Co-promoting Products:DecisionCraft Analytics

www.decisioncraft.com

Issue No: 11/04/1

"Co-promoting is one way of putting together a unique customer offering and is becoming an increasingly important tool for generating value"

It involves combining two or more well-known brands into a single product and if used smartly, it can be an effective way to leverage strong brands.

Co-promoting could happen at global and retail levels. What remains same, is the overall objective of uncovering product associations, determining products that can be co-branded, designing the customer offerings and estimating revenue generation by identifying customer segments that will show propensity to purchase.

Co-branding can be an asset in nearly all aspects of marketing, from creating initial awareness to building loyalty. Some approaches to co-branding that companies may consider are:-

Promotional co-branding. Co-branding began with endorsements. This approach can be a good beginning point for organizations. It can result in significant brand enhancements and sometimes lead to emergence of an unplanned opportunity.

Constituent co-branding. This method, if used appropriately, could revel in lower investments than any other co branding as it banks on the constituent's reputation. A constituent brand's success relies on being distinct, either by being a dominant brand or through patent protection.

Value chain co-branding. Other players in the value chain can create new experiences for the consumer, which, in turn, can create a level of customer value and differentiation, which is normally not feasible in other cases.

Innovation-based co-branding. In this approach, partners create entirely new offerings and provide the potential to grow existing markets and create entirely new ones.

Co-branded products can acquire the salient attributes of both parent brands, making co-branding a particularly attractive alternative to brand extension wherein the parent brands complement each other strongly. On the other hand perceptions of a co-branded product can have spillover effects on the parent brands; e.g. in case of lesser-known parent brands are likely to be affected the most. Pairing a 'high-status' child brand with a 'low-status' parent brand is not necessarily detrimental to the high-status brand. Each partner to a co-branding arrangement brings a customer base, which is potentially available to the other, as in reach/awareness co-branding.

Operationally, co-promotion serves as an efficient technique to achieve corporate objectives like Improving profitability, maintaining and enhancing consumer loyalty, reinforcing market position and increasing consumer choice by providing desirable product combinations.