Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.ibd From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Executive Update Date: Wed, 11 Nov 92 12:52:31 EST Message-ID: <10.1992Nov11.125231@AmeriCast.com> 11/11/92 TITLE Executive Update #m#gm#m#Want To Cut Promotional Costs? Try Joint Marketing But Be Sure Your Partner's Image And Customer Base Fit Your Own Marilyn Much In New York Not long ago, executives at Colgate-Palmolive Co. were faced with a challenge common to the lean and hungry world of consumer pro- ducts: How to inexpensively launch a highly targeted marketing program that adds value to the product and that maintains the brand's high-quality image. Colgate chose to link with another industry leader, a tactic that has caught Marketing on in many corporations. "All companies are trying to figure out how to get more from less out of their marketing dollars in the 1990s, and one way to get there is through joint promotions," said Bram Bluestein, a vice president, A.T. Kearney Inc., a con- sulting firm in Chicago. "These arrangements are valuable when they open up access to a particular marketplace or when the two companies create a greater critical mass by joining forces." In Colgate's case, it will co-market its Colgate Plus toothbrush with Nestle USA Inc.'s Carnation Instant Breakfast drink, an ar- rangement that provides the rite of passage into a market segment Colgate is trying to reach with its oral care products: upscale, better-educated, health- conscious consumers with active lifes- tyles. "By partnering with the right brand, I can target those prospects directly and reach them automatically," said Chester Gittleman, associate director, promotion management for Colgate. Under the agreement, Colgate will attach 100,000 toothbrushes to the Carnation instant breakfast boxes to be displayed prominently in supermarkets early next year. The two will split promotional costs, which could save Colgate $50,000 to $100,000 in marketing expenses, figures Gittleman. If Colgate were to go it alone with a targeted direct-mail program using a toll-free number for responses, the costs to purchase mailing lists and set up an 800 number would be 50 cents to $1 per piece of mail, he estimates. "If done properly, joint marketing programs can considerly lower the marketing investment," said Vincent Belle, an executive vice president at Carlson Marketing Group in Minneapolis. Belle points out that about 20% of the programs his company develops share a dual purpose. "The whole theory behind joint marketing is that the sum of the parts are greater than the whole," he said. Longer- Term Teamups Both Colgate and Carnation come out ahead by joining forces. Col- gate gets to reach a specialized audience at a reduced cost. And Carnation gets to sell more products by offering a premium - in this case, a $2 toothbrush. Longer-term partnerships work dif- ferently, since they are often aimed at reinforcing or enhancing a company's image or a product's brand equity through relation- ships with similar-quality brands. Take the partnership between Delta Air Lines Inc. and Walt Disney Co. Under its 10-year agree- ment, Delta is the offical airline for both Walt Disney World in Orlando, Fla. and Disneyland, in Anaheim, Calif. "We're tied into the purpose to associate ourselves with a product that is highly regarded, and that is a good fit in terms of what both companies do," said a Delta spokesman. For example, both com- panies pride themselves on service, and both cater to the leisure market. Since Delta calls itself the official children's airline, it uses its affiliation with Disney to cross-promote Disney- related items such Mickey Mouse hats to traveling kids. But the main benefits come in the form of Delta's access to certain hotels through its Disney affiliation and the opportunity to create travel packages for Disney customers. "We can offer a different type of package than other carriers," the Delta spokes- man said. For example, its Dream Vacation programs provide on- site rooms at Disney theme parks. And Delta, which sponsors its own ride in both parks, gains valuable exposure at top tourist attractions. Before entering into these arrangements, Delta con- siders a number of intangibles. The most important is how well the strategies of both companies mesh. "It might be a stretch for an auto parts company to hook up with an airline. You really have to have synergies that are naturally realized to make these programs successful," he advises. Complementary Characterisitics Sometimes, however, companies develop alliances with companies that share complementary characterisitics. If, for example, one product is aimed at a young audience and the other is targeted at a more established segment, each product can reinforce the image of the other through a co-marketing arrangement, says Susan Small-Weil, executive vice president and chief planning officer at Warwick Baker & Fiore, a New York advertising agency. The more established brand can gain some of the contemporary appeal of its partner, while the more avant-garde brand can reap the benefits of its partner's heritage, she illustrates. But the only way these programs will work is if the companies joining forces are targeting the same audience, she points out. "Then each brand's image will have a halo effect on the other." Marketing partners also should be on the same wavelength in terms of the message they're trying to relay. 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