Co-Marketing: Understanding the Philosophies and Strategies Behind CPG Partnerships

When CPG companies work together on promotional efforts, they’re typically looking to stand out in their categories and boost baskets for retailers. Finding the right partner is key to co-marketing success. “It isn’t one-size-fits-all,” says Anne Jenkins, director of shopper marketing, Kimberly-Clark. “Sometimes there is a retailer who wants you to work with a certain partner – perhaps they see a synergy or a need they have identified.” On the other hand, a brand might seek out partners who can fill a gap in an overall shopper solution. “It may also start from an overall insights perspective, or company leaders may know one another and want to work together,” Jenkins says.The bottom line, no matter how a co-marketing partnership is formed or implemented, is to make sure it has the needs of the shopper front and center. “The shopper should always be the focus,” says Kathleen Perreault, director of shopper marketing, Hillshire Brands. “The co-marketing programs that don’t work are ones that are not putting the shopper first or are not based in shopper insights.”To understand the philosophies and strategies behind these partnerships, Shopper Marketing recently interviewed marketers from seven companies about their co-marketing work. We present the edited discussions on the following pages. See "Getting Down to Specifics" in Related Articles for several examples of these partnerships. Jeff Dandurand, Director of Promotions, UbisoftHow do you identify like-minded partners?Dandurand: We do a lot of research on our gaming audience – their favorite beverages, snacks, clothing or sneakers – and we look for other brands that we think gamers are excited about, and who we can work with to create an even better solution for our target demographic.How do you divide the work and the budget between the partners – from creation to execution? Does one partner necessarily take the lead?Dandurand: It’s definitely project-dependent. Maybe the partner company wants to run some digital or TV ads that shape the message specifically toward gaming interests. We’ve done media work with Comcast, for example, that uses gaming as an example of why consumers need to have the fastest broadband out there so they can play their games at their best level. There are a number of different ways we can integrate our brands into their media to sell their stories to consumers more effectively.What works and what doesn’t when co-marketing?Dandurand: In our industry, things have changed over the past five years. There used to be more interest in having brands integrated into the game itself and have it be part of the game play that our consumers experienced. Now, in terms of shopper marketing, companies see more direct results when offering a shopper solution. They can point to increased visibility in-store; sales can be tracked more specifically; offers redeemed can be tracked.Please provide an example or two of your company’s specific co-marketing work from the last six months.Dandurand: Kellogg’s has been a terrific partner for our game “Just Dance.” They want to offer that experience to their customers promoting healthy family exercise and living. So each November five Kellogg’s family cereal products – including Frosted Flakes, Fruit Loops and Corn Pops – have featured special promotional offers that drive messaging about the game.Wendy Warus, VP Sales – Winning In Store, Henkel Consumer GoodsWhy is your company interested in co-marketing?Warus: We look for CPG partners who can help us develop scale for the program, to drive bigger baskets with retailers and help create solutions for one-stop shopping. We’ve been at it for about four years now, and we’ve been successful with our approach. We now have a way to make it work much faster in terms of attracting partners and getting retailers involved.How do you identify like-minded partners? Do partnerships start with an idea, or do partners co-create ideas?Warus: It’s almost like dating, you need to find the right fit. Sometimes we will develop the platform and identify like-minded CPG companies that have the same retailer priorities and business objectives and develop the program from there, or we develop programs with existing partnerships to expand our reach in the marketplace. It really is a great part of our business. You meet people within a company and get to know each other and start working together to build the partnership.How do you divide the work and the budget between the partners – from creation to execution? Does one partner necessarily take the lead?Warus: For many of our priority platforms we involve senior management from all the partner companies and we invest time and money on a pretty even basis. We’ll start with a partnership summit with a couple of days of face-to-face meetings and then we’ll take the lead on follow-up biweekly meetings until the program execution. We like to be transparent about costs and sharing the costs, so everyone’s budget can handle what we’re doing.Please provide an example or two of your company’s specific co-marketing work from the last six months.Warus: We have a seasonal care package that runs from September to March every year that includes [Irving Tissue’s] Scotties and [Novartis’] Theraflu and Triaminic. We are able to capitalize on the entire cold and flu season so shoppers can stock up well before it hits. We’ve executed geo-targeted mobile programs, digital, in-store merchandising, in-store communications. It’s hitting its stride, we’ve exceeded 100 million impressions this year, and our ROI has probably doubled year over year. We started slow but have built scale with more retailers every year. Our partners are budgeting well in advance for it, and brand teams love it because they see sales results.Greg McLeod, Vice President, Trade Marketing – Chains, Anheuser-BuschHow do you identify like-minded partners?McLeod: First and foremost, we look at how potential partners align with our brands. We want to know if they are complementary, present at the same consumption occasions, aligned from an image standpoint and, when combined with our brands, if they deliver shopper excitement and engagement. Then we analyze basket affinity data to determine the optimal pairing for shoppers, which drives highest incremental dollars for retailers.Describe if/how you are able to tailor these collaborations to specific retailers’ needs.McLeod: We develop recommended annual plans with retailers. Retailers who provide good insight into their strategic goals and provide useful customer data are most successful in leveraging these cross-category offers. Advance planning allows for development of custom point-of-connection materials that support cross-category displays outside of the beer section and store promotions supported with weekly ads.What works and what doesn’t when co-marketing?McLeod: A number of cross-promotions center around shopper events such as Super Bowl, Fourth of July grilling and NFL tailgate, and our objective is to deliver shopper-based solutions around these events with in-store, shopper-centric, point-of-connection messaging. Alternatively, we also develop partnerships for everyday events, such as beer and food pairings. We like to provide the shopper with value-added take-away items such as recipes that link the beer brand and food item together. Regardless of the program, it’s critical to have the correct messaging communicated to the shopper at the point of purchase.Please provide an example or two of your company’s specific co-marketing work from the last six months.McLeod: We have a strong partnership with Frito-Lay and Pepsi to support our Bud Light NFL sponsorship. All three partners are official NFL sponsors, which gives us the ability to leverage the NFL and Super Bowl marks on point-of-contact materials. Retailers have been very receptive to this partnership.Ryan Martin, Senior Director of Shopper Marketing, E&J Gallo WineryWhy does your company co-market its brands/products with other manufacturers’ brands/products?Martin: We do a lot of co-marketing because we recognize that our category can often be intimidating and confusing. Cross-promotion can help make our aisle more comfortable and inviting. Also, our data validates the fact that wine boosts the average basket ring, whether it’s specialty foods, meats, produce, floral or even the center of the store. So from the retailer perspective, it can offer a healthy return.Do you tailor these collaborations to specific retailers’ needs?Martin: We try to provide retailers with a consultation around what their shoppers are looking for. In fact, we’re working on finalizing our first path-to-purchase study for the alcohol and wine space right now. I think that’s the difference between what was trade marketing and what shopper marketing is. Trade marketing was giving the retailer what they asked for, but shopper marketing is helping the retailer understand what the shopper needs to connect with a category or set of brands.What works and what doesn’t when co-marketing?Martin: Both partners need to work with the retailer early. First you have to understand the retailer’s shopper needs, and then the partners can customize a program and meet their objectives. When you build a program on the outside without retailer involvement, it’s not nearly as effective.Please provide an example or two of your company’s specific co-marketing work from the last six months.Martin: Our “Naked Grape & Blue Moon” cross-promotion between Gallo and MillerCoors has been exciting, as both brands’ aspirations, positioning, target consumer and shoppers overlap nicely, without competing with each other, providing for incrementality for both brands. We put a national craft beer with wine to offer a total alcohol beverage solution to the shopper by occasion, particularly for Millennials purchasing for casual, social occasions. The program began with Kroger but was run with several retail partners in 2013 and is running again this summer.Kathleen Perreault, Director, Shopper Marketing, Hillshire BrandsHow do you identify like-minded partners? Do partnerships start with an idea, or do partners co-create ideas?Perreault: First we do a basket analysis to see what other brands/products are being purchased with ours and then we look to see the affinity between the various brands in the basket. Once we’ve established the product relationship, we reach out to the potential partners and determine together the best strategy to maximize ROI. It’s also important to understand shopper trends and key retailer initiatives.How do you divide the work and the budget between the partners – from creation to execution? Does one partner necessarily take the lead?Perreault: The best programs are when both partners are equally involved. Regarding costs for programs, it depends on how the brands will sell, but we try to split everything 50/50. If we know in advance that one brand has a higher sell rate, then one brand might look to absorb more of the costs. The goal is to have strong ROI across both partners.What works and what doesn’t when co-marketing? Does the activity need to center around a shopper solution? During a particular promotional season?Perreault: The shopper should always be the focus of a cross-promotion, and it should definitely provide a meal solution. The co-marketing programs that don’t work are ones that are not putting the shopper first or are not based in shopper insights. Seasonality only becomes relevant depending on the products you are promoting.Please provide an example or two of your company’s specific co-marketing work from the last six months.Perreault: One program running now is a synergistic partnership between Hillshire Farm lunchmeat and [Unilever’s] Best Foods mayonnaise at Safeway due to the affinity they have with each other. We sweetened the partnership by offering free Safeway Kitchen bread to round out the offering. The program offered a total sandwich solution and will ultimately drive sales of Hillshire Farm lunchmeat and drive secondary exposure in the condiment aisle.Kedric George, Director of Channel Marketing, MillerCoorsWhy is your company interested in co-marketing?George: Co-marketing activities, when done correctly, can be a win-win-win for the manufacturers, the retailers and, most importantly, the consumers. When brands that share a common equity, consumer base and usage occasion can partner, there is opportunity to drive incremental volume, provide efficiencies of scale and amplify the marketing message for both products and companies. For the retailer, smart co-marketing can help drive their strategies, which are typically increasing traffic and basket ring, and provide new solutions and options for their shoppers. For the consumer, these partnerships can provide new options, better values and an enhanced shopping experience.How do you identify like-minded partners? Do partnerships start with an idea, or do partners co-create ideas?George: In some cases we have had a longstanding relationship with a manufacturer and will routinely partner to help provide solutions for retailers and consumers. In other circumstances we identify an occasion or season, such as football, NASCAR or summer, and we seek out products or partnerships that are synonymous with that occasion or season.Please provide an example or two of your company’s specific co-marketing work from the last six months.George: We have had a longstanding relationship with Hillshire Farms based on the fact that grilling occasions and beer consumption go hand-in-hand. The overall intent is to drive incremental volume and purchase for both parties. Another good example is the three-year marketing partnership Miller High Life has had with Harley Davidson. This was a fit because of the brands’ shared heritage (their headquarters in Milwaukee are literally across the street from each other), they both symbolized authenticity and quality, and they were both celebrating their 110th anniversary.Anne Jenkins, Director, Shopper Marketing, Kimberly-ClarkLori Borchardt, Brand Manager, Kimberly-ClarkWhy is your company interested in co-marketing?Jenkins: From an efficiency standpoint, if things can be built together there can be shared cost. Smaller companies need that kind of scale sometimes, and we can really lift them.Borchardt: Co-marketing is a way of winning the trifecta of consumers-shoppers-retailers. It’s also a way to build a story within a retailer, to create visual appeal for the shopper in terms of building a basket.How do you divide the work and the budget between the partners – from creation to execution? Does one partner necessarily take the lead?Jenkins: With our Colgate-Palmolive partnership, “Pick Up the Values,” we started with 50/50 split in resources, but based on our 2013 learnings we’ve adjusted a bit and taken more of the “quarterback” approach with us as the lead.Borchardt: It can differ, but it tends to be stronger if one partner is identified as a lead – quarterbacking is a great term – and others have clearly identified roles.What works and what doesn’t when co-marketing?Jenkins: Co-marketing works well when retailers are looking to build broader solutions for shoppers, like the Kotex work we did with Walgreens, Bic and EOS [Evolution of Smooth] that aligned with a broader feminine and body care solution.Borchardt: It doesn’t work when you don’t define upfront what you’re trying to get out of the program and how you want it to come to life with each retailer.Please provide an example of your company’s specific co-marketing work from the last six months.Jenkins: Kimberly-Clark sponsors the No. 47 NASCAR car. Our sponsorship, along with Clorox, Kingsford and Bush’s, offers the continuous opportunity to deliver co-marketing at retail. Two of the specific areas we focus on from a strategy perspective is around spring cleaning as well as grilling season.Borchardt: These are great themes that offer excellent results – a great example of the partners having a clear strategy of what they’re trying to deliver and tailoring the needs of how that comes to life within the retailer.

Co-Marketing: Understanding the Philosophies and Strategies Behind CPG Partnerships

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