Such ingredient brands can shout loudly using conventional advertising methods, pushing to the front of communications to become a fully-fledged consumer-facing brand. Or they can play a behind-the-scenes role as a partner brand to help its consumer-facing business partners increase sales of its products.
Microchip brand Intel launched a consumer-facing campaign of its own back in the Nineties to communicate that it is “the computer inside” and is now running a campaign promoting the employees behind the brand. But its main rival AMD is shunning that high-profile route in favour of working with its business customers to create a better experience for customers.
The ingredient brand is taking the behind-the-scenes route to further its business. It might come as a surprise to most gamers to discover that their PC or console uses an AMD graphics card. And Nigel Dessau, chief marketing officer and senior vice-president at the microprocessing company, says he doesn’t care whether people know this or not.
Instead of worrying about consumers picking their computers because of the chip inside, AMD has devised a sales tool called Vision to help its consumer-facing customers, like Hewlett-Packard and Lenovo, sell more computers by trying to demystify technology.
“The point has never been to make our brand more important than that of our partners. We want to help our partners and retailers at the point-of-sale to change the conversation about technology,” argues Dessau.
Although many households own a computer, the majority of people can’t get their heads around the technical terms, according to a recent survey by Computing Which? Indeed, 50% of people admit that they are completely baffled by their PCs and laptops and a further 71% say they don’t understand the jargon used.
This lack of understanding is something AMD wants to address. Dessau argues that if people don’t understand the real benefits of computers, then retailers will struggle to sell the most appropriate products.
“People used to talk about how fast a car could accelerate from 0-60mph. Now if you went into the dealer and they told you that information, you would prefer to know how fuel efficient or environmentally friendly the vehicle is.”
“The point has never been to make our brand more important than that of our partners. We want to help our partners and retailers at the pointof- sale to change the conversation about technology”
Nigel Dessau, AMD
The car industry now understands how to communicate the real benefits of its vehicles, says Dessau. He believes that AMD can help transform the computer industry using similar methods.
Shopping for computers can be a confusing process. The temptation to use techno-babble is too strong for some brands and retailers, who use the terms “gigahertz and gigabytes” as if that’s a normal part of conversation, argues Dessau.
AMD has suggested a three-step buying process for point-of-sale locations to help its partner brands distinguish between their “good, better and best” models.
Nine out of ten of the PCs that use the AMD chip and are available to consumers have Vision branding, says Dessau. This includes providing training material to retail staff so that they can sell computers using Vision methods.
Dessau has been assessing the first wave of Vision to see how much of the training has trickled down to the actual sales process. In places where there was in-store sales support of the branding, 74% of consumers “had a usage, not a technology-based conversation”, claims Dessau.
The marketing strategy has been extended to small and medium-sized businesses that may be buying PCs in similar places to consumers, but have a different set of criteria. “Vision Pro is designed to tell the same story but in a business context,” he adds.
Initial feedback suggests that Vision may be helping retailers sell more to customers. A recent secret shopper study carried out by AMD globally revealed that more than 50% of store staff say they have sold a higher specification product than they would have done before.
“That’s good for us, the retailer and even the consumer because customers have got something much more in line with their actual needs,” says Dessau.
AMD is preparing for the second phase of Vision, which will be introduced towards the middle of this year. The execution of the strategy is being refreshed to ensure the message in-store is clear.
The initiative has not been without its difficulties, however. The sales process refers to its “good, better and best” computers as “see, share and connect” models respectively. But some consumers, who were anxious that if they bought a “share” computer they might not be able to “connect” with it, did not interpret this message in the right way. This too-literal translation of the marketing strategy indicates that not all of the complexities have been ironed out of the technology retail sector.
“Some of our initial point-of-sale activity has been too focused around the use of the computer rather than the people,” admits Dessau. “The messaging will be more mature in the next phase to help consumers engage with the question around what they want to do with their machine,” he adds.
AMD claims its partners have been supportive of its strategy so far and do not perceive Vision to be getting in the way of their own branding. Dessau says partners will be adding the Vision sales philosophy onto their websites to help promote it to a wider audience.
Recent research by Leo Burnett’s marketing services arm Arc suggests that many consumers do their initial research online. Dessau agrees that it’s important for partner brands to provide shortcuts for consumers online so that they can quickly find products that suit their needs.
AMD is adamant that this approach creates brand loyalty. Instead of consumer loyalty, it is developing partnership loyalty, Dessau argues.
He believes that an ingredient brand doesn’t need to “steal the oxygen of publicity” from its partners to get more business. By simplifying the shopping process, more products are sold.
He says that ingredient brands should not see being behind the scenes as a disadvantage. “It’s much more important for us that we work in a more intimate way with our partners to drive their brand because that way they’ll drive our business.”
What is Vision?
Vision is AMD’s strategy to help demystify the process of buying a laptop. It wants its customers, such as Hewlett-Packard and Lenovo, and end retailers to focus on the benefits of the system as a whole, rather than the finite detail of the hardware in the computers.
The initial launch of Vision saw AMD divide the market into three groups of models: “good, better and best”. These were represented with marketing material, which communicated:
- See – for basic users who want to email, browse the internet and view photos;
- Share – for the mainstream users who want to use programmes like iTunes to convert music and videos, chat to friends over Skype and watch Blu-ray movies or have a better quality live TV experience;
- Create – for the advanced user who wants to edit movies, play advanced games and manipulate photos.
The next phase of Vision will see AMD communicate the “good, better and best” model in more ways in an attempt to create a human conversation.
Alternative ingredient brand strategies
Intel, AMD’s largest rival, has been turning itself into a consumer-facing brand since 1991. The Inside Intel logo was introduced when stickers were produced to go on the outside of its partners’ brands. It also contributes to the cost of its partners’ advertising to have its logo and five-note brand jingle included in their commercials. The idea behind becoming a consumer-facing brand is to increase trust in the technology contained in its business partners’ computers.
Waterproof fabric Gore-Tex is used by numerous outdoor brands, including The North Face and Berghaus. The lightweight fabric is promoted by brands because it has become synonymous with quality. Gore-Tex has spent money educating consumers about what the fabric does in order to encourage consumers to search out brands that contain its material. It has recently launched a social networking site where outdoor enthusiasts can post photos and write about their own experiences with other interested parties.
The Dolby sound system is an ingredient brand that will be recognised by cinema-goers. The brand provides some free marketing materials to cinemas that use its system so audiences watching a film know the theatre is “using the best entertainment experience possible”. Movie trailers, promotional display material, stickers and even staff badges are offered to cinemas to ensure the brand behind the sound of films becomes well-known in its own right.