The lure of a Dual branding partnership is becoming too much to resist as more and more brands are opting for these mergers but there is one tried and tested recipe for success—both parties have to receive a mutual benefit.
We were recently tasked with preparing a report on potential dual branding project for a large range of brand extension lines for one of our major clients. However, we quickly became aware that although the products would be outstanding, there would be very little value to the clients’ brand and to the consumer of the potential partner brand. It was clear that the balance was out of line; with one brand acting as an awareness platform for the other.
It is this balance that is so often misunderstood. You can have a very large organisation which partners with a small one. In pure company value terms, there is no balance, but in terms of value to each other’s brand the two are equal. A perfect example of where size doesn’t matter.
The key to successful dual branding partnerships is that brands that work together do so because their core values are similar. It is fascinating how for example supermarkets have gradually gravitated to partnering with fuel brands. Is it just coincidence that on even the apparent superficial level of colour compatibility, Shell has partnered with Sainsbury’s, BP with M&S and Esso with Tesco?
In terms of increasing confidence and brand perception, consumers prefer to see added value being realised when brands decide to partner with ‘experts’ in the different types of products and services offered. The well-known supermarkets, coffee franchises etc are much more acceptable as a premium offering to us, than any in-house or own brand offer from the fuel company on its own.
The concept of a brand does extend to certain celebrities or personalities through endorsement. Take Jamie Oliver and Sainsbury’s. A great collaboration that has benefitted both by strengthening a strong set of shared values. If they last a long time, they start to become a single entity.
This can be healthy, but it can also be a risk to each. So frequently collaborations are motivated and developed without any real thought to an exit strategy. It’s a bit like a love affair. No one starts a personal relationship wondering how they might get out of it! And yet for brands, keeping a cool and divorced view on how a relationship is developing, and monitoring whether it is continuing to deliver the benefits for which it was entered into is very important.
Though separate businesses, in some cases a brand merger can work so well that over time, two separate entities become inseparable with Mini and Cooper being a great example of this.
Perhaps the biggest hurdle to jump is keeping the smaller brand in the same level of limelight as the bigger brand, as getting this wrong could not only negatively impact the little guys but the larger labels as well. If you have one brand that is instantly recognisable to the public, combining with an unknown, or perhaps only locally known brand, it is easy for all the attention, good and bad to be focused on the known brand. We have a client who sells products through a network of distributors. The product brand is well known, the distributor is not.
Put simply, a very small logo for the well-known brand, sitting next to a large logo for the distributor can still leave the consumer association with the recognised brand. Sometimes an exclusive distributor may even be entitled to use the identity of the brand. This is great when it works, but this does expose the recognised brand to risk, should the distributor fail to live up to expectations. So brand management is critical.
What we have observed is that ‘brand’ can all too easily be given away as part of the business negotiations. This tells us that controls do need to be in place and negotiators need to be brand savvy to understand the value of the brand they are potentially selling short.
This is why it’s important to consult a professional during the merger negotiations. If the brands are huge they will most likely include an investment banker to clarify anything needed. Many people don’t know much about investment banking and it’s actually just that type of a bank that’s behind any huge deal.
There is no doubt concerning the persuasion power that money holds, particularly with product endorsements. Two brands that might not necessarily be a perfect match on paper can flourish together if one brand pays the other enough. If a premium brand provides a flavouring to a ‘basic’ brand of crisps, the two seemingly different brands can reap the rewards. The brand association is great for the crisps; the income is great for the premium brand. But this has to be done fully aware of any risks.
According to a survey of the main supermarkets, combined brands still make up a very small percentage of all the lines sold, so the importance of getting it right cannot be overlooked.