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Comarketing and cobranding

Product placement is a commonly understood marketing tactic, where films or other media showcase or otherwise reference a product as part of a commercial agreement. Co-marketing and co-branding are similar techniques, where two commercial entities combine their strengths to achieve collective goals.

The terms 'co-marketing' and 'co-branding' are often used interchangeably, but they can have slightly different meanings. The overall concept is that two companies or brands work together - either for a one-off campaign or as part of a longer term plan - and combine their marketing efforts to achieve greater exposure and more effective results. It's generally a case of identifying symbiotic dynamics and complementing each others' products in some way in order to gain a larger overall market share than they would be able to otherwise achieve on their own, without collaboration.

Although products being marketed as part of a co-marketing campaign may remain unique to each brand, sometimes two companies will create a new product together - essentially fusing their brands - and this will then be sold as a co-branded product.

Some examples of co-marketing include:

  • Louis Vuitton and BMW - Louis Vuitton created an exclusive collection of four suitcases and bags for the plug-in hybrid BMW i8
  • Apple and Nike - Apple Watch Nike+ was marketed as 'the ultimate tool for anyone who runs, pairing exclusive Nike Sport Bands with Apple Watch Series 2'
  • Swatch and Mercedes-Benz - an example of co-branding, the Smart car was created out of the combination of design from watch manufacturer Swatch and engineering from Daimler-Benz
  • Nike and Michael Jordan - a combination of a company brand (Nike) with a personal brand (basketball legend Michael Jordan)
  • Apple and Hermes - a combination of functional design and fashion.

Shared resources can vastly reduce overall marketing expenditure, almost halving costs by creating one joint advertising campaign instead of two separate ones. Alternatively, a greater combined marketing budget can provide exposure (eg enabling the purchase of TV advertising space). Furthermore, two brands will each bring their own existing share of the market, introducing their partner to new potential customers.

On the downsides, dilution of brand is a possibility, especially if one brand is much stronger than the other. Another potential problem is that if a co-branded product develops a fault or receives negative publicity, this will affect both brands, even if fault lies with one brand.

It will also be necessary to ensure a sufficient legal framework is in place to protect each company involved in a co-marketing campaign, so there will generally be additional legal costs.

It is vital that the companies involved in a co-marketing campaign ensure they have proper legal agreements in place to clarify their rights and responsibilities as part of their joint efforts, and to avoid any potential disputes. This is even more important if they are developing a co-branded product.

It is also crucial that co-marketing campaigns do not breach any anti-competitive rules.

Ask a lawyer for more information about taking advantages of the opportunities of co-marketing and how to minimise any associated risks.