When two like-minded companies form an alliance, it can be a match made in heaven. But, when strategies don’t align and brand marketing doesn’t reflect either company well, the result can be highly detrimental to both. Brand partnerships are mutual agreements between two companies and this type of business collaboration can take place for a particular product launch or as a continuous agreement. The idea is that, by merging each brand identity and strength, the two become better together. Simply put, a successful brand partnership should result in a win-win situation. Each brand brings with it new audience potential and combined creativity. But sometimes company strategies simply don’t align. Whether poor communication and expectation, a lack of understanding about target audiences or badly written agreements, when a marketing collaboration fails, it does so in full view of the public.
IKEA® + LEGO versus IKEA® + Shell
First, think of the highly successful marketing partnership between IKEA® and LEGO®. The two brands teamed up to create a range of simple storage solutions for adults and kids with play as their inspiration. So why does the BYGGLEK collection work? It’s the perfect solution for messy play and satisfies both the creative child and the adult who usually tidies up after them. Making cleaning fun, the BYGGLEK box forms part of the play and tidy up afterwards. Ikea designer Andreas Fredriksson explains “It was a yes from the beginning. It‘s the perfect match because we work with small space living at home and Lego is all about play.”
But LEGO® brand partnerships haven’t always been so successful. Now think LEGO® and Shell; for almost 50 years the two enjoyed a brand partnership that worked well for both companies. Initially, it made sense for LEGO® to partner with Shell because they could use the brand recognition and credibility of Shell to market their LEGO® gas station sets and racing cars. Fast forward to today’s earth-friendly world and Lego’s growth into a global brand, and that collaboration doesn’t make sense anymore. Shell was criticized for oil drilling and a poor environmental record and there was a public outcry from LEGO® buyers. It ultimately impacted the brand’s reputation and caused them to withdraw.
GoPro and Redbull versus McDonald's and Heinz
GoPro and Redbull are a great example of a multi-year global partnership agreement. They formed a brand-building alliance in 2016 that included content production, distribution, cross-promotion, and product innovation. As part of the agreement, Red Bull received equity in GoPro and GoPro has become Red Bull's exclusive provider of point-of-view imaging technology for capturing Red Bull's events. The partnership is a well-considered approach in achieving brand recognition for both brands. It works because both represent themselves as high energy, adrenaline, and adventurous and their target markets align with each other.
McDonalds and Heinz were one of the longest-running brand partnerships, but that came to a sticky end. After a 40-year tie-up, Heinz was bought by Warren Buffet’s Berkshire Hathaway and 3G Capital and they decided to hire the former chief executive of rival Burger King to lead the business. McDonald’s swiftly removed Heinz ketchup from its 34,000 restaurants worldwide! Brand partnerships can’t just be made, they need to be cultivated.
H&M designer collaborations versus Neiman Marcus + Target
“Halston for JC Penney” was one of the first collaborations between a designer and retailer, but it came at a price. Some saw the value of the luxury brand as cheapened. Since then, retailers such as H&M have got their brand development strategies right, joining forces with fashion heavyweights from Versace to Balmain. In 2004, Karl Lagerfeld became the first designer to collaborate, creating a capsule range of womenswear and menswear. The collection sold out within minutes, setting a precedent for future collaborations.
H&M now stages an annual event in New York to launch its latest designer collaboration, alongside musical acts such as Nicky Minaj. These limited-edition collections make up a tiny percentage of overall sales for the world's second-largest clothes retailer, but the marketing benefits are huge with billions of media impressions. This significantly boosts brand perception for H&M, driving consumers in-store and makes designers that little bit more attainable. An absolute win-win.
American retailer Target saw success with fashion designer Missoni in 2012 so it followed this with a collaborative partnership with luxury department store Neiman Marcus. The results were disastrous, with fashion bloggers and critics tearing into both brands for their high prices, low quality, and boring designs. Prices were slashed and both brands suffered. This happened because they didn’t align in their vision. The Neiman collection didn’t excite Target shoppers and was overpriced for them.
What's clear is that to have meaningful brand partnerships, both companies need to have mutual brand values. It's certainly worth researching before jumping into a collaboration with another brand!