Cooperative marketing occurs when organizations or a group of businesses with the same type of product work together to encourage people to buy their products. These businesses will usually pool their money together to pay for marketing and advertising in print ads, radio spots or other mediums.
The benefit of pooling resources and participating in a marketing campaign is that it is very cost effective. Marketing can be a large expense for many businesses, especially small businesses. Sharing that cost allows companies to invest in marketing at a more reasonable cost, which in turn allows them more time to focus on the actual running of the businesses. This arrangement also increases bargaining power for businesses. For example, one business owner may have trouble charging a higher price for a product because of supply and demand; however, in a cooperative setting, there is more opportunity to increase prices relative to competition.