Welcome to Part 3 of a four-part series on business building through strategic alliances.  Part 2 introduced three common types of alliances:  licensing, sponsorships, and ingredient branding.  Today, we’ll look at two more:  joint promotions and co-marketing.

Joint Promotions

By definition, a promotion is usually temporary in nature.  The goal is to create a sense of urgency, scarcity, or some other condition encouraging buyers to act quickly.  Multi-brand promotions also tend to be short-term tactics.  That said, success may result in seasonal recurrence or even a permanent offer.  Upsell and cross-sell opportunities are common, and word-of-mouth often drives traffic if the offer’s compelling.

Consider two case studies from the fast-food industry.

Taco Bell and Frito-Lay

• Ahead of its golden anniversary in 2012, Taco Bell realized that “50” sounded old to its twenty-something audience. It therefore decided to reinvent the traditional crunchy taco.
• Seeing an opportunity, Frito-Lay suggested its Doritos brand of chips as the new shell.
• The resulting Doritos Locos Taco was one of the most successful fast-food innovations ever. It sold more than 100M units in its first 70 days and required Taco Bell to hire 15,000 more workers to meet the demand.
• The collaboration has since become the most popular item in Taco Bell history. Unsurprisingly, the brands have continued to expand the offer to other Doritos flavors such as Cool Ranch and Flamas.

McDonald’s and Hasbro

• Fast-food behemoth McDonald’s and classic board-game maker Hasbro broke new ground in 1987. Their partnership resulted in a real-life version of one of America’s favorite games, Monopoly.  Simply put, this instantly reset the bar for QSR promotions.
• McDonald’s customers received peel-back pieces on product packaging matching the spaces on the board game. Winning payouts were both big (Dodge Viper) and small (complimentary food and drinks).
• Company execs found that many customers felt the need to buy food not out of hunger, but because they simply wanted to play. The initial launch was so successful that it became a one-month promotion every year.
• McDonald’s has repeatedly seen consumption go up during this period. Monthly global sales upticks reach as high as 6% in locations that participate.

Co-Marketing

For a co-marketing arrangement to work well, brands must bring complementary resources to the table.  This tends to be part of a broader strategy and may even create new revenue streams.  Therefore, they can often be longer in term than certain other types of alliances.

These are a few of my favorite examples.

Ford and Eddie Bauer

• In 1983, Ford needed to make a splash and create a certain image for its new wave of vehicles. The solution was a partnership with renowned outdoor brand Eddie Bauer.
• Their collaboration produced a premium line of passenger trucks with premium interiors and other exclusive, high-end features.
• Ford hoped to play off of Eddie Bauer’s reputation for durability and its unique upscale-meets-outdoor quality. It certainly did, and the new line would eventually become what we know today as the “SUV.”
• Eddie Bauer was able to engage Ford’s customer base while Ford reached new audiences through the outfitter’s retail channels. The result?  A cool 5M units sold in the model’s first two decades.

Red Bull and GoPro

• Both Red Bull and GoPro have transcended their product lines in comparable ways. They’ve both established themselves as true lifestyle brands celebrated for being action-packed, adventurous, and at times extreme.
• Red Bull has created a massive content wing through Red Bull Media House. With GoPro cameras already being used widely by both casual and extreme athletes, teaming up was a natural outcome.
• GoPro equips athletes and adventurers with the gear and funding to capture exciting content. In turn, Red Bull uses its experience with events and media to help create that content.  This has included groundbreaking visuals from the athlete’s perspective.
• For example, GoPros documented Felix Baumgartner’s Red Bull-sponsored Stratos jump from 24 miles above Earth. The 2012 feat set three world records and clearly embodied the value of “reimagining human potential” supported by both brands.

The fourth and final part of this series outlines key factors that should go into your brand messaging when considering strategic alliances like these in your marketing mix.

Go to Part 4.