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When the co-branding strategy was first introduced during the 1980s, its initial objectives included the optimization of the rising advertising costs for launching new products. With billions of resources being spent on advertisement and marketing of brands, companies formed alliances, and the merger of their knowledge and reputation produced new and higher quality products and services.
Yet back then, business strategists were well aware of the advantages and disadvantages of this marketing tool; hence, only a few ventured to tread this route.
However, the recent decade’s dragging recession, saw many companies struggling for survival, amidst a market that proliferated with products that were similar to theirs. Consumer goods carried different brand names but basically promised the same values to the buying public at lower costs. Big named companies whose adverts provided the value to their products, soon found their positions being threatened by consumer items supplied by the lesser known brands.
Thus, the business strategy of forming an alliance with other established brands became a widely-held option, as a means for a company to stay on top of its industry. Successful examples include Coach and Lexus, Diet Coke and Nutra-Sweet, Pillsbury Brownies and Nestle Chocolate, Crocs and Disney, IBM and Intel, Betty Crocker and Hershey, Breyers and Hershey, Lays and KC Masterpiece, Sony and Kodak, and so forth. These co-brandings have created large benefits for stakeholders.
Small businesses also went into linking and co-branding with giant brands like Procter & Gamble, Nike, and Starbucks, which dispelled the myth that co-branding is only suitable for large international brands. All these benefited the buying public, who found greater satisfaction with the new business set-ups.
