The Secrets of Successful Co-brands
In the late 1990s, several Lexus models offered leather interiors by Coach. In 1995, the BMWZ3 Roadster paired with James Bond in the movie Golden Eye, and was featured in the Nieman Marcus Holiday Catalog, followed by inclusion in an Apple Super Bowl ad. In 2006, the Ford Explorer offered an Eddie Bauer edition.
It's not just the auto industry: co-branding is everywhere. Since the 90s, it has infiltrated such broad categories of products and services that it is downright pervasive throughout consumer retail.
Also known as strategic partnerships, the practice of co-branding now extends to industries as far ranging as cosmetics, hotels, restaurants, fashion, household products, and charities, to name only a few. If done well, these partnerships are innovative because they are new, unexpected, and they achieve brand objectives that not only reinforce an image, but also increase awareness.
In the auto industry examples, the brands shared similar target audiences with their partners. Each benefited from the association with the other, and those associations reinforced desirable perceptions about the both the product quality and lifestyle the brands represent.
Brands are judged by the partners they keep. Innovative partnerships can make brands seem hipper, more modern, more distinctive, more interesting, and more noteworthy. A great recent example is the Ace Hotel in New York City, which is considered by many to be one of the most innovative hotels in a city full of trendy lodgings. The partnerships the Ace has thoughtfully forged include the shops and restaurants on its property: Opening Ceremony, one of the most cutting-edge clothing stores in New York City; Stumptown Coffee, probably the hippest coffee currently brewed in New York; the Breslin, a popular, British-style gastropub that specializes in parts of the pig largely unfamiliar in the United States; the John Dory Oyster Bar, which features first-rate, inventive seafood; the eclectic gift shop, NO. 8A, which sells a select, rather random—but curated—range of products, including graffiti-art supplies; and No. 7 Sub, which serves the most original sandwiches I've ever seen.
What also sets the Ace apart is its development of partnerships with local artists whose artwork is for sale in different hotel rooms. You can stay in a room, and if you like the art (and, well, have the money), you can take it with you.
Retail has gone wild for limited-edition clothing-collection partnerships. Witness this Fall's Target and Missoni, Macy's and Karl Lagerfeld, and Alexa Chung and Madewell Collections. Hugely popular past years' partnership collections include H&M with Madonna and Commes de Garçons, and Top Shop with Kate Moss, to name a few. In the case of the recent, co-branded, 400-product range from Missoni and Target that included product categories even outside of fashion, one might wonder why an Italian luxury brand would want to associate itself with a much lower quality, mass-market brand. The Target-Missoni pop-up shop that introduced the partnership line sold out in two days and had to close early. Once the product range was available for sale online, it crashed Target's website and sold out far earlier than anticipated. Target obviously benefited, with increased traffic and sales, increased attention from the press and consumers, and further reinforcement of the brand message: great fashion for less money. But Missoni also benefited through increased awareness, and the seeding of aspirations among many, for more of "the real thing." It was a illogical; it was a win-win.
In the restaurant industry, my favorite two examples are Chipotle and a restaurant in Barcelona called Inopia. Chipotle, the mass-market fast food chain, advertises the local sourcing of ingredients and proudly communicates that its pork is from Niman Ranch. Inopia, a wonderfully original tapas bar in Barcelona, conceived by the brother of Ferran Adria, probably the most brilliant and innovative chef, ever. Inopia prides itself so much on the suppliers it utilizes, that all the servers' shirts are adorned with patches that communicate the names of its purveyors. In both cases, you as a consumer feel better about the delicious food you're eating, because you know the dishes are made from the best ingredients, and the suppliers benefit through the positive association, and the advertisement and recognition of their products.
In the cosmetics industry, MAC has lead the innovative co-branding charge by utilizing celebrities known for their unique styles, individuality, and distinctive personalities: think Cyndi Lauper, Lady Gaga, and the latest co-branded line, Glitter and Ice, set to debut this fall, attached to the flamboyant, talented, and lovable ice skater, Johnny Weir. MAC's choices support the brand image of being bold, attention-getting, and trend-setting.
How far can it go? Co-branding even extends to the beverage industry. The designer Jack Spade recently launched a collection of clothes and bags with Coca-Cola that features the iconic brand's most beloved advertising slogans. Karl Lagerfeld recently designed a wine label to commemorate the 350th anniversary of a wine brand owned by Chanel. These partnerships make the brands seem more contemporary and relevant, and in the case of Coca-Cola, evoke positive nostalgic associations.
Co-brands are also now popular in the household product category, where the philosophy behind combining brands is that one plus one is greater than two. Proctor and Gamble is the master of this: Think Crest plus Scope (combining the best of cavity fighting and breath freshening), Dawn plus Cascade (combining the best of grease fighting with that of glass cleaning), and Tide with Febreze (combining the best of clothes cleaning and freshening power).
Procter & Gamble, long known for having multiple brands in the same category (each potentially fighting against each other and competing for market share) seems not to fear losing sales by combining the benefits several of their brands into one. Procter could, for example, fear losing Scope mouthwash sales to the co-branded Crest toothpaste product. Instead, the company seems to feel that by combining the best of two highly desired product benefits, it stands to gain market share, and source volume from more vulnerable competitors. Better to potentially cannibalize themselves, than be pre-empted by a competitor!
Brand charity partnerships that have been particularly successful include the American Express and Share Our Strength Anti-Hunger Fight (a 20-year old partnership), Pampers and UNICEF, and Dawn Dishwashing Detergent and the International Bird Rescue and the Marine Mammal Center. In each case, the association with a worthy cause helped the for-profit brand's image, and increased the effectiveness of their ad campaigns. For the charities involved, these alliances provided resources and awareness they could never have achieved on their own.
Innovative partnerships serve several strategic purposes. Carefully selected associations can enhance the images of each. The resources both brands bring to bear are greater than either could afford alone, resulting in a synergistic impact that generates higher levels of brand awareness for both. What's more: Interesting and surprising associations, and limited duration product lines can attract more attention for a brand, thereby increasing the likelihood that it will break through the competitive clutter, and attract more press coverage and consumer buzz.
What innovative co-branding partnerships have impressed you lately? Any strategies that you've seen fail? Let us know in the comments below.
MICHELLE GREENWALD | Professor, NYU & Columbia University
Michelle is a former Senior Vice President of New Business Development at Disney and a Vice President and General Manager of New Products at Pepsi-Cola. Currently, she teaches at Columbia and NYU Stern Graduate Schools of Business.