Need Help in Understanding Business Alliances and Trade Marketing

Yashovardhan Ganeriwala

9 years ago

Hello Rodinhooders,

I am a 21 year old recently graduated management student. I was working for a film and sports marketing startup for the last few months. I have now begun my entrepreneurial journey and have started SuperCorp, a film and trade marketing startup.

Business alliances have been really fascinating me for quite sometime and which is why I am excited to explore this as a business opportunity.

Although, I need help in understanding how does the model work?

Which party has more bargaining power?

Who approaches whom?

Let me give an example, FreeCharge tied up with Ola for a campaign where on a recharge of Rs. 50 and above, one can get a free ride worth Rs. 250 on Ola. There was a TVC also to promote this campaign. Now, here who approached whom? Who paid for the media spends?

Similarly, in one of the on-going campaigns for Dollar Club Vests, consumers get a Park Avenue soap free with the purchase of set of 2 vests. Now, who is helping whom here? What might be the deliverables involved for each party? It looks like a Dollar Club is spending on the media and Park Avenue is getting free promotion at the cost of those free soaps.

Taking another example, Colgate is offering free Baskin Robbins and Café Coffee Day coupons. Here, the campaign is run by Colgate, but also leads to promotion for BR & CCD. So do BR & CCD pay over and above the coupons contribution?

Looking at tyre ads, we see complimentary promotion for car brands as well. For example, in the latest CEAT campaign, it is very evident that the car they’re using is a Toyota Fortuner. I know many times the logo of the car is morphed. But what if a car brand wishes to do a co-branded TVC. Is it possible, that a car company pays the tyre brand an x amount for including their car in the TVC and they get to promote their car on the media spends of the tyre brand? Also, can there be some kind of a barter deal, where the tyre brand promotes the car and in return the car company makes the tyre company its OEM partner.

Also, I need help in understanding licensing and royalty.

Taking example of the Games2Win and YRF association. Is there a licensing fees paid by the game development company? But since, it is a promotional activity for the film, are they spending in getting the game developed? What did Games2Win win out of this? Or is it a barter deal, where revenues are shared from the in-app purchases?

Also, do licensing fees and royalty on sales imply together, or is it either of the 2?

For example, McDonald’s has a tie up with Minions for their Happy Meal Campaign. What might have been the commercials involved? Did McDonald’s pay a flat licensing fees for developing the Happy Meal Toys or is there a royalty/ commission on sales also involved here?

I hope I have been able to explain my issue. I know that there are various models that operate in such kind of associations, but which model works where is something I have no idea about. It would be great if someone could share some insights on the same.

Regards,

Yashovardhan Ganeriwala

(+91-7303695656), (+91-9039039093)