As consumers, we all have products that we are more brand loyal to over others. Whether it’s the shampoo that makes your hair shine or the ice cream that satisfies your late-night cravings, there are certain products that we choose time and time again to satisfy our wants and needs.
But the reality is that a large portion of our favorite products are simply the result of strategic brand partnerships. From Thin Mint flavored coffee at Dunkin’ to Bose speakers in Audis, we’re exposed to co-branded products day in and day out.
Co-branded products, services and experiences have become increasingly popular amongst today’s mega brands. These partnerships can be an effective method to connect with consumers in more meaningful ways, while elevating both companies and giving them more power in each of their respective markets.
But what was once a popular trend has recently turned into an essential piece of the marketing puzzle. With multiple variations of products available and heightened efforts to promote them on a range of digital channels, brands are looking to strategic partners to help drive their growth in the saturated marketplace.
While the success of these alliances is case by case, corporations continue to build partnerships for many reasons…
Perks of Partnerships
Corporations that work hand in hand with one another expose their brand to new audiences. Where one brand might have more exposure to a certain audience, the other can leverage the new partnership to reach that same audience. By partnering with another company, brands are able to extend their reach and boost the brand to new, targeted audiences that are fit for their company.
A loyal customer wants to know they can trust the brand they buy from. Without credibility, brands could lose out on a large pool of potential buyers. In fact, 43% customers stop doing business with a company because they lose trust in them. Establishing trust benefits both sides of the branded partnership – fans of a brand will be more apt to try a different product, knowing that their brand loyalty is directly linked with another associated brand.
In today’s competitive marketplace, innovation is critical to success. Companies must constantly offer something new in order to keep consumers interested and engaged with their brands. However, creating that unique, high-demand product is quite the task. Therefore, entering a collaborative partnership is an ideal way to bring in fresh ideas and resources that elevate the brand and spark new, never-before-seen products, services and experiences.
Some brand partnerships feel like they were meant to be – Crest and Scope, Febreze and Gain, Hershey’s and Betty Crocker. Others seem like an unlikely match. Here are a few mega brand partnerships we were surprised to hear about:
Starbucks and Uber
The last thing you want to do during a crazy morning commute is wait for your coffee. You already needed that caffeine to kick in, well yesterday. This consumer urgency is what sparked the recent partnership between Starbucks and rideshare giant, Uber. With this new, established alliance, Starbucks fans will be able to order their coffees, snacks, and beverages through the Uber Eats app. This new coffee-delivery service will be available in six major US cities, with a $2.49 booking fee added to the total price.
Starbucks and Uber are in polar opposite markets, but they both aim to provide consumers with a quick, pleasant experience. This type of experience is a lot easier to achieve if it means customers are waiting in the comfort of their homes rather than in the chaos of long lines.
Toyota and Panasonic
Cars and batteries; big and small products made by two mega brands that have a newfound purpose for one another. Toyota and Panasonic have announced they’re starting a joint venture to manufacture and sell battery cells for electric vehicles (EVs). This partnership is coming at a prime, ironic time for both companies; Toyota’s six-year partnership with Tesla turned dark, and Tesla turned their back on Panasonic to power their electric vehicles with a California-based company.
Now Toyota and Panasonic are ready to gain a competitive edge in the saturated EV market. By combining these Japanese-tech giants, they could turn their electric vehicles into a hot commodity in a heated market.
McCormick and IBM
Mixing spices with technology definitely doesn’t sound like your everyday recipe. But for seasoning company, McCormick, and IT maven, IBM, their new partnership might be the perfect combination to spice things up a bit.
McCormick is teaming up with IBM to analyze over 40 years of its product data using IBM’s Artificial Intelligence (AI) and machine learning. This entails testing information about product formulas and consumers’ tastes, which most recently generated new flavors, including Tuscan chicken, New Orleans sausage, and bourbon pork tenderloin.
While an unexpected combination, it makes perfect sense as to why these two mega brands are joining forces. McCormick can turn its ordinary spices, into unique, AI-tested flavors that appeal to consumers’ taste buds and forecast future flavors in spice racks.
Partners with Purpose
Corporations have become adept at partnering with one another. But with every strategic alliance comes uncertain outcomes. Will one brand surpass the other’s success exponentially? Do the goals align for both companies? Are they truly a good fit for one another?
To limit the risk, it’s crucial that brands choose a partner wisely. This means they must research the market they’re looking to enter and narrow in on the leaders that have values that match their own. While the market doesn’t have to be identical, the core values that a brand stands by gives the partnership a purpose.
By working toward similar goals, brands will drive authenticity and keep customers loyal to their brand and to their partner’s.
So, the next time you reach for those Peeps-flavored Oreo’s at the supermarket, just remember that it’s simply the combination of two brands coming together to create one unique product – and one that you’ve come to love.