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Corporate Branding Strategy 386 could not be trademarked  Develop a trademark name  Launch 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

a. b. c. d. e. f. 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

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

$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

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?
Conflict with 1st tier OEMs Product is under advertised

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 AMD 2. Maintain its brand equity and avoiding brand dilution 3. Trademark its products to avoid copying 4. 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?

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 cuttingedge 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 Intel Having 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

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?
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

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