CO BRANDING:Bundling, Forms of communications, Advertising and Promotions

<< CREATING VALUE:Value thru cost-efficiency, Membersâ€™ relationship with brand, Power defined

CUSTOMER RESPONSE HIERARCHY:Brand-based strategy, Methods of appropriations >>

Brand Management (MKT624)

Lesson 31

CO BRANDING

Introduction

With channels concluded, we now move on to the concept of co-branding, which in present

day's marketing world seems to be getting considerable importance. What is co-branding and

how it works is briefly discussed here! The discussion then transcends into the area of

communication and spreads over the lecture. Forms of communication and all those variables

that make a communication campaign effective are discussed.

Co-branding

If a brand is not strong enough on its own to exert control on the channel, it joins hands with

another brand that offers synergy by operating within the same market space. It can take

different shapes and forms.

Bundling

Two brands join hands (this is known as bundling) to create one brand by using the strong

expressions of both, thereby capitalizing on the strengths of both. This practice saves many

risks and launch costs etc. An example could be a famous yogurt brand "Novelty" joining

hands with an ice cream brand "Hi-cream" to introduce ice cream yogurt by the name of

"Novel-Cream". This brand is seeking an entry into a chain of restaurants to sell ice cream

yogurt or shakes by the given new name "Novel-Cream" that is a contraction of the two brand

names. Two brands get bundled into one new and independent brand that draws strength from

the two parent brands.

Ingredient co-branding

It is where one becomes the ingredient of another. "Intel inside" is a classic example of this

concept mentioned in more text books than one. The objective is to draw strength from each

other, offer customer value, and exert control of the selling channel. The simple philosophy is

what can be done by two is more effective than can be done by one.

Regardless of the mechanics of co-branding, companies pair their products in some kind of a

marketing collaborative effort. This could take the following shapes:

· A product bearing names of two companies, one more prominent than the other.

· A product bearing names of two brands, of course one more prominent than the other.

· A product having one brand name created out of two names.

· Two brands distributed by one company.

· Two brands promoted through one common channel that originally partnered with one

of the brands hotels could be promoted by airlines through travel agents, who

originally partnered with airlines.

· One brand cooperating with another to promote its loyalty program. Banks could

promote their credit cards by offering loyalty points redeemable at gasoline stations.

In other words, strategic alliances are made public, because doing so is important to have

competitive edge. Co-branding takes place either when the two brands need more strength than

they have or when one of the brands is weak and wants to take advantage from the strength of

the other. You can imagine a weak or a weaker brand having access to an established channels

system to which it could not otherwise reach. Under such circumstances, the weaker brand has

to offer some kind of value to the stronger brand to qualify for the partnership!

123

Brand Management (MKT624)

Examples

Example 1

A sachet of biscuits or powdered milk with a pack of tea could be cited as examples

from the local market. This kind of co-branding has taken place in the recent past

2005 and 2006. The main source brand that leveraged biscuits and powdered milk was

Lipton.

Example 2

Unilever has started selling its ice cream brand (Carte D'or) imported from Turkey

through KFC outlets in Karachi. The company plans to roll out to other markets soon. It

has chosen a channel compatible with its brand that sells by the scoop and not as

packaged ice cream. Anyone walking into a KFC joint cannot ignore the ice cream.

COMMUNICATION

The importance of marketing communications cannot be overemphasized. Without an effective

communications program, a marketing strategy does not stand good chances of success.

Actually, it will fail. An effective program is designed to make the customers aware of the

brand, communicate its benefits, remind them of the same and make them take an action in

terms of sales1.

Communication strategies bring brand positioning to life. Unless we communicate the intended

position, the chances of it making a home in consumers' mind are remote. A well positioned

product with an attractive customer value and a strong channel system will not achieve full

marketing success without a good communication program.

Therefore, successful communication strategies stem from four basic strategic factors and then

support these very factors all along the strategic process2.

· Corporate vision

· Brand vision

· Brand picture

· Brand positioning

Forms of communications

It takes on many different forms and goes beyond advertising and promotions as mentioned

below3:

1. Advertising

2. Promotions

a) Consumer promotions

b) Trade promotions

3. Event marketing and corporate sponsorships

4. Public relations

5. Direct marketing (phone, fax and e-mail, catalogs, and internet)

6. Internal communication with newsletters

Advertising and Promotions

The first two tools i.e. advertising and promotions are most widely used and, hence, considered

to be the most vital. But, they are also used interchangeably or meaning the same thing, at

times. They do not mean the same, nor should they be used one for the other. Both have

different meanings that ought to be understood before we proceed further.

124

Brand Management (MKT624)

Advertising is an all paid-for persuasive communication in the main media of

television, press, cinema, and radio4. This is what we generally mean by advertising. It

is known as "above-the-line".

Promotion covers activities designed to increase sales by offering an inducement, such

as extra product, free gifts, sampling, and competitions etc5. Promotions are generally

termed as "below-the-line" and can be split into two different forms:

o Trade promotions

o Consumer promotions

Trade promos are aimed at the trade to entice them into stocking more, giving our brand

more space, and sell more. Consumer promos are aimed at consumers, designed to

encourage them to buy more and use more.

With the help of advertising, you create a pull, that is, you pull the customer toward the

brand; with promotions you push the product towards the consumer. The pull and push

form a convincing basis of registering higher sales as the conventional wisdom goes.

Having understood the basic difference between advertising and promotions, let's now discuss

what communications are all about.

· The first and foremost job of any marketing communication is to create awareness of a

product.

· Second, marketing communication is meant to reinforce the message to maintain

awareness.

· Third, the job of marketing communication is to motivate target customers to take

action and buy.

Objectives of communication

With three basic jobs done by communications, we can elaborate the fundamental objectives of

a marketing communication as follows6:

· Build Awareness - to a level that target customers do understand the important

information about a brand.

· Reinforce the message - to sustain a desired level of retention with respect to image,

key benefits, and name recognition over time. Make sure that brand picture does not get

distorted.

· Stimulate action: - to motivate target customers to take action in relatively a short time.

Different experts present the concept of objective-fulfillment in different ways with the same

essence. Scot Davis makes understanding of it simple by giving it the acronym "AUTHOR" in

the following way7:

· A for awareness

· U for understanding

· T for trial

· H for happiness

· O for only one

· R for referral and recommendation

To ease your understanding of the concept, let's take a look at another model in comparison

with the above to look into the commonality of essence. The essence of the concept is all about

understanding how customers register a campaign and what level of responses are generated on

their part by that campaign.

125

Brand Management (MKT624)

CUSTOMER RESPONSE HIERARCHY

Figure 39

MODEL 1

MODEL 2

AWARENESS

UNDERSTANDING

COMPREHENSION

INTENTION

TRIAL

ACTION

HAPPINESS

ONLY ONE

REFERRAL

What model 1 explains is a hierarchy of responses to a campaign. A similar hierarchy is

expressed by another author as model 2, which also explains the same concept by contracting

the hierarchical levels to four instead of six as propounded by Davis. The next lecture goes into

the details of the importance of arousing all hierarchical responses to create the desired impact

of communication campaigns.

Bibliography:

1. Roger J. Best: "Market-Based Management Strategies for Growing Customer Value

and Profitability"; Prentice Hall (300-301)

2. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bas, a Wiley Imprint (153)

3. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bas, a Wiley Imprint (154)

4. Geoffrey Randall: "Branding A Practical Guide To Planning Your Strategy"; Kogan

Page (66)

5. Geoffrey Randall: "Branding A Practical Guide To Planning Your Strategy"; Kogan

Page (66)

6. Roger J. Best: "Market-Based Management Strategies for Growing Customer Value

and Profitability"; Prentice Hall (300-301)

7. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bas, a Wiley Imprint (154-155)

126

Table of Contents: