In today’s business environment where product complexity is increasing, one to one marketing and globalisation are often becoming a must, going at it by yourself is scary at best and impossible at worst. In such a context co-marketing can make a lot of $en$e.
What is co-marketing?
Co-marketing is as encompassing a term as marketing is. If you’re not sure what the marketing function encompasses, a good, but in my opinion still not fully complete, illustration of a marketing framework can be found here. Marketing spans from identifying the customers you will be serving and their needs all the way to managing the customer touch points at the end of your product’s life cycle. Co-marketing is then defined as executing any of the multitudes of marketing activities in between, in collaboration with one or many other organisations.
Co-marketing agreements can take almost any form. It can include a co-branding agreement or not. It can involve a monetary compensation or an exchange of services, resources and/or know-how. There is no set formula. Very successful co-marketing agreements can even lead to the merger of the partners.
When does co-marketing make sense?
I’m seeing it more frequently with Internet of Things (IoT) start-ups and companies. They are often initiated by tech entrepreneurs who know a lot about technology but not so much about design and the distribution channels of their end products. You can choose to acquire all this knowledge in-house but it will take time and a lot of resources to do so. An example of product complexity would be smart wearables. To create a biometric type garment, you need IT engineers, fabric engineers, health scientists, big data analysts, fashion designers and marketers. These talents often don’t speak the same language and evolve in very different work cultures. Combining all of them under one roof can pose not only recruiting challenges, but management issues that are often too great for many companies to overcome especially in the beginning.
Going after many markets at once
If you offer a service or a digital product, selling in multiple markets early on in your business can be done. If you are offering a physical product and you need to be in as many markets worldwide as you can in a short time span (usually because you have a highly innovative or cutting edge technological product that can be copied relatively easily) then going at it by yourself, when you are small is impossible. Reaching out to other organisations that already have deep knowledge of the markets you are targeting is sometimes the only alternative to reaching new markets in time.
Growing your suppliers and key partners network
Co-marketing can also lead to finding new suppliers and key partners. When partnering with a company that has similar value to yours, you may find that you can also grow your (and your new partner’s) network of suppliers and key partners more easily. You and your partner may also look into signing joint purchasing agreements to increase your purchasing power with common suppliers. Joint purchasing power can also mean finding suppliers that are willing to manufacture inputs that are more suited to your products.
There are many other situations where co-marketing makes sense. When you find a, or a few, co-marketing partners, the opportunities will present themselves to you.
A great example of co-marketing partnership is the one between OM Signal, which commercialises smart fitness clothing and the world renowned fashion house Ralph Lauren. In this partnership, OM Signal gained access to fashion design and fashion marketing know-how, potential access to markets worldwide, as well as to great media visibility. In return, Ralph Lauren gained access to expertise in smart wearables and complex technological and big data know-how in a very short time span and at a significant lesser cost than developing it in-house.
In a future post we will look at ways to find a co-marketing partner and how manage the relationship.