Co-Marketing

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Description of Co-Marketing. Explanation.

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Definition Co-Marketing. Description.


Co-Marketing is a cooperation approach to marketing wherein products or services from one company are marketed jointly with those of another company. Depending on the case, the focus can be on cooperating in distribution, product development or communication.


Many examples exist between manufacturers and retailers (supermarkets) in the Consumer Packages Goods sector, such as marketing a beer tender from one company along with beer from another company.

 

5 Success Factors in Co-Marketing. Conflicts


Bucklin and Sengupta (1993) discuss the determinants of co-marketing performance. Besides the discussion of the more traditional and obvious factors that influence co-marketing performance (1. Project Payoff and 2. Partner Match), the effect of 3 other factors taken together under the broader factor of project management are affecting the effectiveness of co-marketing:

  1. Power-Imbalances. Because co-marketing creates resource dependency among the alliance partners, the success of co-marketing depends on the balance between partners in an alliance. It is said that a larger imbalance between partners stimulates firms with superior power to exploit the other and thus encourages the potential for conflict.
    The organization with inferior power will certainly act so as to reduce its vulnerability, for example by joining competing alliances and attempt to decrease the role of the superior power organization to the customers. Thus, power imbalance increases the potential for conflict.
  2. Managerial Imbalance. This imbalance is also said to create the potential for conflicts and thereby reducing co-marketing effectiveness. If managerial talent cannot be allocated effectively, both partners will fear uneven distribution of equity.
    Also, if there exist differences in status among managers of the partners involved, and interaction between these managers occurs, this will certainly increase the potential for both cultural and political conflict; in technology alliances communication problems are said to be the result of managerial imbalances according to Doz (1988)
  3. Conflicts. The 2 imbalances mentioned above show that conflicts influence the alliance relationship and thereby the effectiveness of co-marketing alliances. Although some conflicts are present in every relationship and may even positively influence performance ('functional conflicts'), the focus of conflicts here is on 'dysfunctional conflicts', the ones that are decreasing the efficiency of co-marketing alliances.

Sources:

- Bucklin, L.P., and S. Sengupta. (1993). “Organizing Successful Co-marketing Alliances.“ Journal of Marketing, Vol. 57, No. 2 , pp. 32-46
- Doz, Y. L. (1988). "Technology Partnerships Between Larger and Smaller Firms: Some Critical Issues." International Studies of Management and Organization, Vol. 17, No. 4, pp. 31-57.


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