Inside Intel Inside

In early 2002, Pamela Pollace, vice president and director of Intel's worldwide marketing operations, is debating whether the company should extend its "Intel Inside" branding campaign to non-PC product categories, such as cell phones and PDAs. The "Intel Inside" campaign has been one of the most successful branding campaigns in history. However, the campaign is more than ten years old, and growth in the PC market appears to be stagnating. In contrast, sales of portable digital devices--such as PDAs and cell phones--appear to be growing at a healthy rate. Pollace is debating whether the "Intel Inside" campaign will work in these other product categories, even though Intel doesn't dominate these other markets like it does the PC market, and it isn't clear that consumers will associate Intel with these other markets.

Inside Intel Inside: Expanding on a Branding Legacy Creating what was one of the greatest branding projects in the era of technology, Intel's decision to expand into the mobile industry set a new precedent for defining the limits of branding campaigns. The Intel Inside branding campaign made a brand inside a commodity a genius B2B practice. Summary of the Case: Intel's decision to market its product as a branded component was genius - it was ground breaking in its industry of microprocessors at the time, and was instrumental in creating equity as an input brand. 'Intel Inside' became the first trademark in the electrical component industry. They effectively taught consumers to understand computers as an assurance of quality through their name. Intel's main success factors included an established reputation in the technology field, a willingness to collaborate with partners, and an aggressive marketing budget even despite economic turns. What is now difficult for Intel to achieve in the mobile market, as opposed to their highly profitable and reputable PC market, is the level of necessity in smartphones and tablets. They don't require the computing power that Intel fosters, meaning either a less quality computing product option and one that sucks less battery power from mobile devices, a constant problem for smart devices. devices. Intel has to kick up its efforts efforts more than the 'Intel Inside' campaign in the mobile market if they want to gain a foothold.

Lessons Learned: 1. Developing products in a B2B atmosphere means adapting to the needs and wants of the customer base in each specific industry. Even if your customers comprise the same foundation, in each respective industry (i.e., PCs vs. smartphones) they have varying needs for each product or service you are offering, even in the B2B world. 2. Understand customer trust and innovative staff in the balance to move forward. Intuition of a collaborative group of employees usually leads to smart decisions don't let previous dominance in a market or company policy withhold new idea generation! 3. Create feedback tools with existing and potential customers to generate important data. It's the critical tool that, if the data is gathered honestly enough, can produce some serious leads toward enhanced product design, especially in the case of Intel where risk and uncertainty are prominent. 4. Don't fear the potential of new market entry: embrace it and accept the risk. Each new industry have a wealth of opportunity and change - but, being in a position to research and develop your business in these new fields is worth the risk, given the potential payoff.

Buyer's Viewpoint: As Jim Bob, the average middle-class user-friendly appreciative consumer, I'm thrilled to see that Intel Inside is expanding into the mobile market. I understand that the company is worried about their image and market share, but as someone who has used Intel in my computers before at work and at home, I'm excited! I hope it doesn't drain my battery though - having to recharge my iPhone two times a day is enough of a hassle. I also hope that Intel keeps its quality in the mobile market, although I'm not so much worried about that part as much as their integration to the product driving up the price per item and monthly service bills. Extend to New Products?

Pamela Pollace, vice president and director of Intel's worldwide marketing operations, is debating whether the company should extend its "Intel Inside" branding campaign to nonPC product categories, such as cell phones and PDAs. The "Intel Inside" campaign has been one of the most successful branding campaigns in history, but it is too old, and growth in the PC market appears to be stagnating. However, she is concerned that since Intel does not dominate these other markets like it does the PC market, it won't be successful.

Initially the motivation behind the branding of Intel Inside was to establish the company by name and identify the high performance products that were used inside the computer with the company. This was in an effort to create an image for a company and to establish its brand presence to the general public. They already had a well established reputation of a quality brand, but they wanted to raise awareness of their brand and create a positive image.

Key Issues and Solutions

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The major problem faced by Intel was the competition from other microprocessor manufacturers, who were producing chips which took aim at a cheaper computer market which Intel had not yet tapped into. Intel was unable to differentiate its products from its competitors due to the number of clone products in the market. Consumers were left confused and often guessing as to what was the content and performance of MP. Consumers knew Intel's product because of the cloning but Intel wanted them to recognize the product through the brand itself.

Solutions: 

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They established a co-op advertising program to start attracting original equipment manufacturers and place their products in mass produced PC’s. Fight the competitors with technology, marketing, lawyers, and money power. All focused towards the same goal.

Intel Consultant Point of View It would be wise for Intel to extend their technology and services to other products. At this time, the sales and production of computer were stagnating, as PDA’s and cell phones were on the rise. The figures in the future would reflect the same trend and it creates a great opportunity for Intel to use their band equity from the computer market and translate that into the cell phone and PDA. If Intel were to capitalize on this, they could maintain their presence in the PC market, while extending their reach to alternate markets and improve their company.

1.

What were the strengths and weaknesses of the Intel Inside campaign?

I think it was a brave and brilliant business move for Intel to distinguish itself from a ‘commodity’ like position and establish itself as the ‘brains’ of the computer industry.

Intel decided not to keep a low profile and make itself known. CEOs tended to see sales of semiconductors and processors as engineer to engineer type sales believing that they were simply fact based: who has t he best product after evaluation. They employed partnership marketing to build stronger customer relationships and increase profits. Intel chose to have its logo on its customer’s products raising the profile of lesser

known computer manufacturers and at the same time levelling the field of computer manufacturers. The campaign delivered results for the partners in a big way. It was a gamble as the big three did not buy in initially. They worried that it diminished their standing. Intel allowed the companies to independently choose their ads and they would pay up to 50% of the cost to the point of 3% of sales. This was absolutely win/win for smaller manufacturers and engendered great loyalty. It also comforted the most timid and least financially able consumer and again engendered great loyalty. The campaign promised upgradability (a big problem at the time as people were continually forced to buy a whole new computer to keep up), power, affordability, compatibility and someone to stand behind the purchase. I think a major strength is that Intel understood the insecurities of its ultimate market and addressed them reducing anxiety. In the end it also forced the larger manufacturers to play Intel’s game. For consumers, in a fairly new and scary world, the branding represented safety and quality. This was sorely needed at the time when few consumers considered themselves qualified to choose a computer. A weakness is that the Intel numbering system was not patentable and thus made them vulnerable. I remember the controversy about the Pentium naming and I was a housewife at the time with small children (meaning I was not exactly in the know.) There was significant free advertising in this controversy alone. The logo itself had a weakness in translation to other cultures. I think a final weakness may be in giving up on the campaign too soon.

2. Evaluate Intel’s continued use of the Pentium family of processors. Did Intel make the right decision by extending the name through the Pentium 4 processor? Absolutely, I think that they did the right thing. Pentium became the ‘name’ of the right

amount of processing power at the time. It had cache like a designer label for computer industry signifying that you were up to date and knowledgeable. Its initial high price reenforced its quality and exclusivity. Although sales were initially slow, they rose dramatically when the price dropped based on this mystique of exclusivity and the cache of being ‘the’ brand. Now, the former ‘commodity or ingredient’ was such a large

brand that they could advertise during the Super Bowl! Again, they understood the ultimate purchaser so well. It was men that normally purchased and computers became

the

new

phallic

symbol

for

techie

yuppies.

3. Suppose you were the chief Marketing Officer for AMD. How would you propose that

AMD

institute

an

Inside¬

like

ad

campaign?

This is a tough question. I guess that being number two is difficult and you could choose a Hertz type of ad “we try harder” but they should try harder to find staff with

vision for advertising as a first step. I think that I would identify the ultimate buyer. I would realize the maleness of the customer, the testosterone driven competition for ‘more power” and yet the anxieties involved in fear of inadequate knowledge to run or

fix the computer. From there I would embrace sporting, Nascar or where ever the male, knowledge/ competitive types were. Maybe I would do an ad with a famous Nascar and driver tearing up the track, rushing into the pit for a team of specialists to change the tires and was the windows in a quick stop and then have the car pull up on a suburban street driveway and the guy helps his young smiling family (with baby asleep) out of t he same car. Tag line: Performance and Safety. Man, that’s AMD’s style. – As he settles down in his computer chair. My logo might be a race car with ‘AMD’ simulating a

Nascar

brand

(or

a

Porsche).

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

I think that I would be tempted to spin off the lowest end chips now. They are established and they could bring in an important market on their own but they dilute the quality message that I think will be crucial to Intel going forward into consumer products. Many pharmaceutical companies do this when their products are approaching the end of their patents. They continue to get revenue but they reduce the price to a generic level and often just spin the product off to concentrate on big money makers. Intel has been the everything to everybody company until now. At one time Toyota built bicycles too but they moved on. Celeron should be spun off to

compete with and draw AMDs attention. I think that they should maintain the better and best lines to accentuate the message of high quality for their other products especially for B2B and for consumer products. They also need to focus on QUALITY production. The Itanium fiasco cost them too much in terms of reputation for quality.

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. I would have been reluctant to waste the 37 year impression that I had made on the consumer’s consciousness especially when I was also   shifting gears and when the

reputation was for quality but they did keep the essential logo and the Intel name. However, given the demographic segment that will primarily be buying these products there is some justification. The ‘millennials’ who are appr oaching the size of the

Boomers in numbers are the ones who are absolutely comfortable with technology and who will have the buying power. The Boomers may keep up with technology but they are aging and not adept so Intel must make it very friendly for them. The important point here is that Boomers may not be the primary market and that the Millenials do not want to buy what their parents and grandparents bought. Even the new Rock Star ad pokes fun at the Boomer sense of Rock Star adulation. (Witness the number of Boomers flocking to Rolling Stones concerts. We would have laughed old men like that off the stage in our own youth but this generation appears more accepting.) They have maintained Intel but the logo has been tweaked and I think that is appropriate. Even Campbell’s soup updates its label from time to time. As they will be marketing to the

MTV generation and to Boomers who stay flexible, they need to be careful not to alienate them. An excellent website that provides information and service is a must. Clear communication without equivocation is also required. This generation will not take much propaganda. A perfect, easy to use product that enhances life and the liveability of a home is the best way to go. Leap ahead reminds me of a toy that this generation grew up with- Leap frog. It was a learning toy- not a bad fit. 6. Intel moved into consumer electronics products, such as digital cameras in 2000, only to withdraw after receiving complaints from OEMs such as Dell. Does Intel face a similar issue with its move into the “digital home”? Does this move too far outside

Intel’s

core

competency

of

producing

microprocessors?

“Consumers are acquiring huge amounts and varieties of digital media on mobile and

consumer electronic devices as well as on PCs — movies, games, photos, email, music

and more. They want to be able to access and enjoy that data easily and conveniently, using any number of devices. To do that requires a home network that allows disparate devices to interoperate seamlessly. Up until now, this consumer desire has remained largely unfulfilled. The DLNA presents a great opportunity to bring together key players in the PC, CE, and mobile industries, to address which standards and specifications are needed to enable the digital home. Without cross-industry standards and specifications, the growth of the digital home market would be very limited.”

Taken

from

Intel

and

the

digital

home.

The mistakes of the past and the lessons gleaned from them have been plugged into this decision. I think that this does represent Intel’s core competencies - innovation, collaboration and marketing. The DLNA Board of Directors is run by representatives from the following companies: Sony Electronics, Philips, Hewlett-Packard, Matsushita Electrical Industrial, Microsoft Corporation, Nokia, and Samsung as well as Intel. All of the companies are potential buyers of Intel’s future products. The process of home

digitization is in its infancy and is clearly the way of the future with only 2% of homes in North America using home digital applications. Computers are always lead by the Star Trek vision of the future with easy integrated computer technology that seamlessly interacts with human beings. Intel is bringing that future to us.