Nike & Apple: The Example of Complementary Branding

The third form of co-branding is complementary branding. It is the marketing of two brands together to encourage co-consumption or co-purchases (Clow and Baack 2010, 64), such as Starbucks coffee sold in 7-11 or other stores or Sennheiser headphone sold in Apple store.

A very successful example of complementary branding is the cooperation between Nike and Apple.  Relevant news: http://www.businessweek.com/innovate/content/aug2006/id20060804_602689.htm

As mentioned, the selection of co-branding partner is essential. Both Nike and Apple are mature in their own field. Nike targeting people who loves sport especially running, at the same time they enjoy music and also wants to track their physical condition during the exercise. According to this, Nike developed a series of products called Nike+. At the same time, Apple developed a tracking chip that can perfectly fit Nike's running shoes (Temporal 2011). The only thing that people need to do is insert the chip into Nike+ running shoes and turn on their iPod nano or iPhone's relevant function during the exercise. It provides users with instant information on time, distance, speed, and calorific burn rates. The chip can even track your physical condition through the song you are listening. The data will be transfered from the chip in the shoes to runner's iPod nano or iPhone. Now people can easily find Apple's Nike+ chip in Nike's retail outlets and Nike is also selling iPod nano in some of its retail store (Temporal 2011). Furthermore, Apple is also offering a Nike sport music section on its iTunes music store, featuring lists of songs chosen by well-known athletes. 

Adidas is working with Polar Electro. This partnership is similar with the co-operation between Nike and Apple. However, it is not as famous as Nike. Running, especially long-distance running will be so boring without music to some runners so Adidas and Polar Electro lost a numbers of potential customers. Adidas is hard to compete with Nike in this area and one of the reason is that  Polar Electro's main field is only focus on physical condition tracking. Even Polar Electro is also a mature company but to most of the non-professional runners, Nike+ product may be their prefer choice because most of people do exercises just for relaxing. Apple always doing well in customer experience and Nike is also caring so much about customers' experience so we can see Nike has different series of high-tech product and all of its products are focusing on people's feeling. The similar pursue lead to this win-win situation.

All in all, it looks a brilliant idea and a win-win situation for both companies and this is the value of strong, well-thought through co-branding partnerships. Partner selection is one of the important element in a partnership (Thakare 2009). If the relationship fails to do well in the marketplace, both brands suffer. In order to reduce risk of failure, co-branding should be undertaken only with well-known brand (Clow and Baack 2011, 65). Make sure that the target audiences of your partners have similar types of profile, demographic and psychographic and also consider whether the brand value of your partner is similar to those of your brand, otherwise there will be significant strategy problems and working together may well be problematic (Thakare 2009).