Intel: Building A Technology Brand

Presented By:-Group 10Bipul Kumar (08FT - 013)Brijendra Tripathi (08IT – 010)Pal Gautam (08FN – 053)Sarathchandra (08FT – 043)Sulabh Gupta (08FT – 052)Sanjib Kanti Dutta (08HR-024)

Prelude

Urge for branding in microprocessor industry

Branding strategies by IntelProduct life cycle of microprocessorFuture challenges for Intel

Early days…

In late 70’s, Intel introduced 8086 processor followed by 8088

Endorsement of 8088 microprocessor by IBM for its first PC

In late 80’s, launched successful products in 386 and 486 technology of microprocessor

Threat from competitors with similar naming products

Trademark battle with AMD over 386 naming convention of microprocessors

March 1, 1991 lost the court battle for explanation of being generic and hence not trademark worthy

Urge for Branding

Raise awareness of Intel brand name

Associate Intel with its family of microprocessors

PC industry becoming mass market, non technical and home buyers

Pre-requisite for successfully implementing ingredient branding strategy: Keller’s 4 tasks

1.

2.

3.

4.

• Convincing consumers that is significantly impacts performance of end product

• Consumers must perceive chosen ingredient as superior to competitive offerings

• Clearly placed / positioned symbol or logo on product packaging or body

• Creating Push and Pull programs

Ingredient Branding Advantages

Ingredient Brand Host BrandPenetration Route sorted Improved brand image in case it is

lesser known

Ingredient can become point of energy, eg. quality standard and exploits its CA

Quick recognition and acceptance by consumer

Direct contact with consumer possible

IB leverages quality perception of end products among consumers

Shared R&D costs Shared marketing costs

Adds the exclusivity factor to final product

Branding of Intel Inside

The “Intel Inside” campaign aimed to “educate both the retail sales associates and the consumer about the value of Intel microprocessors, and to explain to them the difference between the microprocessors” – without the technical jargon

Many consumers were uncertain about the quality and reliability of microprocessors, and Intel found a way of taking away the mystery of the product, gaining the confidence of the end consumers that “Intel Inside” represented quality and reliability

Branding of Intel Inside

Early exercise followed on linking microprocessors with Intel

Mission was to transfer the Intel brand to launch new products and technologies

Intel Inside to convey its presence in PC

Branding of Intel Inside

Sought support from PC manufacturers under its co-op advertising program

Self advertisement through print, billboard and spot TV ads promoted equity building

Achievements of Intel Inside

Awarded with Marcom Award, Grand Marquis

Marketing research showed high end user awareness

Strongest image on quality and compatibility attributes

Customer Based Brand Equity Pyramid

Salience

Performance Imagery

Judg ments Feelings

Resonance

Rati

onal path

Em

oti

onal path

Identity

Meaning

Response

Relationships

Intel Inside Brand Equity

Salience

Performance Imagery

Judgments

Feelings

Resonance

• Active Engagement

• Marcom Award, Grand Marquis

• Trust• Self respect• Tech Savvy

• CPU Brand• Linked with PC

• Technology Driven

• Name of the Company

• Technology Leader• Innovator

• Customer Focused

• Quality• Compatibility

• Speed

• Co-operative Advertising with

OEM’S • Intel brand name

linked with Microprocessors

Branding Intel P5

Fifth generation microprocessor, P5, named Pentium

PR Team spread the name to industry writers, press and corrected errors by editors

Launched Pentium ads before sale

Microprocessor Pentium Life Cycle

Introduction:Targeted to high end consumersPriced at $5000; double of 486

systemsLow accountability in Intel’s

revenues (10%)

Microprocessor Life Cycle

Growth: Increased production and cut prices In 1994, Pentium sales grew 8 times90% of world’s PC owned PentiumLaunched Pentium Pro (94) and

Pentium II (97)

Microprocessor Life Cycle

Maturity In 1999, launched Pentium III

catering to PC user Internet experience

In 2000, launched Pentium IV as desktop processor

Pentium IV boasted of superior processor speed

Emergence of new segment

In 1997, growth of discount PC segment

HP and Compaq bought cheaper chips

Intel ignored this segment; drop in shares of low end market below 30%

Launched Celeron in April 1998Poor reviews and sales reduced

Intel’s share in the segment to 56%

Growing Competition

In 1999, performance oriented competition from AMD

Intel’s problem compounded by product flaws, shortages and delays

By June 2000, AMD’s microprocessors bought by every major OEM

AMD’s market share increased to 17%

Changed strategy

Celeron promotion received fillip Improves speed and reduces price by

30% for Celeron In fourth quarter of 1998, Intel share

increased to 80% in overall marketMarket segmentation by price and

performance; Xeon, Pentium and Celeron in descending order of price and performance

Microprocessor Life Cycle

Decline In January 2001, Pentium IV prices slashed

by 23% in wake of declining PC market Slow sales of Pentium IV with less than 4%

owners by April 2001 Cheaper computers in demand led to

cheaper processors In 2006, Intel announced phase out of

Pentium

Intel Brand extension

Ventured into consumer electronics, e-commerce and Internet hosting

In 1999, acquired 12 companies for $6 billion

Invested in 25 communication technology and over 125 internet-focused startups

Failed ventures

Internet venture proved futile due to lack of experience and stiff competition from established players

Exited non-processor businessStopped manufacturing network

servers and routers on complaints from big customers of microprocessors

Renewed Business Focus

In 2003, launched Centrino, with bundled products of new processor (Pentium M) and wireless communication

OEMs favorable about new processor, but had reservations about entire bundle

Views of better alternate products and poaching by Intel in systems design being aired

OEMs endorsed Centrino but offered up gradation for interested customers

Renewed Business Focus

Expansion into China Worked on developing processors for flat

panel TV Became leader in entertainment PCs Intel reorganized its business divisions

into mobile, digital home, enterprise and health

In January 2006, Intel launched new brand identity campaign of “Intel. Leap ahead”

Launched Viiv, Merom and Conroe (two new PC chips) and announced Core 2 Duo launch

Answer 1

Strength: Adopted both push and pull strategy Relevant and simplified understanding of

chips to customers Used print, billboard and spot TV medium

extensively for 18 months Associated Intel with processors, thus

helping launch future chip launches

Intel Inside Brand Association

Intel Inside

Technology Leader

Quality

compatibility

CPU Brand

Company Name

Answer 1

Weakness Intel Inside theme made it difficult to

diversify across other product lines apart from microprocessor without changing the theme

Answer 2.

Intel Pentium had garnered huge brand recognition through press, technical magazines and ads.

Discontinuation of this theme would have meant drainage of efforts and resources put into building the brand Pentium

Also, introduction of processors happened every next year making it impractical to launch promotion campaign for every product

Answer 3.

Intel has made chip importance firm in customer’s mind through Intel Inside theme, so wont propose for AMD Inside ads

AMD should focus on better value for money, increased efficacy and penetration into frugal markets as PC industry is stagnating

Answer 4.

Intel’s segmentation was based on price and performance. Depending on it, the target market also differed.

Having a technological product with its specifications upfront actually helps the customer appreciate the benefits and shortcoming at the time of purchase and prevents any dissatisfaction thereafter.

Xeon performed poorly in comparison to Opteron and needed up gradation

Answer 5.

For the digital home, Intel Inside theme is not appropriate because it’s a new technology. Intel Viiv will help it project the new product by breaking its link from microprocessors

Leap Ahead was a slogan adopted for changing situations and sighting new opportunities in microprocessor industry. With a new outlook, there should be a new association, and hence warranted changing the old logo to a dropped ‘e’

for new age electronics

Answer 6.

Failure occurred in product lines of digital cameras and routers because Intel did not have expertise, stiff competition from dedicated players and complaints from Intel’s own customers

Digital home is also based on a new technology though it has links with PC applications

There is fear of competition from an established player in this product segment and to evade it Intel has to adopt industry standards and offers

Thank You