Co-branding has been a successful marketing tactic for the last 50 years. From Nike and Apple partnering for Nike+iPod to Gillette M3 power razor featuring Duracell batteries, co-branding is a powerful force in marketing. Leveraging the customer base and loyalty of two brands to increase the sale of a product ideally benefits both brands in the long run.
One form of co-branding that is often overlooked is the combination of local and national brands. This successful form of co-branding works by the same principles as other forms, leveraging locally known brands (in this case, merchants or service providers) with nationally recognized brands to enhance messaging and its impact on customers. This new form of co-branding has evolved with software that enables quick and easy local customizations and fulfillment at scale.
Why should a brand want to co-market with a local brand partner?
Brands with widespread recognition and awareness may think that spending too many marketing dollars is just wasteful. But even megabrands like Coca-Cola and Exxon know that reinforcing their message makes a big difference at the point of sale. Here’s why:
- Manufacturers can put a local face on their brands, they get access to local contact information, and no longer have to solely depend on national advertising media.
- Brands can offload some of their marketing to local partners, requiring less internal resources.
- Large organizations can provide small businesses with brand-approved marketing materials instead of leaving the enforcement of brand compliance to cleaning up erroneous marketing pieces after they already hit in the marketplace.
Brands clearly enhance their overall positioning by adding this local layer in the journey to reach their consumers.
Why should a local brand market with a national brand?
Elevating brand awareness is no easy task for any company, but we know that it's much easier for larger organizations. Local brands try to accomplish the same goal with significantly fewer resources. By partnering with big brands, it’s much more effective for them to get their names out there:
- Local partners benefit from being associated with customer loyalty of big brands. They can access brand-approved collateral that consumers will identify with, so that the consumer will associate that big brand to the local brand.
- Local partners often have limited budgets to execute their marketing and can have a difficult time scrounging up the resources needed to carry all aspects of modern marketing campaigns. Co-op or MDF funds that the brands offer can help defray these expenses.
- Businesses on the local level operate at a much different scale than big brands. This provides large brands with a lot of leverage when negotiating with marketing vendors, something that the local partner could never do alone. Co-branded materials should be subject to the discounts that come with the economy of scale afforded to large brands, saving the small business a lot of money.
Co-branding with a big brand gives local partners a much louder voice in their marketplace -- a voice that is more likely to build shared brand awareness with potential new customers.
Example: Automotive Manufacturer/Local Dealership Case Study
One of the best understood examples of successful national to local co-branding is in the automotive industry. This co-branding occurs as car manufacturers team up with dealerships for advertising in local markets. This makes sense for both business entities -- national quality marketing production with huge brand recognition in messaging. This messaging is delivered to local customers featuring a community brand (in this case, the dealership).
Why Co-Branding Works -- The Proof is in the Consumer Behavior
Consumers trust their neighbors and their community more than outsiders. It is human nature and a large factor in the success of local marketing. Large brands tend to have problems connecting to customers on that local, familiar level. Co-branding can bridge that gap for these national brands. Local stores can have a difficult time competing with national chains.
Many consumers have a relationship with national chains but not every single store in their area, so local stores are competing against a company that has an existing customer relationship. This is an uphill battle for the little guy, but co-branding can help. With nationally recognized brands present in their advertising, they are granted the legitimacy and validation that comes with the national brands.
How the Brand and Local Partners Connect Effectively
National brands have known the power of connecting on a local level for some time, but there has always been technological and budget limitations that prevented it from working. Co-branding is no longer a slow manual process with both parties working in tandem to complete one project for one local partner. Advances in marketing software have enabled co-branding to be efficient, cost effective, and even enable real time co-pay and fulfillment, all at scale. So how can brands use these marketing advancements to better connect?
- Use a Distributed Marketing Platform -- This simplifies the sharing of marketing assets. Local brands can provide their details in the platform so that assets are automatically co-branded, then select campaigns in which they want to participate. Brands should make the campaigns attractive and easy to opt into. Brands must allow for a sizable local brand customization in order for the co-branding to work and to show their local partners that both brands can benefit.
- Provide Co-op Funds -- Cost sharing through co-op funding allows for both entities to have skin in the game. Brands don't have to shoulder all of the costs or their marketing, and local partners get higher quality assets at a lower price because part is co-funded by brand and economy of scale allows for more savings. Manufacturers or national brands can also incentivize specific campaigns or assets to meet large scale priorities.
- Local brands might sell a variety of national brands. For example, go into any local hardware store and you will see the same several brands as any of the big box stores. The local store can call the corporate marketing departments of these big brands and determine if there is a co-branding opportunity through a distributed marketing platform. Local brands can then work within the platform(s) to produce co-branded materials for a number of national brands, and effectively lower their marketing budget while producing more collateral.
Technological advancements will continue with software and fulfilment models. These will create better relationships between brands and their local partners. Co-branding is clearly an effective and evolving marketing tactic, and the national to local paradigm will continue to grow.
Scalable fulfillment from the software and effective measurement and attribution will ensure that both national and local brands continue to invest in this specific form of co-branding. The local face on national brands will also grow brand loyalty and the connection of brands to end customers, creating a lasting ROI.
About the Author
Gary Ritkes, President of SproutLoud, oversees all Business Development and Marketing for the company. Gary, a pioneer in the emerging vertical of Distributed Marketing Technology, is an industry leader and innovator with 20+ years experience in graphic communications and marketing strategy. Gary has been involved with SproutLoud since the inception of the company. Prior to joining SproutLoud, Gary was VP of Marketing for Rex Three, Inc., SproutLoud’s first and largest vendor among its network of providers. He has served many Fortune 1000 clients and worldwide advertising agencies in providing marketing technology direction and optimization. He was an original founder of U.S. based Earth Color Group and co-founder of Advanced Digital Services (ADS), which was sold in 1996 to publicly traded Katz Digital Technologies. He has served as a board member of the local chapter of the American Advertising Federation chapter and other national industry associations, including the DMA and AGA.More Content by Gary Ritkes