Cooperative marketing: profit for manufacturers and trade

After nearly two years of successful implementation in the stores belonging to the Berlin chain Bio-Company, its model of cooperative marketing is ready to be rolled out. At BioFach, various people involved in the model introduced it at one of the events. The experience of producers, manufacturers, the agency and Bio-Company have been decidedly positive. The marketing model creates new momentum in the collaboration between manufacturers and the trade and, moreover, it improves long-term both the brand profile and the profile of the specialist trade itself.
(Picture: Bio-Company boss Georg Kaiser is happy with the results of cooperative marketing)
The core feature of the concept is focusing on the brands of participating manufacturers and creating a long-term win-win situation for producers or manufacturers and the trade by means of creative, systematic sales promotion. It is a question of cultivating the image of the brand manufacturers and of the specialist trade and, by closer cooperation, to achieve better results. Georg Kaiser, Bio-Company’s managing director, explains: “We see ourselves as a company with organic brands and that’s how we want to be perceived by the customers.”

He says that the premium partner programme has helped a great deal in the last two years, and image cultivation has been a success. “We want people to experience manufacturers’ brands in our stores. Apart from that, a key issue is dealing fairly with our partners and being a genuine specialist trade partner,” comments Kaiser. He went on to say that cooperative marketing does not only mean expecting specialist trade loyalty on the part of manufacturers but also offering them something adequate in return, such as giving special prominence to their branded goods. At the BioFach event Franz Schreiber (picture), Bio-Company’s marketing manager, said that this also meant putting clear water between oneself and the others, mainly through adding value and additional benefits, and getting away from the hullabaloo surrounding prices. He went on to say that this intensive collaboration called not only for the will to cooperate, and a not inconsiderable commitment in terms of time and money, but also for quite a bit of courage.

Bio-Company (picture: Store at Hackescher Markt) has two partner programmes involving regional partners (“Bring a piece of the countryside into the town”) and cooperative marketing with privileged partners, in other words selected brand producers. The aims of the two programmes are: to establish regionality as value added and the manufacturers’ brands as a speciality of the specialist trade, and to raise one’s profile with top quality (‘I can only find this quality at Bio-Company’), achieving not short-term but lasting results and creating a win-win situation for producers, manufacturers and the trade. Since the autumn of 2007, three or four campaigns have been carried out each year, explains Kaiser. In 2009, there will be two campaigns with the privileged partners Söbbeke (in the spring) and Rapunzel (in the autumn) in the context of cooperative marketing. There will be a regional partner campaign in the summer. Very successful campaigns have already been implemented with Davert, La Selva, Lebensbaum, Rabenhorst and the fruit farm Augustin. For example, in a four-week apple marketing campaign promoting the Demeter fruit farm Augustin (picture), 26.5 % more apples were sold in Bio-Company stores. A year later, the sale of apples had increased by 250 %.

The managing director of the Berlin agency Information Design, Pia Pötting, and her team conducted the campaigns: “As well as the standard marketing approach with displays, ceiling banners, etc., we thought up quite a few other activities for special aspects of the brand or firm we were focusing on that would capture people’s imagination.” So there was, for example, apple picking at Augustin, professional juice tasting sessions with Rabenhorst and a tree-planting campaign with Lebensbaum. With its creative apple campaign, Bio-Company was even awarded the CMA prize Viktus for forward-looking marketing ideas (Picture: in middle Franz Schreiber flanked by representatives of the fruit farm Augustin)

A project of this kind requires a big input and involves a not-to-be-underestimated level of cost. But Georg Kaiser says that in his estimation the input is worthwhile. He points out, however, that Bio-Company can only manage three or at most four of these big sales promotions a year, because devising campaigns and preparing them occupies a lot of staff over a lengthy period of time. It is also a question of finance for manufacturers, who cover a high proportion of their costs. Mr Schreiber explains that it was important in the case of these large-scale and focused campaigns to have staff who are100 % enthusiastic. This is why no cost or effort has been spared: at a pre-opening, where representatives of the manufacturer and staff from Bio-Company get together, companies, manufacturing processes, products and sales promotion measures are introduced, and brand ambassadors are nominated from among the employees (picture). “With the ambassador concept, we have seen a huge rise in know-how among our employees,” Georg Kaiser is pleased to report. He says that this is living knowledge that will benefit selling when the campaign is over.

Johannes Mauss (picture) from the marketing department of Rabenhorst confirmed the high level of input, but he was convinced by the idea of cooperative marketing. He described the often unpleasant aspects of marketing campaigns. He said that often manufacturers and the trade distrusted each other. Manufacturers usually asked themselves where the advertising subsidies were going and they were not happy with product placements. His conclusion was that manufacturers and the trade did not put much effort into campaigns because their products were not being presented properly. Today you can’t sell off the shelf; what you have to do is create clear distinctions between brand personalities, and then sell lifestyle, emotions and a feeling for life. “Then the customer experiences the fact that the specialist trade is different and better,” commented Mr Mauss. He is convinced that the campaign and the high level of input have proved their worth: in the campaign period in February 2009 Rabenhorst achieved growth in turnover amounting to 400 % in Bio-Company stores!

Mr Kaiser points out that Bio-Company does not lay claim to the cooperative marketing model – it is there to be imitated. It is advisable, however, to adapt it to the individual store concept, the staff and, of course, the budget. Mr Kaiser is convinced it can be done: “We are certainly not going to divulge all the ways and means that we have devised, but any retailer anxious to develop his own profile will develop the ideas appropriate to his business model.” The head of Lebensbaum,Ulrich Walter, said during the panel discussion that it was logical for the retail trade to come forward with marketing proposals: “The retailer knows his customers best of all, and that’s why he can produce the most suitable ideas for his PoS.” Johannes Mauss from Rabenhorst reported on discussions with wholesalers who had shown an interest in the model. “The wholesale trade could offer a sound platform for customers. I can’t wait to see what the result of all this will be.”