Sony Ericsson: The Example of Cooperative Branding

It has no doubt that co-branding is one of the main methods for two or more companies to do the business in co-operate way. Co-branding has various advantages such as risk-sharing, more sales income, expanding customer base, technological benefit, resources-sharing for cost reduction, and also better product image by association with another renowned brand. Different companies co-operate with other companies for different reasons but the common thing is to earn more. The reason I chose this topic is because even co-branding is usually a helpful method for two or more companies to work together but it is still full of uncertainties factors that may affect the business during the co-operation. 
The key factor in co-branding determined by product or business complementarity. (Park, Jun & Shocker 1996, p.465). Mismatch could occur when combining two brands, thus co-branding may affect partner bands negatively if one side is lack of the ability to solve the specific problems. Moreover, it is also easily loss of control if the communication between the two companies is poor. 


Sony and Ericsson go separate ways:

http://www.telecoms.com/35666/sony-ericsson-split-good-news-for-both-parties/

Co-Branding takes 3 forms: Ingredient Branding, Cooperative Branding, and Complementary Branding (Clow and Baack 2010, 64). The form of Sony Ericsson is cooperative branding.

It is the joint venture of two or more brands into a new good, service, or brand (Clow and Baack 2010, 64).   Sony and Ericsson are two independent companies. Both of this two companies are mature in their own field. The co-operation between Sony and Ericsson started at 2001 and the two companies got the early successes with its Walkman and Cyber-Shot phones. However, in recent years it suffered from the competitive climate in the smartphone market and at the end of last year the two companies decided to separate the business and Sony Ericsson will become a wholly owned subsidiary of Sony and integrated into Sony's platform of network.

Sony Ericsson was a successful cellphone company because of its Walkman and Cyber-Shot products. However, Sony Ericsson did not catch the chance when the smartphone become the main product in the cellphone market and even the main Walkman products cannot compete with Apple's iTunes and iPhone. Furthermore, the lack of creative product and the uncertain of operating system selection is also the key issues to Sony Ericsson. Keep changing the platform for the smartphone will easily mislead consumers' understanding of its product segmentation. On the contrary, Apple, HTC, and Samsung's product segmentation strategies are more clear, and the innovate products from the 3 companies already gain the largest marketing shares in the smartphone market, it is hard for Sony Ericsson to change the situation already. 

When iPhone and Black Berry focusing on the high-end market, Sony Ericsson was still focused on the mid section of the smartphone market and lack of innovated products to compete with Apple and Black Berry, it is another reason for the lost. 

In a word, lack of innovation and unclear segmentation of the products and platform selection are the direct reasons that cause the breakdown of this co-operation. When the problem occurs, the two companies did not have a good communication to find out the solution and even the top manager of Sony distrust the co-operation. At this point of view, the situation is easy to loss control and hard to fix the problem. There are a lot of uncertain things will affect the the co-operation in co-branding even the both sides are mature in their area. In order to minimise the lose and avoid the risks, it is essential for both sides to have a good communication and trust each other.