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Have you ever seen two products being advertised in the same ad and wondered why? Well, here’s the answer “Cross marketing”.
Cross-marketing is marketing our product and our allied product as well, in a single advertisement, which has the same target customers. This benefits both the companies.
Let’s make this complicated topic simple by taking an example.
Mcdonald’s advertises its product (burger, fries) with Coca-Cola. Over here McDonald’s and Coca Cola are two different brands but have the same target population. Here burger helps the sales of coke and vice-versa. We can witness this from McDonald’s revenue, of which almost 5 to 10% is by Coca-Cola.
One important thing is that the company you are choosing for cross-marketing shouldn’t be your competitor i.e. McDonald’s will not choose Burger King for its cross-marketing.
Cross-Promotion is very helpful for the business as the cost of marketing is significantly low when compared to traditional marketing techniques. Both parties benefit from the partnership. It also helps in increasing the brand equity of a not-so-well-known company that cross-markets itself with a well-reputed brand. For example, if you own a small beverages business and you cross-market it with fast food giants like subway, the value for your company would automatically increase. It’s like a trickle-down effect. This technique of promotion has high opportunities and low risk.
To make it clearer here’s an example, 2018 India's largest Ed-Tech platform ByJus, and Cadbury’s health drink Bournvita launched “Bornvita Scholar” i.e. if you buy a pack of 500g BournVita, you would get a free experience of learning from ByJus for one whole month, and it was launched during exams time.
Here, the target customers of ByJus and Bournvita are the same i.e. kids of age group 5 to 15, they would be going to school (ByJus) and most of them prefer chocolate milk (Bournvita). People who buy Bournvita would experience ByJus learning (Benefit for ByJus) and if they like it, they would eventually purchase the subscription. On the other hand, people who want to try ByJus would like to take a trial, to understand whether the service is good enough? Now they may buy a Bournvita pack as they get a free trial for 30 days (Benefit for Bournvita) If they like Bournvita they may buy it again i.e. its customer base has increased.
From this example, we can see there’s a Win-Win situation for both companies and this is how Cross-marketing benefits the firms.
There are many successful partnerships by various companies for cross-promotion, namely Apple and Nike. Apple partnered with Nike to launch Apple watch Nike which provides many features making the sports freaks and athlete’s experiences even more amazing.
Red Bull is an energy drink, with target customers mainly interested in adventure and sports, so it partnered with the Go-pro camera.
Let me give you a final and very interesting example of Louis Vuitton and BMW. BMW launched a series named i8, for which Louis Vuitton launched a new range of 4 bags exclusively, which exactly fit in the rear bags of the BMW i8 series.
Now, let me tell you how to choose a proper partner for the cross-promotion of your brand. There are a few important points:
1. The company chosen by you shouldn’t be your competitor.
2. The target customers of both the businesses must be the same.
3. The business goals and ethics of the firms must align with each other.
4. Make sure the partner is credible enough.
One crucial detail which has to be understood while going for cross-marketing is the legal aspect. Get a contract signed between the two companies in the deal so that there are no problems in the future.
So in a nutshell conclusion is that the cross-marketing technique is very useful, improves sales as well as the brand image and, has many advantages for both the companies involved.
--- Sai Shreyas Ravva