55-09.
INGREDIENT BRANDING
Pattern description
Ingredient branding describes the specific selection of an ingredient, component, and brand originating from a specific supplier, which will be included in another product. This product is then additionally branded and advertised with the ingredient product, collectively adding value for the customer. This projects the positive brand associations and properties on the product, and can increase the attractiveness of the end product.
Inventive problems
The product brand should be well-known in order to increase sales.
The product brand should not be well-known, so as not to waste the resources on creating a brand.
Application examples
US-based semiconductor chip maker Intel is another pioneer of Ingredient Branding. The company launched its ‘Intel Inside’ campaign in the 1990s to increase brand awareness. PC manufacturers agreed to advertise Intel processors on their PCs in exchange for Intel paying some of their advertising costs. Simultaneously, Intel independently produced a number of ad campaigns to raise consumers’ awareness of the importance of microprocessors. This strategy greatly contributed to increasing the demand by end consumers, with which Intel has become the number one brand of microprocessors globally.
US-based company W.L. Gore & Associates (Gore), founded in 1958, employs Ingredient Branding very successfully to market its Gore-Tex membrane. Gore-Tex is a breathable, water- and wind-proof membrane that was brought to the market in 1976. Although the membrane was a very innovative product, its advantages were not readily apparent to customers at first. But Ingredient Branding enabled Gore to publicise the membrane and ultimately turn it into a commercial success. Gore has since partnered with over 85 well-known textile companies including Adidas and Nike who use and advertise Gore-Tex.
Founded in 1921, Shimano is a Japanese multinational manufacturer of cycling components that has managed to secure an 80 per cent share of certain sectors of the bicycle market. For a long time consumers considered multi-geared bicycles to be too expensive and complicated, so that none of the companies in the bicycle gear shift industry were able to establish a clear leadership position. Recognising the potential of Ingredient Branding for the bicycle component industry, Shimano succeeded in building a strong brand.