Marketing Agreement

Marketing forms one of the core activities of a business. No company can undermine the importance of marketing in revenue generation and profitability. A well-structured marketing campaign that includes activities like market research/survey, advertising, selling etc can ensure greater success to a product and thereby the business. It is a specialised activity that requires expertise and understanding of the market forces. Therefore, it requires an appointment of qualified and trained personnel. If it is not feasible to have in-house experts for marketing, a company may opt to outsource the marketing activities to external agencies. Such marketing agencies may be any entity including individuals, partnerships, proprietorships, companies, cooperative societies, etc. This allows a company to focus on areas of its own expertise while other areas are handled by experts from outside.

What Is A Marketing Agreement?

A Marketing Agreement is a document signed by a company and an outside entity that shall undertake marketing activities on behalf of the company. The scope of the activities along with the remuneration for the same is well described. The support to be given by the company to the agency in such activities is found a mention in the agreement along with the ways to resolve disputes and ways to terminate the same.

The aim of a marketing agreement is to facilitate all those activities that help in the study of the market, inducing the end buyers to procure the products/services and selling/distributing of products or provision of services for earning revenue.

What Are The Factors That Affect A Marketing Agreement?

There are a plethora of matters that affect a marketing agreement. They may be the type of marketing campaign used, the costs involved; the rules and regulations of different levels of government, market conditions like inflation, boom, recession; The type of individuals targeted: their beliefs, social progress, among others. Such matters decide the type of marketing process and also terms and conditions of the agreement.

What To Include In A Marketing Agreement?

A Marketing Agreement shall describe the exact nature of the business relationship between a company and an entity specialised in marketing. All individual activities to be conducted by the entity are enumerated along with the time frame for completion. The aim of the agreement may also find a mention if required: it may be reaching into a particular new market, or increasing the sales of a particular product to meet a new target.

The following information may be part of a marketing agreement:

Scope Of Marketing Activities

The entire set of activities to be conducted by the marketing agency needs to be enumerated. They may include market research, survey, advertising, product promotion, product redesigning,  trade fairs, exhibitions, and ultimately, sales.

Type Of Market Research

In a consumer oriented market, it is the desires of the end consumers that are paramount. The kind of activities that the marketing entity shall conduct in order to gauge customer preferences shall find a mention here. It may be statistical methods like quantitative research, qualitative research, hypothesis tests, linear regression, etc

Product Adjustments

Marketing also involves making significant changes in the product such as quantity, quality, packaging, design, prices etc. The marketing agency/entity shall have predefined limitations on the changes it is allowed to make.

Market Segmentation

The market to which the marketing activities shall be directed to needs to be well defined. It is this understanding that allows the agency to classify the customers based on geographical and other demographical factors and design activities to suit them.

Budget And Payments

It is better to have a predefined budget before undertaking any activity. The individual break-ups of the payments also need to find a mention in order to avoid confusions. Payment cycles can be written in order to set the expectations appropriately.

Non Disclosure

The marketing agency may be required not to reveal sensitive and vital information about the company and its policies to outsiders. This can be a ground for penalty which can be specified in the agreement.

Other Clauses

A good marketing agreement addresses the rights and liabilities of both the company and the agency. It specifies the ways in which it may be terminated and the penalties for default. It also mentions about indemnity to be provided by one party to another for its own faults. It needs to provide details about dispute jurisdiction and the applicable laws.

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