Strategic Marketing Partnership Agreement
A strategic marketing partnership agreement is created between two business to form a mutually beneficial relationship.3 min read
A strategic marketing partnership agreement is created between two business to form a mutually beneficial relationship. For similar companies that may not have the financial resources to expand or tap into other markets, a strategic partnership helps accomplish both goals.
The Role of a Strategic Partnership
The reasons for forming a strategic partnership, which is also referred to as an alliance agreement, are varied. The following cover a few areas that benefit from such a partnership:
- Accessing key technology.
- Developing new distribution outlets.
- Tapping into the marketing resources of one or more companies.
- Collaborating on a development or business concept, product, or service.
- Driving revenues and/or reducing costs.
- Increasing customer awareness.
- Driving brand development.
- Gaining access to more sales.
- Broadening the market base.
- Allowing companies to reach global markets.
Things to Consider
As marketing continues to be an integral part of a business, a strategic partnership is beneficial to small businesses with limited resources. There are no rules that say a small business cannot partner with a larger company.
A small business doing in-depth research can compile a list of companies that would be advantageous for forming a partnership.
Whether you sign an agreement with a small or large business, you want the strategic marketing partnership agreement to serve as a legally binding contract that specifies the responsibilities and financial stakes of each partner.
An agreement that overlooks and does not include the basic fundamentals can become problematic. This may be due to each party's perspective on the importance of the agreement. In other words, what is strategic to one partner may be the standard operating procedure for another. Both parties do not have to attach the same level of importance to the strategic partnership to be successful.
Crafting a Strategic Agreement
A strategic partnership agreement must meet the needs of all participants. To make sure this takes place, decision-makers from each business and their legal counsel must work together. Some of the areas they will work on include:
- Intellectual property protection.
- Marketing and distribution methodologies.
- Shareholder agreements.
- Rules associated with various business entities.
Basic Elements of a Strategic Partnership
Sharing of Assets
In a strategic partnership, both companies may contribute tangible or intangible assets. Each firm may also contribute labor, equipment, expertise, infrastructure, and finances.
Designation of Responsibilities
For a successful strategic partnership to be effective and function smoothly, each partner's contributions to the agreement must be clearly stated in written form.
The partners in a strategic partnership have the option of forming a separate entity, in which each partner will share ownership. In this situation, the entity is considered a joint-equity venture.
In a joint-equity venture, each partner decides what their percentage of ownership of the venture is. The agreement is outlined with the role of each party and their stake in the venture stated along with each partner signing a memorandum of understanding.
The forming of a strategic partnership can be complex due to multiple intricacies involving areas such as negotiations and intellectual property. For these reasons, it is necessary to have clearly articulated agreements.
Because of the broad scope of areas to cover in a strategic agreement, the set-up of these areas is usually custom-built. Basic cookie-cutter arrangements will not work.
Marketing Partnership Strategies
Defining goals before entering into an agreement is recommended. There are several areas to consider to promote long-term success in a partnership. The first is finding the right partner. This involves research to gain a clear understanding of the resources and goals of each potential partner.
Creating a marketing plan with goals and then categorizing each goal into a manageable activity is a positive step in organizing the basics before entering into a partnership.
When scheduling marketing activities for strategic partnerships, the key is to create and develop programs of value for each partner.
Measuring and reporting marketing results is an extremely important part of the marketing process. These reports provide the data that show the success of marketing initiatives. Without this feedback, the marketing team will not know which activities to pursue and which activity or activities should be discontinued.
To get the most benefit from the timely and accurate reporting of marketing data, each partner should create a timeline of how and where the reporting will take place.
If you need help with a strategic marketing partnership agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.