Cooperative marketing - Essay Example

Cooperative marketing alliances will help both the parties to access distributions channels which are normally unavailable to them. Moreover, cost cutting, additional exposure to some specific or targeted segments of customers, etc are some other advantages of cooperative marketing. For example, the Intel inside advertisement will help not only the computer manufacturers, but also the software developers like Microsoft as well. Moreover this advertisement can increase the reputation of the small computer manufacturing companies since the customers will respect tie ups with such high profile companies immensely.

Cooperative marketing help the companies to reach out non-competing businesses in the market that have the same type of clientele and resources. Cooperative marketing often results in cross-product advertising which may encourage the customers to think that "if you like this, then you'll probably like that". In other words, the reputation of one company can be exploited by the other company in cooperative marketing and advertising. Moreover, the companies in cooperative marketing alliances can swap their mailing lists or may agree to include the other's marketing ads in their mailings.

Thus cooperative marketing can save money; at the same time it can reach out more customers. Many people have the false belief that cooperative marketing is all about cooperative advertising. This is not true. Besides advertising, cooperative marketing can help companies to increase their common economic, social, and cultural needs and aspirations. For example, the Intel inside advertisement is not only helping the computer manufactures; but it is helping the Intel Company as well. When more computers were sold as a result of the Intel inside ad, Intel can sell more of their microprocessors and thus they will also be benefitted economically out of the cooperative marketing.

Cooperative marketing will also increase the bargaining power of the product manufacturers and it can help the company to deal directly with the end users or the customers. Cooperative marketing can also help companies to gather market intelligence. “The first step in moving towards a cooperative market­ing arrangement is to make sure all individuals are on the same page. This is achieved by making sure that all mem­bers are onboard to operate for the same purpose” (West, 2008, p.2). It is impossible to conduct cooperative marketing by two entirely different companies.

The companies which are engaged in cooperative marketing should have similar products and interests. For example, both Intel and Microsoft are working in the computer industry and hence they can easily engage in a cooperative marketing tie up. On the other hand it is difficult to anticipate a cooperative marketing collaboration between Microsoft and BP Oil Company because of the huge differences in their product portfolios. The second requirement for cooperative marketing is the mutual trust and beliefs.

It is difficult to conduct cooperative marketing if the parties watch each other suspiciously. For example, it is difficult to see a cooperative marketing campaign by Microsoft and Apple Inc together since they are the fierce competitors in the market. Global Gadgets Imports (GGI) Company is an importer of home decor and gift items and hence they can