In this industry, it is well known that women in particular can be fickle in terms of brand loyalty. The allure of a new product, feature, or enhancement can woo a consumer away from a trusted brand and into your camp. Thus, the challenge is to introduce fresh and inviting offerings that will wow buyers (and secure prime shelf real estate) and cause consumer heads to turn. Product development can be cost-prohibitive and time consuming, so to supplement those efforts, you may want to consider co-branding. Co-branding allows two or more brand owners to leverage the loyalty and goodwill associated with the other brand(s) to introduce innovative and fresh products and potentially enter new customer segments.
The recent announcement of the Sephora by OPI - Glee nail polish package is what prompted me to write this article. First, there is the genius of Sephora partnering with OPI, an extremely popular, well-known, and trusted brand. Second, adding the Glee brand is yet another opportunity to attract a targeted and potentially unique audience, and gain new market share through the iconic Glee television program and related merchandising. Thus, I predict this tri-branded offering will have a multiplier effect on the popularity of this product because of the strong brand loyalty associated with OPI and because of the specific targeting of the Glee fan base.
Other co-branded product offerings in this industry have blazed the trail. There is, of course, the cult favorite, Dr. Pepper Lip Smacker by Bonne Bell. If you are a Dr. Pepper fan, why wouldn’t you want to taste that snappy treat over and over again? This co-branded hit is sure to be popular for generations to come. Another example is the logical alliance between famed holistic healer Dr. Andrew Weil and the Origins brand, as Dr. Weil’s writings and philosophy complement the natural ingredient focus of the Origins brand.
When evaluating whether to co-brand, first come up with an objective (e.g., gain an audience with a new demographic, or introduce product into a new trade channel), and then look to collaborate with brands that:
• Enjoy a brand stature consistent with your brand (i.e., value brands make good allies, but a premier brand typically will not be a good fit with a more value or budget-based brand). That said, co-branding schemes are often pursued when there are not two equals at the table. One brand may be looking to benefit from the “halo” of loyalty that belongs to another. Under these circumstances, it may be appropriate for the reliant brand to pay a higher royalty to the halo brand.
• Share a common branding philosophy and offer a product of a quality consistent with that of your company.
• Present synergies with your brand, or otherwise complement your brand or product offering.
In addition, know that if a deal is struck, a written agreement between the parties is critical. Such an agreement would include provisions covering branding specifications, market plan strategy, quality control, ad copy review and approval mechanisms, exclusivity, payments and royalties, representations and warranties, term and termination, confidentiality, indemnification and disclaimers, and other licensing specifics.
Beware that co-branding may also come with baggage. By associating another brand with your product, you run the risk that customers will come to identify more heavily with the second brand than your own. This can result in dilution of your brand.In addition, if there is a negative association with the co-brand, that negative image could rub off on your own brand and have a detrimental long-term effect. These possible negative repercussions are why it is critical that you come to the table prepared with a strategic co-branding strategy, and the proper tools (such as an agreement and other guidelines) for implementation.
About the Author
Lori Meddings is a partner in the Intellectual Property Practice Group at Michael Best &Friedrich LLP. She assists clients conducting business in diverse geographic markets and industries, ranging from consumer product categories, such as personal care, to commercial markets with respect to myriad trademark, copyright and advertising needs. You may reach her at 414.277.3464 or firstname.lastname@example.org.