The Power Of Ingredient Branding

The electronics industry is the pioneer when it comes to ingredient branding. There have been many great and iconic cases of this practice, and there is a lot to learn from them. This article analyses two such cases in the first part of this two-part series.

- Abhimanyu Mathur

The computer industry really brought ingredient branding to the forefront. Assembling desktop computers using branded components was a viable way to save money for the end user. An assembler could take a Seagate hard disk, Intel processor, Samsung monitor, Logitech mouse and, like magic, you had a computer as good as an HP or Compaq desktop.

The slow shift to the laptop is what eliminated the ability to ‘assemble’. However, by then, the industry was operating with well-known ingredient brands for the processor, hard disk, monitor and mouse. Although the assembling industry was not threatening the computer brands, the result of this ingredient branding was that there was not much difference between an HP, a Compaq or an IBM product.

What is an ingredient brand?

When a component maker builds a brand, it is called an ‘ingredient brand’. An ingredient brand is not built with the component maker’s customer as the target audience; rather, it is built with the end user in mind. When the end user knows you well, it creates a ‘pull’ for your brand.

Many component makers feel that if their customers know them, and these customers are also well-known in the industry for providing quality products, they have built a brand. But I beg to differ. The end user, too, needs to know them and their products. And these component makers need to have created some ‘pull’ for their products in order to truly call themselves brands.

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