Ingredient branding — The ultimate marketing communications thrill ride

I cannot count the number of times I have heard an ingredient or component manufacturer express how they wish their product could be featured much like “Intel Inside^®,” which is often considered the gold standard for ingredient branding.

While most materials that enter into final products lose their identity along the way, ingredient brands are an essential part of the end product and maintain their own brand identity.

It’s easy to understand the desire to have a product featured like Intel Inside, Gore-Tex^®, Teflon^®, NutraSweet^®, or any other successful ingredient brand. The rewards can be tremendous. The ingredient manufacturer establishes a differentiated brand, which can deliver better profit margins, help expand and open markets, strengthen relationships in the value chain, and contribute to the company’s overall reputation.

But for all those who express a desire to present the next Intel Inside, few can meet the necessary reality check. A featured ingredient brand must contribute to the performance and success of the end product to the degree it becomes a key consideration in the consumer’s reason to buy. The ingredient must be perceived by the consumer as central to product differentiation.

Beyond this highly discriminating standard, if the potential truly exists, then there is some heavy lifting required to effectively bring an ingredient brand to market.

Most ingredient companies will direct their marketing efforts only to the next stage in the value chain, usually the end product brand owner. But engagement in multi-stage branding, directed at two or more downstream stages of the value chain, is fundamental to an ingredient branding campaign. This could be targeted direct to the consumer, and/or the distribution channel, as well as the brand owner.

The pull principle is the dynamic that makes ingredient branding work. The most effective efforts combine a mix of push (to the manufacturer) and pull (from the consumer).

Beyond added complexity and coordination, the other challenge here is resources. Some ingredient manufacturers will take on the B2C communications investment themselves. Some will accomplish consumer pull by developing the ingredient brand communications messages, graphics and basic tools, and then license and incentivize the end product manufacturers to roll this into their promotions.

So the checklist to engage ingredient branding comes down to this:

• Reality check on real differentiation
• Reality check on influencing the consumer’s product purchase decision
• Commitment to engage multi-stage branding
• Development of the best push-pull marketing strategy
• Allocation of resources to support the plan

These unique circumstances will not often come together, but for anyone fortunate enough to work on the creation of a successful ingredient brand program, this is the ultimate marketing communications thrill ride. And then, just as it happened for Intel, the rewards can be great, and long-lasting.

Comments

[www.askthedigitalexpert.com]

I appreciated this posting, very nicely done and informative. I would add to it a perspective that as freestanding brands enter into a more competitive landscape, another consideration/impact is the copromotional investment provided to the host brand. These incentives and the influences they exert on the manufacturer can interupt the more rational analyses which are central to product differentiation and brand value.