John Quelch, a Professor at Harvard Business School, and director of WPP Group plc has written about Ingredient Branding. I agree with Dr. Quelch that ingredient branding is important and is becoming more common.

It even happens with mega-brands becoming ingredients within other brands. His example of Nippon Airways and the Dreamliner is a good one. Another example is AT&T and Cisco. (Full disclosure: Cisco is a Crimson client). I’d argue Cisco is a bigger business brand than AT&T and yet, Cisco offers a “Cisco Powered” Quality of Service certification for qualified service providers. This is a “win” for both parties:

• AT&T has qualified for this ingredient branding which enables AT&T to brag about the quality of its managed service offered to businesses.
• This is a win for AT&T because the Cisco brand carries such significant weight with business (and technical) decision-makers. AT&T can more effectively gain mindshare via a quality certification, and differentiate their offering from other service providers.
• This is also a win for Cisco because it creates a closer partnership between the two companies, and it extends Cisco’s brand to the business buyer. This brand extension helps Cisco position products more effectively to (non service provider) businesses as well.

I also argue that Cisco is much better at marketing to businesses than AT&T. Not only do they have a stronger brand, but they know how to leverage that brand. The key to ingredient branding is that both parties win, and Cisco has created a mechanism to enable a win-win with AT&T, and a variety of service providers. The smarter company drives the branding, whether it’s as an ingredient or not.