May 21st, 2010

Elements of a Successful Partnership

If you haven’t already, sooner or later you will need to develop a business alliance or marketing partnership with another organization or company in order to deliver a product or service that is greater than what could be brought by your company on your own. 

Alliances and partnerships can take many forms. But the usual goal of an alliance or partnership is to drive market share or revenues by strengthening one (or more) of the elements of a marketing mix – be it price, distribution, promotion, branding, awareness, or technology/product. 

Here are a few examples of successful partnerships.

Apple partners with ATT to establish the iPhone on its 3G network

HP is kicking off a series of online photo contests that merge themes from the movie “Shrek the Third” with contestants’ family memories. Beginning today, participants will have the opportunity to win one of more than 3,000 prizes, including a grand prize of an HP Digital Home Entertainment package and a trip for four to attend an upcoming DreamWorks Animation movie. “Life, like ‘Shrek the Third,’ is full of enchanted moments, and great photos are what make them last,” said Kathy Stromberg, vice president of marketing, North America, Imaging and Printing Group, HP. “This photo contest provides an engaging and dynamic new way for users to creatively showcase photos of their families’ heroic, adventurous and funny moments.”

Legoland and Hyundai in Germany have announced a new partnership that will see the Korean automaker providing the theme park with a total of 25 vehicles ranging from the small i10 city car to the new iX35 SUV for service and shuttle rides. The two-year long sponsorship deal also includes the branding of the toy cars used by Legoland’s driving school for children aged 3 to 7.

Ocean Spray and PepsiCo today announced a long-term strategic alliance in which Pepsi-Cola North America will market, bottle and distribute single-serve cranberry juice products in the U.S. and Canada under the Ocean Spray name.

Microsoft and HP announce a $250 million technology development partnership and a series of software/hardware/service rollouts that HP CEO Mark Hurd called “the deepest level of collaboration and integration” in his company’s history. The agreement, which appears to have no official name, is to develop a comprehensive software/hardware stack that is preconfigured, tested and optimized for use in public and private cloud data center environments.

A few key questions can quickly establish the benefits of a partnership to each party.

 1. Why do we want to partner with each other?

• What specifically does the partnership do?
• What is the end benefit – to the customer and each of the partners?
• How does is it tie back to the company’s strategy, business goals, market access?
• How does the partnership strengthen the results and of both companies? For example, I bring a product and you bring customer segment access to me that is my target market.

 2. What does each party bring to the table?

• What specific capabilities or assets of does each party bring to the table?
• Who does what? How does the partnership translate into what each company brings, provides, and has to do?
• What investment dollars will each party bring to the table to launch the marketing alliance?
• Is one party more dependent on the other, bring more to the table, leading the alliance, etc.?

 3. What does the end result look like? 

• Describe the completed partnership in 1-2 sentences?
• What is the end game or result? 
• What does success look like?
• What does the PR/messaging, strategy, and content look like?
• Is it a low key or big bang alliance launch?
• What is the partner commitment and effort going to be? The sum of the parts should lead to a better end result than going alone.

 4. How do we each make money? 

• How does each party derive a financial or market benefit from the partnership?
• Where does the benefit come from – a financial perspective, distribution perspective, market access perspective, brand building perspective (the list of possibilities could be broad)?

Alliances and partnerships should not be confused with sponsorships.

There is often times a fine line between marketing alliance and partnership and more strategic business development or strategic partnership. The more inclusive the partnership is of licensing, joint research, IP sharing, operations, etc., the less it looks like a marketing-only play.

A strategic marketing partnership is different than a joint venture. In a joint venture, the parties agree to create, for a finite time, a new legal entity and new assets by contributing equity. They then share in the revenues, expenses, and assets and “control” of the enterprise.     

Additional Resources:

Improving Alliance Marketing

Organizing Successful Co-Marketing Alliances