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Co-Branding - Marry & Make Merry

Aggressive marketing companies have sparked off a new trend of purchasing, by issuing co-branded credit cards with banks and financial institutions. Co-branded credit cards from LG and SBI, ICICI and HPCL, Air-Sahara and Standard-Chartered Bank, HSBC and Star India Bazaar, show that these have spread across to all possible business sectors in India.
The popularity of these cards in India is on the increase as the 'price conscious' consumers get to enjoy extra exclusive benefits from multiple recognised brands at no extra cost. Co-branded credit cards spur spending as they reward loyal customers with rewards, encashable bonus points, discounts, cash-back offers and a host of such schemes. Ease and convenience during shopping, payment of bills and transacting at petrol or retail outlets are other reasons.

For the card issuers, it is an easy way to directly expand their consumer base and increase customer loyalty. For the other partner, there is an access to a database with complete details of a large number of customers which can make their segmentation and targeting of customers much more systematic, thus increasing their profitability.

According to an ICICI estimate, about 30 per cent of the credit cards issued by it are of the co-branded variety. This is because most of the new issues are co-branded since they are actually stimulating sales.¹

Marry the Right Person

Co-branding can be an interesting way for companies to venture into new areas. Boots-Piramal and Saregama-Records are jointly producing a series of music albums of old Hindi songs. Boots-Piramal fits in perfectly in this alliance as Strepsils from Boots Piramal has always been marketed on the 'voice' platform. Boots-Piramal has taken Strepsils from the 'smooth voice' platform to a next level of 'sweet voice' platform by its arrangement with Saregama. Both of them will also co-promote each other's products at their respective outlets, and thus increase their brand visibility.

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1 "The Power of Partnership", Utpal Bhaskar, "The Brand Reporter", Oct 16-31 2005.

* Contributed by -
Santosh Kumar Vuppala,
Batch of 2007, PG Program in Communications Management,
Mudra Institute of Communications, Ahmedabad.