The recent acquisition of the automobile retailer Saturn by Penske has reawakened an old debate in business: to co-brand or not to co-brand? Co-branding is the collaboration of two companies in marketing their product, aimed to create synergy and draw interest. If Pillsbury Brownies are enhanced by Nestle Chocolate, then brand recognition and desirability is increased for both parties. Too often, though, co-branding has been relegated to large businesses, because small businesses stand nothing to gain by co-branding because they cannot reach as many people with their products. However, co-branding can be effective for small businesses as well.

There are an increasing number of co-branding opportunities for small businesses. The U.S. Postal service allows for the placement of a brand on a package for high-volume shippers. In addition, there are many more off the shelf co-branding opportunities that are offered by credit card companies and large retailers. If co-branding with a larger business doesn’t sound enticing, there are bound to be opportunities to co-brand with other small businesses. Your small business should examine other small businesses and determine which products and services could compliment and enhance the name recognition and credibility of your own brand.

There are some pitfalls to avoid, however. There is always a risk that a consumer will have a negative experience with a product or service as a direct result of a co-branding partner, which in turn reflects badly on your brand. Furthermore, one of the brands may overshadow the other one, and detract from it's quality.

The key is to do diligent and thorough research on a potential partner before starting any co-branding ventures. If the common pitfalls of co-branding can be avoided, co-branding may be an effective way to establish and enhance your brand, and subsequently your profits in this down economy.

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