Explore the Strategy of Alliance Marketing
You walk into a florist shop to purchase a floral arrangement for a wedding. While there, you see an advertisement showcasing a great deal on wedding cakes from a nearby bakery.
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Meanwhile, someone visiting that bakery discovers they can get a great deal on a floral arrangement from the florist. Since each business is not competing with each other, they have found it to their advantage to promote one another, referring customers back and forth to increase sales.
Alliance marketing occurs when two or more companies cooperate to jointly promote and sell a product, service, or even a concept. It can take place on any scale—including internationally—as long as it provides a benefit to all the stakeholders involved.
Alliance marketing can be employed by virtually any business when it can find partners interested in mutually beneficial cooperation. Fundamentally, it involves pooling resources—whether those resources are knowledge/expertise, distribution infrastructure, brand recognition/reputation, or simply money—to achieve a result that would be more costly to obtain independently. Examples include:
New customers are frequently attracted to businesses employing alliance marketing strategies. Companies usually trade loyal customers, increasing business for both members of the alliance.
An allies’ loyal customers become integrated into the new customer base, as they’ll more readily heed referrals to that company's products and services. By leveraging an ally's brands, reputation, distribution, and offerings, companies market to customer groups that were previously beyond their reach.
Effective alliance marketing involves coordinating the strengths of different companies in order to meet a market demand. This requires significant pre-planning, as well as an ongoing effort to maintain the new business relationship.
At first, the marketing team identifies the business opportunity that could potentially be met through an alliance. Next, they research prospective allies, taking into account the likelihood of a return on investing in such a relationship. What can these companies provide? Do they have with alliances with other companies, and how have they fared? Are they stable? Do they have a compatible management style?
When considering an international alliance, additional research must be conducted on the other country’s economy. Are currency exchange rates likely to change? What is their projected rate of inflation? How are interest rates in that country projected to change? What are that country’s laws regarding intellectual property rights? (See also International Marketing)
Once a partner (or multiple partners) for an alliance is found, each stakeholder must establish plans and expectations up front. Whether or not the alliance involves creating a new business entity (as in a joint venture), both businesses need a clear understanding about what each partner is expected to do, and how management decisions will be made in cooperative efforts. Spelling out commitments and expectations increases the amount of mutually beneficial exchange that can take place between partners.
In addition to external marketing, it’s also important to conduct “internal marketing.” (See also Internal Marketing) Employees of both partners must be on board with the program, understanding both what they’re providing and what value they’re receiving from this partnership.
Most effective alliance strategies operate around long-term goals. Significant investment in another company takes time to develop, since short-term payoffs typically do not justify the costs and risks of such an investment. Nevertheless, stakeholders in an alliance must expect their partners to perform; if one firm fails to uphold its commitments, it should be removed from the alliance in favor of a more active and effective partner.
Alliance Marketing Managers may work for a company entering a business alliance, or for an outside third party contracted specifically to promote or develop an alliance marketing strategy.
What do they do?
Education and Skills
Most marketing managers have at least a bachelor’s degree, often in marketing, advertising, or business management. Managers will also have substantial successful experience in marketing, advertising, special promotions, distribution, and/or public relations within their industry.
Market Research Analysts gather data about a market segment, identifying what’s needed to reach new customers and markets.
What do they do?
Education and Skills
Market research analysts need at least a bachelor’s degree in market research, or in a related field such as statistics or computer science. Many research jobs also require a master’s degree, particularly for leadership positions or for positions that engage in more technical research.
Business Analysts review, analyze, and recommend changes to business strategy and implementation.
What do they do?
Education and Skills
Business analysts need at least a bachelor’s degree in business management, marketing, finance, or a related field; as well as knowledge of various computer software for developing a business and tracking business data. Experience should include at least three years of marketing and/or operations, including some project management/team leadership success.
Effective alliance marketing requires a broad and well-developed knowledge base and skill set. A marketing degree program will enable graduates to not only perform producer-to-consumer marketing, but also business-to-business marketing. (See also B2B Marketing)
Alliance marketing involves developing a particular understanding of prospective business partners, as well as the ability to communicate with both that company and target consumer segments. You’ll learn and hone a variety of presentation skills in your degree program, including the ability to tailor presentations to different audiences—a fundamental element of alliance marketing. Courses in organizational communication will also enable you to understand how information moves differently in an organization than among individuals and social groups, enabling you to more effectively coordinate decisions and activities between business partners.
Marketing programs also teach you how to acquire data that will help you understand both your customers’ and your competitors’ decisions, as well as evaluate the strengths and weaknesses of your own and others’ businesses. You’ll be trained in the methods of research, data collection, and statistical analysis, so you can properly develop a picture of a given market’s needs, preferences, and habits. Completing an internship while in school also will give you invaluable experience, as well as future job contacts.
Additional courses will acquaint you with the processes involved in both developing and distributing new products. Such knowledge will be invaluable when managing an alliance marketing strategy, as those responsibilities might well be shared between companies. (See also Product Marketing Manager)
To learn more about what a marketing school can do for you, request information from schools with degrees in marketing, and begin researching your prospective partners for the future.