Joint Venture Agreement: A Separate Company or Contract

joint venture marketing

joint venture marketing

Sometimes the goal of a joint venture marketing project is to create an entirely new brand or type of technology. Since this is an expensive venture that requires many different types of resources, JV marketing agreements are usually a great way to accomplish this goal. However, there are many aspects that need to be considered when doing this. The main decision that needs to be agreed upon by both companies is whether they are going to remain two separate entities marketing a shared product, or if they’re going to come together and create an entirely new company and market it under a different name.

To Merge or Not

If the two businesses joining together already have established reputations, the best option might be to remain as two separate companies. The company names already have brand awareness and will sell the product more successfully than a new name. Including both well-known and established names on the product could increase its credibility even more.

However, it is possible that the companies will feel that the product will sell more successfully under a different name. This is the case when the product being created is not one that’s usually sold by either business. Giving the new joint venture its own name will allow it to build its own reputation. In this case, it makes sense for the companies to join together and create a new company under a third name.

When two businesses considering a joint venture don’t have well-established reputations in the market, creating a new company may prove more beneficial. If one or both of the companies have gained negative reputations for any reason, omitting their respective names on the new product or service will probably serve as a better choice. If the company names are simply not well-known, having a new name will not hurt the marketing campaign. This way the new joint venture name will have an opportunity to build its own reputation.

Nevertheless, if it’s believed that the product or service will enjoy great success, it might also be decided that using the individual company names instead of a new name might be better. This way both of the companies will receive publicity for the new product, increasing their individual reputations.

Consider the risks of the forming a new company

There are risks regardless of whether the companies involved in the project decide to join together as a new company or remain individual companies. As a brand new company, the name will not be known on the market, which has the potential to hurt the marketing of the product. However, keeping the original company names has risks as well. If one of the companies is more well-known than the other, they might receive all the credit for the product’s creation by the public. But if one of the companies has a negative reputation then the other company’s reputation could be hurt by it. Before making any decisions on the matter, there are a lot of factors that need to be considered.

christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.

To discover more joint venture marketing Strategies join his free report on joint venture marketing.

joint venture marketing

joint venture marketing

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