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Wednesday, March 29, 2006

Cooperative Advertising and Cooperative Marketing Programs

Programs that incent resellers, distributors or retail customers to market, advertise or promote a manufacturer, distributor or vendors products. Typically, works in a manner where vendor provides a ratable amount of money to buyer to spend on advertising, promotions, or marketing of the Vendors product. Programs are often structured and may have strict rules. "Proof of Performance" is sometimes required by vendor of the buyer to demonstrate that money was spent on vendors products. Once proved or claim authorized by vendor, vendor reimburses the buyer for the advertising or marketing money spent. Ex. Vendor A sells $1,000,000 in Widgets to Retailer B Vendor A allows a 3% coop fund Retailer B advertises the Widgets in a circular on for Father's Day, spending $10,000, and then spends another $10,000 on ads for 4th of July and Back to School. Retailer B submits proof of the advertisments (copy of ad to Vendor A) along with a receipt or claim amount for the money spent on the ad, totalling $30,000. (Some large retailers require contracts where "Proof of Performance" is not required. Vendor A, provides a credit on Retailer B's account to be used towards future purchases. (Note. Could be a check paid to Retailer, or could be a credit applied towards past due balances.) For further analysis or information on this topic, please contact Softduit Partners.