Know-How Exchange : Student Questions

In general, you as the supplier of one part used by an OEM, would not get that involved with the marketing of the OEM product to the end user. You would provide many technical details on the performance and use of your product to the OEM, and perhaps provide some marketing (financial) support, usually in the form of providing some money if their advertisements promote the product specifically.

One exception to what I listed above is if your product is a very key part the OEM's product. If you are Intel, then you provide comarketing help whenever they put the "Intel Inside" logo on their ads (or in Intel's case, also run your own branding ads, which is an unusual step for a company selling to OEMs).

I've been involved in a number of these situations over the years, and there are a few notable successes.

Perhaps the best known example is DuPont, which markets a nylon carpet fiber under the "Stainmaster" brand.

It became the best known brand in the industry, even though DuPont does not make carpet. They sell the fiber to mills that manufacture the actual carpet. (And virtually all the mills have their own brand names as well.)

DuPont did many things right on that product launch. First they advertised heavily. The market was not heavily advertised prior to then, so their spending level looked even bigger than it was.

Then they mounted a campaign aimed at carpet retailers -- their customers' customers. They provided sales training, point-of-sale promotion materials, and even a field merchandising force that called on retailers on a regular basis -- even though they couldn't take or deliver an order.

And they provided the manufacturers with an alternative: they could buy "unbranded" fiber (which couldn't be called Stainmaster or be linked to DuPont) for less money. Of course, there weren't many takers when the manufacturers saw the kind of support DuPont was putting behind the primary brand.

I actually have a few additional stories about ingredient branding, but the Stainmaster example is probably the most visible/notable success I've seen for ingredient branding. (Intel did a lot of the same things with "Intel Inside," but that came several years after the DuPont experience, and Andy Grove learned a lot from DuPont in this regard.)

If you need more examples, DuPont has several: Lycra, Nylon, Orlon, Corian, Kevlar, Nomex, Quallofil, Cool-Max, etc. Also think about Kodak paper used for photographs, where the paper is just an "ingredient," not the primary product (i.e., the image itself). There are dozens of examples like these.

The supplier importance begin in the strategic plan, you always need to consider the supplier topics in order to guarantee the successful of your strategies. For instance if you want to guarantee your Quality of Service and customers compromises, the supplier agreements and permanent communication with them is critic. All the quality theories of improvements talk about the suppliers processes. You can easy develop a win - win Relations with your suppliers because they will be also interested in develop them. They are interested in increase the customer knowledge and perceptions, they will be interested in helping to resolve the customers claims and problems.

Some useful articles:

https://misweb.com/magarticle.asp?doc_id=23247&rgid=7&listed_months=0

https://www.optimizemag.com/article/showArticle.jhtml?articleId=21400851

https://www.industryweek.com/currentArticles/asp/articles.asp?ArticleId=113...