Article By Hardik Vyas and Anya Behera
(LLM Students at National Law University and Judicial Academy, Assam)
Due to the enlargement of market dimensions and increasing competitions at global level, due to significant enhancement of technology, e-commerce platforms and comparative product analysis are just one click away, so, the market players are coming together to make their products cost-effective and to be easily available at the market. Co-branding is a strategic method through which several brands come together into partnership for the introduction of their common products to reduce their product’s cost and maintains quality product through their mutual efforts. The process of Co-branding accomplished mainly through the instruments of assignment and licensing of trademark among the partners. These collaborations also attract their registered trademarks towards creation of such common product. The Co-branding has a great potential to influence the goodwill of such partners together as well as individually. For example, In India, Air India and State Bank of India came together through the launch of Air India SBI Card for the travelers. However, the situation becomes complex in deciding the rights when two trademarks have equal chances to appear on one product i.e., manufacturer’s trademark or retailer’s trademark.
Advantages of Co-branding:
There are several advantages of Co-branding for the brands to get edge in the market in the ways:
a. It provides enhancement of goodwill of common brand through the combination of two or more different brands together.
b. Co-branding activities provide huge product creation space to the brands without any restriction to form an innovative product which has utility in the market.
c. Co-branding can be used with goods and services together to enhance its value in both the areas for two different brand.
d. Co-branding provides help brands to understand market trend and approach towards direction with mutual efforts.
For example, the Apply Pay Service product came out of collaboration between the MasterCard and Apple to provide the service combining the mobile phone services with the payment processing services of MasterCard.
Co-branding can be proved as a creative tool to bring unique products and promote innovative ideas by bringing together two or more brands from different areas.
Disadvantages of Co-branding:
Despite of numerous benefits of co-branding, there are certain drawbacks which also needs to be addressed in order to completely cover it:
a. It may create confusion among potential user due to collaboration between two brands.
b. It may increase the competition between the partners which may result in dissolution of partnership.
c. Due to the bad reputation of one brand, it may affect the goodwill of common product.
d. Vulnerability relating to product liability due to deficient reputation of a partner.
e. Loss of trademark rights because of improper trademark use due to ambiguous co-branding agreement.
Given that, strategic and structural measures are required for launching co-branding campaign. Critical evaluation of all the stages of co-branding campaign i.e., pre-launch, preparation and introduction and to be consider as crucial as trademark licensing agreement. Therefore, the approach should consider the day to day activities between both the partners and the agreement should be critically drafted and understood for both good and the bad conditions.
Analysis on famous Co-branding Partnership
· Uber and Spotify
Spotify is an established and prominent music streaming app and a media service provider. It is basically a Swedish music service provider. In the year 2008 it was launched worldwide and this is used in lot many countries which includes Australia, America, Africa, Asia and many more. This app is easy to access as it gives easy option of searching the required music as per the user and it also includes music of different language, artist etc. This company partnered with Uber which is a transport Aggregator. This partnership works in mutual understanding by promoting each other’s app and by gathering huge consumers and by earning out of this. For instance while searching for an Uber ride in Uber app. On opening the app by default it speaks about Spotify where the customer reads about Spotify.
This partnership will give better competition to the competitor brands and the audience might choose Uber and Spotify for a better musical ride over other competitor companies.
· Taco Bell and Doritos
There were two companies which came together to create a new product called Daritos Locos Taco in which it had Taco Bell and Frito-Lay. Taco bell is a famous American restaurant in the fast food category. It is basically working as a fast food restaurant under the Yum! Brands, Inc. The other company, Frito-Lay wherein PepsiCo in their value added agricultural products like potato chips, corn chips and other snacks sold the products under the brand name Frito-Lay.
Crunchy taco recipe of Taco Bell was taken by Frito-Lay and it added special effect to it by adding a Daritos shell and invented a new fast food named Daritos Locos Taco. Both the companies tried to make this new fast food as similar to that of the existing Taco bell fast food.
The product packaging showed both the companies which basically reflected co-branding partnership and it also attracted both companies consumer which was benefitting for both the companies.
· Apple and MasterCard
Apple is well-known brand and a famous Tech company which produces products like Smartphone, computers, portable media player, Air Pod, has its own web browser and many more. Apple also wanted to venture in to digital payments and thus launched Apple Pay. This app encouraged the consumers to reduce the physical use of cards by saving all the information related to the card in the phone. But for successful running of this app it required credit card companies to update themselves according to the present advanced technology. So to give effect the first company which offered the users the save there details in Apple Pay were MasterCard. This helped both the companies to grow and gain profit in the same time.
Analysis of Co-Branding Rights:
In the manufacturer-retailer relationship, manufacturer’s trademark can be signified as the source identifier of the product while retailer’s trademark act as an identification of trusted remote delivery services of such product which surfaces dilemma. For instance, when in a clothing brand, retailer places its trademark on the price label affixed to the product contracted with the manufacturer, although, the product provides availability assurance and supports retail services but such product should also be source indicative of the clothing. But, by putting retailer’s mark on the product, it does not become the only retailer’s product as it does not bear the manufacturer’s mark on it.
The main ingredient of trademark is to distinguish the goods or services in association with its use by the owner from those goods or services of others in order to generate the exclusive trademark rights.The foremost factor for the identification of any goods or services can be made mainly on the basis of its origin or source. It is important for the consumers to associate the trademark with a source of the product for its unambiguous identification.
If the retailer wants their mark to be affixed with the product originally manufactured by some other which could act as a source of such product when the manufacturer’s mark not to be appeared with such product. It could be possible through the agreement between retailer and manufacturer relating to their mutually created product and it shall exclusively contain the mark of retailer on it (it is also known as the private label).
If the retailers apply their marks on the product which is separately manufactured by some other manufacturer in the absence of any express or implied agreement between them may lead a pathway for the opposition by third parties which ultimately may lead to refusal of retailer’s trademark.
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