Ingredient Branding: Making the Invisible Visible

Philip Kotler is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management, Northwestern University, Evanston, Illinois. He received his Master’s Degree at the University of Chicago and his PhD Degree at MIT, both in economics. He did post-doctoral work in mathematics at Harvard University and in behavioral science at the University of Chicago. Professor Kotler is the author of: Marketing Management: Analysis, Planning, Implementation and Control, the most widely used marketing book in graduate business schools worldwide; Principles of Marketing; Marketing Models; Strategic Marketing for Nonprofit Organizations; The New Competition; High Visibility; Social Marketing; Marketing Places; Marketing for Congregations; Marketing for Hospitality and Tourism; The Marketing of Nations; Kotler on Marketing; Building Global Biobrands; Attracting Investors; Ten Deadly Marketing Sins; Marketing Moves; Corporate Social Responsibility; Lateral Marketing; and Marketing Insights from A to Z. He has published over one hundred articles in leading journals, several of which have received best-article awards. Professor Kotler was the first recipient of the American Marketing Association’s (AMA) „Distinguished Marketing Educator Award“ (1985). The European Association of Marketing Consultants and Sales Trainers awarded Kotler their prize for „Marketing Excellence“. He was chosen as the „Leader in Marketing Thought“ by the Academic Members of the AMA in a 1975 survey. He also received the 1978 „Paul Converse Award“ of the AMA, honoring his original contribution to marketing. In 1989, he received the Annual Charles Coolidge Parlin Marketing Research Award. In 1995, the Sales and Marketing Executives International (SMEI) named him „Marketer of the Year“. Professor Kotler has consulted for such companies as IBM, General Electric, AT&T, Honeywell, Bank of America, Merck and others in the areas of marketing strategy and planning, marketing organization and international marketing. He has been Chairman of the College of Marketing of the Institute of Management Sciences, a Director of the American Marketing Association, a Trustee of the Marketing Science Institute, a Director of the MAC Group, a former member of the Yankelovich Advisory Board, and a member of the Copernicus Advisory Board. He has been a Trustee of the Board of Governors of the School of the Art Institute of Chicago and a Member of the Advisory Board of the Drucker Foundation. He has received honorary doctoral degrees from the Stockholm University, University of Zurich, Athens University of Economics and Business, DePaul University, the Cracow School of Business and Economics, Groupe H.E.C. in Paris, the University of Economics and Business Administration in Vienna, Budapest University of Economic Science and Public Administration, and the Catholic University of Santo Domingo. He has traveled extensively throughout Europe, Asia and South America, advising and lecturing many companies on how to apply sound economic and marketing science principles to increase their competitiveness. He has also advised governments on how to develop stronger public agencies to promote the development of the nation’s economic well-being.

Waldemar Pfoertsch currently holds the position of Professor for International Business at the University of Pforzheim, and he is visiting lecturer at the Executive MBA Program of the Liautaud Graduate School of Business, University of Illinois in Chicago. In addition he is an Online Tutor for the MBA Program International Management at University Maryland College Park and at the Steinbeis University in Berlin. He received two Master’s Degrees (economics & business administration) and his Doctorial Degree in social science at the Free University Berlin. He did his post-doctoral work in industrial planning at the Technical University Berlin. His latest publications in German cover the areas of Business-to-Business Marketing, Brand Management and Ingredient Branding. He also published: Living Web and Internet Strategies. The Blog: The new business language is in preparation. He has also published several articles in German, Chinese and English language on international management issues. Professor Pfoertsch has consulted for such companies as Daimler Chrysler, HP, IBM, and many medium-sized corporations in Europe, Asia and North America in the areas of international marketing and brand management. He is on the advisory board of various companies and non-profit organizations. His other teaching positions have been at the University of Cooperative Education Villingen-Schwenningen, Visiting Associate Professor at Kellogg Graduate School of Management, Northwestern University and Lecturer for Strategic Management at Lake Forest Graduate School of Management. Prior to his teaching appointments, he was a Management Consultant for international consulting companies. In this position, he has traveled extensively throughout Europe, Asia and North America working with companies in developing international strategies. His earlier positions include being an Economic Advisor to the United Nations Industrial Development Organization where he worked as an advisor to the government on how to develop internationally competitive industries. He also worked for many years in the automation industry, serving automotive companies.

CDs and DVDs, water bottles, sports eyewear, binoculars, helmets, storage boxes for food, car headlights, automotive roof glazing – these are just some of the everyday products that benefit from the unique properties of Makrolon®, a plastic manufactured by Bayer MaterialScience AG. To draw the attention of trade and consumers to this high-tech material, many of the consumer goods made from it now bear the quality mark “Made of Makrolon®”, which has transformed Makrolon® into a world-famous brand.

“Ingredient Branding” is the technical term for this strategy of taking the product – originally a business-to-business product – to the consumer marketplace, where it gains global recognition. Bayer MaterialScience is exploiting the benefits of a brand strategy to make its high-tech polycarbonate Makrolon® stand out from its competitors. This cooperation between Bayer and selected Makrolon® processing companies began in 2000. Through this arrangement, the message conveyed to the consumer is that not only the product manufacturer is committing himself to the quality of the product but also the supplier of the most important constituent – the material used to make it.

Since its invention in 1953, this plastic has been regarded as a versatile material with many positive properties. With its customizing ability for transparency/opacity, impact strength, temperature-independent dimensional stability, exceptional flow properties and light weight, the application potential for Makrolon® is virtually unlimited. As far as brand strategy is concerned, it is an enormous benefit to Bayer MaterialScience that the plastics industry has known and worked with Makrolon® for several decades. A new aspect, however, is the targeting of other groups. The aim is that not only product designers, buyers and engineers should be made familiar with the material but also the tradesmen and consumers. Since plastic is a key component of the consumer product and bears considerable responsibility for its function, but cannot be directly “seen”, Ingredient Branding makes an important contribution.

Some examples of consumer products that bear the quality mark “Made of Makrolon®”:

– Our Latin American partner Videolar, uses this seal of quality to show which plastic guarantees optimum storage quality and data security for its writable CD-Rs and DVD-Rs.

– Sheffield Plastics Inc., a Bayer MaterialScience Company, produces Makrolon® polycarbonate sheet products for a variety of markets, including architectural, security, specialty vehicle glazing and sign applications. Manufactured to offer attractive protection in areas subject to high traffic, vandalism or burglary, and tough enough to withstand severe weather, Makrolon® sheet products provide unsurpassed quality and performance.

– The UVEX Sports GmbH & Co. KG, headquartered in Fuerth, Germany and its worldwide agencies extending from the United States to Japan utilize the benefits of Makrolon® for their branded cycling, skiing and sports goggles, UVEX Supravision® visors in motorcycle helmets and Microshell outer shells in cycle helmets. This form of Ingredient Branding is currently unique in the sporting goods segment.

– Steiner Optik GmbH in Bayreuth uses Makrolon® to manufacture the body of its high-quality binoculars and thus give the optical system the necessary protection.

– The German manufacturers of the Alurunner® high-tech sled and the American manufacturers of the Makboard transparent snowboard both draw attention to aspects of the product experience that are enhanced by Makrolon® plastic – the seat on the Alurunner® and the basic material in the case of the Makboard.

– The Asian company Zhongshan C&C Luggage Manufacturing Co., Ltd. uses the “made of Makrolon®” tag as a marketing tool for its Crown hardtop cases, as does the Japanese company Matsuzaki Industry Co. Ltd. for its Maruem brand.

– Last but not least, Makrolon® has in recent years also made a name for itself in the field of designer lamps. The Italian company Luceplan is another marketing partner that uses Makrolon® to manufacture and promote its classic Constanzina range of lampshades.

All these established partnerships that are part of the strategic marketing of Bayer MaterialScience’s high-tech polycarbonate promote the Makrolon® brand. As a result, the end user can better identify with the product. This book gives managers and future decision-makers useful information on this interesting marketing tool that helps consumers to look not only at the product itself but also at the materials used in its manufacturing when making a purchasing decision.

Jürgen Hohmann
Spring 2010
Bayer Material Science
Business Unit Polycarbonates
Global Branding Makrolon®
Leverkusen, Germany

During my 30-year career, which includes being a consultant for McKinsey & Company and senior executive at IBM, I’ve thought long and hard about how to strengthen various businesses. However, it has only been in recent years, as CEO of Microban, that I have fully appreciated the amazing power of Ingredient Branding. So, when I learned that Philip Kotler and Waldemar Pfoertsch were writing a book focused on this subject, I was only too happy to help. As far as I know, this is the only comprehensive, scholarly, yet very practical book on Ingredient Branding.

I’ve found that business leaders are constantly searching for new, important ways to strengthen their businesses. Most leaders are looking to increase market share, raise prices, broaden distribution or improve their product mix – e.g., sell more of their premium products. They deploy many “conventional strategies”, such as creating greater awareness through advertising or offering temporary price reductions. Ingredient Branding is not a substitute for these “tried and true” strategies. Rather, it’s another strategy to add to the arsenal. It’s like adding another arrow to a quiver. And the business leader with more arrows – more firepower, is more likely to win in the marketplace.

Ingredient Branding: Making the Invisible Visible is on the mark. This book provides helpful frameworks to understand Ingredient Branding, when it should be used, and how to get the most value from it. It also provides examples and case studies that bring the conceptual frameworks to life. It is both scholarly, and yet almost a “how to” guide for people with a charter to make things happen.

Of course, leveraging an Ingredient Brand is not going to be the right strategy for every business all the time. However, it’s constantly surprising to me how often I speak with sharp business leaders, and they haven’t even considered this important strategy. If nothing else, this book will enhance your knowledge of Ingredient Branding and make you a better well-rounded business leader. And of course, it may also lead you to drive stronger business performance in the marketplace through Ingredient Branding.

David J. Meyers
Spring 2010
President and CEO
Microban International, Ltd.
Huntersville, NC, USA

My career has taken me in a few directions, but I could never have predicted that I would be actively involved in something, which Philip Kotler and Waldemar Pfoertsch refer to as “Ingredient Branding”. However, this is exactly what we have been doing here at Macfarlan Smith for almost thirty years. The preparation of this foreword has also made me realize what an interesting journey our product Bitrex® has taken me on personally. Having started my career as a chemical analyst, I had responsibility for overseeing both sales and marketing of Bitrex® globally. The challenge, as encountered by my predecessors, was how to take a product ingredient, which has no effect on the performance of the product, and make it the reason for the consumer to purchase the product. Simply put, I have relied on the fundamentals of Ingredient Branding.

As the most bitter substance ever discovered, our key selling points of Bitrex® are safety, innovation and credibility. Bitrex® has a wide and varying use. Its primary use is to render a product unfit for human consumption. This started with the use of Bitrex® in denaturing industrial alcohol, and has lead to preventing children from ingesting a range of household chemicals, and deterring dogs from eating common garden pesticides. It is in applications such as these latter two markets in which we see Bitrex® gain its full potential as an Ingredient Brand.

My experience of product category managers is that they are constantly looking for new means of selling their products to the consumer. It is our job to educate them that Bitrex® is an option. Once informed, these managers can confidently develop new marketing strategies, not only connecting their products closer to the customer, but also enhancing their own personal knowledge of a unique marketing tool. When a Bitrex® partner utilises the Bitrex® brand, they have a number of options to communicate this to end consumers. Done efficiently, this message can have many positive outcomes for our partners such as innovation, product improvement, market leadership, and caring for the customer. All of which reflect well on our partners. Crucially, we ensure that the message from Bitrex® inclusion is clear and easily understood by the consumer. I’m sure this is the same for most Ingredient Brands.

A fundamental part of our business model is to work with highly regarded experts in the field of safety. In addition, our dedicated technical service ensures our credibility, and of course, efficient use of Bitrex® in our partners’ products. We, as I’m certain is the case with other Ingredient Brands, face fierce competition. It is the ability to offer something more, something motivating and inspirational, which separates successful Ingredient Brands from cheaper generic imitators. This also ensures that Bitrex® continues to move forward as a brand.

To summarize, Ingredient Branding has been our line of business for a long time. Maybe only now are the strategies employed fully recognized as a unique marketing tool. This educational book will help readers to develop their personal marketing skills, and hopefully lead to the Ingredient Brands of the future.

Cameron Smith
Spring 2010
Bitrex® Business Manager
Macfarlan Smith Limited
A Johnson Matthey Company
Edinburgh, Scotland, United Kingdom