What Is a Brand Partnership Agreement?

If you are familiar with Pillsbury baking ingredients combined with Hershey’s chocolate or Kellogg’s cereal mixed with Smucker’s Jif peanut butter, both are good examples of brand partnerships. A brand partnership agreement is an arrangement between two entities who seek to increase their profitability, brand image, cost savings, market share, and more by manufacturing special items. Brand partnership, which is also known as co-branding, is a business strategy where two brand names work as one to gain more sales by creating a new product. Now, before we proceed to statistic figures, let us first define the term brand value. Brand value describes a brand’s worth, and it implies that a more famous brand can generate more sales than a less-famous brand. Note that even Apple signed a partnership contract with Nike to invent NikePlus, which is a technology that tracks a person’s activity.

According to Statista, as of this year, Amazon has the highest brand value amounting to $221 billion.

Google comes second with a brand value amounting to $159.7 billion.

Apple comes third with a brand value amounting to $140.5 billion.

Useful Facts About Brand Partnerships

In a marketplace where several and different brands fight to get the spotlight, it can be tough. Unestablished brands often lose to innovative competitors, therefore, decreasing the value of their brand. For that reason, co-branding is a method companies use to maintain brand identity, to keep the loyalty of customers, and to stay on top. With that said, brand partnerships are not as simple as they may seem. Bear in mind that not all methods are without flaw, and sometimes partners may lose with co-branding rather than gaining from it. So, it is essential to keep reality in check before getting involved in any 50 50 partnership agreement.

Co-branding is not co-marketing. Co-branding and co-marketing may be similar because both are examples of strategic partnerships that aim to support their advertising efforts. They vary in the way companies execute them. In co-marketing, there are no new products formed because companies only unite to help market each other’s brand. One example is the campaign of Uber and Spotify. In this campaign, Uber users can select music freely on Spotify playlists through a car’s audio speakers. In this way, the two companies gain profit by satisfying their customers at the same market base. Then, after the deal, both companies can leave with more money and without setbacks. On the other hand, co-branding does not only involve marketing campaigns but includes brand equity, value, and identity.Co-branding requires suitability. Three factors contribute to a strong selling image: brand awareness, brand associations, and consumer perception. The question is, will these qualities be enough for two brands to implement co-branding successfully? Your answer, maybe yes, but other reasons can hinder two companies from reaching their sales target. Two companies may have different goals, values, and capabilities. Both may not be suitable when it comes to agreements in licensing, financing, and advertising, or both may not be ideal for one another because one brand may affect the value of the other. One example is the McDonald’s and Disney joint venture agreement, where McDonald’s was permitted to sell happy meals with Disney miniature toys. The partnership ended in 2006 over Disney’s concern for the kind of food that McDonald’s serves children. Initially, the alliance went well, but in time, McDonald’s affected the brand value of Disney.Co-branding means finding the right customer base. The term customer base refers to a group of consumers who frequently purchase the services or goods of a particular company. They are the primary source of profit for a business. Growing a customer base is one of the advantages of brand partnership because this strategy allows two partnering brands to access new customers who are loyal to both their brands. One example of another brand partnership agreement is the credit card arrangement between Macy’s and American Express. Both companies created a credit card that is convenient for customers to get discounts and rewards while shopping at Macy’s. It is necessary to consider that brand partnerships work for specific types of consumers. The real challenge of co-branding is finding a niche in the market.Co-branding can come in four different forms. According to Investopedia, there are four different co-branding strategies: market penetration, global brand, brand reinforcement, and brand extension. The market penetration strategy focuses on trading an existing product together with another in a current market to increase the market share. The global brand strategy aims to serve all consumers with one existing co-brand that is known worldwide. The brand reinforcement strategy seeks to create a new brand title. The brand extension strategy makes a new merged brand name exclusive for a new marketplace.

How To Develop Partnerships Between Two Brands

Signing a brand partnership agreement form with another company can have its benefits as well as disadvantages. For that reason, companies need to know how to develop partnerships through strategic ways. The following are brand partnership guidelines or ways to help you and your partner achieve your business goals.

Step 1: Choose a Partner Who has the Same Goal

Your company must choose a partner who has the same goal in mind. When one company ties with another, both will have the same ties with their customers. So, when one company loses its customers, the other will lose those customers as well. Having similar goals from the beginning of the deal will serve as a foundation for you and your partner to rely on when problems arise later on.

Also, check for brand engagement. Do not look at a brand’s advertising materials and assets, but see how a brand connects with its customers in review platforms, online forums, and social media. By doing that, you will see a brand’s core beliefs, principles, and values. Once you have chosen the right partner, support your partnering company by promoting it. Share your referrals and connections because the success of your partner is now also your success.

Step 2: Bring Value to Your Customers

Both companies should have complementary strengths. When one company has deficiencies, the other must fill those gaps, while operating in unity. When businesses help each other, both will be able to provide true value to their customers, whatever their product may be.

Step 3: Seek to Solve a Problem

The new product you create must solve your customers’ problems. You can identify complementary items by performing customer segmentation, persona strengthening, and strategic marketing. Customer segmentation is when you divide customers into different groups based on their characteristics so you can market a particular product to each group successfully.

Step 4: Delve into Customer Data

In your brand collaborations, it’s crucial to delve into all your customer data, so you get to understand your consumer’s behaviors when it comes to using your product. Determining the differences and commonalities of your customers and knowing what they need or want will be your basis for establishing marketing programs. In this way, you will probably have a remarkable boost in your sales.

Step 5: Sign a Basic Partnership Agreement

A verbal agreement concerning all the steps you need to take is not enough to keep your partnership intact. You and your partner must agree to sign a brand partnership contract. The contract will be your guide on how things will proceed, and it will also outline your obligations towards one another while the contract is in operation.


How do you launch a new service or product that fits your brand?

Your new service or product should fit the name of your brand so customers will not get confused, that is unless you have a good reason to separate a new product from your existing products. You can launch it while keeping the standards of your brand in mind. What you need to do is to create a business plan to launch it. You can ask help from brand advocates so they can display proof of your product’s performance.

What do you need to do after the initial launch of a new product?

After your first launch, check the feedback, and adjust your business plan as necessary. Prepare yourself to implement the changes made and be flexible in the process. To back up your efforts, invest enough resources, including workforce and time. If your plan succeeds, make use of your product’s momentum instead of waiting for your investments to return.

What are the key components that make your brand successful?

The key components that make a brand successful are the following: (1) Preparation. Planning is vital, and it gives you a chance to take advantage of opportunities, so your brand reaches its full potential. (2) Evaluation. It is crucial that you assess the weaknesses and strengths of your company by conducting customer and employee surveys. These surveys will help you see what areas you need to improve in your business. (3) Monitoring. Keep an eye on your competitors by getting information from your customers. (4) Engagement. Address the concerns of your customers towards your products. Deal with negative feedback professionally and don’t disregard them. Think of complaints as a chance for you to make your brand better. (5) Consistency. Customers buy your products for what they are, so keeping your product’s consistency is very important. By being consistent, you will build the trust of your consumers and strengthen your relationship.

How do you improve brand recognition?

Brand recognition is more than just getting name mentions from customers. It is fostering the understanding and perception of your target audiences towards your brand. A baseline assessment will guide you in knowing why your brand recognition is weak. You can do this by incorporating and experimenting with different strategies. Create an opening that will give your audience a chance to spread the word. Also, remember that you have your advocates, which are your employees. They can be an effective resource if you allow them to make your product known.

Can you benefit from your employees’ word of mouth?

When you talk about your company’s values, mission, and vision and expound on important business matters with your employees, your employees may talk about these matters to others. They are not directly selling a product, but are simply being excited about the company’s plans. Also, to promote brand awareness, a company must give before it takes. This is one thing businesses often forget about. A brand that helps the community is a brand the community knows very well, thus, increasing brand awareness. Also, this helps build stronger bonds among your employees and a better working culture.

In brand partnerships, companies share their expertise to provide better services or products to their customers while increasing and generating more sales. Co-branding has already proven itself, as we’ve seen in some of the examples mentioned above. So, if you are a company owner who plans to get into an agreement with another, first know the facts concerning co-branding, then learn how to develop partnerships, and lastly, download one of our partnership agreement templates above.