Co-op Marketing StrategiesBuilding a Better Co-op/MDF Program

For national brands with co-op marketing programs

Ask yourself the following questions:

• Do you believe your co-op budget is being fully optimized?

• Can you guarantee coordination of timing and messages for product launches?

• Are you concerned about how your resellers represent your brand in their local markets?

What are you doing to address these questions?

If you are like the majority of product manufacturers, you know that you need to refine, improve and/or modify your co-op marketing strategy.

Currently, the average product manufacturer….

1. Reaches their customers primarily (if not exclusively) through a reseller network

2. Has recently had their marketing budget reduced while projected sales goals have increased

3. Recognizes that improving their co-op marketing program represents one of their largest revenue opportunities

One of the biggest challenges facing manufacturers’ marketing teams in their efforts to make reseller co-op marketing more effective is at the very heart of what defines the century-old ‘co-op’ marketing concept:

The coordination and execution of programs and financial transactions across two separate organizations.

Co-op Marketing Today

Over the past decade, marketing at the manufacturer’s level has become remarkably more sophisticated due to:

• Cascading closed-loop planning processes

• Return-on-Marketing investment metrics

• Real-time program tracking facilitatedby the internet

HOWEVER….

Co-op Marketing Today

The tools and means available for managing co-op marketing have generally lagged behind or been abandoned entirely – despite the fact that your reseller marketing activities supported by your co-op funds are typically closest to the customer and are critically important to brand communications and demand generation.

Co-op Marketing Today

Today, manufacturers work with hundreds, if not thousands of different resellers, making the scale and breadth of the effort simply overwhelming.

However, achieving success for both the manufacturer and his/her resellers is not only possible but a reality due to the implementation of fully integrated technology solutions - bringing co-op marketing management into the modern age.

It has never been more important to coordinate and leverage marketing activities with your network of resellers.

Short of applying integrated technology solutions, manufacturers often fall into a mix of the following traditional methods and strategies:

1. Develop and distribute ‘Co-op Kits’

2. Maintain multiple creative platforms

3. Manufacturer dictates - owns program development, planning and full execution

Common Co-op Marketing Strategies

1. Develop and Distribute ‘Co-op Kits’Often due to the challenge of supporting a large reseller network, manufacturers resort to this classic “spray and pray” model

Positives: + Resellers receive a package containing a situation brief and associated

creative assetsNegatives:- Resellers have to find their own vendors, develop their own marketing

plans, negotiate media rates, etc. to execute (all of which require skills that many smaller resellers lack)- Pricey – the additional steps required by the reseller add up quickly,

ultimately consuming a MAJOR portion of total co-op funding, thus the actual execution that reaches the customer represents a shockingly low percentage of the total money spent

Overall:

Strategy Analysis

2. Maintain Multiple Creative PlatformsProduct manufacturer contracts with multiple media vendors to deliver marketing solutions to their resellers (often in the form of multiple medium-specific web portals)

Positives: + Involves multiple media forms (direct mail, pay-per-click, online, TV, etc.)

Negatives:- Incredibly time-consuming (when new media vehicles are added to the mix

manufacturers must create an additional portal, while resellers must establish yet another new vendor relationship)- Places the burden of executing a true integrated marketing campaign on the

reseller while also tying them to specific fulfillment vendors- Fails to address the critical financial component of giving both the

manufacturer and reseller clear visibility into the co-op reimbursement process requirements and system

Strategy Analysis

3. Manufacturer owns program development, planning and executionManufacturer manages the marketing material development, strategic media/marketing planning and local-level marketing implementation

Positives: + Can lead to timely execution on strategy with well-characterized expenses

and a predictable reseller reimbursement modelNegatives:- Largely removes the valuable input, expertise and involvement of the

reseller to affect their local demand generation efforts- Places immense pressure on the manufacturer organization, requiring

adequate staff numbers with appropriate competencies to develop these pre-packaged programs for their reseller network (something not typically within marketing head count and expense budgets)

Strategy Analysis

While each of these three approaches has their own unique strengths and weaknesses, none of them completely meets BOTH the needs of the manufacturer and the reseller…

Ultimate Challenge

In order to satisfy both the manufacturer and the reseller, the challenge is to integrate the following:

1. Co-op funding process 2. Management and distribution of creative assets3. Media and marketing planning4. Media and marketing execution

Yielding an efficient and effective platform capable of seamlessly satisfying both the product manufacturer and the reseller network equally.

Ultimate Solution

Integrated Co-op Marketing Combines creative customization, local media execution and co-op funding into a single Integrated Co-op Marketing platform.

Providing product manufacturers and their resellers a single location to manage all co-op marketing activities.

Integrated Co-op Marketing

What is Integrated Co-op Marketing?• A software-plus-services solution• Functions across all media forms• Allows manufacturers to translate their national marketing

strategies into reseller execution• Shortens marketing planning and execution timelines• Improves use of creative integrated across all media• Reduces burden on manufacturer in managing co-op

funding • Simplifies the co-op reimbursement process• Improves reseller execution and overall satisfaction

Integrating these two worlds together with technology and automation:

• Shortens marketing planning and execution timelines with better use of creative integrated across all media

• Reduces burden on manufacturer in managing the co-op funding and reimbursement process

• Improves reseller satisfaction and execution by increasing predictability of co-op reimbursement process

Built from key elements of an enterprise class closed-loop marketing process, Integrated Co-op Marketing adds and integrates financial functionality that characterizes, structures, and manages funding planning, approval and reimbursement with the reseller.

Integrating the creative and the financial worlds is the breakthrough in driving effective co-op marketing and is made possible by technology and automation.

This financial component is integral to all forms of co-op marketing, and its automation moves the world of manufacturers and resellers into the “instant rebate” era, compared to the “mail-in rebate” traditions of the past.

Co-op Reimbursement Cycle

In an Integrated Co-op Marketing model, the manufacturer provides all required tools for local marketing success including:

• Brand guidelines• Creative assets• Marketing planning• Best practices• Customer data• Reseller co-op financial guidelines around funding levels

and reimbursement rates

Breakthroughs yield incredible benefits for the national marketing team. They see their creative and marketing plans being executed by their resellers and have complete visibility to timing and media execution.

Meanwhile, resellers receive the tools needed to allow them to easily assemble integrated programs at a lower cost with less burden on their marketing and sales teams, and under a totally predictable co-op reimbursement system.

All resulting in more profitable sales.

Five Primary Components

When considering implementing an Integrated Co-op Marketing Solution, there are five primary components to address:

Distribution and Customization of Assets

Local Media and Marketing Planning

Local Media and Marketing Execution

Measurement and Reporting

Co-op Funding

Distribution and Customization of Assets

•Distributing creative assets to resellers should be quick and cost-effective for the national brand• Local customization of these creative assets should be

simple and inexpensive for the resellers across all mediums

Five Primary Components

Local Media and Marketing Planning

• Placing the burden of local media and marketing planning on resellers results in marketing campaigns that are often non-strategic and ineffective• Providing enterprise-class media and marketing planning

at the local level can increase reseller ROI by 30% or more

Five Primary Components

Local Media and Marketing Execution

• Engaging with multiple fulfillment and media vendors across mediums is a daunting and time-consuming task for resellers•An effective Integrated Co-op Marketing solution will

manage all vendor negotiation and interaction to ensure resellers are receiving the best quality at the lowest price.

Five Primary Components

Measurement and Reporting

• Tracking marketing performance at the local level is imperative to driving positive local marketing ROI•Aggregation and reporting of all marketing activity and

platform adoption provides business-critical information to the manufacturer• Imagine having total and real-time visibility into reseller

activities around a product launch!•A manufacturer will know “all is well” OR “we need to re-

energize our plans” as the launch approaches, not weeks or months after

Five Primary Components

Co-op Funding

• Real-time tracking and presentation to the resellers of their available co-op funds, reimbursement rates on planned activities, payment status, along with integrated and instant program approval functionality•Gives resellers a certainty and predictability to their

finances and reduces their internal overhead in tracking expenses and payments•Applying technology to integrate the financial and creative

aspects of co-op marketing is a long needed breakthrough in improving overall effectiveness

Five Primary Components

Benefits of Integrated Co-op Marketing

More affiliates engaging in a more effective co-op program at a lower total cost (ROI/Optimization)• Significantly reduced marketing production costs for

affiliates• Easy to both access and customize marketing materials

across all mediums• End-to-end fulfillment at the best prices• Strategic marketing guidance at a local level – improving

ROI of local demand generation efforts• Streamlined process takes significant time and effort out of

approval/reimbursement processes• Leverage national buying power for local marketing

execution

Benefits of Co-op Marketing

Affiliate marketing efforts are always in concert with the national brand and perfectly timed• Customizable templates lock-down branded elements• Ensure reseller marketing activities align with key national

initiatives (product launches)• Clearly see WHO is doing WHAT and WHEN across your

entire reseller network• Share ‘best-practices’ across the entire network• Integrated local campaigns

Benefits of Co-op Marketing

Greater share-of-voice with customer• Lower admin and media costs put more of your co-op

dollars to work driving local demand generation• Apply marketing expertise locally for best-performing

programs

Until now, even with the complexity added by an increasing number of co-op marketing options, managing the co-op marketing process has not progressed at the same rate that technology has enabled improvements in other marketing management functions.

Applying technology and automation to this function delivers the key benefits of dramatically simplifying the process for both manufacturer and reseller while at the same time making co-op efforts more effective at the local level.

Integrated Co-op Marketing is a solution whose time has come

To learn more about ‘Integrated Co-op Marketing Platform’ visit www.balihoo.com/icm to request our free ‘Integrated Co-op Marketing’ white paper.

Or to schedule a live demo contact Balihoo at: (877) 212-8019 – Ext.1