Co-branding comes with inevitable risks. Before the brand managers of brand A go for co-branding with brand B, they must consider the following points −

●      If brand A is well established and generating excellent revenue, brand B would get the benefit of A’s positive perception and experience. In such case, brand A’s perception gets diluted.

●      There is a risk of any of the brands A or B underperforming or failing. In such case, the underperforming brand negatively impacts the over-performing brand and destroys its reputation for none of its mistake.

●      If brand B is to some extent depending upon brand A’s equity, then brand B may be taken as weak or secondary.

●      Brand A and B should be fit or compatible from the perspective of attributes and benefits. For example, co-branding of ice cream parlor and dry-fruit shop is natural so is co-branding of clothes brand with footwear brand.

●      Brand A and B both should have common core values and corporate philosophies. This is beneficial for both brands and reduces the risk of negative reputation if one of them fails.

Rough Criteria for Co-branding

Here are basic rough guidelines for co-branding −

●      Know your partner in co-branding. Go for co-branding only with the companies that share complementary values.

●      Co-brand only if the company has same ethics, core values, and common vision.

●      Choose co-branding only with brands whose products are best-in-class status.

●      Co-brand if the partner and company’s brand share the same target audience.

●      Co-brand only if the company can retain full review and approval rights on all elements of communications.

These guidelines bring down the opportunities of growth of the company but the good news is, it reduces the risks associated with co-branding.