Intel in an HP laptop. Hemi engine in a Dodge. Jack Daniels on ribs at TGIFriday’s. Gore-Tex inside a Marmot jacket. Ingredient branding is a well-used marketing strategy where a leader brand borrows equity from a related brand used in the development of execution of the product or service to enhance the value of the leader brand.
Does it work? Ask HP, Dodge, TGIFriday’s and Marmot; all brands that spend big dollars marketing their brand and the ingredient brands that fuel their performance. It works, because consumers will pay more for a branded product or experience. Consumers trust established brands. And in a noisy branded market, the opportunity to stand out and be noticed is significant. Ingredient branding adds value to a product or service brand’s overall competitive positioning.
In his book Ingredient Branding: Making The Invisible Visible, Philip Kotler highlights Intel for creating and developing the ingredient branding concept:
“Intel owes its corporate success to their “Intel Inside” campaign. In the early 80’s however, when they created the ingredient branding concept, it seemed like a gamble. At the time they had a mere $500 million in sales, and yet they invested $110 million in their ingredient branding campaign over a period of three years and drove their concept and the business forward.”
During Intel’s marketing of “Intel Inside” they taught consumers to look for the Intel Inside logo as an assurance of quality. Consumers eventually came to see “Intel Inside” as a standard and began asking the question: “Why doesn’t your product use Intel processors?” This standard became so important that today it is one of the world’s largest ingredient marketing programs, where hundreds of computer companies license the use of the Intel Inside® logos.
Tim Hawkins the Global Vice President of Sales & Marketing for Core Health & Fitness, shares the importance of an ingredient brand strategy:
“Food, automotive, clothing and restaurant brands have all made this strategy work. So what about the fitness industry? The industry has strong brands like Nautilus, Schwinn, StairMaster and others. Clubs, hotels, rec centers and multi-unit housing facilities pay a premium for branded products from equipment manufactures. Members, aka consumers, are looking for a quality and reliable experience. But something’s missing; a commitment to ingredient branding.
On one occasion, while meeting with fitness club owners when asked what they thought of Core’s brand collection, they went on to tell me the brand stories behind Nautilus, Star Trac, Schwinn and StairMaster with such precision, detail and passion, they made me blush. But when I in turn asked what part of these stories and linked brand architecture they share with prospective club members during the club tour, they looked at me like I had a hole in my head. I couldn’t help but think what a missed opportunity this was to share their “Intel story” of what’s inside their brand and what makes their offering special vs their competition.
We’ve since embarked on the largest brand study the company has ever executed and I’m excited to say that we have 4 of the best brands in the industry; brands that consumers all over the world recognize for quality, performance and innovation. Ingredient branding is about meeting and exceeding member/prospective member expectations regarding your unique offering. Is your brand better than the guy’s brand down the street because of what’s inside?”
Find out how to leverage your ingredient brands to drive membership retention.