Cooperative Marketing Game based on Industrial Cluster

Yijun He

Department of Economics and Management, Shaoyang University, Shaoyang, Hunan, 422000, China

Keywords: Industrial cluster, development background, impact factor, cooperative Marketing Strategy, game.

Abstract: Economic benefit needs mutual cooperation and coordination of characters in non-isolated business

activities. Cooperative marketing model of industrial cluster emerges with the enhancement of economic

level, offering a new model to economy development. The cooperation of production, packaging and

marketing can be achieved. It contributes to conservation of resources and improvement of economic

benefits of cooperative partners. In this work, backgrounds, impact factors and specific strategies of

cooperative marketing of industrial cluster were analyzed with Game Theory.

1 INTRODUCTION

Industrial cluster cooperation is a common and

distinctive model in modern economics. It

contributes to connections of enterprises and other

economic organizations, strengthening relations and

communications among various enterprises.

Cooperative marketing of industrial cluster can

promote development and progress of whole region

and establishment of regional brands. Thus, the

marketing model has been accepted by many regions

and enterprises. More tight relations and

cooperations emerge with the implementation of

industrial cluster cooperation in one region. But

competitive relationship within these enterprises,

especially similar enterprises, is fierce and brutal.

Coexistence of competition and cooperation is the

true relation state among enterprises (Zhang

Xiaobao, Yin Fangzi, Chen Cong and Gui Ling,

2012). Therefore, competition and cooperation

should be paid same attention to well balance the

relationship based on industrial cluster. The “win-

win” can be achieved with Game Theory. More

economic value can be created based on the

guarantee of economic interests of cooperative

partners.

2 BACKGROUNDS OF

COOPERATIVE MARKETING

OF INDUSTRIAL CLUSTER

Socialist economic level in China is relatively low

since it is in the early stage. Economic development

speed increases continuously. Environment for

China’s market development is not stable compared

with other developed countries. Meanwhile, small

and medium-sized enterprises play an important role

in the socialist market economy, but with

characteristics of less capital, small scale and weak

vitality. They are too feeble to survive in the

unstable market in China. Thanks to industrial

cluster cooperation, sale cost and transportation

expense can be decreased for internal marketing of

cluster (Yang Baojun, 2007). With labor division

and cooperation, industrial cluster has adapted to

macro economics in China and micro economics and

trade environment of small and medium-sized

enterprises. Industrial cluster provides more

opportunities and a broader space for cooperation of

enterprises.

From the perspective of present status in China,

there have been a lot of industry cluster cooperation

in relatively developed southeast coastal areas. For

example in Wenzhou, collaboration between

enterprises has become more and more common in

economic development. But cooperation

management of industrial cluster is still affected and

restricted by many factors. Industrial cluster in

China is not a reasonable system. Seamless regional

133

He Y.

Cooperative Marketing Game based on Industrial Cluster.

DOI: 10.5220/0006445401330136

In ISME 2016 - Information Science and Management Engineering IV (ISME 2016), pages 133-136

ISBN: 978-989-758-208-0

133

cooperation and pipeline connection are rarely seen.

Research on cooperative marketing of industry

cluster is still superficial without special scientific

theoretical guidance (Huang Benxiao and Luo Qin,

2005). Moreover, others factors also affect

cooperative marketing, such as trends of economic

development, different resources of partners, guide

of market, personal preferences of managers.

3 IMPACT FACTORS OF

COOPERATE MARKETING

UNDER INDUSTRY CLUSTER

BACKGROUND

3.1 Trends of economic development

Enterprises and economic organizations are

strengthened continuously with the rapid increase of

economy and the sustainable development in China.

Business relationship between enterprises emerges

for the purse of economic benefits. Joint efforts are

made to achieve economic benefits. Such

development state provides more opportunities for

cooperation of enterprises. Similar enterprises in the

same region tend to cooperate for marketing of

industrial cluster. Compared with other marketing

methods, cluster cooperative marketing endows

strong competitiveness of quality, features and cost

performance of products. Better yet, a certain degree

of monopoly can be formed, such as featured brand

in one area. Therefore, backgrounds and trends of

economic development are important factors for

promoting cooperative marketing.

3.2 Different resources of partnerships

Economic interest is the certain goal of all

enterprises and economic organizations. Mutual

using of resources is the premise of cooperation

between enterprises, for resources of enterprises are

the foundations for creating economic benefits.

Similar with other cooperation, cooperative

marketing should take full advantages of partners’

resources for better value and economic benefits.

Partners should make their own contributions for

marketing, achieving “1 + 1 > 2” – meaning a

successful cooperation. Therefore, different

resources of partners are also impact factors for

cooperative marketing.

3.3 Guidance of market

In market with widespread cooperation, there

emerges an economic organization for creating and

strengthening cooperation, called cooperative

marketing intermediaries. The intermediaries offer

careful planning for marketing strategy of

enterprises. Cooperation between intermediaries and

customer enterprises can be achieved, as well as

cooperation with more partners for customer

enterprises. A kind of freemasonry delicate

relationship is formed between enterprises of

competition and cooperation. Feedback of economic

phenomenon along with market can be acted back

on market. More enterprises and economic

organizations should develop a broader market for

expanding business, so as to attract more economic

partners. The level of cooperative marketing can be

improved, thus forming a benign circle of economy.

3.4 Personal preference of manager

Manager plays a decisive role in one enterprise’s

plan and decision, directly affecting healthy

development and persistent operation. Manager’s

personality has an obvious intervention in

cooperative marketing decision. If manager has a

positioning of business object and idea, together

with an ambition, the enterprise can develop for the

distinct object on the basis of cooperation.

Superficially, there will be more business expansion

and cooperation and continually excavated market.

Instead, if a rational manager has a goal of stability

and an absolute control of enterprise, the enterprise

is in obscurity to a certain extent. Old customers are

the main sources of income. Therefore, personal

preference of manage has a direct impact on

enterprise development, as well as cooperative

marketing decision.

4 SPECIFIC STRATEGY FOR

COOPERATIVE MARKETING

OF INDUSTRIAL CLUSTER

4.1 Cooperative pricing in industrial

cluster

In terms of same kind of product, internal enterprises

of industrial cluster own great advantage in pricing.

Regionalism is an obvious characteristic of

cooperation in industrial cluster. Cost and spending

can be saved in raw materials flow. Large-scale

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cultivation and manufacturing of raw materials are

popularized in cluster enterprises for smooth

production. Cost of product can be saved with

scientific standardized management and obtaining

materials locally. In the collaboration of related

enterprises, proper internal price is to be adjusted

and negotiated for more economic benefits. Products

with such cost and price are very competitive in

industrial cluster, compared with other similar

products. Of course, low price is more attractive for

customers. Enterprises are able to earn more profits.

Low price in industry cluster is achieved on the

basis of guaranteeing enterprises’ profits.

Meanwhile, such a low price has no damage on

legitimate rights and interests of consumers. With

saving some expenditure in a certain extent,

enterprises can obtain recognition, support and trust

of customers. Economic goals of cooperation

partners can be achieved at the same time. As a

result, the pricing is entirely different from price in

“price alliance” of market— intentionally driving

down price. Industrial cluster can realize cooperative

target of “killing three birds in one stone”. Product

of higher cost performance can be achieved with

scientific and reasonable management and tight

cooperation. On the basis of product value and price

advantage, pricing is to be agreed for occupying a

stable market. Moreover, prolonged trust

relationship between enterprises can be maintained

for better long-term cooperation.

4.2 Planning of marketing activity in

industrial cluster

With income guaranteed and profits achieved,

product sale is a key component of enterprise’s

business. Planning of professional skills is needed.

For example, discount promotion has many different

modes. Cooperation promotion has obvious

advantages over personnel promotion, advertising

and other forms. Media agencies, public relation

companies and websites, along with the market,

provide a good external environment for industrial

cluster marketing cooperation. By using these

conditions, internal enterprises of industrial cluster

can make mutual cooperation with joint promotion

activities. The risk can be appropriately dispersed.

Promotion messages can be widely spread through

media and network, so as to attract more consumers’

attention. E-commerce can also be run on website.

More market shares can be achieved with “small

profits and good sales” by connecting with

international market directly. In the promotion

activities, enterprise and brand should establish a

good image. Furthermore, regional economic

development should be boosted with increase of

sales efficiency and decrease of time.

Regional economy and brand are signatures for

promotion activities. One kind of product in the

region is a conspicuous representative. With

collaboration between enterprises in cluster, many

unknown small enterprises can obtain exchange

opportunities on product exhibitions. Thus, small

and medium-sized enterprises can cooperate with

strong partners for its attractive excellent product

quality and performance. Reform of product quality

of whole industry is to be driven. Under mutual

supervision of fair competition, more and more

opportunities are provided for small and medium-

sized enterprises. With market expanding, small and

medium-sized enterprises can achieve more

economic benefits by taking advantages of regional

economy.

4.3 Diversification of sales channels for

industrial cluster enterprises

Sales channel is an essential sales method, which is

different from promotion and exhibition. With great

significance, it brings the most stable income for

enterprises. Industry cluster enterprises have a

certain advantage in product’s price, as well as in

after-sales service. It is convenient for the service

and maintenance of product. By taking advantages

of industrial cluster, a whole sales network can be

built with cooperation of similar enterprises. The

scope and channels of sales can be expanded for the

sharing of partners. “Enhancing advantage and

avoiding disadvantage” can be achieved. More than

low cost of product, cost of market development can

be shared with cooperation of enterprises in

industrial cluster. Thus, overall cost can be saved,

and risk of investment can be avoided. More

enterprises are able to co-found well-known regional

brands in the same broad market with mutual

supervision and improvement. For strong sense of

trust, regional economy can attract more domestic

and foreign large-trading partners. Success rate of

foreign cooperation increases continuously.

Enterprises can progress together with cluster

partners in one region.

Meanwhile, industrial clusters and regional

economic integration development need

government’s support and assistance. Government

should actively advertise local cluster in the

cooperation and communication with external

economic entity. Regional economy can be more

competitive and reputable. Diversity of sales

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Cooperative Marketing Game based on Industrial Cluster

135

channels can be developed, as well. Government

should provide industrial cluster for beneficial

policy support, so as to better serve local economic

development and enterprises’ value achievement.

5 CONCLUSIONS

Industry cluster is a trend of future economic

development. Obvious competitive relationship is

among similar enterprises. With inadequate

cooperation and competition methods, problems and

obstacles will occur in the development of

enterprises. Analyzed from backgrounds, impact

factors and strategies, cooperative marketing of

industrial cluster should be promoted with well

balanced cooperation and competition. Based on

Game Theory, management of internal enterprises in

industrial cluster can better deal with profits and

continuous development. Economic interests can be

achieved with rational benign cooperation.

Enterprise can obtain long-term and sustainable

development in fierce competition, contributing to

enhancement of regional economic level. Economy

in China can be developed soundly and rapidly.

With guidance of enterprise leaders, industry

organizations and national government, enterprise in

industry cluster can progress with a better and

broader prospect.

ACKNOWLEDGEMENT

This research was funded by Education Department

of Hunan Province “Innovative network of cluster

based on knowledge management” with Grant

number 11C1144.

REFERENCES

Huang Benxiao, Luo Qin. Characteristics and trends of

development of manufacturing industry cluster— case

of textile industry cluster in Shaoxing of Zhejiang

Province. Science-Technology and Management,

China, 2005.

Yang Baojun. Marketing models of industry cluster in

western regions in China—Moslem food in Ningxia.

Heilongjiang National Series, China, 2007.

Zhang Xiaobao, Yin Fangzi, Chen Cong and Gui Ling.

Marketing models of garment industry cluster in

China— based on data of Humen clothing industry.

Modern Business Trade Industry, China, 2012.

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