INGREDIENT BRANDING

BY:
Gautam Donga

Definition:
An ingredient branding is exactly what the
name implies: An ingredient or the component of the
product that has its own brand identity.

Ingredient branding is the special case of the co-branding.

It Involves creating brand equity for materials, components or

parts that are necessarily contained within other branded
product.

Ingredient branding attempts to create sufficient awareness

and performance for their product such that consumers will
not buy a Host product that does not contain the ingredient.

Examples:
Intel Inside,
Diet soft drinks with NutraSweet,
Stereos with Dolby noise reduction.
Boeings 787

WHAT ARE THE

REQUIREMENTS FOR SUCCESS
IN INGREDIENT BRANDING?

1. Consumer must perceive that the ingredient matters to the

performance and the success of the end product.
2. Consumer must be convinced that not all ingredient brands
are the same and that the ingredient superior.
3. A distinctive symbol or logo must clearly signed to consumers
that the host product contains the ingredients.

4. A coordinated pull and push program must help

consumer understand the importance and the
advantage of branded ingredient.
5. The ingredient is highly differentiated, usually
supported by patent protection, and so adds an
aura of quality to the overall product.
6. The ingredient is central to the functional
performance of the final product

IS THE INGREDIENT
MARKETING FOR SUCCESS
OR DISASTER?

If the host product is:

New/has

low awareness
Ingredient brand provide quality advantage
The ingredient branding strategy can be highly effective.

For the product that :

Enjoys a premium image
High customers expectation

Its best to avoid ingredient branding.

BENEFITS OF
INGREDIENT BRANDING

1. Ingredient branding can enhance the:

Image.
Perceived quality.
Credibility of the Host product.

2. Ingredient branding can provide immediate brand recognition

and a "ready-made" audience for a new product.
3.It can boost differentiation by giving the host product a distinct
characteristic that is difficult for competitors to imitate.

5. When an ingredient or component is the point-of-entry

to your product category, ingredient branding becomes
the only viable course of action.
6. Ingredient branding can help companies achieve
significant efficiencies because often the supplier and the
manufacturer will share production, promotion,
advertising and R&D costs.
7. In addition, a well-known ingredient brand can make
highly competitive distribution channels more
accessible.

DRAWBACKS OF
INGREDIENT BRANDING

1.

The ingredient brand's image could overshadow the

product's brand identity or conflict with its core values.

2.

Unless consumers are convinced that the ingredient truly

adds value or represents a genuine product innovation, they
may not be willing to pay the additional price necessitated
by the cost of licensing the ingredient.

3.

consumers can become skeptical of the additional promise

of an ingredient, especially if the product is already a
category leader.

4.

If licensing is not controlled, both the ingredient and your

product are at risk of becoming generic.

CASE STUDY
INTEL INSIDE

Twelve years ago computer chips, in the eyes of consumers,

were a generally unknown component of PCs - a commodity
product. From a competitive standpoint, a computer chip is a
typical commodity.

In 1980s Intel developed the chips which set the standard for
personal computing. but Competitors rapidly adopted the same
naming convention, and Intel's product names - the 286, 386
and 486 could not be protected.

Intel already had an established reputation as a quality

producer of microprocessors amongst the OEMs.

However, Intel needed to differentiate itself from its

competitors and build a consumer brand. Intel believed it
could position its chips as a premium product, which it
could in turn sell at a premium price to computer
manufacturers.

"Intel Inside" ingredient branding strategy

The name "Intel Inside" became the first trademark in

the electrical component industry.

This case study demonstrates how a successful,

ingredient brand campaign can transform a commodity
product into a valuable consumer brand with a brand
value.

ANY
QUESTIONS??

THANK YOU