Texas Instruments Becomes an Ingredient

August 30, 2006

Intel did not invent ingredient branding, but they did take the strategy to a whole new level. (At this point I think theyíre a victim of their own success here, but thatís a blog for another day.)

GoreTex offers an earlier visionary example of ingredient branding, as it was always more important than the actual product brand ñ leading to the holy grail of ingredient branding: pull through with your customerís customer. Now Texas Instruments, the semiconductor and technology company with a 75 year history, is applying the direct to the consumer approach to help stimulate market demand among end users.

DLP Logo

The Texas Instruments brand is probably best known to consumers for calculators and early forays into personal computers. Beyond that, it has long been pretty quiet. Now Texas Instruments is in the midst of a significant campaign to promote Digital Light Processing ñ or DLP technology. DLP is used in a range of projection and display applications by a number of different companies making the TVs

and selling them to consumers. The consumer television environment is cluttered with formats, features and technologies ñ from HDTV and LCD to Plasma and HDMI, aspect ratios, vertical lines of resolution, flat panel vs. flat screen; itís enough to make all but the most savvy technophileís head spin. DLP offers yet another source of confusion. So Texas Instruments takes the opportunity to help their own customers sell DLP products more effectively with a campaign to speak directly to consumers, educating end users about the difference of their technology.

This is a smart approach for a company like TI, with no infrastructure to sell to consumers and no driving need to take on the likes of LG, Samsung and Panasonic. Instead of competing with them, TI has focused on selling them the technology and partnering with all of them to market it. TI has over 50 partners selling DLP products. Each of these partners likely contributes financially to support marketing behind the DLP ingredient. And each of these partners offers their own communications support of DLP in their product literature, advertising and retail displays. For a publicly traded company like Texas Instruments, the boost to familiarity among investors that comes from this type of exposure can even drive a higher stock price.

Ingredient branding is a compelling solution when a company is selling a strongly differentiated component. It can help direct customers differentiate by facilitating their communications the end user about product features and performance. For TI, another approach may have been a simpler technology license, without any kind of ingredient initiative. But that would leave TI with much less leverage and probably would have reduced theirs to a commoditized, brand-free offering. And, as Intel showed us back in their day in the sun, a successful ingredient initiative can create a marketplace where TIís leading edge technology becomes table stakes for everyone.

Jonathan Paisner jpaisner@corebrand.com

 

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