A Case Study in Co-Branding

American Isuzu Motors, a long time client of my company, M\S Database Marketing, wanted to extend their brand image to the rugged outdoors to separate its vehicles from the competition by positioning them as vehicles that were prepared to go the distance.

To this end, Isuzu launched a new model called the "Ironman," named after the Ironman triathlon, an annual event in Hawaii where competitors must swim two miles, then bike ride 100 miles and finally run a marathon. Only the competitors with the greatest endurance can even finish the race much less qualify for it. The Isuzu Ironman was to be launched in early spring. The commercials where not yet cut and there was little photo availability because most of the vehicles where being displayed at auto shows.

The challenge was to launch the Ironman vehicles through a direct mail campaign to stimulate interest before the advertising broke.

The creative group spent hours trying to come up with a unique position that had not been done before. We wanted something fresh, something different to really capture the customers attention.

After thinking about and discussing the vehicle attributes and analyzing the data mined from the database, it was suggested that we approach Nike to see if they, with all their super-stars, would want to tie into the promotion. Alas, after many phone calls and emails we were finally told that all their promotion slots were filled.

Well, if Nike wasnt interested perhaps its competitor Reebok would be, we thought. We called Reebok and sure enough, the person in charge of promotion and marketing was interested. After all, Isuzu was going to "foot the bill" for the entire promotion. All we asked of Reebok was 100,000 shoe boxes. Isuzu would do all the printing and mailing to a highly selective targeted audience.

Getting the existing customer who is in the buying window to return to the dealer for a test drive was one of the objectives of this campaign. We thought a pair of Reebok running shoes would be a good incentive. The initial idea was that Isuzu would offer a coupon good for a discount on a pair of running shoes if the consumer took a test drive.

The Isuzu-Reebok compatibility became even more interesting when we discovered that Isuzus customer profiles and Reeboks customer profiles matched exactly.

Reebok got excited about this and wanted to expand the program to give away a pair of running shoes as a result of the test drive. It was concerned that with a discount coupon, the consumer might come to a retailer and discover that the running shoes on the promotion were not in stock. This would irritate the consumer and could make them angry with Isuzu, Reebok and/or the retailer.

So the decision was made to give the running shoes away. However, this put a bigger dent in Isuzus promotion pocketbook than had been planned. After a little re-strategizing, Reebok came to the rescue. Reebok would host a promotion with one of their large chain clients offering co-op funds and a contest.

Implementation turned out not to be as easy as one would think. The retailer, who had 1300 stores, had already planned its programs and committed its promotional dollars, so the joint promotion looked like it was destined for extinction. To complicate matters further, the Isuzu marketing manager left and went to work for another company.

Not willing to give up, we gave it the old college try one more time. With the new Isuzu marketing manager on the verge of losing face with his superiors, we took action. We hopped on a plane to Boston and Reebok headquarters to try to resurrect the program.

Arriving in Boston, we found that the Reebok marketing manager wed been working with had also moved on to another company! We are left with his protйgй, who was familiar with the program details but not as experienced as his predecessor.

To keep the project alive, we decided to sweeten the pot for the retail partner. Isuzu would give away two Isuzu Ironman vehicles, one to the best retail sales person and one in a sweepstakes to a retail customer. We got approval from Isuzu over the phone shortly before we presented the idea.

The retailer said yes! They shelved the pre-approved program and bought into the Isuzu/Reebok Ironman program. The retailer further persuaded Reebok to kick in some co-op advertising funds in local magazines and newspapers and the deal was done.

Now, we had to coordinate with the two Brands, making sure that each ones branding was consistent with its national look and to present approved graphics to the retail chain.

This actually was the easiest part. There have been numerous horror stories that this is where co-branding often falls apart, either because of egos or corporate standards two companies just cant be compatible. Our program sailed through the legal departments and was approved within days of each other.

The program was to launch the first week in February 2000 and run through April. The retailers program was to correspond to this with its presentation running March 2000 through April.

Perfect. The budgets were modified due to new internal allocation, and the commitments for Reebok running shoes had to be modified to meet the new projections. Negotiations went back and forth on just whose shoes they really were.

The direct mail hit the streets. We had our fingers crossed. Boy, after all this work, if we miss this one were sunk, we worried. As we waited for the first returns, we were excited to learn from the Isuzu staff in the field that people were coming in to take test drives. This was initially good news.
But where were the test drive coupons?

It turned out the coupons were being held at the post office. The Post Office wasnt expecting such a huge response and were waiting until they could put extra people on to deliver them. Then the coupons came pouring in.

We had data entry people working overtime to enter the coupons to get the information to the fulfillment company so the shoes could get to the consumers.

Eureka! We all felt a euphoric sigh of relief. Everyone was thrilled with the out come of the effort. More than 3,000 test drives were taken. The single most test drives ever taken in Isuzu history. Reebok sold 3000 pairs of running shoes and got its brand in front of 50,000 Isuzu customers. The retailer moved a bunch of shoes and gave away a vehicle.

In the end, it was a great promotion and I am glad that we did it. However, I would not recommend co-branding for the inexperienced marketer. It requires tricky negotiations even when the timing and products seem right. It can win big like this one did. But it also could have gone the other way. We learned some valuable lesson in the process, among them:

· Be sure you have a good, solid, well thought out plan.

· Remember what an experienced Chinese general said, "battle plans change once you engage the enemy." You must be flexible, not tied to a specific idea and willing to negotiate.

· You must have a great client who trusts you or else you could find yourself without any negotiating room.

· You must provide a win-win condition for all parties.

And don’t forget, something will always come up. It’s hard to predict what, so allow for enough time to modify your plan.

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