Strategic Marketing Alliances
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What is a strategic marketing alliance?
A strategic marketing alliance is obviously a
strategic alliance focusing on marketing. Strategic marketing alliances (SMAs) are a way for companies with complementary strengths to penetrate into a certain market more effectively and efficiently than any alliance partner could manage on its own. The alliance allows the companies to minimize the risks relating to their technological, market, or competitive environments and is typically based on long-term relationships and mutual trust.
SMAs can be as simple as two companies sharing their technological and/or marketing resources. Contrarily, they can be highly complex, involving several companies, located in different countries.
What are the main categories of strategic marketing alliances?
There are four major categories of SMAs:
- Product or service alliances - One company licenses another to produce its product, or two companies jointly market their complementary products or a new product. For example, the credit card industry is a complicated combination of cards jointly marketed by banks and credit card companies.
- Promotional alliances - One company agrees to carry a promotion for another company's product or service. For example, McDonald's teamed up with Disney for 10 years to offer products related to current Disney films as part of its meals for children.
- Logistics alliances - One company offers logistical services for another company's product. For example, Starbucks allied with Pepsi in order to distribute its ready-to-drink beverages to gas stations, groceries, and convenience stores. Starbucks accessed Pepsi's established distribution network without having to build their own; in return, Pepsi got part of the revenue from new products (such as bottled Frappuccinos) that didn't directly compete with their own beverages.
- Pricing collaborations - One or more companies join in a special pricing collaboration. For example, hotel and rental car companies often offer mutual price discounts.
SMAs must continually be evaluated. If the market or conditions between allied companies change, the businesses can modify the alliance to match current conditions. For example, if a Disney character is not popular, McDonald's might change the characters offered with its kid meals.
Challenges in Strategic Marketing Alliances
- Lack of
trust between parties.
- Goal incongruency in terms of the alliance parties' expectations.
- Difficulties in managing such alliances.
- SMAs may create a potential competitor.
- Parties have to give up some strategic autonomy/flexibility to join in the alliance.
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Unequal power between parties
- Changes in the external environment can hamper the effectiveness of SMAs.
References:
Marcel Meler (2003), "Strategic Marketing Alliances — A possibility for Croatian companies' penetration into the EU market", 4th International Conference "Economic System of European Union and Accession of the Republic of Croatia", At Opatija, Croatia.
Pietras, T., Stormer, C. (2001), "Making Strategic Alliances Work", Business and Economic Review; Vol. 47, No. 4.
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