Ingredient Brands

Patents, licensing, and royalties
Background

Less popular but effective marketing

There are several different marketing strategies to increase a business's brand value and awareness. Some traditional and well-known marketing strategies are TV commercials, billboards, events, and digital advertising. A marketing strategy that is less talked about but which has proven to be very successful for many companies is ingredient branding. It is a form of marketing where a component of a product or service is branded as a separate entity.

A simple logotype marking

The most well-known example of ingredient branding is probably the semiconductor and microprocessor producer Intel, which reached major success with its ingredient branding campaign “Intel Inside” in 1991. During the 1980s, the emerging PC market created a huge demand for central processing units. The problem for Intel was that end customers did not know that the increase in computer performance largely came from Intel’s hardware. This, in turn, created an intent for Intel to somehow communicate that they were a vital part of the booming market. The result of this is the simple logotype marking that you can see on your PC today, which lets consumers know that their devices contain quality components provided by Intel.

In addition, a scalable and profitable business model

Another prime example of a successful ingredient brand is Gore-Tex, which sells its technologies for keeping clothes dry B2B. Other than obtaining predominant brand value with this strategy, this also lets Gore-Tex operate with low capital deployment needs. Thus, ingredient branding can also be considered an often easy-to-scale and high-margin business model, in addition to being a marketing strategy.