Co-Branding: The Science of Alliance

160 Pages·1999·0.516 MB·English

by  Tom Blackett, Bob Boad (eds.)

Co-Branding
The Science of Alliance
Editors
Tom Blackett and
Bob Boad
Co-Branding
The Science of Alliance
Editors
Tom Blackett
Bob Boad
© Leslie de Chernatony, Preface; Tom Blackett and Nick
Russell,Chapter 1; Bob Boad, Chapters 2, 3 and 6; Mark
Linnell, Chapter 4; Marc Smit, Chapter 5; Jan Lindemann,
Chapter 7; Tom Blackett, Bob Boad, Paul Cowper and
Shailendra Kumar, Chapter 8 1999
Softcover reprint of the hardcover 1st edition 1999 978-0-333-76089-5
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First published 1999 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
ISBN 978-1-349-41416-1 ISBN 978-0-230-59967-3 (eBook)
DOI 10.1057/9780230599673
A catalogue record for this book is available from
the British Library.
This book is printed on paper suitable for recycling and
made from fully managed and sustained forest sources.
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Designed and formatted by
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Contents
List of Tables and Figures vii
List of Illustrations viii
Preface ix
Acknowledgements xi
List of Contributors xiii
Introduction xvi
1 What is Co-Branding? 1
Tom Blackett and Nick Russell
The Importance of Brands 2
‘Rare and Precious Assets’ 4
How Brands Appeal 4
The Rise of Co-Branding 6
Co-Branding – the Interbrand Definition 6
The Duration Factor in Different Types of Co-operation 8
The Shared Value Creation Factor in Co-operation 8
Definitions for Other Types of Co-operation 16
The ‘Essence’ of Co-Branding 18
What About the Customer? 19
Some Preliminary Conclusions 20
2 Co-Branding Opportunities and Benefits 22
Bob Boad
Royalty Income 22
Sales Boost 23
New Markets 23
Additional Consumer Benefits 25
Investment Minimized 25
Avoids Barriers to Entry 26
Risk Reduction 27
Quicker Returns 27
iv Co-Branding
Price Premium 28
Communicates High Product Quality 28
Customer Reassurance 28
Access to ‘Leading-Edge’ Technology 29
Market Priming 31
Reinforcement of Advertising Messages 32
Brand Exposure 32
Consumer Interest 32
Adding Distinctiveness to Diluted Product Get-Ups 33
Special Promotions 34
Trade Customer Relations 34
Enhancing of Brand Value 34
Assimilation of Positive Values from Partner Brand 35
Communication Opportunities 35
Retailer Collaboration 36
In Conclusion 37
3 The Risks and Pitfalls of Co-Branding 38
Bob Boad
Financial Greed 38
Incompatible Corporate Personalities 39
Over-Extended Brand Franchise 39
Partner Brand Repositioning 40
Change in Financial Status of Partner 40
Failure to Meet Targets 41
Takeovers and Mergers 41
Changes in Market Attitudes 41
Creation of a Single ‘Hybrid’ Brand 42
Loss of Exclusivity for Brand Features 42
Increased Risk of ‘Lookalikes’ 42
Degeneration of a Trademark into a Generic Term 43
Brand Separation 44
Disciplined Trademark Use is Vital 45
Sibling Brand Incompatibility 45
Anti-Trust and Other Legal Problems 46
In Conclusion 46
4 Co-Branding – a Retailer’s Opportunity 47
Mark Linnell
History 48
Choosing a Partner 51
Critieria for ‘The Deal’ 53
Cross Benefits and Costs 54
Contents v
Workable Structures 58
Does Size Matter? 61
Conclusion 64
5 Ingredient Branding 66
Marc Smit
Introduction 66
Defining Ingredient Branding 66
Categorizing Ingredient Branding 67
Famous Ingredient Brands 68
Case Studies 69
Parameters 76
In Conclusion 81
6 Legal Aspects of Co-Branding and
Trademark Licensing 84
Bob Boad
The Co-Branding Agreement 84
Title to Intellectual Property Rights 87
Trademark Clearance 88
Trademark Registration 89
Parallel Imports 90
Trademark Licensing 90
Trademark Royalties 91
Taxation 92
Competition Law Aspects 92
Product Liability 93
Development of New, Jointly Owned Intellectual Property 93
Proper Use and Acknowledgement of Trademarks 94
7 Creating Economic Value Creation Through
Co-Branding 97
Jan Lindemann
Defining the Co-Branding Structure 97
Creating Economic Value 99
Using Brand Valuation to Assess the Value Creation of
Co-Branding 101
Choosing the Appropriate Valuation Method 101
Interbrand’s Approach to the Economic Use Method 102
Applying Interbrand’s Valuation Approach to a
Co-Branded Business 103
Attributing Brand Earnings to the Co-operating Brands 105
vi Co-Branding
Benefits and Risks 111
Applying Brand Valuation to Managing Co-Branding
Structures 111
The Future of Co-Branding 113
8 Tom Blackett, Bob Boad, Paul Cowper and
Shailendra Kumar
Mergers and Acquisitions 114
Co-Branding Strategy 117
Future thoughts 121
Appendix 125
Glossary of Terms 133
Index 140
List of Tables and Figures
Tables
4.1 Benefits of co-branding and co-investing 55
5.1 Overview of ingredient brands 82
7.1 A role of branding index calculation 105
7.2 A role of branding index calculation for a major–minor
co-branding structure 106
7.3 Brand strength score 108
7.4 Brand Value Assessmenet 110
8.1 Results of post M&A reviews 116
Figures
1.1 Share price performance of ‘branded’ organizations with the
average of the FTSE ‘Top 350’ 3
1.2 Brand value ladder 5
1.3 Co-branding distinguished from other forms of co-operative
venture 7
1.4 Hierarchy of types of value creation sharing in co-operative
relationships 9
4.1 A ‘multiplex’ type of retail outlet 57
5.1 Strategies for establishing technological credibility 75
6.1 Guidelines for proper use of trademarks 95
8.1 Tangible assets, goodwill and intangibles, 1998–2008 115
8.2 Interbrand’s brand blueprint 119
vii
List of Illustrations
1 Young’s – Hary Ramsden’s
2 Shell–Mex – BP
3 Visa
4 Lycra
5 Bailey’s – Häagen-Dazs
6 Tefal – Le Cordon Bleu
7 Switch
8 WWF
9 Disney – BP
10 Disney – BP
11 Dolby
12 Silversea – Le Cordon Bleu
13 Nippon Ham – Le Cordon Bleu
14 BP – Woolworths
15 Cisco
16 Teflon
17 TATA – BP
viii
Preface
Leslie de Chernatony
Beneficial Bank Professor of Brand Marketing
CO-BRANDING, if used properly, can be a very effective strategy that benefits
both the participating organizations and customers. Much has been written
about strategic alliances and joint ventures, but little has been written about co-
branding. It is therefore most welcoming to see this book which advances our
understanding of this important topic.
Branding is about adding value and co-branding is testimony to this,
particularly as the aim is to ensure that the resultant entity has a value greater
than the value of the component parts. It involves a visionary perspective about
how to make the world a better place, and creativity to conceive the innovative
cluster of benefits. It necessitates a strategic orientation that then considers how
the two players can realign their value chains to deliver the promised value and
jointly capitalize on the resultant rewards. As this book so lucidly shows,
adopting a tactical, short-term perspective on co-branding does not take advant-
age of the true potential from strategically leveraging the competitive advantage
from a new bundle of benefits.
From an organizational perspective, co-branding represents an opportunity
for a win-win scenario. As we move away from the era of transaction brand
marketing to relationship brand marketing, co-branding is doubtless going to
become an even more important strategy for co-producing enhanced value. This
book not only provides well argued insights about getting the most from co-
branding, but also covers some very useful application issues.
Different managers have different interpretations of co-branding and a
strength of this book is that it provides a clear definition of co-branding. What
we are then able to appreciate are the different levels of co-branding and through
the typology presented in this book, the indigestion caused by diverse
interpretations about co-branding is calmed and a clearer route forward
presented.
As sources of added value become more difficult to identify, co-branding
presents an opportunity for leapfrogging competition to win the hearts and
ix