Answer to Question 1
Co-branding is the use of two or more brands on one product. Marketers employ co-branding to capitalize on the brand equity of multiple brands. Co-branding is popular in several processed-food categories and in the credit card industry. The brands used for co-branding can be owned by the same company. For example, Kraft's Lunchables product teams the Kraft cheese brand with Oscar Mayer lunch meats, another Kraft-owned brand. The brands also may be owned by different companies. Credit card companies such as American Express, Visa, and MasterCard, for instance, team up with other brands such as General Motors, AT&T, and many airlines.
Effective co-branding capitalizes on the trust and confidence customers have in the brands involved. The brands should not lose their identities, and it should be clear to customers which brand is the main brand. Nike and Apple successfully teamed up to release a co-branded running shoe, the Nike +. It syncs with an iPod to track running performance. The co-branded shoe and iPod accessories helped boost sales for both brands. It is important for marketers to understand that when a co-branded product is unsuccessful, both brands are implicated in the product failure. To gain customer acceptance, the brands involved must represent a complementary fit in the minds of buyers. Trying to link a brand such as Harley-Davidson with a brand such as Healthy Choice will not achieve co-branding objectives because customers are not likely to perceive these brands as compatible.
Answer to Question 2
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