Imagine a scenario, where you visit a mobile phone shop.
This one has everything, right from phones, to back covers, to scratch guards, basically everything, mobile phone.
Now you buy a phone from say X company.
At the shop additionally you see a scheme to buy a phone cover from brand Y, for the phone you just purchased.
Have you experienced this?
What exactly is happening here?
Brand X and brand Y have indulged in Alliance marketing, where both are selling different products, so they aren’t competitors, but are promoting each other.
This blog post aims to cover all the relevant information in regards to Alliance Marketing, we will address the following points here
1. What is Alliance Marketing?
2. What are the different types of Alliance Marketing?
3. What kind of brands can use Alliance Marketing?
4. What type of customers are targeted, through Alliance Marketing?
5. How do we develop an Alliance Marketing campaign?
6. Examples of Alliance Marketing?
Let’s look at each of these now
1. What is Alliance Marketing?
Alliance marketing is a marketing strategy whereby the expertise of one company is combined with the expertise of another company for promoting products that are beneficial to both.
So say for example Company A is really good with manufacturing, and Company B is good with marketing, then both can be combined to get mutual benefits.
Alliance marketing, however, need not specifically cater to only two companies, it can be more than two.
This kind of partnership need not be specific to a region, it can also take into account international brands, as long as all the stakeholders involved are benefiting from it.
2. What are the different types of Alliance Marketing?
Alliance marketing between the two brands can be promoted through the following types:
a. Advertising
Advertising in any form, television, digital, slogans, banners, etc. that talks about the strategic alliance between two brands and the combined product.
b. Distributor Agreements
Distributor agreements are another type of Alliance marketing, which basically focusses on a wider reach of the product.
With distributor agreements in place, you can enter international markets without any additional investments.
c. Promotion strategy
Your public relations strategy can be put to great use to promote Alliance marketing between two brands.
This can be done through press releases, or other ways to just announce the alliance and create promotion
d. Licensing
Licensing a particular character related to your brand, or a mascot can be considered as another form of Alliance marketing
e. Franchising
This is the most common type of Alliance marketing, and also the most preferred kind.
However, in this case, you get the full rights to copy a product that has already gained the right kind of brand reputation
f. Product development
Product development type comes into play when a specific company possesses the first-mover advantage for technology.
They can easily claim partnerships with other products who will be using this technology, thereby benefiting both
3. What kind of businesses can use Alliance Marketing?
While Alliance marketing can be incorporated by any and every business that has a partner, who they can mutually benefit from.
But broadly speaking, these businesses can be divided into the following kinds-
i) Non-competitive businesses
This is similar to the mobile phone and back cover example that I mentioned at the start of the blog post.
Basically, any two products getting into an alliance, where the products are not competitive.
ii) Travel
Alliances with hotels travel tours etc. are other ways to get more customer base.
Promotion here can also be done for a specific location, you may come across an airline promoting a specific hotel or a destination.
This is also a form of Alliance marketing
iii) Technological
These are alliances made between brands that use parts of technology.
For an easy example, we can consider the software being used in specific tablets or laptops, maybe a strategic alliance
iv) New markets
Each brand or product has these set of markets that they cater to.
But with alliance marketing, they can explore the customer base of other products too, and get into new and unexplored markets.
4. What type of customers are targeted through Alliance marketing?
Alliance marketing works in psychological ways when it comes to customers.
The target is around those customers who believe in combo offers or are on the lookout for getting more together.
These customers would be attracted to an alliance between two brands because they can buy both products together.
Few brands also provide promotional offers to their already existing loyal customer base, whereby making the customers feel special.
5. How do we develop an Alliance marketing campaign?
While developing an Alliance marketing campaign, you need to consider the following 5 steps:
Step 1: Research and find the business opportunity
What is that you require concerning your product, that can develop into a business opportunity?
For example, if you are selling a phone, you might want to additionally include a pair of earphones with it.
This is the business opportunity that can be further explored through alliances
Step 2: Research prospective Allies
Now that you have narrowed down your business requirements, the next step is to analyze all the prospective allies that you can team up with.
There might be 50 companies, manufacturing earphones, all of them can be your prospective allies
Step 3: Narrow down your allies
Not everyone out of these 50, can be considered your allies just yet.
We need to analyze some parameters before we decide on an alliance.
These include questions like the popularity of the company, their customer base, the quality of the earphones, profit percentage, etc.
Step 4: Research for International markets
In case your alliance is focussed on international markets, you need to work on more in-depth research.
Keeping in mind the geographical conditions, import-export legal laws, etc.
Step 5: Finalize the Alliance
After you have the final set of companies that you wish to create an alliance with, its time to put your offer upfront.
Keep in mind the importance of including both, what you expect from the alliance as well as what the other brand expects.
6. Examples of Alliance marketing?
Now before I share some brand examples for Alliance marketing, I want to talk a little about other forms of alliance marketing.
If you consume content on YouTube, you would have seen that a lot of influencer channels promote each other.
Something on the lines of ‘I got my inspiration from this channel, you should definitely go subscribe’.
These can also be considered as types of alliances.
Now let's look at some brand examples:
a. Starbucks
During the initial days of Starbucks, they partnered with a set of airlines to promote their coffee.
Whereby, the coffee served to the passengers was provided in cups branded with the logo.
b. Vodafone and ICICI bank
India’s largest private sector bank and Vodafone India entered into a strategic alliance during the launch of their product m-pesa, a money transfer service app
c. Spotify and Uber
Imagine having the experience of traveling in a car with your favorite playlist.
This strategic alliance helped both brands tremendously.