We all know about the co-existence of Intel and CPU brands like Dell & Gateway. Its one of the most unusual and yet one of the most successful co-branding exercise ever. It also has an impressive sounding name called “Ingredient Branding”. But just like any co-dependent human relationship, brands must constantly ask who is benefitting from these co-existence more.
Its amazing how many brands actually depend on other brands for their product to function. Boeing depends on carriers like Singapore Airlines and Emirates to make their product appealing to end users. Nokia depends on telecom service providers like Vodafone and AT&T to make their product usable. After all, whats a handset without a connection?
In such complex situations, three things are key.
1. The brands should fight it out with their co-dependent category and ensure they are calling the shots, not the other brand from other category. i.e. – For all the good R&D benefits Boeing is bringing, its the inflight experience provider like Virgin and Southwest who are stealing the show. No one talks about how wonderful Boeing is, but everyone goes ga-ga over Southwest and Virgin’s service. So in this co-dependent category, Virgins and Emirates of the world are calling the shots. Poor old Boeing and MCD Douglas can do nothing about it.
2. Find your unique place, that is not dependent on your co-dependent different category partner. i.e. Nokia’s vision of “Connecting People” is heavily dependent on their telecom service providers ability and vision. So there’s a strong overlap. When people think about connectivity, they usually attribute it to the connection provider (i.e. AT&T) not the handset provider. So that is a grey area that Nokia should discuss.
3. Nothing is black and white. From case to case how much horizontal integration is required would change. For someone like Gillette, who provides the full line for anything to do with shave, might be the best way to go. Then for others like airlines, it would be ill-advised that Boeing starts it own airlines service provider business to win back control from Virgins and Singapore Airlines.
One comment
STalukder
July 5, 2009 at 6:16 pm
Is it really necessary for Boeing “stamp authority” on their strategic alliance with airlines?
Boeing is a B2B company; it sells its products to airline companies. Southwest, Emirates and other airlines are B2C; they sell to passengers/consumers. Boeing doesn’t need “everyone” to talk about “how wonderful Boeing is”, it just needs the airlines to think like that. I doubt most passengers buy tickets based on the plane they’re going to be travelling in (except when ‘novelty’ planes are introduced, like the A380, and that only until the novelty wears off).
Considering this, I would think that the Boeing brand doesn’t stand much to lose from letting airlines’ brands dominate the strategic alliance.