Ingredient Branding : Does what's inside matters ?

"Branding is all about creating a strong, positive, perception of a company's offering in the minds of consumers".

The fact that consumers are willing to pay more for a branded product is a well-accepted phenomenon in the business to consumer (B2C) industry. ?Whether it is for long-lasting quality, superior workmanship, or as a status symbol. Popular brands like Apple, Mercedes-Benz, Rolex, Starbucks command premium prices and exclusive reputation for their products.??

A recent phenomenon has emerged; that of branding the ingredients contained in the end product. After all, what makes up the end product is the sum of its ingredients? Why not advertise and use to advantage the very things that contribute to the desirable end result??Below are Logos of some of successful Ingredient Brands -

"Ingredient branding attempts to create sufficient awareness and performance for their product such that consumers will not buy final end product that doesn't contain the ingredient"?

While there are lot many examples, the successful one which I could relate to is "Intel Inside". This is the story of how Intel built a brand around a commodity. Intel was a dominant microprocessor brand in the 1980's. However, the competition was getting fierce from other microprocessor manufacturers who were producing chips which took aim at a cheaper computer market. This gave 'The birth of Intel Inside'

Factors that played a major role in the success of ' Intel's Ingredient Branding'

Understanding the Need -

Back in the 90's people bought computers based on someone expert opinion. Very few understood about software and Specs, so it was very difficult to choose between alternates. Intel saw this as an opportunity.

Positioning & Messaging-

1. Targeting the correct segment : Intel decided to target a segment called "Achievers" - People who are knowledgeable, spend the majority of their time in gaining knowledge, reviewing information like gamers and Programmers.
2. Intel collaborated with some of the most well-known PC brands of the time. They positioned themselves as a premium product by showcasing that the world's best PC are run by Intel's microchips (this aligned to the exciting needs of Achievers segment)
3. Intel followed precise and easy to remember communication message by using the naming "Intel Inside" - Findable, memorable, desirable.

Partner strategy -

" Look for a Strategy to 'grow the market' rather than just aiming to grow the company’s market share"

As the 'Intel' brand name was unknown among end-users, the advertisements had to be along with a PC brand. For Intel, it was clear that the PC brands had to be encouraged to advertise so that the overall PC market could grow and would be beneficial to both the parties. Without mutual benefit, every programme would fail. To motivate its partners to advertise, Intel team announced a 6% rebate on its purchases of Intel microprocessors, which would be transferred into OEM partner’s advertising budget that paid for up to 50 percent of the advertising. The PC partners were asked to present the “Intel Inside” logo on the product and in their product advertisements. Advertising for computers exploded due to this program.

Psychology element -

Intel Made use of principle called 'Peak-End rule'. Based on the peak-end rule, individuals judge a past experience based on the emotional peaks felt throughout the experience and the end of the experience.

Have you seen PC manufacturer TV ads? The ‘Intel’ logo appears only at the end of the ad with a specific music. That music has become synonymous with Intel. Why did Intel team choose to display the logo at the end rather than at the beginning or in the middle of the ad? The first thing everyone would remember from an event is the “Ending” part. If you end well on a high note — you create a positive impression and a special place in mind. The Intel music provides that pleasant sensation. Everyone could remember the Intel Logo and the sound. The logo doesn’t just appear — It gradually grows on the screen. — Psychology helps.

My Learnings for creating successful Ingredient Branding strategy -

1. Understand the B2B Value chain and find out the influencer
2. Get to 'Underserved Need' of an End-User
3. Be specific whom you want to target and position your product accordingly
4. Create an Ecosystem where you enable the host product to differentiate which inturn expands the market
5. Test the hypothesis before you go full throttle.

References — Making the invisible visible — Philip Kotler, Ingredient Branding case study articles, Intel Inside case study.