Blank Inside - Branding Ingredient

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"Blank" Inside: Branding Ingredients

Reviewed By,

Mayur Jain–

1021906Ex- MBA Sem IV Marketing

Christ University

Published: October 10, 2007

Author: John Quelch



Building a distinctive product offering

can be challenging in many industries

• Proliferation, commoditization and other factorscontribute to diminishing margins, and otherthreats exist to the development of a lasting and

valuable brand.• One opportunity to counter this is through

Ingredient Branding, where in, emphasis is givenon a recognizable ingredient in products or

services, or the promotion of products or servicesas a component of a third party’s products orservices.



John Quelch Proposed

Four conditions for Ingredient Branding

1. The ingredient is highly differentiated, usuallysupported by patent protection, and so adds an auraof 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, becausecustomers buy infrequently or because there is lowperceived differentiation among the options.

4. The final products are complex, assembled fromcomponents supplied by multiple firms who may sellthe “ingredients” separately in an aftermarket.



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 upthis concept, such as textile producers, food and

cosmetics companies like 3M, DuPont and Bayer.

John Quelch Proposed

Four conditions for Ingredient Branding



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

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.”

TetraPakA machine builder becomes household name

“With partnership profit for everyone.”

Dolby Leading an industry with innovation“How to successfully maintain customer relevance.”

TeflonBasics of Ingredient Branding

“How DuPont differentiates and progresses in chemical commodity business.”

BitrexImplementing the Network Approach

“Doing good things for the child safety and strengthening the brand.”

Shimano

Implicit Ingredient Branding

“Never ever compete with a customer.”

DLPPampering the customer

“Big screen HDTVs without the big price.”

MicrobanConvincing and Measuring

“Ensuring customer attention and price p Microban remiums in the value chain.”



Logos of Ingredient Brands



Ingredient Branding: Advantages

Ingredient Brand Host Brand

• Penetration route sorted. • Improved brand image in case its

lesser known.

• Ingredient can become point of

entry, eg. quality standard, and

exploit its CA.

• Quick recognition and acceptance

by consumers.

• Direct contact with consumers

possible.

• IB leverages quality perception of

end product among consumers.

• Shared R&D costs. • Shared marketing costs.

• Adds the ‘exclusivity’ factor to final

product.



Smell

Sound

Taste Touch

Sight

Only about 9% of all companies make use of sound to make their

brands more distinct, recognizable and memorable…

- Brand Sense by Martin Lindstorm

…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 oftenguessing 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 aboutimportance 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 Europe’s 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 onhealth 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

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