The key to B2B branding and marketing is to think of your brand as an ingredient that makes your customer's brand more appealing to their customers. In other words... Are you the secret sauce in your customer's product 'recipe'?
The reason I say this, is because inevitably, there is a customer of the customer for every business – an end user if you like. And it's these end users who are in many cases more important to your intent on growing sales, increasing price and building sustainable brand equity.
The problem for many B2B companies is that they are far removed from the customer's customer and have few of the marketing competencies required to create value for the downstream customer chain. Unfortunately, many B2B businesses still continue to define their brands around their manufacturing features or distribution capabilities, and so end up pushing themselves upon their customers.
Increasingly, these types of companies are facing stiffer competition and an uphill battle to maintain price premiums and sales volumes. Success in these businesses are then determined not by the strength of their brand but rather the quality of their procurement and distribution footprint.
Ingredient branding is about branding a product or service that transfers a higher level of quality or utility to the 'host' brand or product. Intel is a great example of this - their memory processing chip makes the computer more valuable than it would be without it. In the modern era, we see this everywhere from Android powering the world's top smartphone hardware, to Shopify acting as the invisible commerce engine behind major retail brands, to Gore-Tex in premium outdoor apparel.
Therefore, ingredient branding is a hybrid approach to branding for B2B companies because they need to be one part consumer marketer and one part customer marketer.
Indeed, the critical element for ingredient branding is the ability to generate demand with the end consumer. By doing this, it allows the ingredient brand to extract better pricing and more favourable supply terms with the "host" brand. Without the ingredient brand, the "host" is viewed as more generic or fails to meet the quality benchmark of category competitors.
One of the reasons we love B2B marketing is this multi-layered challenge that B2B businesses face which requires real strategic and creative thinking not possible in many consumer markets.
Of course, B2B businesses face the immediate reality of generating direct sales with customers. However, long-term, sustainable success for your business is more likely once you embrace the idea of your brand being an ingredient in your customer’s brand experience. As an ingredient brand, the challenge is to make your customer’s brand or product vastly better than if your brand was absent.
The Ingredient Branding Payoff
Becoming an ingredient brand is not easy. It takes time and is rarely cheap in the short term. However, once an ingredient brand takes hold with its "host," it benefits from a powerful domino effect derived from the customer's own brand advertising and promotion to its customers. As a result, ingredient brands tend to be significantly more profitable over the long term.
Successful B2B ingredient branding examples
While legacy giants like Intel and Teflon paved the way, modern B2B powerhouses have taken the playbook even further.
Look at Nvidia, which transitioned from a niche graphics chipmaker into the ultimate ingredient brand powering the global artificial intelligence boom. Look at Corning Gorilla Glass, which consumers actively look for when buying premium smartphones to ensure durability. Even in the automotive transition, EV battery manufacturers like Panasonic or BYD are becoming crucial markers of quality that car buyers look for.
These are truly brands that end users value and will pay a premium for. In fact, their B2B customers promote these ingredient brands for them, often without charge, just to borrow their credibility.
Dolby began in the 1960's with the purpose of reducing the hiss associated with recording on magnetic tape. Dolby's brilliance was in developing technology for both encoding and decoding sound. Importantly, Dolby licensed their technology instead of building factories and infrastructure - they stayed true to their 'why'.
By licensing their brand, Dolby became not only the must-have branded ingredient for audio and video recording equipment manufacturers, but also the highly demanded technology for the artists, producers, engineers, and directors using that equipment.
Dolby has since successfully made the move from home audio, to cinema audio, to mobile video and gaming with Dolby Atmos and Dolby Vision. Dolby could have focused purely on being an industrial ingredient brand that makes audio better. Instead, they aligned themselves entirely to the emotional, immersive experience of the end-user. In doing so, they made their business infinitely more valuable than if they were still only selling components to equipment manufacturers.
Dolby remains an ingredient brand, but they have moved beyond being a mere technical component. The brand is the experience, achieving cultural and commercial success well beyond the physical product.
Does your brand make your customer's brand experience better?
No matter what industry or category your B2B business operates in, this ingredient brand thinking will lead to better relationships with direct customers because your brand makes their brand's quality and experience better which is a fantastic outcome to aim for.
Your B2B brand could be creating value by providing deep end-user insights, driving downstream lead generation, or pioneering collaborative product innovation. Further to this, ingredient brand thinking can help define the overarching purpose, the competitive set, and ultimately the financial engine of your company.
With an ingredient branding approach, the likelihood of increased innovation, improved customer intimacy, and disruptive thinking are distinct possibilities. Said another way, it’s pull versus push thinking. It’s not revolutionary, but it requires a shift in mindset.
Perhaps begin with answering the following questions?