Magazine article Marketing

The Beginning of a Profitable Friendship

Magazine article Marketing

The Beginning of a Profitable Friendship

Article excerpt

Businesses worldwide are using brand partnership as a way to maximise market share and minimise risks. But for the alliance to work, choosing the right partner is crucial.

A new 'P' is cropping up more frequently in the marketing lexicon these days - partnership.

As with most things in marketing, it can be called by any of a number of names: brand partnerships; marketing alliances or even, as the Americans have dubbed it, 'brand buddies'. But marketers are becoming more aware of the attractions of joining their own brand with a like-minded marketing partner.

Partnership is a growth market. Orange is linking its telecoms network with NatWest's cashpoints to create super-smart ATMs. National newspapers are teaming up with snack companies for brand promotions in schools. Mercedes-Benz and Swatch, meanwhile, are even working on a co- branded car.

The right partnership can unlock new markets, create brand opportunities, and attract new and existing customers. The number and scale of brand alliances is growing, as are the companies' ambitions.

For those marketers who are contemplating their latest product development budget, or the obstacles involved in cracking new markets, the thought of having a partner to help share both the cost and risks is a comfort.

Co-branding on the increase

A new book published this month is among the first texts dedicated to marketing partnerships.

Co-Branding: The Science of Alliance, edited by Tom Blackett and Bob Boad, describes a McKinsey and Company report which said that the number of corporate alliances worldwide - including co-branding projects - was growing at 40% per year. "Over the last four to five years, co-branding initiatives have blossomed,"says Blackett.

"Growth has been particularly driven in financial services and in the US marketplace."

According to the authors of Co-Branding, there are several factors driving the number of marketing alliances being struck.

The huge cost of mergers and acquisitions has made companies consider the value of harnessing other brands as partners, rather than rushing into a costly acquisition.

Earlier this month, BT and AT&T of the US announced a deal linking their worldwide telecoms networks.

The strategic alliance takes in 150 countries, and will lead to lower prices on wireless calls for customers travelling internationally. The partners are also developing a handset which can be used in the UK and US.

The two telecoms giants are clearly looking to counter the impact of Vodafone's acquisition of AirTouch/Bell Atlantic. But the BT/AT&T deal is a pure marketing alliance, rather than a merger or acquisition.

A brand alliance can work on several levels. A recent TV campaign by McDonald's linked its fries to CocaCola, because it saw the soft drink brand as a positive brand partner. As Tom Blackett says: "Co-branding offers a leg-up for companies."

But co-branding involves more than just basking in the glow of each other's brand values. One area where partnerships are frequently struck is in promotions.

Partners in promotion

News International's successful link with Walkers for its Books for Schools promotion, lifted both newspaper and crisp sales and brought millions of new books into thousands of schools in the UK.

Sponsorship is probably the most common form of brand partnership, whether it is Sega Dreamcast appearing on Arsenal shirts or Sainsbury's making a special one-off ad supporting Comic Relief. …

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