Companies develop their businesses through new and successful methods. One such tool is cross-branding, where two companies pair up together. Let’s have a look at what cross-branding is, with its benefits, strategies, and challenges.

What is cross-branding?

Cross-branding is when two brands work together to create a new product using both the brands. Also called co-branding, by working together, they create awareness for their individual brands. It is an effective way of branding when it involves two brands with similar stature, similar brand awareness, and similar profits. Cross branding is different from cross marketing, where cross marketing uses existing products to collaborate, and cross branding is where you create a new product through collaboration.

Benefits of cross-branding:

1. Increased brand recognition: introducing one brand to another brand’s customers and followers increases brand awareness and recognition. Not only to either brand customer but might gain new customers when two brands create a new product. When cross-branding is successful, it creates brand recognition among new audiences.
2. Extension of your business: cross-branding leads your business to extend into a new era. This is successful when the product output is unique and presentable to the customers.
3. Enhanced credibility: when you pair up with a well-respected brand, it increases your credibility. When both brands have an equal reputation where customers trust one brand over another, cross-branding helps build trust for one brand with respect to the other brand. This provides both companies with trustworthy opportunities and credibility.
4. Builds excitement: When two brands collaborate, it attracts interest and attention towards your brand. It makes customers refresh your brand page when excitement hits them about your new launch.
5. Cost-effective: cross-branding helps you reduce the cost of creating a product as an individual. With the involvement of two brands, there is a cost split, and more money is spent for the completeness of the product.

Types of co-branding strategies:

1. Ingredient co-branding: This is the usage of one brand’s ingredients by another brand’s product. Among the two, one is usually a major brand, and each product typically has unique patented qualities. By doing this, the reputation of the brand increases for both brands.
2. Same-company co-branding: involvement of one brand but advertising several branches of the product from the same brand. In simple terms, using one product to promote other products of the same brand.
3. National-to-local co-branding: This type of co-branding occurs when a national brand partners with a small local business. This increases national brand awareness and revenue for small businesses.
4. Joint venture (or) composite co-branding: alliance with two or more well-known companies to present a new product that could not exist alone. This includes creating a new product or developing an existing one.
5. Multiple-sponsor co-branding occurs when two or more companies share technology and promotional events. For example, athletics, concerts, and any such attention-grabbing activities. Each company earns its own reputation, recognition, etc.

Challenges of cross-branding:

1. Finding reputable collaborators: Cross-branding is successful only when two brands are considered equal. They might work for two different industries; choosing the right collaboration is important. Finding one with suitable elements is difficult where one might not be ready for collaboration or some do not have the ability to collaborate.
2. Customer reactions: Consumer responses to a cross-branding initiative can differ. Companies working on cross-branding projects may find it difficult to control client reactions, including knowing which customers to target and how to reach them.

Conclusion: 

Cross-branding, or co-branding, is a powerful tool that helps enhance reputation, brand recognition, customer loyalty, financial success, etc. This is very helpful for small businesses, where they can collaborate with larger companies and increase their business activity. At last, co-branding gives companies the chance to foster an innovative and creative culture while raising consumer satisfaction through special partnerships and shared value.

Birth Marque is the right place to brand with one of the leading and most professional branding companies in Chennai. They provide you with various digital marketing services to market your product, so your organization reaches out to more clients.