In
marketing
Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce.
Marketing is usually conducted by the seller, typically a retailer or ma ...
, ingredient branding or ingredient marketing refers to a process in which a company markets an established ingredient or component used in its own products. The overall marketing strategy seeks to signal a high-quality product based on the perception of the ingredient.
From the ingredient company's perspective, they are not required "to convince consumers that their product is valuable, their customers do it for them".
History
Chipmaker
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California, and Delaware General Corporation Law, incorporated in Delaware. Intel designs, manufactures, and sells computer compo ...
's 1991 "Intel Inside" marketing campaign was the first landmark ingredient branding success. It came about in the late 1980s when the abruptly rising interest in personal computers led to a huge demand for
central processing unit
A central processing unit (CPU), also called a central processor, main processor, or just processor, is the primary Processor (computing), processor in a given computer. Its electronic circuitry executes Instruction (computing), instructions ...
s, (CPUs) which Intel took as an imperative to "explain the desirability of its products" to end users, not just the
original equipment manufacturer (OEM). In addition to Intel's advertising for "Intel Inside", it subsidized OEMs that had agreed to include the Intel Inside logo on their products and ads.
Other examples of ingredient branding include:
* ''
NutraSweet'' and ''
Canderel'', a brand name for the
artificial sweetener
A sugar substitute or artificial sweetener, is a food additive that provides a sweetness like that of sugar while containing significantly less food energy than sugar-based sweeteners, making it a zero-calorie () or low-calorie sweetener. Arti ...
Aspartame
Aspartame is an artificial non-saccharide sweetener commonly used as a sugar substitute in foods and beverages. 200 times sweeter than sucrose, it is a methyl ester of the aspartic acid/phenylalanine dipeptide with brand names NutraSwe ...
in the food industry (
Coca-Cola
Coca-Cola, or Coke, is a cola soft drink manufactured by the Coca-Cola Company. In 2013, Coke products were sold in over 200 countries and territories worldwide, with consumers drinking more than 1.8 billion company beverage servings ...
lite)
* ''Teflon'' as a coating for pots and pans and ''
Gore-Tex'' for sportswear (both products are brand names for
polytetrafluoroethylene
Polytetrafluoroethylene (PTFE) is a synthetic fluoropolymer of tetrafluoroethylene, and has numerous applications because it is chemically inert. The commonly known brand name of PTFE-based composition is Teflon by Chemours, a corporate spin-of ...
)
*''
Makrolon'', a plastic produced by
Bayer MaterialScience
*''
Bitrex'', a bitter substance discovered by
MacFarlan Smith Ltd.
* ''ClickTight'' as a car seat installation method by
Britax
* Microban for anti-microbial technology or additives
*
Dolby
Dolby Laboratories, Inc. (Dolby Labs or simply Dolby) is a British-American technology corporation specializing in audio noise reduction, audio encoding/compression, spatial audio, and high-dynamic-range television (HDR) imaging. Dolby li ...
's
Dolby Digital
Dolby Digital, originally synonymous with Dolby AC-3 (see below), is the name for a family of audio compression technologies developed by Dolby Laboratories. Called Dolby Stereo Digital until 1995, it is lossy compression (except for Dolby Tr ...
mark on cassette tape players
Marketing
Ingredient branding cannot be allocated to either
industrial or consumer goods marketing. The consumer is the
end-user
In product development, an end user (sometimes end-user) is a person who ultimately uses or is intended to ultimately use a product. The end user stands in contrast to users who support or maintain the product, such as sysops, system administrato ...
of the ingredient, but is not part of the
buying decision for the component, as this is up to the producer of the end product. On the other hand, the producer will only decide on the usage of the ingredient—or at least take it into account in the communication policy—if the image of this ingredient will affect the consumer, meaning a positive influence on his or her buying decision.
Ingredient brands "complement other brands without conflict. They go inside and aren’t necessarily identifiable visually. Their quality message carries over to the brand they’re inside of."
Cooperative advertising
Cooperative advertising may be used to incentivize the end-product manufacturer to advertise the ingredient, of which the "Intel Inside" campaign was a big example. In fact, by the end of 1992, over 500 OEMs had signed onto Intel's cooperative marketing program and 70% of OEM ads that could carry the "Intel Inside" logo did so.
See also
*
Co-branding
Co-branding is a marketing strategy that involves strategic alliance of multiple brand names jointly used on a single product or service.
Co-branding is an arrangement that associates a single product or service with more than one brand name, ...
References
{{reflist
* Kotler, Philip;
Pförtsch, Waldemar: ''Ingredient Branding – Making the Invisible Visible'', Springer 2010
* Esch, Franz-Rudolf: ''Strategie und Technik der Markenführung'', Verlag Vahlen 2008
* Pförtsch, Waldemar; Müller, Indrajanto : ''Die Marke in der Marke - Bedeutung und Macht des Ingredient Branding'', Springer 2006
* Havenstein, Moritz: ''Ingredient Branding'', Deutscher Universitätsverlag 2004
* Malaval, Philippe: ''Strategy and Management of Industrial Brands'' Springer 2003
Brand management
Types of branding