Strategic Brand Partnerships
August 19, 2004
Marketing in the millennium is challenging and costly. Advertising effectiveness is decreasing while fragmentation is increasing. In the new world of marketing to the internet-connected consumer how does one determine the role strategic brand partnerships play in building a relationship with a consumer. Is targeting them as a team a better avenue versus competing for attention?
1. Does your organization currently have strategic branding relationships with other companies?
2. Under what circumstances would you consider a co-branding or strategic alliance effort for your brand or business?
* To strengthen creative strategy
* To share a portion of the budget expense of a campaign
* To comply with upper management's request for partnership
* Gain wider consumer audience/potential customers
* Are you pro-actively seeking complimentary brands to build relationships with?
3. What are the key principles that guide your evaluation of a co-branding opportunity? How do you determine which brand to target an alliance with?
- We begin with clear strategic goals for the year and the key marketing Initiatives/ products we want to emphasize. Then we source partners that can help us achieve our goals.
- Personality Audience Synergy with our industry.
- Brands that will help build our brand including reaching audiences that we do not normally reach. The co-brand needs to be able to make our brand relevant to their market.
- The most important guidelines are their fit within our definition of supply and value chains to the end customers needs.
- Non-Competitive Similar Brand Status/Image Complementary Mutually Beneficial.
- Must have a good brand/company reputation and their image brand recognition size of their client base revenues is similar/complimentary to our target audiences.
- The value proposition they provide with our consumers should be significant.
- A co-brand must compliment your strategy and assist with getting orders for your products and orders for your equity shares.
- We look for companies that can strengthen our relationship with our customers and for opportunities to provide customers with more value added products and services.
- Ability to assign specific results to an effort. Analysis of the basis of both brands needs to occur, possibly with the help of an outside agency.
- Compatibility Reach Audience Image.
- Careful assessment and determining of how one brand's products or services can complement the other to deliver a unique solution for both. Also, bridging diverse markets is lucrative, e.g. electronics provider with an educational institution or national coffee chain.
- Must be a positioning/target match to begin with.
- Leaders in their categories, strong point of difference.
4. Does the potential partner company have an articulated branding strategy? Does the potential partner company have customer satisfaction data they will share with us? How does the partner company's brand position match up with ours? Is there overlap? How much? Whose brand is creating the value in the arrangement? Is the brand extension in an area where our brand is credible and relevant? What is the ultimate result desired by combining our brands? What is the exit strategy if expectations or agreements are not met?
- They must share the same brand philosophy and demographic target. Their goals and strategies must also be closely aligned.
- Link with the service level and brand image of our own company
- Must be a brand that is associated with the brand values that our company represents or aspires to. Must be a brand with a positive image. Could be a customer brand in our industry.
- Alignment of brand positioning and target consumer is of primary importance. Partnerships that facilitate development of compelling in store promotions are a key area of focus.
- The alignment of the business mission and strategy. An explicit and detailed contract that defines the roles and objectives of the co-branding opportunity.
- Relevancy to our brand desirability/preference by target group track record of successful product introductions experience of working other brand relationships.
- Potential partners should be premier brands in their own right - high consumer awareness, strong brand equity and leadership position.
- Highly reputable brand with common target market.
- Brands we would choose to co-brand with would have to fit a similar positioning to our brand. There would need for cohesiveness.
- Alignment in terms of target audience distribution/availability of non-competing product but rather complementary.
- Compatibility of brand positioning and relationship of products and their usage occasions.
- Trial Strategy on a promotional level; not on a positioning or co/branding level.
- Must improve consumer perception of both brands.
- Strategic fit to our brand in terms of: Image Customer Product/service quality. Have the ability to create synergy with our marketing. We also have to like working with them
- For opportunities to develop, the partner must be strategically critical to our business, the risk to our brand must be low, there must be a significant measurable benefit to our brand and the impact on our sales elsewhere in the channel must be manageable.
- Shared brand attributes. Equal weighting of marketing messages. Qualify if it is additive to existing efforts.
- End result benefits the business. More revenue. Improved ROI. Less cost. Etc
- Synergy. Enhances image.
- Distribution and reputation of the co-brand. We look for partners that will give us access to their customer base in exchange for access to our talent. They must be "reputation positive" or neutral and financially profitable arrangements.
- Share the same customer base. Culture of the partner company mixes with our culture. Seamless integration for the customer- natural partnership.
- Similar target and database sharing; reach of partner's marketing efforts.
5. What is your general approach to evaluating strategic alliance opportunities- Key principles, Decision Rules, Decision Matrix? Please explain what they are.
- Initial screen of potential partners; development of potential concepts for top 2-3; meet with top 2-3 to gauge interest; flesh out concept in joint brainstorming; further develop concept and present to management.
- Our brand group has develops key criteria. Next steps would be to develop a decision matrix where rules/attributes are "weighted."
- Does the alliance fit strategically with our key initiatives/products? Is it unique or proprietary? How can we enhance it and make it truly our own? Does it provide various channels to reach the consumer? Will this elevate the communication beyond what we current have planned? What is the cost structure behind the alliance?
- Type of product or service they offer. Other alliances relative ness to our industry/target audience. Potential to gain media opportunities.
- We would first ask: 1) Does the association fit or help our brand? 2) How will the consumer benefit? 3) How will our franchisees benefit? 4) What is the selling point of the deal? 5) How can a deal be structured in a complex franchisee environment? 6) How can we test?
- We use two kinds of evaluative processes-maximizers and optimizers. We look at replacement, consolidation, aggregation and integration formulas for our core products, deployment and services.
- Opportunity Impact Relevance Target Cost/Benefit Role Size/Balanced Partnership.
- What makes sense for the company and what makes sense for the consumer
- Key principles. It must be a "WIN-WIN" for both parties.
- We evaluate what they bring to the table (experience, strategy, funds, reputations) and determine what we will get from the partnership.
- We're just getting involved in this area so much of the rules have not yet been established.
- Benefit vs. expense in relation to exposure.
- Evaluating and positioning a strategic alliance is, in itself, not rocket science. Getting the alliance opportunity in front of decision-makers in both companies, concurrently, with a working budget, is the final hurdle. Principles, rules, matrix charts, etc. are just marketing support materials. The key to success is bridging the decision makers and the budgets. Too many times the idea is good, but the budget is already spoken for.
- They are often reactive - - but we are always open to discussion, but not always proactive about seeking it out, and/or the discussion comes about secondarily as part of another relationship, like sponsorship or co-brand.
- Decision rules include: does an association with our brand help position the business arrangement for success? Is the arrangement aligned with our brand identity, character and positioning? (Extremely well aligned, well aligned, Neutral, Not well aligned, extremely unaligned). Is there potential risk to our brand in signaling an affiliation with the arrangement (Extreme risk, High risk, Minimal risk, No risk)? Types of risk might include: competitive signaling, competitive supply reliance, image, public perceptions, environmental issues and legal issues. Do we have majority ownership control of the business arrangement? Do we have, at minimum, an absolute veto over issues impacting the use of our brand? Do we believe this branding relationship will last longer than five years? Are other companies involved in this business arrangement? Is our brand best positioned to help this arrangement succeed?
- Sometimes it's a matter of just research and gut check.
- Revenue potential (direct revenue link), link with our own existing brand, indirect revenue opportunities (e.g. to build our own customer base), to gain synergies on the cost side of the business.
- We have macro and micros decision rules that must be reviewed. Our general approach is that the relationship must contribute to visible brand building, support our brand positioning, offer multiple marketing opportunities and our products/solutions can be integrated into the property and demonstrated to target audiences.
- Is the brand positioning and consumer target aligned? Does the alliance contribute to building brand equity? Would an alliance further business objectives?
- Key principles and alignment with the decision rules.
- Company receptivity to partnerships is based on prior experience of working brand alliances and strategic opportunities in the marketplace.
- We have a set of strategic criteria we use to evaluate opportunities. These are based on corporate goals such as leadership positioning, complementing our advertising creative strategy, usefulness to our distribution channel partners, and price/value.
- We really hold the partner brand accountable to our strategy and see where there are gaps and opportunities.
- Matrix between marketing/brand owners and partnership group.
- Promotional efforts for trial.
- Solid Consumer Research.
- Does it benefit the business short and long term.
- Brings more to the brand than without. Strengthens competitive advantage. Helps the customer achieve their needs/wants.
- Sales driven -- look for opportunity to access market/distribution system. 2.) Financially sound 3.) Reputation or brand enhancement or no impact with one of the strongest brands in our industry, brand is one of the biggest drivers of why we are selected as co-brand partners. We generally gain little for our brand from these partnerships except wider exposure and evaluate them on a financial basis primarily.
- It has to make sense for the customer, needs to drive measurable business for both (all) companies involved. Customer acquisition cost must be kept in mind. Message must be representative of joint goals.
- Good fit in achieving corporate goals.
- Varies depending on the department and discipline-seeking partner.
6. Do you have senior level buy-in and senior level management assigned to that position?
7. What is the structure of your strategic alliance team-what are the roles and responsibilities of those involved in the decision making and risk taking and measurement process? Who drives this process?
- Matrixed: Marketing, Marketing Services and Agency Partners
- Channel marketing, brand mgt, advertising depending. The business channel is currently driving for their business. Corporate is also looking at cross channel opportunities
- Our media group (and agency counter-parts) is usually the primary driver of the strategic alliances, but we work very closely with our brand team, to ensure we maximize the relationship.
- 1 person team.
- Two areas can drive the process, communications or brand plans. The alliance team is with in MarCom and it is part of the ongoing MarCom responsibilities.
- Brand Directors would seek out opportunities
- We use two groups-Strategic Business Development and the CMO to evaluate relationships-costing, forecasting and budgeting the relationships
- We have a strategy that includes strategic alliance. We seek out these opportunities. We encourage all our media partners to bring us these opportunities. We are establishing metrics for each partnership. We report on status and results.
- VP Partnerships and Promotions - generates leads and negotiates terms three managers - manage specific "accts" or programs 2 asst. program managers - assist as assigned Asst. VP reports to Chief Marketing Officer.
- The C-levels (CEO, CMO and CFO).
- Our alliances are managed by our New Product/Services Development group. They are held accountable for every aspect of the relationship. The process is driven by the types of products or services we are researching.
- Creative department folks are responsible for compliance issues, brand issues and creative execution. Media and administration and direct marketing folks handle vehicle selection and analysis of results. Outside vendors/agencies might be involved in recommending and/or executing and delivering final program.
- Very limited at this time.
- Our CMO and CEO drive the creative and manage high-level communications. Our advertising and marketing departments provide custom support material, both at their own creative discretion, and at the request of the CMO, CEO or client. An independent 3rd party objectively defines and measures the performance criteria. Our company's compensation is dictated by our performance. Our risk is making no money if we don't perform to expectations and losing a client referral. The client, of course, has the material risk in building and rolling out the campaign.
- We do not have an official team. Our marketing team is relatively small. The process is driven by the individual or team handling the specific project.
- Director level Partnership Marketing Organization
- Team is very small and the organization as a whole is guided by policy
- No team
- CMO and Brand Marketing teams drive engagements and manage relationships
- We have multiple teams based on the purpose of the strategic alliance. If the alliance is to offer new product or services, our Product Office takes the lead. If it is to literally co-brand products in the market, our Sales organization takes the lead. If it is to support marketing programs such as promotions or advertising, then our Brand Marketing department takes the lead
- This is privileged information
- There isn't a specific team, but rather it becomes a discussion for our Executive team. We multi-task, do not have a single person or department for that purpose
- The process is driven by various decentralized marketing groups, but must be approved at high levels within the corporation
- Dedicated team, lead at the VP level
- Business Development Group takes the lead. Generates the agreement. Then, gains buy in from CEO
- Sales leads team. - Cross-functional operations/finance team reviews for suitability - Brand and senior management input on final structure if approved by operations team
- We have both a sales team and an implementation team and both units report to Business Development.
8. What percentage of your marketing mix dollars is dedicated to co-branded marketing programs?
|10% - 20%||6||33|
|25% - 70%||7||39|
9. What are the requirements of the strategic partner company? Using the below checklist, please indicate which of the following are requirements for the companion company.
|Not a concern||Consider-ation||Relevant||Important||N/A||
|Brand Measures: has strong national awareness||11% (5)||9% (4)||29% (13)||42% (19)||9% (4)||3.29|
|Within a similar breadth of product line to compliment lead brand||16% (7)||18% (8)||34% (15)||18% (8)||14% (6)||2.95|
|Prefer a different product line but compliments campaign strategy (e.g. food product & gym)||9% (4)||20% (9)||42% (19)||20% (9)||9% (4)||3.0|
|Time frame of their project objectives align with your goals||2% (1)||13% (6)||38% (17)||38% (17)||9% (4)||3.38|
|Values and ethics match your company||2% (1)||13% (6)||20% (9)||54% (25)||11% (5)||3.59|
|Capabilities (e.g. must have an internet arm)||16% (7)||18% (8)||38% (17)||11% (5)||18% (8)||2.98|
|Has a retail tie-in||17% (8)||30% (14)||17% (8)||24% (11)||11% (5)||2.80|
|CRM customer acquisition tie-in||16% (7)||18% (8)||38% (17)||11% (5)||18% (8)||2.98|
|Goal to be perceived as a leader in the marketplace, an "Innovator of Momentum" company and can deliver expectations||7% (3)||4% (2)||26% (12)||48% (22)||15% (7)||3.61|
|Receptive and has their own strong PR component||7% (3)||24% (11)||46% (21)||15% (7)||9% (4)||2.96|
|Has sufficient, sustainable funding to create awareness||0% (0)||15% (7)||37% (17)||39% (18)||9% (4)||3.41|
|Program has global applications, can be extended outside the U.S., international||35% (16)||20% (9)||11% (5)||20% (9)||15% (7)||2.61|
10. What are your requirements for taking the "Lead/Header" brand position versus the companion brand position?
- Dollar sales, image and awareness/reach of partner.
- It would be a consideration - would depend on the promotion and offer, along with the positioning.
- We are always the lead because our budget dwarfs the companion brands.
- We view ourselves as an ingredient and thus do not place an overly important value to this.
- Unique Opportunity Change or Enhance Perception Creative and Relevant Cost/Impact Exposure Control.
- Dollars strength of their brand target.
- They must alternate by market.
- We would require the lead position and would be very reluctant to play the part of companion
- Maximum benefit.
- Stronger brand recognition 2. Greater market share 3. Stronger retail opportunities (in-store & via the internet) 4. Time to market 5. Ability to carry larger portion of the budget.
- Must always be Lead/Header.
- It depends on the situation. If we cannot be the lead then we'd want equal billing
- Size of companies, brand preferences.
- It varies by case.
- Situation dictates position.
- The business strategy.
- Joint agreement to do so.
- We are open to either possibility.
- Prefer to be the lead brand in a promotional effort.
- Must be the lead in co-branding.
- Level of investment.
- Shorter the agreement - more likely we will want to be the "lead" brand.
- We are always the companion brand.
- It has to be the right relationship and to our business and either drive traffic or create an experience for the consumer.
- Informal - we look at each opportunity on a case-by-case basis.
11. What do you feel your brand should get out of the relationship?
- Lift Awareness to a new market.
- A lift in brand value by associating with a unique complementary brand. Exposure to new audience.
- Sales Growth. Positive brand perception.
- Scalable growth patterns for the deployment of products and for the development of the category. In general, the substantial creation of a new category.
- Increased Awareness Greater Relevance to Target Improved Perception Inquiries Sales
- Increased recognition/consideration increased revenues.
- Every increase in brand awareness should correlate to an increase in sales.
- We want our customers to think of us more positively after offering various products. We want customers to think of us as the expert in our area of business. We should receive a halo effect from the other company to strengthen our brand.
- We would want to create a program that would provide specific, measurable sales results that generate profit. We would want to have a good idea of the costs involved before we could commit.
- Maximum exposure better perceived image customer value.
- Greater awareness and penetration in diverse markets. Increased product sales. Measurable performance metrics.
- A lift in innovation, relevance and enjoy ability.
- Improved equity in alignment with our goals.
- The key is expanding the value proposition to the defined customer set.
- Sizzle change in perception of dynamic, cool, inventive.
- More customers, better brand equity, efficient marketing.
- The relationship has to be win-win or symbiotic.
- Generate trial for the brand.
- Our brand values must be supported by the opportunity so that our brand is reinforced.
- Measurable consumer impact.
- Each company needs very clear goals that they expect to gain out of the relationship. The need to be written and measurable. Very important to be brief afterwards to gain knowledge about what worked, what didn't.
"Strategic Brand Partnerships." ANA Advertising Management Committee; ANA Promotion Committee, 08/19/04.