Strategies to innovate: co-branding
By Miriam Morante Bonet, AIJU
In the ultracompetitive context of the market, it is important to surprise consumers and reel them in with innovative proposals. But that is, without a doubt, quite challenging. One obvious way toy companies have been appealing to children for many years now is by applying licensing from popular movies, TV shows, and even social media content onto toys. However, there is a similar, yet different and unique strategy that might prove to be effective in our sector. What’s more, it has until now not been exploited very much: co-branding.
What is co-branding?
Co-branding is based on the collaboration of two companies that join efforts to create services or products under the common umbrella of their brands. It is usually a temporary action, but in some cases has remained over time.
These alliances are sought by identifying shared interests and recognizing potential benefits for both parties. For instance, a brand from the sports industry might be interested in reaching a younger audience, and by creating a toy under their brand, they can accomplish that goal.
An industry that uses this strategy quite often is the food industry: Milka-Oreo’s cookies, Milka-Philadelphia’s cheese, Ben & Jerry’s–Netflix’s ice cream, etc. As we can see, collaboration can be done between companies from the same or different sectors. Related to the toy industry, we have the example of Principe (cookies) creating its iconic prince with Playmobil.
In the toy industry, companies are starting to be aware of the potential of innovating by entering into a partnership with another brand. In the last years, there have been very interesting and profitable co-branding proposals carried out by Lego. For instance, Ikea and Lego have partnered up to create a set of boxes that serve as storage for Lego pieces. At the same time, the product, named BYGGLEK, has areas with Lego shapes that allow the product to be used while playing as well. Both companies, which define themselves as experts in “learning to play”, realised how this collaboration could help them both reach more customers under this common idea.
Lego also collaborated with Adidas to create a set to build iconic Adidas shoes with Lego pieces. At the same time, Adidas has launched shoes and apparel based on the aesthetics and some characteristics of the Lego brand.
The fashion industry is one of the favourite sectors for the toy industry to collaborate with in such a way. There are several examples of Barbie with important designer brands: Moschino, Tommy Hilfiger, Balmain, etc. One of the latest collaborations is with Puma, in which both companies have created different products under both brands.
Another example of a company embracing this strategy is Build-a-Bear. Most recently, they collaborated with Rockets of Awesome, a New York-based innovative brand of children’s clothes. On the one hand, the partnership helped Build-a-Bear to modernise, improving their appeal to a new generation of parents, while on the other hand, this action helps Rockets of Awesome gain recognition. A win-win campaign.
What are the benefits of co-branding?
Co-branding could have a positive impact on the sales and brand awareness of the companies involved, thanks, in general, to the following benefits:
- Co-branding supports you to create new ways to innovate and generate original ideas.
- Co-branding helps to elevate a product in a competitive market.
- With co-branding you usually surprise consumers.
- With co-branding, the image of your product is enhanced as it is associated with another renowned brand.
- With co-branding, you could appeal to kidults when you collaborate with a brand based on their interests.
- Co-branding helps to reach an audience that might not be interested in toys anymore (E.g. co-branding with social media platforms)
- With co-branding, you could expand your brand by entering new sectors.
- New consumers reaching you from a different sector will be more willing to trust you if you are partnering with a brand they already know.
- With co-branding, both brands generate joint advertising, reaching a wider scope.
Although co-branding has many benefits, previous in-depth analysis of a brand is very important before deciding on any kind of collaboration. Even if a brand is well-known or popular in one moment, that does not mean it is a good match for any other brand. Brands that want to implement co-branding actions must share similar values, missions, visions, goals, etc. If not, they are in danger of having an adverse effect on their brands.
Co-branding might be an interesting strategy for toy companies that want to reach consumers and generate new ideas in order to compete successfully in the complex market of today. Not to mention, if the co-branding strategy is implemented well, it has the potential to benefit both companies.
About the Author:
Miriam Morante Bonet, PhD, is a specialist in the children’s sector and works as a designer, researcher and professor. She carries out social and market research to determine new consumer behaviours and preferences for AIJU, the Technological Institute for Children's Products & Leisure, based in the town of Ibi (Alicante). Furthermore, she supports companies to create appropriate and appealing products and campaigns. Miriam Morante Bonet is a professor of marketing and design at the Polytechnic University of Valencia and the Open University of Catalonia.