Ingredient Branding at DuPont

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Ingredient Brandingat DuPont

• Carol Gee
• Global Brand Manager
• DuPont Textiles Interiors
• MSI Conference
• March, 2002

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The Powerand the Challenge

• The Power DuPont makes products that go into
  other products
• The Challenge We are invisible
• We overcome this challenge with a two-pronged
  attack
• Nurturing a strong corporate brandthe DuPont
  name and oval
• Leveraging successful product or ingredient
  brands throughout the value chain

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Viability
Maturity
Growth
Maturity
Growth
Maturity
Birth
Growth
Chemistry, Biology... knowledge-intensive
solutions
Birth
Chemicals, Energy
Birth
Explosives
1802 1830 1850 1900 1925 1945 1990 2000 2050 2090

• Operates in 200 countries
• Markets 2,000 trademarked products in literally
  every existing SIC code

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Branding History

• 200 years of branding experience, demonstrating
  the interplay
• between corporate and product branding.
• Highlights
• 1808 DuPont becomes company trade name
• 1909 DuPont superbrand born connects all
  product brands to the DuPont name. Oval finds its
  form.

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Branding History

• 1934 1936 Shaping image around name/oval
  increasingly important
• From Merchants of Death to Better Things for
  Better Living through chemistry
• Trademark or generic issues arises - DUPRENE vs.
  neoprene, cellophane
• 1939 Nylon introduced at Worlds Fair, not
  trademarked
• 1946-1960 Post-war boom/burst of product
  innovation
• Antron nylon, Orlon acrylic (1948), Dacron
  polyester (1950), Nylon carpet fiber (1957),
  LYCRA (1960)

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Branding History

• Late 1980s/1990s Term ingredient branding
  in vogue, with DuPont widely regarded as the
  pioneer
• DuPont should be credited as the first
  industrial supplier to promote its inputs as
  recognized brands
• -Journal of Business and Industrial
  Marketing, 1993
• 1994 Brand manager hired for TEFLON
• -Brand licensing starts
• 1999 The miracles of science created to reflect
  shift from chemicals to science and
  knowledge-intensive processes

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Corporate Branding Today

• Strong belief that the DuPont name adds value
  acrossbrand portfolio
• Increases purchase intent for new brands and
  existing brands with low awareness
• Linking the name to strong brands strengthens
  the corporate reputation without negative impact
  on the brands
• A product-endorsed, ingredient-branding strategy
  leverages our corporate and product brands for
  mutual benefit is key to our success

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Ingredient branding defined

• One of a growing number of brand partnership
  options
• Co-brands complementary products or services
  add value to
• one another (American Express and an airline)
• Component brands relates components which have
  identities
• of their own within larger, more complicated
  product offering
• (Bose stereo in luxury cars)
• Manufacturer-initiated ingredient brands
  Manufacturer uses
• established brands in an effort to communicate
  quality or value
• in its own products. Inputs are marketed by
  their producers as
• separate end-products. (Hersheys syrup in Betty
  Crocker)

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Ingredient branding - why?

• Goal is to build awareness and preference along
  the value chain
• for the suppliers brand of ingredient - everyone
  benefits.
• Supplier
• Better profit margins from large volume,
  non-price differentiation
• Stability and variety in customer demand
  (TEFLON alternate uses)
• Longer term supplier-buyer relationships
• Manufacturer
• Shared product promotion costs
• Increased access to distribution channels
• Competitive advantage - overall quality enhanced
  by ingredient quality
• Shared production and development costs

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Ingredient branding - why?

• Retailer
• Better operating margins (STAINMASTER carpets
  command price premium)
• Faster-turning inventory/better consumer
  acceptance
• Additional promotional support
• Consumer
• Salient value-added in a readily identifiable way
• Simplified purchase decision based on brand
  familiarity

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Ingredient branding - when?

• 1. Ingredient should be a substantial innovation
  and/or advantage over existing alternatives
  (defensible patents a great plus)
• And the consumer needs to care! (CORFAM)
• 2. Versatile in current and future use - leverage
  investment across products and categories
  (LYCRA)
• 3. Sales potential for final product high -
  revolutionize a category (STAINMASTER)

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Ingredient branding - how?
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LYCRA case study - getting it right

• Based on valid and significant consumer needs
  better comfort and fit in apparel
• Decades of effective consumer promotion

1959
1980
1974
1997
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LYCRA case study - getting it right

• Consistent collaboration with manufacturers and
  retailers in promotion
• ...and collaboration in non-promotional areas
• Liz Claiborne cut and sew guidelines

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LYCRA case study - getting it right

• Expansion of manufacturer user base LYCRA
  Assured

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LYCRA case study - getting it right

• Results LYCRA now among the worlds top ten
  apparel brands
• alongside heavy hitters such as Armani, HUGO
  BOSS, and Levis.
• Despite expiration of its patent on spandex
  several years ago,
• DuPont retains roughly 2/3 worldwide demand

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Success requisites

• Understanding the dynamics of the market segment
  value chain
• Identifying where the power is in the value chain
• Clearly identifying DuPont as the hero, provider
  or supporter at every step in the chain
• Clearly defining the product brand attributes,
  benefits, and position that will comprise the
  brand franchise
• Pursuing a marketing and communications plan that
  creates purchase preference
• Maintaining continuity and consistency of face
  and voice over time

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DTI Business / Strategy Model
Consumers Retail Garment Fabric
Yarn Distribution DuPont Suppliers
Processing
Lycra Teflon Cordura Thermolite Coolmax
Stainmaster Supplex Tactel
Spandex Nylon Nylon Polyester
Other Corporate Capabilities Alliances
Value Chain Alignment - System Cost
Efficiencies - Speed

• Market Back Approach
• Opportunity Identification
• Offering Development
• Value Capture

• Branding
• Benefit Platforms

• Innovation
• In - house
• 3rd Party

11,000 people 10,000 customers 30 plant
locations 10 RD laboratories 15 JVs 3B
revenue
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Market-Back Dynamics
Consumer brand portfolio
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A new model of ingredient branding
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DTI Brand Architecture
Portfolio of Potential Licensed Brands
Enviroreact, High Trek, Metropolis,
Micromattique, SolarMax, Optique, Adoration,
Cool-Loft, Duralife, Eloquence, Microloft,
Sleepsmart, The Huggable Pillow, Thermastat,
Bodycare, Energywear, Skincare, 501, Orlon,
Ballistic, Colorlink, Coloursafe, Duratech,
Grand Luxura, Steamguard, Xtralife,
Cosmetique, Great Feelings, LightSpirit Blend
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Conclusion

• As our new ATS structure demonstrates, the DuPont
  approach
• to branding is an evergreen process.
• De-link brands from specific ingredient products
• Link to broad market-relevant needs
• Means of leveraging knowledge portfolio
• The future is today.