Co-branding involves combining two or more brands into a single product or service. Companies engage in co-branding to leverage strong brand. It is becoming a popular business practice to strive for a positive association between different brands that can develop synergy. A well executed co-branding strategy can lead to win-win situation for both co-brand partners and can help in realizing unexplored markets or untapped opportunities. Concisely, it is instrumental to handle almost every marketing matter from creating initial awareness to building customer loyalty. Companies form co-branding alliance to fulfill following goals: ► Expanding customer base ► To make financial benefits ► Respond to the expressed and latent needs of customers ► To strengthen its competitive position ► Introduce a new product with a strong image ► Creating a new customer perceived value ► To gain operational benefits Co-branding is a frequently practised in fashion and apparel industry. Some of the examples of co-branding are between Nike Phillips (Electronics Manufacturer) and Adidas -Porsche (car manufacturer). Co-branding can be used for promotion campaigns, to use cartoons on t-shirts, for using logos, distributing through branded retailer etc. Co-branding Agreements In a co-branding alliance, both companies should have a relationship that has potential to be commercially beneficial to both parties. Co-branding agreement includes rights, obligations and restrictions that are binding on both the parties. It includes important provisions and needs to be carefully drafted to give clear guidelines to the parities involved. Agreement also explains about marketing strategy, brand specifications, confidentiality issues, licensing specifications, warranties, payments and royalties, indemnification, disclaimers, term and termination. Person involved in campaign must be very clear about these issues.
► Inability to meet the requirements of other party may result in termination of co-branding agreement. ► Legal requirements. ► Mergers and takeovers of one party may prove detrimental to other party. ► Future environmental changes like political, legal, social, and technological or changes in consumer preferences may give unexpected outcomes. To read more articles on Textile, Fashion, Apparel, Technology, Retail and General please visit www.fibre2fashion.com/industry-article
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