Few areas have been more discussed lately than the issue of marketing partnerships. In fact, PRODUCE BUSINESS has been in the vanguard on this issue with an in-depth cover story this past October that really analyzed what these partnerships are about. But the more I hear people talking about partnerships, the more I think a good idea is going to get a bad reputation as people call anything they feel like doing a “marketing partnership.”
The problem comes in distinguishing what a real marketing partnership is just a good sound business relationship. At the Annual Produce Conference this year, I moderated a panel on marketing partnerships between service wholesalers and retailers, a little different twist on an issue usually thought of in the context of retailer/shipper relationships. The panelists, two men from service wholesale companies, went down the extensive list of services their organizations can provide retailers. The list was impressive, but I think that having a menu of services is really only a start at getting to marketing partnership.
To get to a real partnership, you need to keep five points in mind:
- A marketing partnership has to be based on a non-adversarial relationship. An attitude must be developed that both partners are principally concerned with building the business. This is tough to do because in most cases the differences in interests between a buyer and seller are clear. The buyer’s interest would be served by paying less and the seller’s by charging more. But if you can’t get beyond this adversarial jousting for position, you can’t have a partnership. By working together the retailer’s produce business can be built and thus produce large orders for the shipper. This is a very long-term proposition.
- The shipper or wholesaler has to have resources beyond product. This can be researched, such as consumer research on the acceptability of different ripeness levels of product: it could be training for the retailer’s employees or a whole list of other things. The point is that you can’t have a partnership unless there is something to talk about beyond what will be paid for produce.
- The support services have to be customized to meet the retailer’s needs. If you are a shipper and print up point-of-purchase material and make that available to clients, you are trying to help your customers and are showing that you want to be supportive. But if you go into an individual retailer’s stores, look at their merchandising strategy, examine their store formats and create customized material for them, then you are working on a partnership.
- There really can’t be any partnership without honesty. The supermarket has to reveal shrink numbers, sales figures, profit margins and more. After all, how can a shipper help the retailer if he doesn’t really know the situation? At the same time, the shipper has to be brutally honest, at least with himself. One reason marketing partnerships are so rare is that salespeople are hired to sell the product available. That is to say that if the product their company is packing is mediocre that week, the salesperson’s job is still to move it. A real partnership requires the shipper to say he doesn’t really have the kind of stuff for his partner’s stores, a real tough thing for a salesman to do.
- There has to be someone on both sides of the equation who is in a position to really act on these partnership issues. A buyer for a chain, generally speaking, sees his position as buying correctly. He has no basis by which he can enter into his calculations whether one firm offers his company training, research, etc. Even if someone tells the buyer to think of these issues, the buyer is probably not trained in a manner to allow him to evaluate the importance of these contributions.
Equally the salesperson for a shipper has to be restrained. He has to understand his role in building his client’s business, not pushing product. This is a role he may not be suited for by training and inclination. Usually, a partnership requires top-level participation, someone who can set the tone for the whole organization and has authority to bind together the future of two organizations.
Of course, top-level commitment is a start, but it is not enough. The whole organization has to be sold, over and over again, on the partnership concept and that they have the right partner. If the top level doesn’t push the partnership it will never happen. And if the whole organization isn’t constantly resold and made to feel proud of the companies they are partnering with, then the “bad partner” becomes an excuse for poor performance.
There are a lot of things that partnering is not. If all a supplier does is pay a retailer a lot of money for shelf space, he may have a committed customer, but not a partner. Equally, signing a supply contract for a year or so, “locking them in” is not partnering. The fact that the chain helps the shipper out when he’s long and the shipper protects the retailer when he is short also is not partnering. Nor is having a list of standard services anyone can get for the asking much of a partnership.
And true partnering is important, both to firms involved and to the industry as a whole. To the firms involved, the partnership makes sense because no one organization knows everything or has the resources to do everything. Intelligent businesspeople, all across the country, in all industries are looking at partnering as a way to tap into others’ expertise and combine efforts for mutual growth. In the end, the most successful organizations are likely to be those capable of most effectively accessing the capabilities and resources of other organizations.
But partnership may be more important to the overall industry than to the individual firms. The unique thing about the partnership is that it enables suppliers to concentrate on building the business. Instead of a continual fight for market share, efforts can be dedicated to increasing per capita consumption. Once a supplier has formed a partnership, his money and time will be devoted to getting his partner’s customer, the consumer, to buy more product. This makes partnerships a profitable deal, not just for the partners, but the produce industry as well.