Strategic partnership models and effectiveness

¶ … large movie distributor and a fast food restaurant is a symbiotic one. The movie distributor gets a nationwide outlet for advertising the movie in every corner of the United States, especially for movies that are appealing to children as well as adults. Children have more limited markets for advertising and because they are not generally consumers of newspapers, prime-time television or the Internet, where a lot of movie marketing takes place. For the fast food chain, the advertising geared to children through the use of toys and through adults through contests, adds value to the meal experience and creates differentiation from the other fast food restaurants. Thus each has something to gain by the tie-in, from advertising awareness, creating a brand, and an example of a bit of an unexpected benefit of the consumer. The direct benefit of more moviegoers is obvious for Paramount, as buzz about the movie in any way is beneficial to the distributor's bottom line. Additionally, tying multiple movies together over an extended campaign provides additional expectation to the consumer. The benefit Burger King is greatest because the dining experience can be tied into the excitement of the movie's action, and a consumer's emotion can create significant brand loyalty. Thus, for both parties there is anticipation, excitement during movies, and extended loyalty which are all beneficial. This partnership infuses pop culture with a connection that otherwise wouldn't exist.

2. By spending $900 million on Paramount, Burger King's expected return on investment is $990 million over 3 years. Because of the 5% discount rate, the net present value of the decision on whether this is a good investment is given by the formula Rt / (1 + i)^t, where Rt is the net cash flow ($90 million in this case), I is the discount rate (5%), and t is the time (3 years). This is a positive value so this should provide additional value to the shareholders, especially since interest at 5% is $45 million, so the net gain would be $45 million. This is a very nice profit and thus it is a good investment.

3.

The strategic goal of Amazon.com was to leverage its large online presence to provide a location where ideally all toys purchased online would go through Amazon. This is the natural complement to the brick and mortar stores of Toys R Us and gives Amazon an advantage over other online retailers with the brand recognition of Toys R. Us. Consumers would be more comfortable making purchases at Amazon.com if they know they can return items directly to Toys R Us stores, rather than having to ship it back, which gives an advantage to any other online only retailer. The strategic goals of Toys R Us are to allow consumers to purchase online but pick up in-store. Also, Amazon's structure is much more suited to fulfilling the online orders for ToysRUs.com and reduces the overhead for Toys R Us to operate and maintain an Internet site. The arrangement should also improve the ability of Toys R Us to compete with eToys and Walmart.com while eliminating toy inventory problems that had been plaguing Amazon. For any online business, having a consistent supply chain is of primary importance (Toys R Us has this) and for any store, having an excellent customer relationship is also very important (Amazon has this).

4.

Both the Burger King/Paramount deal and the Toys R. Us/Amazon.com partnerships hoped to leverage the similar target audiences between them. The synergy between the target demographics are very similar, as18-34-year-olds make up the majority. The fact that this key demographic also is most likely to have children makes the strength of the connection even stronger. I learned that the weakness of one business can seek out the strength of a complementary business and leverage the relationship to make the sum of the two greater than its parts. Additionally, I learned that Burger King and Toys R Us had to spend money to acquire the rights to the movie trinkets and pay for the service of the Internet site, respectively. The business must give up some money up front, to provide extended returns over the years to come.

1.

Clinique and Sony invested in the Web Sitcom "Sufei's Diary" because they were trying to reach out to their target audience in non-traditional ways. Clinique has a small market share and this is a way to improve the market share by targeting an older, more upscale demographic because Sufei comes from a wealthy family. The Clinque products are actually used in the storyline (called product placement) and due to the popularity of the series, they can get into the minds of potential customers. Additionally, there are a number of other advantages, where the Sony followed this premise by having their products such as televisions and digital cameras used in the show. This is a way for a brand with a lot of competition to differentiate itself. Sony was also the producer of the video series, so they could also have name recognition at the beginning and ending of each episode, which is also a boon to Sony's plan as new people curious about the series might see this at the start of the episode. Clinque chose to work with the premise that the men watching would be more likely to buy Clinque products for their significant others. There may have been no other way to reach this type of customer, as traditional print advertising is generally in women-focused magazines. Other potential sponsors of this Chinese sitcom might use these same techniques, but there are only so many advertisers that could have product placement before it would overshadow the series itself.

2.

The personality and lifestyle of the men used in the product placement campaign are confident, well-to-do jet-setters who have a very active social life. They are similar to the "Most Interesting Man in the World" campaign that is probably modeled after the basic Jaguar idea. There is an attractive allure to any individual living this lifestyle of rubbing elbows with celebrities, exclusive clubs and locations, and using expensive products. These men are very confident, have successful careers, and may be surrounded by beautiful women. Thus both men and women alike are attracted him because of who he is and what he surrounds himself with. This man is a mini-celebrity himself within the small circle he fraternizes in.

3.

A Jaguar XK was given to various people to be driven quite prominently in a number of cities. Those individuals were "real life" users of the vehicles who would go to local hotspots and talk up the car when they were seen. These are exclusively handsome men who dressed well. This is how the car was getting noticed as the target audience for this car generally frequents these exclusive establishments. By being in the midst of large groups of potential customers, this "real life" user, who is not promoting himself as a salesperson, is more likely to form a favorable relationship with those interested in it. Anyone could also try the vehicle if they asked the individual, thus forming impromptu test drives in a more relaxed setting. Beyond the people that are there to witness it first-hand, this strategy can also bring in "water cooler" talk that helps to spread the word through gossiping, much like any other celebrity story.