of growing your brand, sharing resources, and connecting with a broader audience.
At Studio Noel, we understand the nuances of these unique brand strategies, and we can confidently maximise their potential.
If you are contemplating dual branding or co-branding, we have the expertise and experience to guide you towards your goals.