Presented By:Group 1 (Sec. B)

Introduction

• Corporate Branding Strategy• “386” could not be trademarked

Develop a trademark nameLaunch a corporate branding campaign

• 2006: Retooled and launched “Intel Leap Ahead” campaign

Company Background

• Founded in 1968 by Robert Noyce and Gordan Moore

• 1978, 16-bit 8086 Processor• 1979, 16-bit 8088 Processor• Competition with Motorola 68000• 1980:- IBM’s selection• 1988:- Intel 386 SX• April 1989:- 486 Processor• 1990:- 7.5 million sales

Microprocessor Industry in the early 1990’s

• 1986, only supplier of 386 and 486 technology• 0ct. 1990, AMD386• 1991, Chips and Technology and NextGen

microsystems

Intel’s Branding Issues

• Late 1980’s : Shift from PC industry to mass market, non technical business and home PC

Strategy shift

• Create Brand awareness and brand preference• How to differentiate it’s products• June 1989: Mimicked Grafatti by spray

painting over 286 and inserting 386 SX• 1991: Sold 8 million units

Evolution of Intel’s Branding Strategy

• March 1991: lost “386” trademark case

• Ingredient supplier to PC OEM’s• Combining both Push and Pull communication• Use of logo to represent it• Use of coop marketing funds• Build brand equity • Intel: “The Computer Inside” – Quick-Do you

know the first name in microprocessors?• Range of products: PC enhancement,

multimedia, peripherals• Brand offering “Safety” and “Technology”

Intel inside• “The Computer Inside” campaign• “Intel In It”• Finally to “Intel Inside”

• Enlisting OEM Support• Coop Advertising Program• Rebates between 30 to 40 percent of the cost

of print add up to a maximum of 3% of company’s Intel processor purchases

Launching the “Intel Inside” Program

• 1991:- $125 million in the next 18 months• 240 OEM customers agreed• To create a brand image for the products that

fall under the Intel Inside umbrella• Aimed at:- “Microchip maker to quality

standard bearer”

Relationship with OEM’s• IBM was the first major OEM to use Intel Inside Logo, in April 1991.• Followed by Zenith Data Systems, Everex Systems, NCR Corp, Dell Computers and AST

Research but by then first tier companies like Compaq and IBM left using the Intel Inside Logo.

Intel’s AD Campaign• The first Intel Inside ad was a print ad called “measles”.• The objective was to get the new logo in front of consumers and get them familiar with the

Intel name.• In November 1991, Intel launched its first T.V. ad named “Room for future” using special

effects to take the viewer inside the computer.

Branding and Naming “P5”• As the numbers were not trade-markable, Intel decided to create a new brand that would – a. Be difficult for competitors to copyb. Be trade-markablec. Indicate a new generation of technologyd. Have positive association and work globallye. Support Intel’s brand equityf. Sound like an ingredient which worked with Intel’s partner’s brand name

The Pentium Name

• Announced October 20, 1992• Pentium Name chosen• “Pent” – Fifth generation processor• “ium” – Elemental component• Great emphasis on PR and media

Product Announcement

• Employed extensively detailed ads• Elite positioning• For “all but the most demanding users”• Went back to the roots

Success

• $500 million invested in advertising• Ingredient branding was the focus• Intel Inside• Competition ignored and rejected the strategy• Won several awards:– Marcom award– Grand marquis excellence award

Success (Contd.)

• Intel conducted market research globally• Users perceived Intel as tech leader vs. AMD and

Cyrix• Brand recognition increased highly after the

campaign• Intel and Intel Inside confusing for non-technical

users• Foreign languages also created a little confusion

The Hit

• Initial sales only 10% of revenue• Price cuts showed rapid surge in sales• In 1992, Intel had 90% of the market share• In 1994, the revenues sored 24% from the previous

year• 1997 – Pentium II launched• Used Super Bowl and Bunny People Ad• $100 million spent on campaign

Renewed Competition

• 1998- HP and Compaq chose cheaper AMD and Cyrix• Intel ignored the low-end market• By 97 summer, AMD and Cyrix gained 20% of low end

market• Intel dropped below 30%• Intel release low-end Celeron• The slow Celeron resulted in drop of market share

from 68 to 56%

Renewed Competition (Contd.)

• 1999 – Release of Pentium III• Positioned as tool to enhance home PC user`s

Internet experience• Double advertising budget in 1998 – $300 million• More PC centered campaign• Featured trio – Blue Man Group• Reinforced number “III”

AMD in market place

• AMD launched its Opteron chip against Intel’s Xeon in 2003• It was favored by HP, Sun microsystems and IBM as it

consumed lesser electricity and generated lesser heat• AMD also launched Turion chip against Centrino• It managed to beat Intel in many areas

New Opportunities

• Expansion in china as it was the 3rd largest market for chips• Apple started using Intel• Intel focused on ‘digital household’

• Leap Ahead:• Changed its brand identity and logo after 37 years• Intel was now ‘Leap Ahead’• Focused on boosting wireless computing

Conclusion

• The share price went from a high of $71 in 2000 to a low of $18 in 2005

• But it gradually became one of the five most valued brands in the world

Q.1 What were the strengths and weaknesses of Intel Inside campaign?

• Weakness– Conflict with 1st tier OEMs– Product is under advertised

• Strengths– Clear conversion– Build brand equity and pull preference– Co-op support from OEMs

Q.2. Evaluate Intel’s continued the use of the Pentium family of processors. Did Intel make the right decision by extending the name through the Pentium processor?

• Flaws of the previous processor model names• Hence it took the right decision by extending the name through the

Pentium processor• This helped the company:1. Differentiate its products from its competitors like AMD2. Maintain its brand equity and avoiding brand dilution3. Trademark its products to avoid copying4. The word ‘Pentium’ connected with the product and this name

became synonymous with processors

Q. 3 Suppose you were the Chief Marketing Officer for AMD. How would you propose the company position itself to better compete with Intel? Would you propose that AMD institute an Inside – like ad campaign?

• AMD management does not believe in “Inside” campaigns. Besides, it is not recommended to imitate Intel to avoid a “follower” image.

•AMD is half the size of Intel, there was no need of similar marketing strategy

• AMD should focus on its core competencies, excel in the commodity-like memory business, and try to be ahead in cutting-edge technology, support its brands Athlon 64 and Opteron and buil a better experience and better lifestyle by bridging the digital gap between poor and rich

• AMD should concentrate on Flash memory- mobile technology

• They have a better, less expensive product, both consumer and business.

Q. 4 Evaluate Intel’s segmentation strategy. Is having a good/better/best product line ( Celeron, Pentium, Xeon) the best positioning for Intel? Should it discontinue a line(s) and focus on other(s)??

• Yes, it was a good segmentation strategy by IntelHaving a product line like Celeron, Pentium, Xeon, it

will cover whole market from low end to high end chip. So it was a good positioning for Intel

No need to discontinue any line but try to focus on speed and product performance

Q. 5 In light of Intel’s move to a digital home, did the company’s executives make the right decision in launching an entirely new brand identity? Did it make the right decision in changing a 37 year old Intel logo and dropping the Intel inside campaign for Leap Ahead? What other marketing strategies might the company employ?

• Yes, a company like Intel must progress and develop new applications for its products because the customer base is comfortable with technology and have the buying power.

• Not wasted the 37 year impression that they had made on the consumer’s consciousness, they have kept the essential logo and the Intel name.

• Easy to use products that enhances life and the liveability of a home is the best way to go.

• By using a strategy of combining products in computer systems, Intel can sell more of its non-processor products by including them with Intel Processors

• Intel has stated that Viiv-based PCs will feature dual-core processing, remote control operation, gigabit Ethernet controllers and wireless network cards. Viiv-based PC’s will also act as a personal video recorder with the addition of a TV tuner card.

• It will also feature a “Quick Resume” Technology” which will allow users to turn off and on the computer in a manner of seconds.

• This new campaign has established an emotional connection with the customers. It also credited the engineers behind Intel's technology.

• The ad voiced optimism about the future in the backdrop of the global economic slowdown.

Q.6 Intel moved into consumer electronics products such as digital cameras in 2000, only to withdraw after receiving complains from OEM`s such as Dell. Does Intel face a similar issue with its move into the “digital home”? Does this move too far outside its core competency of producing micro-processors?

• Shortcomings:– Major competition– Diluted focus– Lack of expertise

• Digital Home:– Employs DLNA (Digital Living Network Alliance) organization– Co-operation between several brands (245)– Focus on combining ideas and providing a unique experience– Connect and enjoy

• Intel`s competency:– Digital home integrates software and hardware– Exploits Intel`s expertise of micro-processors– Integrates it with expertise from different partners– Enhances Intel`s “Intel Inside” image– Expands range of functionality keeping in mind the need of the

times– Moves outside the core competency

Q.6 Intel moved into consumer electronics products such as digital cameras in 2000, only to withdraw after receiving complains from OEM`s such as Dell. Does Intel face a similar issue with its move into the “digital home”? Does this move too far outside its core competency of producing micro-processors?

Thank You

Members:Aadil Ahmed (01)Abhijeet Chowdhary (03)Abhishek Sharma (05)Akshay Gopal (07)Ankur Dave (10)Arushi Goswami (18)