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A Winning Brand Strategy

Co-branding happens a great deal these days with many of the well-known brands, and it is interesting to have a look at why they do it and what they have to take into consideration,

Co-branding Opportunities
Co-branding, sometimes called cross-platform marketing, is increasingly popular as firms look for new approaches to reach their target audiences. Credit cards are good examples of co-branding, linking up with all sorts of businesses. The main reason for co-branding is to reach more of the consumers you want that are currently customers of someone else. Another reason for co-branding is that it shares marketing costs, and this is very important in major campaigns that can cost in excess of US$100 million. Of course, the third major factor in considering co-branding as a business opportunity is to give more benefits to your own customer base, enhance brand loyalty, and widen your customer base.

There are many opportunities for co-branding in every industry, and one of the latest and greatest examples is that between Nike and Apple.


Nike and Apple
Nike Inc. is making running shoes that will provide users with instant information on time, distance, speed and calorific burn rates. To achieve this, Apple computers Inc. is providing a tiny i Pod, and there will be a new wireless system named Nike + i Pod that gets data from a sensor in the insole of the shoes.

This major innovation leapfrogs the ‘Smart Shoes’ concept of Nike's rival Adidas-Salamon AG, which has developed a product containing a chip-based device that adjusts foot cushioning to a person's needs – cushion response shoes. Indeed, at the launch of the Nike/Apple product in May 2006 (with Steve Jobs also present), Nike CEO Mike Parker went as far as to say that “We realized making a smart shoe wasn't really smart enough” Also launched at the same time was a range of performance clothing that holds i Pods, keeping wires out of sight.

Behind every good co-branding activity is a healthy dose of consumer insight. Nike's VP of global brand management Trevor Edwards said, “we share the same types of consumers……….and know that these two brands work really well together”.

Both Nike and Apple retail outlets will sell the new shoe product technology, but Nike will also sell i Pod nano products and Apple will offer a Nike Sport music section on its i Tunes music store, featuring lists of songs chosen by well-known athletes.

All in all, it looks a brilliant idea and a win-win situation for both companies and this is the value of strong, well-thought through co-branded partnerships.

Important considerations for co-branding initiatives
It is important to evaluate any co-branding opportunity before you commit to it, as certain things have to be in place for success to be achieved. One is that unless your customers are going to receive (and see that they will receive) real benefits from the exercise do not bother. Second, make sure that the target audiences of the partners have similar types of profile, demographic and psychographic. Thirdly, make sure that the partners have brand values similar to those of your brand, otherwise there will be significant strategy problems and working together may well be problematic.