1.

Company background

Founded in 1968 by Robert Noyce and Gordon 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

Recognised as the undisputed market leader

2. 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

3. 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

4. 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”

5. Intel inside

“The Computer Inside” campaign

“Intel In It”

Finally to “Intel Inside”

6. 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
 7. 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

 8. 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.

9. 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.

10. Branding and Naming “P5”

As the numbers were not trade−markable, Intel decided to create a new brand that would −

Be difficult for competitors to copy

Be trade−markable

Indicate a new generation of technology

Have positive association and work globally

Support Intel’s brand equity

Sound like an ingredient which worked with Intel’s partner’s brand name
 11. The Pentium Name

Announced October 20, 1992

Pentium Name chosen

“Pent” − Fifth generation processor

“ium” − Elemental component

Great emphasis on PR and media

 12. Product Announcement

Employed extensively detailed ads

Elite positioning

For “all but the most demanding users”

Went back to the roots

13. 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

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

 14. 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

 15. 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%

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”

 16. 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

 17. New Opportunities

Expansion in china as it was the 3rd largest market for chips

Apple started using Intel

Intel focused on ‘digital household’

18. Leap Ahead:

Changed its brand identity and logo after 37 years

Intel was now ‘Leap Ahead’

Focused on boosting wireless computing

Ques 1. What were the strengths and weaknesses of the Intel inside campaign?

Strengths

It places the company and its name directly in front of the consumer.

The campaign aimed at changing Intel image from a microchip maker to a quality standard bearers.

The tie up with OEM’s was a masterstroke since Intel had to just spend 30% to 50% of ad costs and
reap the dual benefits of high sales and also widespread branding.

It's very smartly made the OEM’s dependent on Intel instead of the other way around.
Differentiating factor between Intel and not OEM’s.

The advertising medium and name was based upon strong research data.

A perfect mix of push and pull strategy

Weakness

The success off the campaign Heavily depended upon the OEMs agreeing to it majorly the BIG 3 of
them. Intel did not have a backup plan for it.

The campaign did not focus as much on the product as on the brand name. Hence consumers
awareness of intel brand grew but they were still not aware of the product features and benefits.

Ques2. 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?

Intel needed a brand to differentiate itself from the AMD and other processors present in the market

Its initial high price maintained that exclusivity of the product and also reinforces its image of being
better than the rest

The continued use of Pentium made sense because the processors belonged to the same generation
The more than 30% compounded annual growth reinforces the fact that Intel strategy of continuing
with Pentium name.

Ques 3.Suppose you were the chief Marketing Officer for AMD. How would you propose that AMD
institute an Inside¬ like ad campaign?

Reasons for not proposing an Inside like Ad campaign

Intel already has a first mover's advantage in tying up with most of the OEMs hence it would be
extremely difficult for AMD) to lure them to agree to it.

o AMD's revenues makes such a branding exyreise unviable. I would compete with Intel by focusing
on the following issues

o Focusing on remaining ahead of Intel in the Product eyele by investing on R&D

o Narrow the scope of our products to target a particular segment

o Use a customer-centric approach to ensure innovation directly addresses customer needs,

o Show the customers superior value for money with power savings and our
commitment to innovation

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).
Yes, Intel made the right choice in segmenting their products through tiers because It
gives consumers choices depending on their purchasing capabilities.
However we consider Spinning off the lowest end chips –
They are established and they could bring in an important market on their own but they
dilute the quality message that will be crucial to Intel going forward into consumer
products and concentrate on big money makers.
Celeron should be spun off to compete with and draw AMDs attention.
Intel has been the everything to everybody company until now. However it would be
better if they 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.

Ques 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?
If the firm plans to change the brand’s identity, our stand would be changing
incrementally and not totally because entirely changing the brand’s identity means
wasting all the investments incurred in building the brand.
Changing incrementally means not to make changes dramatically and instantly.
This step will undergo process of educating the market about the transition that the
company would make.
While not changing totally means important brand elements and associations should still
be kept and changing other brand elements and associations would be necessary if these
things are perceived by the market irrelevant in present and if these changes are
implemented to cope up with market’s environmental changes.

Ques 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?
In this case, Intel integrated too much that adversely affected their partnerships with
OEMs. The firm pursued opportunities that cannot be compatibly matched by their core
competencies. They should be fully focused on their line of business to be the top of the
mind brand on their industry.