Joint venture in advertising (JVA) means that two or three companies promote their products in cooperation. Mostly, such cooperation is set up between a manufacturing company and wholesalers or retailers. It allows national advertising companies to advertise in regional Media, where the rates are lower than in the national one. Such kind of advertising is very popular. An average amount of funds, spent for the joint venture advertising, reaches approximately thirty billion dollars. Moreover, the JVA is an effective tool to motivate sales locally.
In most cases, a local wholesaler or retailer, that is, a shop, a store or a warehouse gives the advertisement. They give the ad in local Media for local prices, but the manufacturer pays this advertisement, as a rule, sometimes, in full. The manufacturer makes most of all, the ad's message or a trailer as well. It only includes a logo or name of the retailer. In this way, a large advertising company protects its image and controls the advertising process.
The Joint advertising is beneficial for all its participants: the manufacturer, the merchants and the Media.
Such corporate advertising, due to the lower prices for using local Media, allows national advertisers to use their marketing budget in a more favorable way. These companies pay up to one hundred percent of the advertising expenses, or they may remunerate them according to the sales level of the local retailer. Moreover, the JVA helps improving the image and relationship between the manufacturer and merchants.
The Merchants find their profit in the JVA, since it helps substantially to save funds on the advertising and increase its sales volume and, consequently, consumers' awareness of their trade network. The Media welcomes the JVA, as they find new customers and have more income from the local advertisers.
The JVA may be carried out in the form of sales motivation and event marketing locally. The shops may conduct campaigns with discount coupons or gifts from the brands. Furthermore, a shop may organize a party, concert or competition, sponsored by the companies that manufacture the prize products. For instance, if the event is a beach party, then the sponsors will be swimming suits, UV protection lotions or sunglasses manufacturers. Such events are called trade programs.
Another kind of the JVA is the corporate advertising of the manufacturer, the company that produces its ingredients and their merchants. The corporate ad may be given in any kind of Media, but most of it goes to the newspapers.
Moreover, it also may be the joint advertising of large manufacturers and wholesalers. It is carried out in the case, when the manufacturers do not associate with retailers but only with the wholesalers. However, manufacturing companies are not likely to use this corporate advertising with wholesalers, since they cannot control it and their reputation may be threatened.
The JVA offers advertisers a big variety of opportunities. The main issue is to control its implementation and quality in order to reflect the general advertising image of the product and the company.