Laptops, Tablets and SmartPhones contain hundreds of electronic components, plastic and glass. While, typically, those that supply these parts don’t independently advertise them…about about 2 years ago I started noticing glossy print ads for Corning’s Gorilla glass.
From a technology standpoint, the glass itself is no doubt very tough, more resistant to scratches compared to ordinary glass and other good stuff. But again, since customers are not buying the glass on their own from Corning, why would it spend millions of dollars running print ads touting the amazing benefits of its glass?
The answer can be divined from another famous and enormously successful “ingredient branding” campaign from a few years ago:
[And before that, it was NutraSweet's successful campaign to fight off patent expiration and competitors by creating its brand in consumers' minds.]
So what happened with Intel is that until that campaign was launched, PC makers captured most of the value they were creating for customers…so customers were buying an IBM PC or a Dell PC or an Acer PC (did Acer exist back then?). Consumers did not really think (or care) a lot about the chip or processor inside…so by building Intel’s brand, it increased the value or “B” that customers associated with having an Intel processor inside the box. This, in turn, allowed it to charge PC makers higher prices (compared to AMD chips and processors) and diminished that part of the value that the PC makers were able to capture. Business school case studies ascribe the eventual destruction in the PC manufacturer industry partly to the rise of Intel’s brand.
I suspect Corning is trying to make progress along the same path (building its brand…not destroy SmartPhone and Tablet makers).
As its Gorilla Glass brand gets built in consumers minds, they will start to associate a higher value with this specific brand of glass and two things should happen:
1. Consumers will demand, like or prefer to buy devices with Corning’s Gorilla Glass. This will allow Corning to charge device manufacturers higher prices for its products.
2. It will also depress prices that Corning’s competitors (existing ones today or new ones that might crop up tomorrow) can command for their products.
Good moves on Corning’s part, no?