April 30, 2003
Some of the most important products at NPE next month won't be on display — at least not as one might expect. A handful of exhibitors will be presenting branded goods — products with a brand name that's recognizable by, and desirable to, end-users, be they consumers or oems.
Branding is a powerful marketing tool. Studies show that consumers love brand names; even children as young as five recognize and ask for them.
In manufacturing, where production capabilities are more important to customers than the names of machines or materials, brands still have cachet. A processor can reinforce his competency by citing investments in select makes of machinery and equipment or process technologies.
The concept behind branding is trust in the quality and value of a product. Consumers and others usually pay a premium for a brand.
One exhibitor offering branded products is GE Plastics. The company has embarked on a major campaign to promote its Lexan polycarbonate brand to consumers. The effort, geared to the 50th anniversary of Lexan this year, is costing GE $25 million, a sum that includes electronic and print advertising, and co-sponsorship of a car and driver in the Winston Cup series, a popular racing event in the U.S.
GE executives say consumers are familiar with the Lexan name and are a logical target for a marketing campaign. The product is not only available as resin, but as shapes for a variety of applications. The goal is to get more consumers, along with homebuilders, remodelers, and others, to ask for Lexan products in retail outlets like home-improvement stores.
The concept of materials suppliers promoting branded products to downstream users is hardly new. Dow Chemical, for one, has been doing it for years with Styrofoam insulation. Owens Corning created a huge franchise with its FiberGlass insulation. Many resin producers have been successful in textiles.
Famous fiber brands include DuPont's Antron (nylon), Hoechst's Trevira (polyester), and Amoco's Marquesa Lana (polypropylene). The fiber promotions have been so successful that consumers often ask for goods by fiber brand rather than end-product name. (This is why in America, BASF television commercials stress, "We don't make the carpet, we make the carpet better.")
Cargill Dow, which produces NatureWorks biopolymer, a polylactic acid resin, is selling the benefits of using the material in "green" packaging to food stores and consumer product manufacturers. The goal is to have these companies insist their vendors use it in packaging. The effort has been successful. Food stores like the IPER chain in northern Italy, and electronics giant Sony, use packaging made with NatureWorks resin. Cargill Dow supplies signage and other displays for in-store use and advertising to make consumers aware of the brand and its environmental benefits.
Voridian, a division of Eastman Chemical, is promoting its cpet resin for use in VersaTray, a dual-ovenable package. Voridian licenses the VersaTray technology to processors, but it is promoting to food stores the convenience and value of the brand in packaging for single-serve entrées. The resin producer also supplies in-store signage touting the benefits of the package to consumers. Executives say studies show consumers will pay a premium for such packaging, which can add to a store's profitability.
[Editor's note: Neither Dow, Cargill Dow, nor Voridian is exhibiting at NPE. They will likely have representatives at the show.]
What's in a name? Very often a huge competitive advantage. And as processors seek ways to hone their competitive edge, acquiring and promoting branded products is a viable strategy, and another reason why NPE attendance is critical.
Patrick A. Toensmeier [email protected]
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