Brand fails: The worst partnerships ever

When they’re the perfect fit, brand partnerships can help businesses increase their brand awareness and drive business growth. The return on investment that comes with partnering with a like-minded brand with similar goals is incredible – with statistics showing that it offers a 28% return – which is much higher than the average 18% offered by paid marketing. However, not all brand partnerships work out for the benefit of both parties involved. In fact, some of them end up having a negative effect, resulting in a loss of time, resources, and revenue.

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Here's our list of some of the biggest brand fails in existence to prevent your business from making mistakes some of the biggest brand names have made.

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Related: Brand partnership mistakes to avoid in 2022

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What leads to brand partnerships failing?

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Brand partnerships usually fail because of a number of reasons. Some of these reasons include:

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Poor communication

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Sometimes brand partners don’t have transparent and open communication, which leads to the partnership failing. Communication is key because it ensures that all partners are on the same page and are doing what they said they’d do in their partnership agreement. 

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A lack of common goals and shared values 

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Partners need to have common goals and shared values to have a successful venture. This is why before getting into a partnership, both brands need to outline what their end goal is. For example, if a business wants to increase brand awareness or boost profits, they should mention that to the other party. It’s also important for partners to check in with each other regularly to see if their end goals are still the same because goals change with time. A contingency plan should also be in place in the event that goals change and one party wants to exit the partnership.

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Shared values are important in a partnership because they determine the types of decisions people make. It can be problematic if one partner values making profit no matter what and another values making a societal impact over money. When partners have misaligned values, making joint decisions becomes harder, which can lead to arguments and project delays. 

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The partnership is profit driven

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If partners get together purely for the purpose of making money, the partnership has less chances of working. This is because focusing only on profit takes away any lasting impact the partnership could have on customers and the broader community. 

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Unequal effort from both sides

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If one party does more work than the other, the partnership becomes unequal and is bound to fail. Partnerships that succeed include parties that are just as committed as the other. They're both willing to bring their A game and understand that a partnership can only work if it's mutually beneficial.

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A lack of motivation and drive to succeed

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Motivation and drive is needed to make a partnership successful. Outside of the individual brands’ business functions, they also have to dedicate time and resources to their partnership. Sometimes one or both partners lack the drive needed to make a partnership successful, which leads to failure. 

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Different risk appetite

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Business is risky and by the same token, so is entering a partnership. Some brands are risk takers while others are risk averse, which can stifle the growth of the partnership. It’s important for both parties to be aware of the type of risks they’re willing to take before entering into an agreement. 

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Poor performance in one partner’s business

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If one partner’s business begins performing poorly, they might not be able to handle the demands of a partnership, which will lead to the partnership failing.

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Inability to depend on each other as partners

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If partners are unable to rely on each other, then the partnership will most likely fail. This happens when either one or both partners are unable to prioritize the partnership. 

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A lack of security

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Good security means having a partner that has enough stability to continue the partnership in the long term. Being sure about a partner’s security involves communicating and being honest about where both of you are.

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Examples of brand fails/worst brand partnerships ever 

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Now that we’ve gone over the various reasons why a partnership might not be successful, here are some real-life examples of partnership marketing campaigns that have failed dismally that your business can learn from: 

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Target and Neiman Marcus' disconnect with their core audience

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The Target and Neiman Marcus collaboration is mentioned often in many 'marketing fails' lists. They collaborated on a clothing line in 2013. This partnership marketing campaign didn’t make as many sales as expected because the two brands are polar opposites – with Target being an affordable brand and Neiman Marcus being a luxury brand.

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This meant that both of these brands isolated their core audiences. Target’s customers couldn’t pay for an expensive brand that offered edgy clothes and Neiman Marcus customers were disconnected from Target's affordable brand.

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Shell and LEGO's clash in values

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Shell and LEGO had a working relationship for about 50 years. Their partnership was strategic because LEGO was able to use Shell’s credibility to sell their toy gas station sets and race cars. It worked out well until LEGO became one of the biggest toy brands in the world.

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Toy brands’ primary customers are children and children are associated with innocence, so when Shell started getting in hot water for their shady environmental practices, this contradicted everything that LEGO stood for. The partnership was dissolved because of public outcry and campaigning from Greenpeace.

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McLaren and Honda's disastrous Formula 1 partnership

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McLaren and Honda partnered in 2013. The partnership involved Honda providing engines for McLaren race cars that were used in the Formula 1 races. The engines were replacing the Mercedes Benz engines that McLaren had been using for years and were going to be used from 2015 and onwards, but unfortunately, Honda's performance was terrible and it impacted the partnership negatively.

This is because the engines Honda provided were not optimum, which led to many technical failures that led to McLaren drivers Jenson Button and Fernando Alonso not making it out of the first quarter of the qualifying season. The car they used was 2.7s off the qualifying speed, resulting in the duo sinking to ninth place.

The technical issues that were influencing McLaren drivers to have less than satisfactory finishing times were only discovered halfway through the season, partly due to the fact that the engine was so unreliable that it had to be run in its simplest form to prevent overheating. The backstory behind the technical issues is Ron Dennis, McLaren's former CEO, pressuring Honda to start the partnership a year earlier than planned, resulting in overly ambitious targets that couldn't be reached. This is what makes the McLaren and Honda alliance one of the biggest partnership marketing mistakes in history.

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Kraft and Starbucks

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Kraft and Starbucks collaborated on what was supposed to be a mututally beneficial deal. They agreed that Kraft would sell packaged Starbucks coffee to grocery stores across America.

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Starbucks accused Kraft of not meeting certain conditions of their partnership agreeement, which includes Kraft not looping Starbucks in on their marketing initiatives. These failures were said to have eroded Starbucks' brand equity.

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In 2010, Starbucks released a statement about their long-standing partnership with Kraft, stating that during the 12-year strategic alliance, Kraft didn't rectify any of their wrongdoings despite being told by Starbucks to meet the conditions of the partnership agreement.

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Starbucks wasn't the only party with grievances, with Kraft accusing Starbucks of trying to end their partnership without fulfilling their conditions after Kraft had helped Starbucks grow their packaged coffee business from $50 million to $500 million.

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Apple and PayPal

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Apple and PayPal were in negotiation talks about collaborating on Apple's payment platform, Apple Pay. The potential partnership ended on a sour note despite seeming promising in the beginning because of betrayal.

The betrayal in question includes Apple finding out that their potential partner had already partnered with one of their biggest rivals, Samsung. Apple decided to cancel the partnership and end it sooner than they had anticipated. The payment platform PayPal and Samsung collaborated on integrating a fingerprint scanner with Samsung’s Galaxy S5 model, a similar feature to Apple's Apple Pay fingerprint scanner.

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This makes Apple and PayPal one of the worst partnership marketing campaigns ever.

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Forever 21 and Atkins

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One has to wonder what caused the Forever 21 and Atkins marketing team to drop the ball on this marketing campaign. In one of the most renowned marketing fails of all time, Forever 21 and Atkins partnered by giving free Atkins snack bars to customers who purchased Forever 21 clothing online. Even though it was a nice gesture, it had the exact opposite effect to what was intended. The partnership failed because their loyal customers didn’t like the fact that they were being sent weight loss bars and as a result, they felt body shamed. 

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Forever 21 didn’t explain to their customers that they’d receive a free bar with every purchase, so people assumed that only plus-sized customers received these weight loss bars, which led to a hoard of angry customers and Twitter users who complained on social media. Talk about a marketing blunder!

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BestBuy and Carphone Warehouse

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decision-makingBestBuy and Carphone Warehouse, the UK's largest phone retailer, entered into a 5-year agreement which stated that 11 Best Buy superstores would be opened in the UK. The purpose of the joint venture was to expand Best Buy across Europe and Best Buy invested $2.15bn in the project which launched in 2008. Carphone Warehouse was responsible for helping with the launch of Best Buy Mobile in America.

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Best Buy admitted that its expansion plans were ambitious, and even though the joint venture seemed to benefit both parties for a while, the partnership was dissolved because Best Buy became more focused on their business while Carphone Warehouse focused on the daily operations of their European stores.

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This ultimately meant that they were no longer compatible as partners and as a result, they both agreed on Carphone Warehouse buying out Best Buy's 50% stake at the price of $775m. Best Buy agreed to pay the UK-based company's consultancy fees for a period o 5 years, at the price of £5m/year. The amount of money involved in dissolving this brand partnership makes it one of the biggest marketing fails in existence.

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One of the ultimate brand fails: Daimler and Chrysler

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The Daimler and Chrysler deal was announced in 1998. It was seen as a great deal by many business analysts, with many people saying it's the ideal example of a global partnership that would allow both parties to scale and expand their market reach. 8 billion dollars was anticipated and there was no foresight that the deal would end badly.

At the time of the Daimler and Chrysler deal, Chrysler was one of the biggest automotive companies in the entire world. Their revenue was high and they had a 23% market share in the U.S. with $7.5 billion cash if they experienced a financial downturn. So what exactly happened that turned Daimler's deal with an auto giant into something so sour?

Chrysler felt that expectations of the deal were betrayed by Daimler when the CEO at the time, Jurgen Schrempp, said that the partnership wasn't a "merger of equals" as previously communicated, but it was rather an acquisition. There was also a lot of friction between the two teams caused by bad leadership and a lack of direction, which led to breakdowns during every critical decision-making point.

The story doesn't just end there — the Daimler executive allegedly ripped out new smoke detectors at the Chrysler headquarters just so they were able to smoke cigars while drinking red wine at the end of their work day. Chrysler also failed to retain its best talent, with the entire A team of executives quitting or being forced to leave only 3 years after the company was dubbed Company of the Year by Forbes Magazine.

What also makes this one of the biggest partnership marketing fails is that by 2001, Chrysler lost $3 billion annually and its top competitors had taken over its U.S. market share by 40%.

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eBay and PayPal

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How many marketing mistakes can one company make? PayPal has made the list again! This time, their partner was the renowned e-commerce platform, eBay. PayPal and eBay's partnership agreement was based on the premise that eBay would use PayPal to pay its sellers. However, in 2021, eBay decided to replace PayPal with a smaller company called Adyen which will now become the platform's primary payment provider.

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This marks the end of their 19-year-old partnership, which some people have criticized because PapPayl is a well-known and established brand compared to its replacement, Adyen. eBay says its decision to end the partnership was influenced by its desire to offer merchants lower costs and better control over their money. To make the transition from PayPal to Adyen smoother for its merchants, eBay will allow its customers to use PayPal until July 2023.

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HP and Compaq

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HP decided that it was no longer viable to have its own microprocessor foundry, which led to the company ceasing production and partnering with Intel to produce its VLIW 64-bit enterprise chip instead. The chip, also known as the Itanium, was infamous for its slow performance, which led to Intel and AMD developing their on high-performing chips at significantly lower prices.

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At the same time, IBM and Sun were developing infrastructure for their high-end servers, which negatively impacted HP's market share at the time. To make matters worse, vendors like IBM and Dell sold Itanium products briefly before discontinuing them. During this period, HP's Itanium partnership with Intel was ramped up, with the CEO Carly Fiorina merging HP with Compaq after signing a 25 billion dollar deal. Many of HP's shareholders were against the deal, arguing that Compaq had many similar products which were already being phased out by its main competitor, IBM.

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The partnership led to HP losing more than half of its market value, leading to hectic job losses.

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Cisco and Motorola

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In 1999, Cisco and Motorola teamed up to create a new framework for wireless networks. The collaboration marked the inception of the very first all-IP platform for the wireless industry, which integrated video, voice, and data over multiple cellular networks.

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The two companies invested $1 billion over a 4 to 5-year period to make wireless internet a reality. They also cross-licensed technology to create complementary products that would be of high-quality and offer the latest tech to their customers. Added to this, the companies created 4 Internet Solutions Centers worldwide to promote innovation and spur third-party companies to develop new services and products that mirrored the new Internet standards at the time.

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What caused this partnership to fail was the fact that these two parties ended up becoming competitors because of business acquisitions. The partnership ended up becoming more disadvantageous than beneficial for both Cisco and Motorola, which made it a partnership marketing mistake that is an example of what not to do in a partnership.

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Related: How to write a brand licensing agreement

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Lyft and Google Waymo

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Google-owned Lyft and Waymo worked together on introducing a new product to the market which relies on self-driving car technology. The deal involved the Google-owned Waymo and the popular ride-hailing company offering self-driving cars to the masses through an e-hailing app.

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The reason this deal became one of the biggest brand fails and worst partnerships ever is because of safety. People are hesitant to use self-driving vehicles and they feel more comfortable with a person driving them from one location to another. Self-driving technology is something that no company has gotten quite right yet, with U.S. lawmakers still amending legislation to accommodate self-driving vehicles.

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Coca-Cola and Costco

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Coca-Cola and Costco signed a deal that involved pairing a can of Coke with a hot dog at its food courts across 400 locations. It became one of the biggest combos Costco had ever had, with the partnership lasting for 27 long years. Each Coke and hotdog only cost $1.50, which is part of the reason it was so popular.

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After a while, Costco announced that they were canceling their long-standing partnership with Coke and were collaborating with their biggest rival, Pepsi, instead. The break-up seemed unusual to many, but it was actually quite predictable because a few years prior the company introduced its own Kirkland Signature brand hot dogs in an effort to replace Hebrew National hot dogs.

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Conclusion

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Choosing the right partner for a brand partnership campaign is important. Vetting your potential partners helps with ensuring that you have shared goals and a similar vision, are equally as dedicated to the partnership, have the same risk appetite, and can offer security and dependability.

When the wrong partner is chosen, huge marketing mistakes, like the examples shown above occur. This leads to a loss in revenue, a waste of time, and sometimes irreparable business relationships.

Some of the worst partnership marketing fails include Shell and LEGO, PayPal and eBay, Daimler and Chrysler, and Kraft and Starbucks. All of these failed partnerships provide examples of what not to do when entering into a partnership agreement and can help your brand spot the red flags or navigate unfavorable partnerships effectively.

This is why we often recommend dipping a toe in the water first. Date a little with a partner before getting married. Rather than start with a big co-branded campaign, try some smaller cross marketing campaigns first.

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If you found all of that a little depressing, click here for some inspiration.

Click here if you're a bit confused about the difference between co-marketing and co-branding.

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