In this paper, ingredient branding is examined from different perspectives. In more specific terms, the paper deals with ingredient branding for industrial goods. There is more research on fast moving consumer goods, but less research is found for industrial goods. The paper gives an insight into areas where ingredient branding has been successful, and at the same time areas where ingredient branding has not been seen as a common phenomenon, namely, the automotive industry and automotive suppliers. The paper examines two major suppliers in the automotive industry: Autoliv, car-safety supplier and equipment producer of seatbelts and airbags; and the auto-parts maker Bosch, producer of hundreds of automotive car components, such as injection systems for gasoline and diesel engines, components for brakes and stability systems (i.e., ABS and ESP), alternators and starter motors. The paper presents findings which show a large potential, through differentiation with ingredient branding, for companies operating in B2B environments. So far, car suppliers have rarely chosen to opt for branding their ingredients in the finished product, the car. A historical perspective is also presented, showing, for instance, that ABS braking system, which was invented by the German supplier Bosch, could have been used perfectly for ingredient branding to the final consumer. The ingredient, the ABS-system, could have guided the preference for the purchase of a specific car by a potential car buyer. In summary, the authors found that investments into ingredient branding by the ingredient manufacturer (i.e., Bosch) could leverage the reputation and revenue of the supplier, and in the end also of the car maker itself.

We now live in a world where consumers receive thousands of impressions and messages every day. The ever increasing competition makes it more difficult for a message to reach the audience and the target group, thereby making it difficult for a consumer to differentiate between the brands. Furthermore, as competitive advantages and innovations are copied at a higher speed, products and services become more alike. In this kind of environment, it is important for producers to find a position for their product or service in order to focus and clarify the attributes that make their product unique to the customer. In response to this current business environment, research and best practices show that firms are realizing that one of their most valuable assets is the brand name associated with their products or services (Keller, 2003; and Pfoertsch and Mueller, 2006). Producers understand that powerful brands are beneficial to the company. Enormous amounts of marketing budgets are spent every year to create and maintain the uniqueness and value of a brand. Value can be divided into consumer, retailer, supplier, and producer value (Blackett, 1989). For the consumer, the value of a brand is the price he/she is willing to pay to get what the brand promises to deliver. Value to the supplier and retailer is the possibility of higher margins and increased ‘store traffic’ through a strong brand. Value to the producer generally is expressed in market share, sales revenue, profit, return on capital, etc. “Brands, therefore, are genuine assets and, like other forms of assets, can appreciate considerably as a result of careful management and development” (Blackett, 1989).

A strong brand can reduce the factor of insecurity associated with an offer, commodity, or service. It is a guarantee that the customer’s expectations will be fulfilled or exceeded. The brand also assures a higher level of stability in business due to smaller fluctuations in demand and brand loyalty, which can give higher future income, lower sales cost, etc. Furthermore, strong brands have a positive effect on investors, which leads to lower risk and secure future cash flow. Keller (2003) gives a short definition of what a brand is all about: “A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of seller and to differentiate them from those of competition” (Keller, 2003).

Brand Management Journal, Ingredient Branding of Industrial Goods, Case Study, Two Distinct Automotive Suppliers, Analyzing with Real World Data, Sufficient Brand Equity, Customer-Based Brand Equity (CBBE), ‘differential effect’, ‘brand knowledge’, and ‘consumer response to marketing’ .