Improvement of sales and reaching new market segments are the main reasons for retail co-branding.

Research conducted by Johan Schwartz indicates that South African retail brand managers have different reasons for pursuing co-branding strategies. The research firstly found that that the improvement of sales is the main reason for retail branding practitioners to pursue co-branding strategies. Secondly the research found that the improvement of brand image are deemed to be a lesser important reason for pursuing co-branding strategies. The research also found that reaching out to new segments of the market is another appropriate reason for brand practitioners to pursue co-branding. Extending the brand through a shared new product or service offering is deemed to be another appropriate reason to co-brand. The latter reason (extending the brand) were deemed to be a lesser important co-branding reason. Lastly the research indicates that renewing the brand though positive associations as well as launching a new and redevelop are deemed to be lesser important co-branding reasons.

Retailers prefer to co-brand with FMCG companies

A recent study by Johan Schwartz found that South African retailers prefer to co-brand with FMCG companies. Retail brand managers were asked to indicate the sector which they prefer to co-brand with. The options (sector) given were financial institutions, e-companies, ticketing companies and communication companies (cell phone etc.). More than 60% of the respondents indicated that they prefered to co-brand with FMCG companies. The definitions of co-branding can be described as follows. Co-branding occurs when two or more existing brands are combined into a new joint product or are marketed together in the same fashions. Co-branding also involves two or more firms that associate their brands together to create superior market offerings, or to engage in effective strategic or tactical brand building programs.