Management & Engineering Inter-firms Co-marketing: the Influencing Factors Under Cluster Context

Management & Engineering 20 (2015) 1838-5745
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Management & Engineering
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Inter-firms Co-marketing: the Influencing Factors Under Cluster
Context
Kai LI, Wenya GUO, Xiaofei XU
School of Business, Anhui University, 230601, China
KEYWORDS
Inter-firm,
Co-marketing,
Influencing factors,
Industrial clusters,
Cluster firms
ABSTRACT
Due to geographic agglomeration, there are the possibilities for cluster firms to lower cost in
production and transaction, to flow information, and to take advantage of cluster
externalities. To realise it, cluster firms have to co-market with each other. However, there is
relatively lack of literature on inter-firm co-marketing in cluster context. As the starting
point, this paper, from firms’ point of view, studies on the factors which influence inter-firm
co-marketing in order to better understand inter-firm co-marketing behavior. The research
conducts an empirical investigation which adopts a multiple-case approach and involves six
Chinese traditional industrial clusters. The result shows that the main factors include
entrepreneur’s communication ability, marketing personnel ability, resource complementarity
and external environment. A research model is then designed.
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1 Introduction
With the development of economic globalization, industrial clusters are becoming more and more important for regional and national
economy. Due to geographic agglomeration, there are the possibilities for cluster firms to co-market with each other in order to lower
cost in production and transaction, information flow, and to take advantage of cluster externalities. Sean Clark (2002) proposes that a
firm who wants to survive in high technology market must own strong capability in co-marketing [10]. Cluster firms may derive
complementary advantages from co-marketing, which polymerizes and amplifies individual firm functions, and forms synergy effect.
There are already a lot of successful examples doing so, and its explanation has emphasized in particular the importance of
co-operation amongst cluster firms (Hubert Schmitz, 2000) [6].
Although some of small & medium-sized firms have opened markets by means of co-marketing and have achieved successes, most
of others compete more than cooperate, or they cooperate with each other only in short-term. In the research field, there are a few
researches on inter-firm co-marketing in cluster context. Nowadays, because of global economy instability, resource shortage and
intense competition, Chinese clusters are stepping in a period of transformation and upgrade, which needs more positive inter-firm
co-marketing. This paper therefore, as a starting point of systematic research, studies this issue with emphasis on the factors
influencing inter-firm co-marketing within clusters from micro-view in order to understand better inter-firm co-marketing in cluster
context.

Corresponding author.
E-mail address: [email protected]
English edition copyright © ST. PLUM-BLOSSOM PRESS PTY LTD
DOI:10.5503/J.ME.2015.20.020
101
2 Literature Review
2.1 The concept of co-marketing
So far, scholars haven’t achieved a common mind to name and define co-marketing. Adler (1966) put forward firstly the concept of
symbiotic marketing. He pointed out that symbiotic marketing is that two or more firms work together to create a marketing
opportunity. After him, Varadarajan and Rajaratnam (1986) research further on it. They suggested that symbiotic marketing is a kind
of alliance in which two or more independent economic organizations share resources in order to expand potential market [12].
The concept of co-marketing can be traced back to earlier time. In the middle of nineteenth century, some small producers often
struggled against bigger companies by marketing cooperation [5]. Asher Hobson (1921) studied the economic situation around
co-marketing system and the capital accumulation from co-marketing, and tried to describe the basic framework of co-marketing [2].
There is a suggestion in MBA Library on line: co-marketing can be called joint-marketing or collaborative marketing. It is a kind of
marketing idea or marketing way, aimed at sharing market resources and consolidating marketing networks, through which firms
may share marketing expenses, collaborate with each other for communication, brand building, product sales and promotion (MBA
Library on line 2010). Cheng Kai (2001) defines co-marketing as that in order to enhance competitive ability, improve performance
efficiency, firms flow initiatively marketing resources in and out of the firms through some organizations and policies for the purpose
of making marketing resource much valuable [3]. In addition, Buckling and Sengupta (1993) discuss that marketing alliance is one
contractual form of co-marketing through which the members achieve product complementarity, which is mainly aimed at
maintaining stable relationship among the members in marketing field [8].
According to the statement above, the name “co-marketing” is used in this paper and its definition may be described as: two or more
firms work together to utilize complementary resources, design product portfolio, build brands and distribution channels, promote
products and communication, share information, and etc. in the purpose of enhancing their market competitiveness.
2.2 The factors influencing inter-firm co-marketing within clusters
After studying the relationship between suppliers and manufacturers, Anderson and Narus (1990) propose that the factors influencing
co-marketing include mutual dependence and trust, degree of communication and individual contributions [1]. Neil (2001) concludes
that the indispensable factors of cooperation are members’ contributions (the most fundamental one) and visions as well as intimacy
between the members. Dickinson and Ramaseshan (2004) have done an empirical study on affecting factors and engaged areas of
co-marketing. They divide the factors into two sides, internal factors and external one. The internal factors contain firm characteristics
and management characteristics, while the external factors include industry characteristics and regional characteristics [9]. Turner (2008)
discuss that the main factors affecting co-marketing relationship in industry market are product necessity (complementarity) and
replaceability, target compatibility, and trade formality [11].
Cheng Kai (2001) also divides co-marketing factors into internal and external parts. The internal driving factors refer to expanding
market share and raising profit rate. The external driving factors refer to competing pressures in global market, economic
globalization and consumer demand changes, etc. Jin Xiaoxing (2007) suggests that there are internal and external factors which
affect inter-firm co-marketing activities within clusters. The internal factors includes firm’s capability, information flowing within the
firm, trust between partners, management patterns, and etc. The macro-factors outside refer to social productivity level, related
economic situation, laws and regulations as well as regional culture and traditions, which has long-term and overall effect to
co-marketing [7]. Cheng Datao (2009), combined biology theory with the research results from Anderson, Narus and Neil, presents
four factors from firm migration within clusters, that is, dependence, communication, contribution and trust, which provides a
research basis in micro level for inter-firm co-marketing in cluster context [4]. Zhao Haoxing et al. (2010) separates co-marketing into
two areas, the breadth of co-marketing and the depth of co-marketing, which are influenced by firm’s cooperation ability, macro
pressure from involved industry, cooperation conditions in the region and the cluster [13].
Summing up the abovementioned there are already some research results on co-marketing, which has established foundation for
further study. However, research is just in the initial stage. Firstly, there is no common definition, framework and theoretical system
yet. Secondly, the research on cluster firms’ co-marketing is even scarce, and literature mainly focuses on cluster level rather than
firm level. Thirdly, literature shows that the research samples are mostly one or two clusters, which makes the results not significant
universal. Taking it into consideration, this paper, from cluster firms’ point of view, conducts an empirical investigation which adopts
a multiple-case approach, employs quantitative data analysis to study the factors affecting inter-firm co-marketing within cluster.
Zhao Haoxing’s research framework provides a research basis for this paper.
3 Methodology
3.1 Data collection methods
Since this study is an exploratory research and available data is quite limited, the method for data collection employed in this paper is
questionnaire survey with entrepreneur interview. Questionnaire survey aims at collecting data from different cluster firms, while
interview focus on entrepreneurs’ real thought to explore deeply the reasons of firm co-marketing activities.
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3.2 Questionnaire design
According to Anderson and Narus’ research, there are four influencing factors of co-marketing: mutual dependence and trust,
communication and individual contribution, which form the indicators in the questionnaire. Design of the manipulated variables is
mainly based on the research results from Turner, Hrtley & Lemay, Dickinson & Ramaseshan, and Rickman Neil. For example,
based on two indicators of mutual dependence and individual contribution, the manipulated variables are designed as firms’ resource
complementarity and contributions in product, technology, personnel, information and market. Under the indicators of mutual trust
and communication, the manipulated variables are designed as trust, intimacy, entrepreneur’s personal relationship, communication
ability and adaptability to change, regional culture and etc.
In addition, on one hand, entrepreneur is decision maker in the firm, his willingness of cooperation is determinant to co-marketing
occurrence and implementation. On the other hand, marketing person is usually executor of co-marketing, his individual quality,
experience and specialty are of direct impact on the success of co-marketing. Therefore, entrepreneur’s willingness to cooperation,
marketing person’s ability is added as manipulated variables too. Furthermore, the role of local government and intermediary
organizations is also taken into consideration (see Table 1). Based on the above manipulated variables, five-point Likert scale is
employed as a measure tool.
Table 1 Main indicators and manipulated variables designed in the questionnaire
Indicators
Manipulated
variable
Dependence
Contribution
Products
Products
Information
Information
Technologies
Technologies
Personnel
Personnel
Markets
Markets
Trust
Government & Intermediary
organizations
Communication
Intimacy
Mutual trust
Communication ability
Government policy
Adaptability to changes
Personal
relationship
Cooperation
intentions
Personal quality and
experience
Intermediary organizations
participation
Regional culture
4 Data Analysis
4.1 Data analysis from questionnaire survey
Survey was carried in the three regions of Quanzhou, Dongguan and Wenzhou. 210 questionnaires were distributed totally, in which
75 were in Quanzhou, 50 were in Dongguan, 85 were in Wenzhou. Finally 164 of them are valid, including Quanzhou 57, Dongguan
37 and Wenzhou 70. Because most questionnaires were sent, filled and taken back on the spot, the return-ratio was very high
although the quantity is limited. SPSS17.0 is used to make statistical analysis.
4.1.1 Factor analysis
Factor analysis and reliability analysis are carried in this research. Factor analysis is carried by means of the principal component
analysis method. Then through KMO and Bartlett's test, it is proved that further analysis on all the variables can be continued. Four
factors are explored from many variables. According to reliability analysis, the reliability is good (Alpha=0.819> 0.7).
According to the characteristics, four factors are given titles separately. Factor 1 refers to entrepreneur's communication ability which
includes personal relationship with others, cooperation intention, trust, intimacy, flexibility and adaptability. Factor 2 refers to
marketing personnel ability which includes personal quality, marketing experience and specialty. Factor 3 refers to resource
complementarity which includes products, information, technologies, personnel, markets and so on. Factor 4 refers to external
environment which includes local government policy, intermediary organizations involvement, regional culture and so on.
4.1.2 Relevance analysis
The following carries on relevance analysis between four factors and co-marketing, and then synthesizes the result (see Table 2).
Table 2 Pearson correlation between four factors and co-marketing
Co-marketing
Factor 1
Factor 2
Factor3
Factor 4
Pearson Correlation
0.608**
0.509**
0.368**
0.534**
Sig.(2-tailed)
0.000
0.0002
0.000
0.000
Note: **Correlation is significant at the 0.0l level (2-tailed).
*Correlation is significant at the 0.05 level (2-tailed).
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The result of data analysis from Table 2 shows that the four factors are remarkably relevant to inter-firm co-marketing within
clusters.
5 Conclusion
The result shows that inter-firm co-marketing is affected deeply by entrepreneur’s communicate ability. The stronger the
entrepreneur's flexibility and adaptability, the closer the entrepreneurs’ personal relations, the stronger of their cooperation
willingness, the more trust, and the deeper of understanding with each other, finally the easier and the more frequent of inter-firm
cooperation. Consequently, the following conclusion is determined:
Conclusion one: Entrepreneur's communication ability is a factor influencing inter-firm co-marketing within clusters.
According to the result of questionnaire analysis, marketing personnel's ability is remarkably relevant to inter-firm co-marketing in
clusters too. From interviews, many entrepreneurs emphasize the necessity of marketing personnel’s ability to the result of inter-firm
co-marketing. Based on the result, the following conclusion is determined:
Conclusion two: Marketing personnel ability is a factor influencing inter-firm co-marketing within clusters.
There is remarkable relevance between firm resource complementarity and inter-firm co-marketing from questionnaire analysis.
Most of the interviewees point that resource is limited, that is why firms need to cooperate with each other to make resource
complementarity, especially for the firms in upstream or downstream of supply chain. Accordingly, the following conclusion is made
out:
Conclusion three: Resource complementarity is a factor influencing inter-firm co-marketing within clusters.
In addition, the analysis also explores external environment and inter-firm co-marketing which are remarkably relevant. The
interview result indicates that local government policy and intermediary organizations involvement as well as regional culture play
very important roles to co-marketing. Accordingly, following conclusion is made out:
Conclusion four: External environment is a factor influencing inter-firm co-marketing within clusters.
Co-marketing is a complex behavior among firms, its influencing factors are therefore various from many sides and different levels.
This paper study inter-firm co-marketing only in some traditional industries, and involved samples which are limited, therefore, the
research result needs to be tested further.
About the Authors:
1. LI Kai: professor, School of Business Anhui University.
2. GUO Wenya: graduate student, School of Business Anhui University.
3. XU Xiaofei: graduate student, School of Business Anhui University.
Fund:
This paper is funded by Chinese National Social Science Funds: 10BGL025.
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