Unlock New Markets with Co-Branding: Strategies for Ecommerce Success (2024)

Although United States law doesn’t require it, every presidential candidate for the past century has run on a ticket that includes a VP pick. A running mate can strengthen a campaign’s brand by attracting additional voter groups to the ticket and contributing another candidate’s skills and expertise to campaign efforts.

In this sense, presidential tickets use a specific type of strategic partnership known in the business world as co-branding. Here’s what co-branding is, how it helps companies, and four real-life co-branding examples to inspire your next collaboration.

What is co-branding?

Co-branding is a specific type of strategic alliance in which two or more brands partner to create a new product or service. Co-branded products show the influence of both brand identities and are marketed under both brand names. Examples include the Doritos Locos Taco (Doritos and Taco Bell) and the Apple Watch Nike (Apple and Nike).

Co-branding vs. co-marketing: What’s the difference?

Both co-branding and co-marketing involve partnerships between brands, but they’re distinct strategies.

• Co-marketing: Co-marketing partnerships (or co-advertising partnerships) are strategic marketing initiatives where two or more companies agree to promote each other’s separate products, but they don’t join forces to create a new co-branded product or service.

• Co-branding: Co-branding partnerships always create a new collaborative product or service. In many cases, co-branding collaborations also include co-marketing strategies designed to amplify each company’s marketing efforts.

Many co-marketing partnerships capitalize on alignment between each brand’s target audience. In 2022, for example, the paint company Sherwin-Williams began an ongoing partnership with the lifestyle brand Joybird. Joybird released a curated selection of products designed to pair with the paint company’s color of the month. Louis Vuitton’s partnership with BMW is another example. In a campaign titled “The Art of Travel,” car manufacturer BMW released a sports car model called the BMW i8, and designer Louis Vuitton launched a line of travel luggage designed around the car’s storage dimensions.

In both cases, the company’s products remained separate: Joybird’s furniture wasn’t marketed under the Sherwin-Williams name (or vice versa), and the same was true of the BMW i8 and Louis Vuitton luggage. Instead, the brands collaborated on marketing strategies designed to cross-pollinate their audiences, drive brand awareness, and increase sales.

Benefits of co-branding

Great co-branding partnerships can help businesses boost profits and reach new customer groups. Here’s an overview of the benefits:

Increased brand awareness

Co-branded products can appeal to fans of both companies, boosting brand recognition by creating a new audience that includes loyal followers of each brand.

Becca Millstein, co-founder and CEO of the tinned fish company Fishwife, says increased brand awareness has been one of the major benefits of her company’s partnership with the Sichuan pantry staple brand Fly By Jing. Their partnership produced popular co-branded products like Smoked Salmon with Chili Crisp and Smoked Salmon with Sweet and Spicy Zhong. “We’ve gotten millions of media impressions from the collab alone,” Becca says, adding the brand received an increase in “interest from retailers who knew Fly By Jing before they knew Fishwife.”

Improved brand image

Co-branding strategies can also increase a brand’s credibility and boost customer loyalty by encouraging followers of one company to extend that loyalty to the other brand.

Becca cites the improved brand image as another major benefit of Fishwife’s collaboration with Fly By Jing. “We saw increased credibility from being associated with this brand that had solidified its reputation a couple of years before we did,” Becca says, adding, “It marked us as being particularly innovative in this previously stagnant category.”

Access to new audiences

Companies can use strategic co-branding partnerships to adjust their brand positioning and access new audience segments. Consider the Portland-based provider of no-fuss snow and work boots SOREL, for example. The brand effectively changed its product positioning by partnering with Gen Z apparel favorite Free People on SOREL x FP Movement, a colorful line of sandals, flats, and clogs that combine SOREL’s durability with Free People’s boho aesthetic.

Traditional brands like L.L. Bean (L.L. Bean x NEIGHBORHOOD), Barbour (Barbour x GANNI), and Teva (Teva x Opening Ceremony, Chloe, Nasty Gal, and Anna Sui) have all used similar strategies to reach younger, trendier audiences.

Extended capabilities

Co-branding campaigns make it possible for brands to innovate beyond the individual capacities of the companies involved.Co-branding partner scan contribute different areas of expertise, share market research or other industry insights, and split product development and marketing costs—reducing risk and making it easier to experiment with innovative new product offerings.

4 examples of co-branding

1. Lip Smackers and Dr Pepper co-branding campaign
2. Apple and Mastercard co-branding campaign
3. CoverGirl and Lucasfilm co-branding campaign
4. Uber and Spotify co-branding campaign

Many leading companies use co-branding to boost brand awareness, support innovation, and increase sales. Here are four real-world examples of great co-branding efforts:

Lip Smackers and Dr Pepper co-branding campaign

In 1975, lip balm company Lip Smackers released its first co-branded product, a Dr Pepper–flavored lip balm that remained one of the company’s top sellers for 45 years. Leslie Gibbs, former director of brand management, licensing, and product development at Lip Smackers’ parent company Bonne Belle, attributes the success of the classic brand partnership to broad demographic appeal. Younger consumers were loyal to Lip Smackers, and older consumers responded to the popular soda’s familiar flavor. “Dr Pepper was always our top-selling SKU,” she says in an Allure article.

Apple and Mastercard co-branding campaign

The Apple and Mastercard co-branding partnership started in 2014 when technology giant Apple released Apple Pay, and Mastercard became the first credit card company to allow the major consumer tech developer to process transactions through the app. The partnership expanded to create the Apple Card, a Mastercard credit card designed to be used with Apple Pay.

The Mastercard and Apple co-branding campaign allowed Apple to launch its payment services and helped Mastercard tap into Apple’s loyal customer base, positioning it as the credit card company of choice for customers excited by the latest consumer purchasing tool.

CoverGirl and Lucasfilm co-branding campaign

In 2015, the cosmetics company CoverGirl and Star Wars production company Lucasfilm teamed up to produce a limited-edition collection of Star Wars-inspired makeup products. The companies hired legendary makeup artist Pat McGrath to design Star Wars–inspired looks. The brands timed the collaboration to correspond with the release of Star Wars Episode VII: The Force Awakens, allowing CoverGirl to hitch a ride on the premiere’s advertising bandwagon. The brand partnership resulted in a more than seven-fold increase in CoverGirl sales. It also ranked as the most popular trending topic on Facebook, boosting social media exposure for both brands.

Uber and Spotify co-branding campaign

In 2014, Uber and Spotify joined forces to allow Spotify Premium users to play music through the Uber app. The partnership linked a user’s Uber and Spotify accounts and offered customers waiting for an Uber the choice to build a playlist for their ride or automatically play music based on the user’s previous activity in the Spotify app.

Like other successful co-branding partnerships, this helped both companies deliver more value to customers and generated positive media coverage for each. Analysts also theorized that the campaign would help Spotify add value to its premium tier, encouraging more users to upgrade from the free to paid version of the app.