Intel Inside

CASE: INSIDE INTEL INSIDE

Submitted By: Anjana Warrier 16F712

Q1. What was the motivation behind Intel Inside Branding campaign? Intel inside campaign was motivated by the following factors: 1. Branding – to create a performance based awareness among the users: Intel introduced several new products and branding each product was not feasible. Also the chip labels were in numeric form and as per law they could not be trademarked. Intel Inside campaign would ensure creation and awareness of umbrella brand where new products could be added and identified by consumers as high performing products. Instead of running a marketing strategy limited to each chip the campaign reflects marketing its own brand strategy. Restriction on trademarking chip numbers created a need to create an umbrella brand that leverages the attribute of all the product lines (existing & upcoming). 2. Marketing – need for change in marketing strategy from design engineers to consumers: Intel’s presence was known at t he industry level but they also wanted the consumers to be aware of them as an essential high performing product inside computers. This essentially meant more advertising.

There was also limited understanding of the ever innovative new products and the difference from its predecessors. 3. Develop pull strategy – change the customer buying behaviour and generate the need: Utilizing the awareness campaign they wanted the consumers to be more knowledgeable about the brand. This strategy was adopted to increase demand from the end users. 4. Higher bargaining power: Intel wanted to enjoy higher bargaining power as a supplier and hence utilizing ingredient branding  it wanted its processors to be at the spotlight and be given an identity as an essential component in computing resources. 5. Increase market share: Utilizing the campaign Intel wanted to be gain more market share by marketing activities. These included goals such as advertising to the industry and logo on OEM’s products to gain attention of the consumers towards the micro -processor to perceive it as the key component in the product.

Q2. What factors have accounted for the success of the campaign?

Even after a lot of scepticism Intel Inside campaign did turn out to be a successful branding campaign. This is evident from the fact that it was ranked sixth most valuable brand in the world. The factors that contributed to its success are as follows: 1. Successful implementation of pull strategy: 

Intel manufactured a product that was actually used by the OEMs. So Intel required B2B marketing.

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The observations showed that if the end consumer is aware of the product only then the OEMs use it. The  ads of Intel Inside campaigns targeted the end users directly . So they were displayed/broadcasted on wallstreet journals, televisions, point of purchase, OEMs like Dell, IBM etc. This created an awareness in the end consumers  like the IT professionals thus increasing the demand from their end. Therefore by increasing the demand from the end users, they were able to pull the OEMs  and that resulted in 2700 PC makers to participate in the campaign by 2001. Thus microprocessors became most important component in the perception of the buyers.

As a result of this more PC makers started adopting Intel. OEMs supported Int el’s marketing strategy of Co-op advertising program.

2. Delivery of quality:  Intel’s campaign was mainly successful because it had technology to back it up.

Intel was market leader in innovation by spending significant amount on R&D. They were the first to introduce microprocessors with faster processing speed. 

They were a leading microprocessor company when the campaign began. Intel always stuck to its core values of leading technology safety.

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They delivered what they promised and were performance based product manufacturers.

3. Consistency of brand image: The campaign made sure that the company’s brand image remained constant.

The core values of the brand were kept consistent The emphasis of bra nd on “leading technology and safety”. Thus consumers had formed a strong association of this with Intel products. 4. Focus of marketing on experience and performance:  The campaigns never focused on the technical details of the Intel chips.  They were more focus on performance and how it enhanced the digital world.  They tried to bridge the gap between technical details and the emotional experience.

Q 3. What are the current problems Intel is facing in the PC market? 

The PC market has already matured and has reached stagnation.  There is extensive competition in the industry and Intel’s market share was falling.

There was an influx of cheap PCs into the market by competitors like Advanced Micro Devices (AMD), Texas Instruments, and Cyrix.  PC market was a highly technologically driven market where consumers demanded for high technological changes and continuous advancements. So there was a need to continuously innovate and advance in technology to be at par or overtake the competitors.  The competition in the PC market remained stiff not only at the low end market but also at the high end. For example in 2000 AMD had briefly threatened Intel’s technological dominance by being first to break the 1GHz barrier with a version of its Athlon chip. 

Q4. How has the Intel’s advertising focus changed?

Intel initially tried a low cost experiment using billboard advertising in a single market. They began by covering billboards in Denver with a large 286 enclosed in a circle. They then splashed a big graffiti style red “X” over the numbers. After a few weeks, they added a large 386 enclosed in a circle. The 386 sat alongside the crossed-out 286, and the billboards promoted the fact that the 386 was now the same price as the 286 but with many more advantages. Intel had two main motives: 1. To create more advertising in the industry 2. Get Intel logo on OEMs’ products The Intel Inside campaign was launched to create an umbrella brand that could spand successive generations of products. Intel went for co- op advertising with OEMs. Intel’s OEMs would be able to accrue co-op advertising dollars on the basis of their purchases of Intel chips. These co-op advertising dollars couls be used to pay for up to half the cost of any advertisement produced by the OEMs as long as they put Intel’s logo in their ads and on their computers.

Q5. Should the company extend the “Intel Inside” branding campaign to other non-PC categories such as cell phones and PDAs?

Intel Inside campaign was perfectly successful in creating a brand identity of Intel not only in B2B industry but also in B2C industry, where customers felt that microprocessors are essential ingredient of computers. The campaign also helped us the form to associate with the brand, two attributes “Safety and Reliability”. Now as the PC industry started getting stagnated in the years from 1999 to 2001 and competition in the microprocessor segment increased significantly. Till now, Intel was leading in desktop category having high market share. Now as the market has huge potential in highend in high end cellphone category, the company started its business in this category by getting a tie up with “Microsoft” to develop “template” for cellphones using chips from Intel

and software from Microsoft. Although Intel was little sceptical about taking the business in non-PC category they knew that in non-PC category using Intel Inside branding may produce good result for the following reasons: 1. As the demand in high end cellphone was rising, Intel could use its brand identity which was created from PC product category to successfully take forward to non-PC product category. 2. This would also Intel to retain two attributes “Safety” and “Reliability” intact with brand. These attributes along with proper marketing channels could help conquer in non –PC category. This move will not only generate trust in the product but it will also help establish name in other categories also which was lacking. 3. Intel had high market share in desktop category but had low market share in the other categories. This could be attributed to the fact that they only had Intel logo marketed in the desktop category. So extending this branding throughout other market like cellphones, could give them a bigger push 4. Mobile and PC market are technologically driven in nature. Both had regular technological upgradation happening in short spans. Consumers considered both the products as high end technological products. Extending the umbrella brand f rom one similar market to another would actually boost the sales and since the PC market is already stagnant it would be a good idea to extend their brand identity to the thriving mobile market.