Ingredient Branding - The Hidden Challenges of B2B Branding
Ingredient branding is an old concept – one of the first instances occurred in the 1940’s when Dow Chemical promoted “Styron” (polystyrol) to end consumers; this chemical became the basis for Styrofoam products.
Teflon (also known as polytetrafluroethylene) was invented at the Dupont research centre in 1938 by a researcher working with refrigerants who discovered a compound that was inert to almost all chemicals. The first Teflon pan was created in 1954 and the rest is history:
- Ingredient branding didn’t become a mainstream concept until the 1990’s when it became synonymous with Intel – the ultimate ingredient brand: making zero sales to end consumers having created an incredibly strong consumer demand pull for its chips.
- The publication of Kotler and Pfoertsch’s book: "Ingredient Branding: Making the Invisible Visible" (2010) is creating a renewed interest in ingredient branding.
- The B2B connection – ingredient branding has been described as a "B2B branding strategy in which an ingredient/component of a finished product has its own brand which is promoted to the end consumer...it represents a symbiotic relationship between the component manufacturer, the manufacturer of the finished product and the supply chain".
- Ingredient branding is typically recognized as a successful B2B brand strategy – industrial trade names evolve to become consumer brands over time. "Ingredient branding hurts the top-end players just as often as it helps the bottom-end players” (David Aaker) – never has this brand strategy come under such scrutiny.
- Ingredient branding is now recognized as more of a trade-off than a sure bet – with both benefits and risks.
- Some recognize Intel’s branding campaign as a great success story but others have severe reservations: that IBM may not have benefited from the alliance with Intel; smaller PC brands with inferior products were legitimized; at one point IBM even felt threatened by the strength of Intel.
The Intel story - prior to the Intel Inside campaign its computer chips were a generally unknown component of PCs: most customers don’t see chips, many don’t understand and many don’t care about this commodity. When Intel was unable to trademark its “386” chip the company launched the Intel Inside campaign to create a consumer brand – PC manufacturers were convinced to place the Intel Inside logo in their advertising and marketing materials. The advertising results were stunning: brand name recognition soared from 25% to 80% to 94% (Intel regularly makes it on Interbrand’s list of top global brands.
The Pink Panther – the most under-rated ingredient brand – for the past 25 years Owens Corning and MGM have had a licensing agreement to use the iconic Pink Panther as a mascot for Corning’s home and commercial construction materials (especially its pink insulation products); in 1987 Owens Corning became the first company to trademark a colour, in this case, pink.
Other ingredient brands you might not have thought of – Techron (the additive in Chevron gasoline that is associated with better, cleaner gas); Geek Squad (computer support company acquired by Best Buy to reinforce its service credentials); Kevlar (better known as the Kevlar vest); Gore-Tex (which lists 85 partners on its web site including Adidas).
Ruth Lukaweski
1 Comment
Nick said
I hadn't paid that much attention in the past to the important role of ingredient branding. In the B2B playing field, however, it is a critical cog in the marketing wheel. It's quite genius, really, the way that Intel's marketing manager, Dennis Carter, used ingredient branding to explode recognition and sales in the launch of' Intel Inside' in 1991.