"Blank" Inside: Branding Ingredients

Published: October 10, 2007 Author: John Quelch

Reviewed By, Mayur Jain 1021906 Ex- MBA Sem IV Marketing Christ University

Building a distinctive product offering can be challenging in many industries

Proliferation, commoditization and other factors contribute to diminishing margins, and other threats exist to the development of a lasting and valuable brand. One opportunity to counter this is through Ingredient Branding, where in, emphasis is given on a recognizable ingredient in products or services, or the promotion of products or services as a component of a third partys products or services.

John Quelch Proposed

Four conditions for Ingredient Branding
1. The ingredient is highly differentiated, usually supported by patent protection, and so adds an aura of quality to the overall product. 2. The ingredient is central to the functional performance of the final product. 3. The final products are not well branded themselves, either because the category is relatively new, because customers buy infrequently or because there is low perceived differentiation among the options. 4. The final products are complex, assembled from components supplied by multiple firms who may sell the ingredients separately in an aftermarket.

John Quelch Proposed

Four conditions for Ingredient Branding
This conditions can lead to establish credibility to an otherwise unknown brand. Although Ingredient Branding has become increasingly popular, it is important that suppliers thoroughly examine InBranding and co-Branding options to ensure it is the right strategy before moving ahead. More and more industries are taking up this concept, such as textile producers, food and cosmetics companies like 3M, DuPont and Bayer.

Ingredient Branding by DuPont

Ingredient Branding conception

 787 the Dreamliner

On July 8, 2007, Boeing unveiled the 787 to the public. Over 650 orders were been placed by more than 40 airlines without even the first test flight scheduled On May 2008, Boeing branded a new product named 787 the Dreamliner. And All Nippon Airways, the archrival of Japan Airlines, placed the first 50 orders which Nippon Airways used it as differentiating Ingredient for Advertising. BOEING guaranteed that passengers will seek out (and pay more for) tickets on airlines that offer Dreamliner service, especially when they are taking long-haul flights where cabin comforts are especially important.

Other Popular success stories with the concept of Ingredient Branding are
Intel Inside
TetraPak Dolby Teflon Bitrex Shimano DLP Microban Leading provider of the brains for the personal computers (PC) Promote Intel-based PCs by sharing advertising costs for PC print ads that included Intel logo. A machine builder becomes household name With partnership profit for everyone. Leading an industry with innovation How to successfully maintain customer relevance. Basics of Ingredient Branding How DuPont differentiates and progresses in chemical commodity business. Implementing the Network Approach Doing good things for the child safety and strengthening the brand. Implicit Ingredient Branding Never ever compete with a customer. Pampering the customer Big screen HDTVs without the big price. Convincing and Measuring Ensuring customer attention and price p Microban remiums in the value chain.

Logos of Ingredient Brands

Ingredient Branding: Advantages

Ingredient Brand Penetration route sorted. Host Brand Improved brand image in case its lesser known. Quick recognition and acceptance by consumers.

Ingredient can become point of entry, eg. quality standard, and exploit its CA. Direct contact with consumers possible. Shared R&D costs.

IB leverages quality perception of end product among consumers. Shared marketing costs.

Adds the exclusivity factor to final product.

Only about 9% of all companies make use of sound to make their brands more distinct, recognizable and memorable - Brand Sense by Martin Lindstorm
Smell

Taste

Touch

Sound

Sight

and Intel with its unique trademark sound has been doing just that for years now.

Focus of branding strategy: INTEL

The Intel Inside campaign aimed to "educate both the retail sales associates and the consumers about the value of Intel microprocessors, and to explain to them the differences between the microprocessors" - without the technical jargon. Many consumers were uncertain about the quality and reliability of microprocessors, and Intel found a way of taking away the mystery of the product, gaining the confidence of the end consumer that "Intel Inside" represented quality and reliability.

INTEL Inside: The case

Identifying the problem: Developing strategic course of action Implementing strategic decision Assessing effectiveness of decision

Identifying the problem

Due to a number of clone products in the market, Intel was unable to differentiate its products from the herd. Consumers were left baffled for choice and often guessing as to the content and performance of MP. Consumers knew Intel through its product offerings which were often being cloned. Intel wanted consumers to recognize its product through the brand Intel itself that connoted reliability and superior performance.

Developing Strategic Solution

Intel Coop Program marked the birth of brand Intel. The program intended to levitate Intel as a brand through 3 strategic steps:
1. Developing and using a brand logo in advertisements of OEMs. 2. Engaging tier 2 and 3 OEMs in the program via profitable propositions. 3. Prolific advertisement to create awareness about importance and superiority of Intel chips.

Implementing the Coop Program

Designing a unique logo. Convincing tier 2 and 3 OEMs initially of the short term and long term benefits of alliance and engaging them. Direct advertisement aimed at organizational rather product communication thus enabling a brand consumer connect.

Assessing the program

Awareness of Intel logos prior to IB strategy was a meagre 24% in European PC market. That, within 2 years of its launch soared wildly to 94% Worldwide sales within a year of launch of IB strategy rose by 63%. By 2002 Intel broke into the list of top 10 most valuable brands.

Power of Intel brand equity

Ingredient Branding in Indian Market

Flat glass suppliers in India were engaged in an aggressive brand war for the past two years. The main companies operating in this industry are Modiguard, Saint Gobain and Asahi. Another company named Trevira, established its brand and presented its ingredients to the end consumer as quality features ever since the company was founded in 1956. Initially a division of Hoechst AG, Trevira spun off in 1998, and now belongs to Reliance Industries, India. Trevira is one of Europes most important manufacturers of polyester fibers, with production sites in Germany, Belgium and Denmark and customers from the textile industry all over the world. This includes high-quality clothing, sportswear, windproof and weatherproof clothing, flame-resistant household textiles, curtains, fleece materials and bedding. Tetra Pak had announced its new advertising campaign for 2006 in various parts of the world. It emphasized on value for money concept without compromising on health benefits. The television commercials were on air from early July across India. The campaigns ran for 12 weeks and featured two commercials. The commercials focused on the benefits of UHT Milk set in two different environments. To support the television campaign Tetra Pak also ran a retail activation program in Mumbai and Bangalore. For this activity, 300 outlets were chosen in each city.

Thank you
Reviewed By, Mayur Jain 1021906 Ex- MBA Sem IV Marketing Christ University