In one of our previous LABReport article “Co-branding, a 1+1>2 formula”, we have discussed about how a successful cooperative marketing of two or more brands may add value to both the participating brands. We argued then that by drawing from the respective strengths of the cooperating brand, new products and services developed would increase both brands recognition and esteem among all consumer groups.

In the previous new post “A New Door for the Hut”, we also talked about how marketing brands together within a firm can be a strong, if daring, strategy to innovate the firm’s product offerings and the brand image. But does the co-branding strategy also works for brands under different firms?

A newly announced cooperation may give us an answer in the near future. Tim Horton’s, Canada’s favorite doughnut and coffee shop, has signed an agreement with American ice-cream chain Cold Stone Creamery to launch a series of stores that include the brand name and the menu items of both firms. The logic is same as that of the combined Taco Bell/KFC shops in North America operated by Yum Foods, but it probably marks the first time an international, inter-corporate deal of such magnitude is reached.

Although the initial phrase of the deal only covers stores in Canada, New York, and New England regions, the potential benefits for both firms is immense on a global scale. For Cold Stone, already well-established in North America, Europe, and Asia, including here in China, is set to use the extra doughnut and coffee offerings to enter into direct competition with established firms like Dunkin Donuts, Krispy Kreme, and even Starbucks. Even modest success in the competition would bring greater revenue for the firm in time when its ice-cream market is tightly squeezed by likes of Haagen Dazs, Dairy Queen, and Ben & Jerry’s.

But the greater beneficiary in the cooperation is sure to be Tim Horton’s. Currently virtually unknown outside of Canada and upstate New York, the co-branding deal would quickly bring the Tim Horton’s brand to an international audience using the existing Cold Stone outlets. Potential successful expansion of the co-branding deal to an international scale is sure to propel Tim Horton’s to the limit ranks of internationally recognized food chains. We extend our best wishes for both brands.

Source: oxfordpress.com