What is cooperative advertising?

Cooperative advertising is an arrangement where manufacturers agree to support the advertising costs of retailers who sell their products. This type of collaboration benefits both parties involved: manufacturers can promote their products more effectively through the advertising power of retailers, while retailers reduce their advertising costs with financial assistance. This partnership not only enhances product visibility but also encourages retailers to stock and promote the manufacturer's goods, creating a more robust market presence.

In this context, the focus is entirely on the shared responsibilities and benefits of advertising expenditures, which is why it aligns well with the description of cooperative advertising. The other choices do not capture this essence; for example, simply having retailers pay for their ads does not highlight the collaborative nature of cooperative advertising, while a strategy for enhancing customer loyalty and a type of promotional discount are distinct concepts not directly tied to the financial and promotional partnership that characterizes cooperative advertising.