A car dealer can offer a free steak dinner at a local restaurant to anyone who comes in for a test drive. Both the restaurant and the car dealer get more customers to come through their doors.
Joint venture marketing cuts through the top-heavy expense of finding large amount of customers from scratch. You don’t need to do any market research, or buy a lot of expensive advertising.
If you look around, you’ll see all kinds of examples of this: McDonald’s and Coca-Cola, Ford with Firestone Tyres, IBM and Intel. In each of these cases, one company agreed to sell the other’s product as part of the overall package to the consumer.
The benefit to the host company (such as Ford) is that they don’t have to go to all the trouble of manufacturing their own tyres. The benefit to Firestone is access Ford’s distribution network, marketing, etc.
There may be other examples out there that we will never be aware of, because the host company rebrands their partner,s goods as their own. This approach, known as “White Labelling”, is quite common with supermarkets and other retailers.
Perhaps the best example of this is the car industry, where different brands collaborate on the design and manufacture of the underlying structure of the car (“platform”), and then add their own styling to get the finished product.
For example, Ford’s C1 platform has been used for Ford, Mazda and Volvo models. In an industry where economies of scale are key to being competitive (at least in the budget end of the market), this approach allows companies to reduce the development effort and spread fixed manufacturing costs over a great number of units.
Joint Venture Networks
When it comes to joint ventures, don’t think just two dimensionally – think about developing entire networks of joint venture partners. Get together with a cluster of businesses and have monthly meetings and discuss how you can all pool your resources to help each other out. Build a joint venture marketing group.
A JV group provides an opportunity to conduct cross-promotion campaigns. A beauty therapist cross-promotes with a chiropractor, or an IFA with a law firm. You put together a series of non-competing, complementary business entities to obtain additional business from each other’s client bases.
Joint venture opportunities are everywhere. So next time you are at a breakfast meeting, local business seminar or awards dinner, listen closely to the person sitting next to you. They might just be the key to helping you grow your business!