Ingredient Branding Strategies in an Assembly Supply Chain: Models and Analysis Juan Zhang, Qinglong Gou, Liang Liang School of Management, University of Science & Technology of China, Hefei, Anhui, 230026, P.R.China firstname.lastname@example.org, email@example.com, firstname.lastname@example.org Xiuli He Belk College of Business, University of North Carolina at Charlotte, Charlotte, NC 28223-0001 email@example.com 1
Abstract We consider a supply chain in which an original equipment manufacturer (OEM) procures a key component from a supplier. We consider an ingredient branding strategy under which the supplier and the OEM form a brand alliance. Specifically, the supplier invests in ingredient branding to build up her goodwill and additionally she shares a portion of the OEM’s advertising cost through a cooperative advertising program. Under a differential game framework, we obtain the equilibrium advertising efforts of the supplier and OEM, and the supplier’s equilibrium subsidy rate for the cooperative advertising program. We further extend the model to the case in which the OEM procures two complementary components from two suppliers. We consider three different scenarios of supplier interaction, i.e., the suppliers are (I) independent, (II) allied and keep two brands, and (III) allied and keep one brand. We demonstrate how the different interactions between suppliers affect the channel members’ advertising efforts, goodwill levels, and their profits. Keywords: Ingredient Branding, Cooperative advertising, Goodwill, Differential game models 2
1. Introduction Owing to the Intel’s huge success in its “Intel Inside” program, Ingredient Branding, as a special brand alliance form which emphasizes on identification of components in the final product, is picking up in popularity in recent years. According to Kotler and Pfoetsh (2010), Ingredient Branding is the brand policy concerning a branded object of materials, components, or parts (raw materials, component materials, or component parts) that represents a brand for the respective target group. Besides Intel, a number of companies from different industries have successfully used Ingredient Branding strategy. Examples include DuPont, Dolby Laboratories, Tetra Pak, Microban and so on. According to the motivation behind it, Ingredient Branding can be manufacturer- initiated or supplier-initiated one (Norris, 1992). In manufacturer-initiated Ingredient Branding, the Original Equipment Manufacturer (OEM) usually chooses an existing ingredient brand with strong brand awareness and promotes the fact that this ingredient is part of his final products. Supplier-initiated Ingredient Branding occurs when a component supplier promotes her ingredient to final users in efforts to build up brand awareness. Combing the two kinds of Ingredient Branding together, Luczak et al. (2007) proposed a new concept of InBranding, which is shown in Figure 1. To create the brand awareness of her ingredient brand, the ingredient/component supplier forms an alliance with an OEM in a supply chain framework. Under the alliance, the component supplier leaps the OEM and communicates to final users directly (supplier-initiated Ingredient Branding), whereas the OEM labels the ingredient brand logos in his final products, trying to persuade final users that his products have certain positive attributes which are related to this ingredient brand (manufacturer-initiated Ingredient Branding). 3
Ingredient Supplier Demand Supplier-Initiated Ingredient Branding Supply Cooperative advertising program OEM Advertising efforts Demand Supply Manufacturer-Initiated Ingredient Branding Advertising efforts Final user Figure 1. InBranding framwork InBranding strategy could create a win-win situation (Luczak et al., 2007). For the component suppliers, such a strategy enables them to communicate their product offerings and performance directly to end consumers and hence increase their brand equity. Accordingly, the component suppliers gain greater bargaining power as the brand awareness of suppliers will result in the consumers’ request or pulling the ingredient brands from the OEMs. Furthermore, the good brand image built in consumers makes the component suppliers escape the anonymity and substitutability of supplying a part or component by competitors easily. For the downstream OEMs, incorporating a reliable supplier’s component may enhance the image of their end products and increase demand due to the superior performance of a key component. Doyle (1989) argues that advertising is central to the process by informing consumers of inherent product benefits and positioning the brand in the mind of the consumer. Our model focuses on advertising decisions for InBranding and tries to answer the following questions: 4
(i) When a component supplier implements her InBranding strategy, what are her optimal advertising efforts directly to final users? (ii) What are the OEM’s optimal advertising efforts? Furthermore, noting that Intel has launched one of the largest cooperative advertising program in the world to stimulate computer OEMs to label the “Intel Inside” logos in their computers for its InBranding strategy, we also incorporate cooperative advertising decisions in our model, trying to illustrate: (iii) Whether and under what condition should a component supplier offer a cooperative advertising program to her OEM when she implements an InBranding strategy? (iv) And if so, what is the supplier’s optimal subsidy rate under a cooperative advertising program? To answer the above questions, we consider a supply chain in which an OEM procures a key component from a supplier. To implement the InBranding strategy, the supplier not only builds up her goodwill through advertising, which is just the same as the OEM, but also shares a portion of the OEM’s advertising cost via a cooperative advertising program. Noting that building a brand is a long-term process and must be regarded as an investment in the future (Meenaghan, 1995), we model the impact of advertising efforts on the goodwill of the two channel members in a Nerlove-Arrow framework. Specifically, the goodwill of the OEM depends on his own advertising and the supplier’s goodwill level whereas the supplier’s goodwill depends on her own ingredient branding efforts and the OEM’s advertising efforts. The sales of the final products are expressed as a function of the OEM’s advertising efforts and goodwill. Under a Stackelberg-Nash game framework, we calculate out the equilibrium advertising efforts of the supplier and OEM, as well as the supplier’s optimal subsidy rate for her cooperative advertising program. Main findings include the following. First, the component supplier shares the OEM’s advertising cost only when her profit margin exceeds a threshold. Second, the supplier will not advertise directly to final users if the OEM does not label her component brand logos in his final products. Third, the supplier’s decisions on her own advertising efforts and subsidy rate of the cooperative advertising program can be made separately. That is to say, the 5
supplier’s optimal subsidy rate of the cooperative advertising program does not depend on whether the supplier implements an supplier-initiated Ingredient Branding strategy (i.e., the supplier advertises directly to the final users), it is just influenced by the relative magnitude of the OEM’s and the supplier’s profit margins. In practice, there are usually multiple component suppliers for OEMs and the marginal profit threshold plays a key role when a firm decides whether to offer a cooperative advertising program to its partner (Huang and Li, 2001; Jørgensen et al., 2000; 2001; Li et al., 2002). We extend our model to the case in which the OEM procures two complementary components from two suppliers in three different scenarios in which the suppliers are (I) independent, (II) allied and keep two brands, and (III) allied and keep one brand. We attempt to address the following questions: How does a complementary component supplier affect a supplier’s ingredient branding strategy? Whether the two suppliers should cooperatively offer a cooperative advertising program when they implement ingredient branding strategies? Analysis of the extended models result in the following findings: (i) Whether or not a supplier should offer the OEM a cooperative advertising program depends on the supplier’s own profit margin and not on the other supplier’s profit margin; (ii) Suppliers will share a part of the OEM’s advertising costs when their profit margins exceed a threshold level; (iii) If both share the OEM’s cost, the subsidy rate of each supplier decreases compared to that with a single supplier, but the total subsidy rate for the OEM increases; (iv) When the suppliers form a strategic alliance, the allied supplier system is more likely to meet the profit margin threshold and provides the OEM a cooperative advertising program with a higher subsidy rate compared to the single supplier case, which implies that both the OEM and the suppliers benefit from such alliances. The rest of the paper is organized as follows. Section 2 provides a review of related research. Section 3 presents the model and analysis for the case of a single component supplier. Section 4 explores the case of two component suppliers. Section 5 presents numerical analysis. Section 6 provides concluding remarks. 6
2. Literature Review This paper is related to the streams of literature in ingredient branding and co-op advertising. In marketing theory and industrial practice, ingredient branding is defined as the marking or labeling of components or their industrial goods (Kotler and Pfoertsch 2010). Early research by Norris (1992) shows that ingredient branding, if successfully implemented, can be very beneficial to both partner brands. Norris (1992) distinguishes between the manufacturer-initiated and supplier-initiated ingredient branding strategies. The motivation behind the former revolves around the host brand and usually extends or modifies an attribute of the host brand in an effort to enhance consumer brand evaluations, whereas the motivation behind the latter revolves around the component brand forming an alliance with an end product manufacturer in an effort to create brand awareness for the ingredient brand and generate pull effects through the value chain (Desai and Keller 2002, Havenstein 2004, Pfoertsch and Müeller 2006). Hillyer and Tikoo (1995) describe the impact of ingredient branding on consumer product evaluations. Rao and Ruekert (1994, 1999) evaluate ingredient branding from the perspectives of multiple beneficiaries. McCarthy and Norris (1999) show that branded ingredient could improve the competition position of host brands with moderate quality. Bartlett et al. (2004) and Havenstein (2004) show that the brand cooperation between the OEM and ingredient suppliers enables firms to establish and maintain their competitive advantages and provide criteria for their customers to differentiate between competing products. Venkatesh and Mahajan (1997), McCarthy and Norris (1999), and Pfoertsch and Müeller (2006) show that ingredient branding can prompt suppliers to create a pull effect from downstream customers. Luczak et al. (2007) combine the manufacturer-initiated and supplier-initiated ingredient branding and propose a new concept, InBranding, in which the ingredient suppliers promote their brands to the OEMs and the end users simultaneously. While Baumgarth (2001) studies the single stage branding in which the brand is promoted directly to the next users in the supply chain, Luczak et al. (2007) study three kinds of relationship: (i) suppliers with OEM, (ii) OEM with final user, and (iii) suppliers with final user. Pfoertsch et al. (2008) and Kotler 7
and Pfoertsch (2010) use a similar framework as proposed by Luczak et al. (2007). There are a few empirical studies in the ingredient branding literature. McCarthy and Norris (1999) design two experiments to investigate the impact of branded ingredients on the host products. They find that branded ingredients consistently and positively affect moderate-quality host brands while branded ingredients only positively affect higher-quality host brands occasionally. Desai and Keller (2002) conduct a laboratory experiment to analyze the impact of two different branding strategies on consumer acceptance of brand expansions, i.e., branding the target attribute ingredient as a self-branded ingredient versus as a co-branded ingredient. There is very limited analytical research on the ingredient branding except Venkatesh and Mahajan (1997) and Erevelles et al. (2008). Venkatesh and Mahajan (1997) consider a bundled product with two jointly consumed components. They propose an analytical approach for the sellers of bundled product to make optimal pricing and partner selection decisions. Erevelles et al. (2008) employ an econometric modeling approach to discuss why the ingredient co-branding occurs. We propose an analytical model to study the dynamic ingredient branding strategy. Our research is also related to the co-op advertising in supply chains. Berger (1973) proposes a static co-op advertising model. Bergen and John (1997), Huang and Li (2001) and Li et al. (2002) extend Berger’s work in a single-manufacturer single-retailer supply chain. Other static models in co-op advertising include Yue et al. (2006), Karray and Zaccour (2007), Karray and Martín-Herrán (2009), Xie and Neyret (2009) and Karray (2011). In this paper, we study the dynamic ingredient branding and co-op advertising strategy. A few papers have studied the dynamic co-op advertising strategies. Jørgensen et al. (2000) study the co-op advertising in a supply chain composed of a manufacturer and an exclusive retailer. They explicitly distinguish between the long-term and short-term advertising efforts. The short-term efforts stimulate the demand at the retailer store while the long-term advertising efforts affect the demand through the accumulated goodwill. The manufacturer and retailer choose their short-term and long-term advertising efforts. Jørgensen et al. (2001) assume 8
decreasing marginal returns to goodwill and use a more flexible functional form for the sales dynamics. These works are extended by Karray and Zaccour (2005) in which the retailer sells both his own private product and the manufacturer’s product. He et al. (2009) study the co-op advertising and pricing decisions in a decentralized supply chain with a single manufacturer and single retailer in which the OEM decides the subsidy rate for the retailer. He et al. (2011, 2012) extend He et al. (2009) to a competitive retail market and they investigate how the competition in retailers affects the co-op advertising policies. All of the above papers study the manufacturer’s optimal subsidy policy for the retailer(s) while they do not model the ingredient branding strategies as the components suppliers are absent in their models. To our best knowledge, this is the first paper to study the joint decisions of ingredient branding and co-op advertising in a dynamic assembly supply chain. We contribute to the ingredient branding literature by proving an analytical model. Our results provide quantitative guidelines for marketing brands and supply chain managers. We also contribute to the co-op advertising literature by extending the practices into the supply chains with manufacturers and suppliers while the previous research primarily focuses on the manufacturer-retailer supply chains. 3. Basic Model: Single Component Supplier In the basic model, we consider a supply chain in which an original equipment manufacturer (OEM) procures a key component (ingredient) from a supplier and uses the component to produce a final product. The supplier may implement an InBranding strategy. To build up her ingredient brand awareness, the supplier not only advertises herself directly to the consumer, but also offers a cooperative advertising program to encourage the OEM to label the ingredient brand logos in the final products, as well as in the advertisement of the final products. The OEM’s determines his advertising effort level to build up the final product brand awareness. Brand building is a long-term process (Meenaghan 1995). We model the impact of advertising efforts in a Nerlove-Arrow framework to catch the long term influences. Let 9
U M (t ) and U S (t ) be the advertising effort levels of the OEM and supplier at time t , respectively. If the OEM does not label the supplier’s brand logo in the final product, the rate of change in goodwill for the supplier S (t ) and that of the OEM’s goodwill M (t ) are just given by the Nerlove-Arrow model as Equations (1) and (2), i.e., d S (t ) SU S (t ) S (t ) , S (0) S0 , dt d M (t ) M U M (t ) M (t ) , M (0) M 0 , dt (1) (2) where M and S are positive constants which illustrate the efficiency of OEM’s and supplier’s marketing efforts, respectively; M 0 and S 0 are the initial goodwill levels of the two channel members at t 0 ; 0 is the constant diminishing rate of goodwill. If the OEM labels the supplier’s ingredient brand logos in the final product and promotes the fact that the ingredient is a part of the end product, some changes occur. First, due to the “brand halo” effect, consumer’s goodwill on the ingredient brand can be partly transferred to the OEM (which is the main purpose of manufacturer-initiated Ingredient Branding), and thus the rate of change in the OEM’s goodwill is translated to Equation (3), i.e., d M (t ) M U M (t ) M S (t ) M (t ) , M (0) M 0 . dt (3) where the M is a positive constant and M S (t ) represents the impact of such “brand halo” effect. Generally, a larger M implies that the ingredient/component plays a more important role in the final product. Second, since consumers can see the supplier’s ingredient brand logos in the OEM’s final products and their advertisement, the OEM’s advertisements are promoting the supplier’s brand partly. Thus, the rate of change in the supplier’s goodwill is transferred to d S (t ) SU S (t ) SU M (t ) S (t ) , S (0) S0 dt (4) where S is a positive constant that captures the overflowing effect of the OEM’s advertising effort, reflecting the fact that the OEM’s continued advertising investments always have a positive effect on the supplier’s goodwill accumulation. Note that the asymmetry between Equations (3) and (4) is original to the fact that the 10
OEM’s advertisement labels the supplier’s brand logo while the supplier’s advertisement does not label that of the OEM. Furthermore, letting M S 0 in Equations (3) and (4), they can be rewritten as Equations (1) and (2), implying the case that the OEM does not label the supplier’s ingredient brand in his final products. We assume that the sales of the final product Q(t ) are determined by the goodwill level of the OEM and his instant advertising effort level, i.e., Q(t ) Q(U M (t ), M (t )) . While most previous literature on Nerlove-Arrow framework assumes that the sales are only affected by the stock of goodwill (e.g., Nerlove and Arrow 1962; Chintagunta and Jain 1992; Viscolani and Zaccour 2009), our sales response function is more general in that it captures both the long-term carry-over effect and the instant effect of advertising on the final product sales. Specifically, we assume a linear sales response function: Q(t ) aU M (t ) bM (t ) , (5) where a is a non-negative constant that captures the instant effect of the OEM’s advertising on the final product sales and b is a positive constant that captures the long-term effect. When the OEM’s advertising effort does not stimulate any instant sales, we have a 0 and Equation (5) reduces to the sales response function in Chintagunta and Jain (1992) and Jørgensen et al. (2000). We assume that one unit of final product requires one unit of component, so the sales of the component QS (t ) are equal to the sales of the final product Q(t ) , i.e., QS (t ) Q(t ) . (6) Let C (U M (t )) and C (U S (t )) denote the OEM’s and the supplier’s advertising cost functions. We assume that the advertising cost functions of the OEM and supplier are quadratic in their advertising efforts: 1 1 C (U M (t )) (U M (t )) 2 , C (U S (t )) (U S (t )) 2 . 2 2 (7) The quadratic cost assumption is common in the literature (Deal 1979; Sorger 1989; Chintagunta and Jain 1992; Prasad and Sethi 2004; Bass, Krishnamoorthy, Prasad, and Sethi 11
2005; He et al.2009; He et al. 2011). It implies diminishing returns to advertising costs. We assume that the firms have certain advertising budget constraints so that the efforts U M and U S are limited by upper bounds: 0 U M K ,0 U S K , (8) where K is a positive constant which is large enough. Let , [0,1] , denote the supplier’s subsidy rate of her cooperative advertising program, the profit rate functions of the OEM, M (t ) , and supplier, S (t ) , are then given by M (t ) M Q(U M (t ), M (t )) (1 )C(U M (t )) , (9) S (t ) S Q(U M (t ), M (t )) C(U M (t )) C(U S (t )) , (10) where M and S are the OEM’s and the supplier’s profit margins, respectively. We assume that the objective functions for the OEM and supplier J M and J S are the discounted values of their profit streams over an infinite horizon with a common discount factor r : max J M (U M ,U S , ) UM max J S (U M ,U S , ) U S , e M (t )dt , (11) S (t )dt , (12) rt 0 e rt 0 subject to the state equations (3) and (4); M (t ) and S (t ) are given by (9) and (10), respectively. The sequence of events is as follows. First the supplier offers the OEM a co-op advertising program and announces her subsidy rate . Then the supplier chooses her ingredient branding effort and the OEM chooses his advertising effort for the final product simultaneously. Sales are then realized. The supplier and OEM maximize their individual profits while taking each other’s best response into consideration. The result for the subgame 12
is a Nash equilibrium. There are two types of equilibrium strategies for this dynamic optimization problem: open-loop and closed-loop strategy. A closed loop strategy is a function of time and the supplier’s and OEM’s current goodwill levels while an open-loop strategy is a function of time only. Closed-loop strategies are generally more complex mathematically and more desirable as they are time-consistent. However, for our particular model formulation, closed-loop strategies are mathematically intractable. Therefore, we focus on deriving the open-loop strategies. Since our supply chain operates in deterministic situations, open-loop strategies are reasonable for those occasions (Eliashberg and Chatterjee 1985). To derive the dynamic equilibrium strategies for the channel members, we first keep the subsidy rate fixed and derive the best response advertising effort levels of the OEM and supplier. We follow the standard procedure of dynamic optimization. Substituting Equations (9) and (10) for M (t ) and S (t ) in (11) and (12) respectively and taking into account the state Equations (3) and (4), we obtain the present value Hamiltonian equation for the OEM as 1 H M M (aU M bM ) (1 )U M 2 , 2 1M ( SU S SU M S ) 2 M ( M U M M S M ) (13) where 1M and 2M are the co-state variables (shadow prices) in the OEM’s problem corresponding to OEM and supplier goodwill levels, respectively. Similarly, the supplier’s present value Hamiltonian equation is: 1 1 H S S (aU M bM ) (U S ) 2 (U M ) 2 , 2 2 1S ( SU S SU M S ) 2 S ( M U M M S M ) (14) where 1S and 2S represent the co-state variables in the supplier’s problem corresponding to the supplier and OEM’s goodwill levels, respectively. Let U M ( ) and U S ( ) denote the OEM’s and the supplier’s best response advertising effort levels for a given subsidy policy , respectively. We obtain the following result: Proposition 1. When the single supplier offers the OEM a cooperative advertising program, 13
for a given subsidy rate , the supplier’s best response advertising effort level for the ingredient brand is given by U S ( ) S S M b , (r ) 2 (15) and the OEM’s best response advertising effort level for the final product is given by U M ( ) M b b a M S M 2 . 1 r r (16) We find that for an announced subsidy rate , the best response advertising effort of the OEM, U M ( ) , and best response ingredient branding effort, U S ( ) , are both constant over time. The strategies of maintaining the constant advertising levels are easy to implement from the managerial perspective. The OEM’s best response advertising effort is increasing in the supplier’s subsidy rate , which makes intuitive sense as the OEM has more incentive to promote the end product if his promotional expenditure is shared by the supplier. Although we allow the supplier to decide on her advertising effort after she announces her subsidy rate, her best response advertising effort U S ( ) does not depend on the announced subsidy rate . In other words, the supplier can make separate decisions on the ingredient branding effort and a co-op subsidy rate. Furthermore, the supplier’s best response advertising effort U S ( ) is increasing in her own profit margin S . With a slight abuse of notation, we sometimes omit the time argument t for the state equations and replace it with to denote that the corresponding variables are the best response functions. We substitute the best response functions (15)-(16) into the state equations (3)-(4) to get the response state equations as: M ( ) M U M ( ) M S ( ) M ( ), M (0) M 0 , S ( ) SU S ( ) SU M ( ) S ( ), S (0) S0 . We substitute the best response functions (15)-(16) into (9)-(10) and express the OEM’s and the supplier’s profits as functions of : M ( ) M Q(U M ( ), M ( )) (1 )C(U M ( )) , 14
S ( ) S Q(U M ( ), M ( )) C(U M ( )) C(U S ( )) . We then solve for the supplier’s equilibrium subsidy rate for the OEM and the equilibrium advertising efforts of the channel members. Results are summarized in the following proposition and the proofs are in the Appendix. Proposition 2. When the single supplier offers the OEM a cooperative advertising program, her equilibrium subsidy rate * is 2 S M 2 M * S 0 if if S S M 2 M . (17) 2 the supplier’s equilibrium advertising effort U S* for her ingredient brand is U S* S S M b , (r )2 (18) and the OEM’s equilibrium advertising effort U M* for the final product is b b ( S M ) a M S M 2 if 2 r r U M* M b S M b a if M 2 r r S S M 2 M . (19) 2 The comparative statics are: * / S 0 , * / M 0 , U M* / M 0 , U M* / S 0 , U M* / M 0 , U M* / S 0 , U S* / S 0 , U S* / M 0 . The supplier will subsidize the OEM’s advertising expenditure only when her profit margin S exceeds a threshold M / 2 . Below the threshold, the supplier does not share the OEM’s cost of advertising because the OEM is so profitable that he himself will invest significantly in promoting the final product. Such threshold could be prohibitive for some component suppliers which only have lower profit margins. 15
The supplier’s equilibrium subsidy rate is non-decreasing in her profit margin and non-increasing in the OEM’s profit margin. The equilibrium subsidy rate is independent of parameters such as M and S , implying that the supplier will share the OEM’s advertising costs even if he does not label the supplier’s logos in his final products. Our result partly justifies why Intel offered plenty of preferential conditions to Apple even when Steve Jobs refused to label the “Intel Inside” logo in Apple’s products in 2005. The supplier’s equilibrium advertising efforts are linearly increasing in the component’s importance degree in the final products, i.e., M , which is consistent with the observations in practice. For example, companies producing key components, such as Intel (computer microprocessor), Microban (anti-bacterial protection), and DuPont (Teflon, Lycra, etc.) have successfully implemented InBranding strategies. In contrast, the suppliers producing non-critical components rarely advertise directly to final users to build up brand awareness. The OEM’s equilibrium advertising effort is non-decreasing in his own profit margin and the supplier’s profit margin. We illustrate the impacts of the three terms in a M b / (r ) S M b / r 2 in (19). The term a shows that instant advertising effort increases the immediate sales. Even when the other two terms are equal to zero, the OEM still keeps certain level of advertising to stimulate instant sales. The term M b / (r ) captures the long-term carry-over effect of the OEM’s advertising on the product sales. This term is large if the OEM puts more weight on future profits (a small r ) and/or the consumers have a long memory (small ). The term S M b / r 2 represents the benefit of manufacturer-initiated ingredient branding. When the OEM promotes the supplier’s brand, the component brand image is improved and the improved component brand image in turn enhances the OEM’s brand image. Note that this “feedback effect” gets less significant with a large discount factor r or decay factor . When the OEM does not promote the supplier’s brand, we get the equilibrium advertising efforts of the two channel members by setting M S 0 in Equations (18) and (19): U S* 0 , U M* M b a M , * 1 r
Supplier-initiated Ingredient Branding occurs when a component supplier promotes her ingredient to final users in efforts to build up brand awareness. Combing the two kinds of Ingredient Branding together, Luczak et al. (2007) proposed a new concept of InBranding, which is shown in Figure 1. To create the brand awareness of her ingredient brand .
Ingredient co-branding, its most direct interests would be reflected in the Ingredient products which can provide differentiated attributes for the final product. And it brings to the consumer association though the ingredient products differentiate, indicates that the quality of the final product, builds high market entry barriers to prevent .
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
Despite these and many other examples of successful co- branding, the strategy comes with challenges that can lead to failure, of which there are numerous examples in practice (Ahn et al., 2020; . Ingredient branding, which is also known as vertical co- branding, en - tails the integration of a branded product (i.e. ingredient) within an-
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Mastercard branding is referred to as ingredient branding. When a partner chooses to white-label, we require them to use our ingredient branding shown here in all consumer-facing marketing materials or mobile app experiences. This allows the partner to take the lead in brand, marketing, and communications, but with the acknowledgment that
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