The Demise Of Brand X - branding of auto parts/supplies

Automotive Industries, May, 1999 by Gerry Kobe

Branding is helping the industry's mega suppliers create a pull for products and a push for more profits.

A James Bond movie is essentially a crash course in what branding is all about. The camera captures the "Sony" badge on Bond's television screen, Rolex billboards make the perfect backdrop for a top-secret rendezvous and every speedboat chase is courtesy of a prominently displayed "Mercury" marine engine. Such blatant branding is a marketer's dream and, not surprisingly, the groundwork is being laid to make automobiles the next brand name showcase.

In fact, auto suppliers have been watching other industries for years, jealous of the fact that generic colas have become "Cokes" and facial tissues have graduated to "Kleenex" status. But since those products were marketed directly to consumers, it just wasn't a good parallel to supplying commodity parts to an automaker. However, it was the computer industry that showed the way, when PC manufacturers began touting "Intel Inside" as an endorsement to the machine's speed, and "Windows 95" as their seal of approval on its operating system.

"Things like `Intel Inside' was good news to the automotive mega suppliers," says Michael Schmall, managing partner for Troy, Mich.-based consultancy The Planning Edge. "It signaled a new frontier and the larger companies can easily afford to establish brands that will differentiate them from smaller unbranded competitors. If they do it right, they can source the brand that creates more sales, higher profits and a pull for their product." Schmall adds that the "giants" are moving in that direction now, with Johnson Controls (JCI) being one of the most aggressive in the business.

"Tier 1s have always had industry brands they sell to the OEM," notes Mike Suman, JCI vice president of advanced sales and marketing. "We are continuing that but we are ramping up consumer branding. By creating a pull for our products from the ultimate consumer, we can help the OE make a sale, which gets them excited. Plus, the more the customer talks about JCI, the quicker the OE will think of us when they want support."

JCI has chosen its consumer brands carefully, and has focused its efforts on products that not only make a vehicle more useful, but ones that make life easier.

"One of the phrases we have been secretly kicking around here is `connecting cars to life,'" Suman says. He points to products like JCI's recently introduced PlaySeat as a good example. PlaySeat is an activity center built into a fold-down seat that gives children a writing surface, a built in toy box and Lego-friendly surface. "Our partnership with Lego gives us many advantages," Suman says. "We can update our product whenever Lego does. We give the dealer a closing aid by giving away a Lego starter kit. We have a unique product in the industry and we make life easier for parents." Suman notes that the JCI name is not even on the PlaySeat, but feels that the OE and coverage from the media will make the connection to Johnson Controls.

The company has also branded an electronic communications system called HomeLink, a monitor/VCR combination called AutoVision, a recorder/reminder device called TravelNote and even offers the highly regarded Recaro seating system as part of its product line.

Suppliers increasingly believe that in a time of lookalike, work-alike products, it is important to get good brand equity through customer exposure, press exposure and investor exposure.

"If you get enough math working in your favor, you automatically get people believing in the future of Johnson Controls," Suman notes. "And if they believe in us, that is creating value for the future."

JCI Consumer Branded Products

PLAYSEAT -- Jointly developed with Lego, gives small children a self-contained activity center.

AUTOVISION -- Ceiling-mounted monitor links to VCR/video games. VCR detaches for home use.

HOMELINK -- Built-in communication system operates garage doors, activates home lighting, safety and convenience systems. It's cross-promoted at Sears and other retailers.

RECARO -- Last year JCI gained exclusive rights to manufacture Recaro brand seats for North American automakers.