Creating Profit Through Alliances - business models for collaboration E-book | Page 45
of the sales persons. Ivan has recently received
approval for a proposal to pay 5% of the gross margin
of the first year to the alliance partner that did the
commercial work. This money can then be used to
reward the sales persons involved.
The value of the alliance for Getronics lies in the
extensive sales network and the brand value of the
partners. Ivan: “When we sold our activities in the
U.S., we lost 150 salesmen as well. By collaborating
in this alliance, we partly get them back. It would be
Co-branding
Co-branding involves utilising the value of two
different brands. Co-branding closely resembles two
other forms of alliances. If it concerns the combined
promotion of two different products, each belonging
to a different supplier, in a single offer or in one
marketing campaign, then this is referred to as joint
promotion. This is actually not a form of co-branding
but of collaborative offering.
On the other hand, it may be that two companies
collaborate to develop an entirely new product, such
as moisturised shaving by Philips and Nivea. Another
interesting example is the collaboration between
Biodermal and Davitamon to develop tablets that
care for the skin from the inside. This is an example
of joint R&D as described further on in this book. This
need not necessarily result in co-branding; it might
be handier to market the product under the brand
name with which the product is most closely
associated. If the other brand's contribution is only
partly visible, this could create some confusion.
Between these two extremes we find the two most
common forms of co-branding22:
very expensive to build up this sales power ourselves.
On the other hand, through the pricing policies in the
alliance we avoid margin stacking of 15% or more,
as would commonly occur if we worked with other
types of partners. This makes us more competitive,
and that is something we see reflected in our results.
Our international activities are doing well. The
alliance has over 300 large customers throughout the
world, of which 35 truly global customers that could
not have been served without the alliance.”
Symbolic co-branded products: the product of
one of the brands is augmented with just the
exterior features of the other brand, such as a
cereal that is linked to Disneyworld, or the
Ferrari laptop by Acer. The actual product is not
altered.
Ingredient-branded products, in which an
ingredient, component or technology of one
brand is added to the other brand, with explicit
reference; for instance Dr. Pepper soft drink
with NutraSweet or Liga Yobreak children‟s
biscuits with Danone Yoghurt.
A number of aspects are important in co-branding.
First of all, the brands should fit together in terms of
their values and appeal. The collaboration between
Swatch and MSN, which lets you receive messages
from friends on your wristwatch, is a successful
match because both brands engage a young target
group. The earlier example of the 'fast' Ferrari
teaming up with somewhat „nerdy‟ Acer is not as
good. Since a brand's product portfolio supports the
brand experience to a significant extent, the
portfolios should also fit together intuitively. Thus, a
McDonald's sales outlet inside a clothing store is not a
good idea.
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