Marketing co-operation
Encyclopedia
A marketing co-operation or marketing cooperation is a partnership
of at least two companies on the value chain
level of marketing
with the objective to tap the full potential of a market
by bundling specific competences
or resources. Other terms for marketing co-operation are marketing alliance, marketing partnership, co-marketing, and cross-marketing.
Marketing co-operations are sensible when the marketing goals of two companies can be combined with a concrete performance measure
for the end consumer
. Successful marketing co-operations generate “win-win-win” situations that offer value not only to both partnering companies but also to their customers.
Marketing co-operations extend the perspective of marketing. While marketing measures deal with the optimal organization of the relationship between a company and its existing and potential customers, marketing co-operations audit to what extent the integration of a partner can contribute to improving the relationship between companies and customers.
In recent years, marketing co-operations have been increasingly popular between brands and entertainment properties. This usually involves a minimum exchange of name and image rights on behalf of a film studio for a specified advertising commitment from the partnering brand.
Studies show, that companies recognise the increasing relevance and potential of co-operations.
3M
's corporate site describes the value they see in Joint Marketing:
Examples of entertainment based marketing co-operations include:
Business alliance
A business alliance is an agreement between businesses, usually motivated by cost reduction and improved service for the customer. Alliances are often bounded by a single agreement with equitable risk and opportunity share for all parties involved and are typically managed by an integrated project...
of at least two companies on the value chain
Value chain
The value chain, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.-Firm Level:...
level of marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
with the objective to tap the full potential of a market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
by bundling specific competences
Core competency
A core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works...
or resources. Other terms for marketing co-operation are marketing alliance, marketing partnership, co-marketing, and cross-marketing.
Marketing co-operations are sensible when the marketing goals of two companies can be combined with a concrete performance measure
Performance Measurement
Performance measurement with a process is the complement to process execution. Based on measured performance, the feedback control loop may be closed. The metrics to assess performance is set according to a determined econometric model...
for the end consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
. Successful marketing co-operations generate “win-win-win” situations that offer value not only to both partnering companies but also to their customers.
Marketing co-operations extend the perspective of marketing. While marketing measures deal with the optimal organization of the relationship between a company and its existing and potential customers, marketing co-operations audit to what extent the integration of a partner can contribute to improving the relationship between companies and customers.
In recent years, marketing co-operations have been increasingly popular between brands and entertainment properties. This usually involves a minimum exchange of name and image rights on behalf of a film studio for a specified advertising commitment from the partnering brand.
Importance
The importance of marketing co-operations has significantly increased over the last few years: Companies recognize partnerships as an effective means for untapping growth potentials they cannot realize on their own. In the big merger and acquisition wave at the end of the nineties it became apparent, that co-operations (especially on the value chain level of marketing) often present a much more flexible approach with a more immediate growth impact than merging or acquiring entire business entities.Studies show, that companies recognise the increasing relevance and potential of co-operations.
Objectives
There are five main objectives of marketing co-operations:- Build-up and/or strengthening of brandBrandThe American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
/imageImageAn image is an artifact, for example a two-dimensional picture, that has a similar appearance to some subject—usually a physical object or a person.-Characteristics:...
/traffic by implementing joint or exchange communicationCommunicationCommunication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
measures - Access to new markets/customers by directly addressing the co-operation partner’s customers or by using its distribution points
- Increase of customer loyaltyLoyaltyLoyalty is faithfulness or a devotion to a person, country, group, or cause There are many aspects to...
by addressing own customers with value added offerings from the partner - often useful for community building - Reduction of marketing costs by bundling or exchanging marketing measures
- Measure the potential value of an intangible asset through how much consumers are willing to pay the premium
3M
3M
3M Company , formerly known as the Minnesota Mining and Manufacturing Company, is an American multinational conglomerate corporation based in Maplewood, Minnesota, United States....
's corporate site describes the value they see in Joint Marketing:
- Joint marketing refers to any situation where a product is manufactured by one company and distributed by another company. Both parties invest in commercialization dollars. Joint marketing differs from a joint venture in that it deals with commercialization and marketing dollars, rather than equity. The prominence of each logo generally is relative to its use as a primary or secondary contributor. Joint marketing differs from third-party relationships because both brands are present on the product itself. Normally, third-party relationships have both brands on literature and sales materials, but only the manufacturer is present on the product.
Forms
Marketing co-operations can take on many different forms, for instance:- Joint product development or Co-brandingCo-brandingCo-branding refers to several different marketing arrangements:Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy...
- Joint communicationCommunicationCommunication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
or “Co-advertisingAdvertisingAdvertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
“ - Joint sales measures or Co-promotionCo-promotionCo-promotion is a marketing practice where a company uses another company's sales force, in addition to its own, to promote the same brand or range of brands. The term is frequently confused with Co-marketing....
- Co-marketingCo-marketingCo-marketing is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with co-promotion....
- Cross media
- Product bundlingProduct bundlingProduct bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business , in the cable television industry Product bundling is a marketing strategy that involves offering several products for sale as...
- Sponsoring
- Branded entertainmentBranded entertainmentBranded entertainment, also known as branded content or advertainment, is an entertainment-based vehicle that is funded by and complementary to a brand's marketing strategy. The purpose of a branded entertainment program is to give a brand the opportunity to communicate its image to its target...
- Product placementProduct placementProduct placement, or embedded marketing, is a form of advertisement, where branded goods or services are placed in a context usually devoid of ads, such as movies, music videos, the story line of television shows, or news programs. The product placement is often not disclosed at the time that the...
- Music-brand partnerships
- Sales partnerships
- Licensing
Examples
Examples of marketing co-operations include:- Apple Inc. and Nike Inc. have formed a long term partnership to jointly develop and sell “Nike+iPodNike+iPodThe Nike+iPod Sports Kit is a device which measures and records the distance and pace of a walk or run. The Nike+iPod consists of a small accelerometer attached to or embedded in a shoe, which communicates with either the Nike+ Sportband, a receiver plugged into an iPod Nano, or directly with a...
” products. The "Nike + iPod Sport Kit" links Nike+ products with Apples MP3-Player iPod nano, so that performance data such as distance, pace or burned calories can be displayed on the MP3-Player’s interface. - The South Korean manufacturer of electronics products LG ElectronicsLG ElectronicsLG Electronics is a global electronics and telecommunications company headquartered in Yeouido, Seoul, South Korea. The company operates its business through five divisions: mobile communications, home entertainment, home appliance, air conditioning and business solution...
has teamed up with the luxury brand PradaPradaPrada S.p.A. is an Italian fashion label specializing in luxury goods for men and women , founded by Mario Prada.-Foundations:...
in order to better tap the potential of the growing mobile phone high-end market by creating a Prada branded phone, the “Prada phone by LG”. - OpelOpelAdam Opel AG, generally shortened to Opel, is a German automobile company founded by Adam Opel in 1862. Opel has been building automobiles since 1899, and became an Aktiengesellschaft in 1929...
and Mango have established a pan-European marketing co-operation around the Tigra TwinTopOpel TigraThe Opel Tigra name has been applied to two quite different cars engineered and produced by the German automaker Opel, both based on different iterations of the Corsa supermini, the first built in Spain, the second in France. The first Tigra was a small 2+2 coupé, produced from 1994 to 2000. The...
campagne "Every street is a catwalk" with a focus on communication. This co-operation includes joint marketing communication, events/PR and promotional activities. - YouTubeYouTubeYouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
and NBA have joined forces up to develop a special NBA Channel on the video platform, which basically is an individualised micro site providing primarily NBA material and offering user recordings of NBA games/players. - NAPA Auto Parts sponsors the Napa Parts 200. Through this sponsorship, Napa Auto Parts validates to the NASCARNASCARThe National Association for Stock Car Auto Racing is a family-owned and -operated business venture that sanctions and governs multiple auto racing sports events. It was founded by Bill France Sr. in 1947–48. As of 2009, the CEO for the company is Brian France, grandson of the late Bill France Sr...
fans that Napa Auto Parts is the place to go for quality auto parts. NASCAR get promoted by Napa Auto Parts. Naturally, Napa's competitor, Kragen also sponsors NASCAR in the form of the Winternationals - Banner and link exchanges
Examples of entertainment based marketing co-operations include:
- OmegaOmegaOmega is the 24th and last letter of the Greek alphabet. In the Greek numeric system, it has a value of 800. The word literally means "great O" , as opposed to omicron, which means "little O"...
partnered with the James Bond franchise to help promote their watches, Daniel Craig appeared in advertisements. - The SMC Group worked with Alexandra Burke and UnileverUnileverUnilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products....
on the company's Sure Deodorant Campaign. This was done during her album cycle, helping to promote album sales as well as Unilever's product.
External links
- Bucklin Louis P., Sengupta Sanjit.: Organizing Successful Co-Marketing Alliances, Journal of Marketing v57, n2 (Apr 1993):32-46