On one side of the equation was Missoni. The Italian luxury brand is famed for its knitwear in wildly colourful geometric designs, which sell for thousands of pounds. On the other side of the deal was Target. Solidly Mid-western associations of quality and value have made this national retailer one of the success stories of the past decade in the US.
Last Tuesday Target launched a range of some 400 items designed by Missoni but manufactured and retailed by its mainstream retail partner. The collection was meant to last until mid-October but the heavy promotion of the line combined with price points between $3 and $600 meant it sold out in most Target stores by noon. Indeed, such was the demand that Target’s website went down for the day after unexpectedly huge visitor numbers intent on purchasing the new line deluged the site.
An Italian luxury brand and a US mass-retailer might appear odd bedfellows, but in reality nothing could be further from the truth. According to the established theory of co-branding, this was a perfect marriage.
Indeed the first rule of successful co-branding is exactly that. For a brand marriage to work it should be built on contrasts, not similarities. When co-brands with similar brand equity combine the results are usually disappointing. It’s only when brands with different equities combine that the co-branding impact will prove impressive. Ideally you are looking for a partner that will not only add some new associations to your existing brand equity, but those new associations will confer strategic advantages as a result. In the case of Missoni, this partnership was about generating awareness for a brand that has a relatively tiny North American marketing budget. For Target, this was another opportunity to bolster its value message with the kind of design and premium associations that ensure differentiation compared with arch-rival Walmart.
Next your co-brand partner should have a completely different target market from your own. A strong co-brand strategy not only offers synergy in branding terms but also confers similar advantages with respect to customers. In Missoni’s case, a whole new generation of Americans, perhaps 50 times the size of its existing market, now know and are interested in the Italian brand. For Target, this was a rare chance to entice the metropolitan fashionista back into Target and hopefully convince her that this is a place where she can shop for staples and not feel embarrassed.
The final piece in creating a successful co-brand strategy relates to authenticity. Both brands must also have a legitimate fit within the product range being offered. Missoni and Target have strong product pedigree in clothing, homeware and the other items that were part of the Missoni for Target collection.
Tick those three boxes and the subsequent success of your co-brand is usually guaranteed. And success in co-branding is about as good as it ever gets in marketing terms.
First you generate enormous amounts of brand-centric communications. In the Missoni for Target case there was a very strong integrated campaign to promote the line. This went viral well in advance of last Tuesday’s opening day and, when everything sold out, was covered by the national media the following day. Missoni’s major objective of increased brand awareness was achieved. As was Target’s attempt to premiumise its own brand associations.
The second benefit is softer but often overlooked. Both co-brand partners learn from each other. I have no idea if the design team at Missoni or the merchandisers at Target shared lessons and insights with each other. But if the past history of other co-branded partnerships is anything to go by, there was probably a lot of mutually beneficial synergies enjoyed at the back of house level. When BMW produced a limited edition Mini with Puma interiors, for example, one of the major advantages for the Mini team was learning how a different design team approach the challenge of furnishing a car with leather.
The third, and often most impressive impact, is on brand equity. For brands in need of awareness, revitalisation or a change in association, a successful co-brand strategy can work miracles in a relatively short space of time.
And finally, there are the profits. Co-branding is the only brand strategy I know that makes money while building brand equity. It didn’t cost Missoni a penny to increase its brand awareness by a factor of 50 last week. In fact, Missoni probably made 30% of its annual US revenues from the line. And Target just added a whole new lustre to its brand while selling out of an extensive and highly profitable new product line.
A brand building strategy that makes you money, now that’s on target.