Intel – The Component Branding Saga

“What Microsoft is to software, Intel is to hardware: a marketing &technology monster that is seemingly unstoppable”…………………

History• Intel ( Integrated Electronics) was established in

1968.• Is an American multinational semiconductor chip

maker corporation headquarter in Santa Clara, California.

• Founded by three semiconductor pioneer - Robert Noyce - Gordon Moore - Andy Grove

• Intel’s first commercial product was ‘3101 Schottky bipolar 64-bit static random access memory (SRAM) chip.

• Intel manufactured microprocessor chip for (calculator manufacturing company) Busicom, that performed the function of 12 silicon chips together (called 4004).

• Invention of 4004 was a major technological achievement but there were many challenges arising with it.

• The question was whether there were enough applications out there other than the calculator to make it worthwhile.

• To meet the challenge Intel took up the task of educating the engineering community about the potential of their chip.

• After 4004 intel released 8008 microprocessor in 1972 (twice powerful as the 4004) & was used in a computer called Mark-8, one of the world.

• Then in 1978, Intel released the 8086-8088 chip, which was chosen by IBM’s PC division for making new PCs.

• Chip went to become huge success and gave a major boost to Intel’s sales and goodwill & ranked among the Fortune 500 companies, and the Fortune magazine.

• Intel released 286, then came 386 and 486 chips and kept on achieving success.

• Intel also licensed the technology of these chips to its competitor like Advanced Micro Devices.

• Intel played a vital role in transforming the PC from business management tool to a device that offered information, entertainment, and education in rich multimedia format.

The Need for a Component Brand• Less awareness about Intel and its products.• Users not aware about advance processors &

their cost saving performance.• Intel realized its mistake.• Realization inspired by ‘Moore’s law,’ an

industry guiding principle.• Resulted in first marketing initiative in 1990 to

market the 386SX microprocessor.

• Group of marketing people interacted with IT managers.

• Rival AMD got license to manufacture chips by Intel.• By 1990, AMD captured 52% of the market.• Intel attempts to protect their technology 386 &

486 processors.• AMD sued Intel for Breach of contract.• Intel lost the case & courts stated the processors

no. were not trademarks.

• Intel realize microprocessors were ambiguous & unprotected.

• Intel decided to create a strong brand.• Invested billions of dollars in product

development.• Microprocessors was seen as ‘just another

component.’• So Intel adopted component branding tool.• Took help of Teflon, Dolby & NutraSweet.

WHY BRANDING INTEL?• To create awareness among PC users about Intel and its products.• Most PC users were not even aware of the availability of advanced processors and their cost-saving performance• This realization was inspired by “Moore’s Law”, which stated that ‘the number of transistors on the microprocessors roughly doubles every 18 months to two years’.• Initially, interactive marketing and B2B interactions increased customer awareness among business users.• Creating a strong brand to communicate with the consumers.• To present the microprocessor as a ‘key component’ and ‘not just a component’ in the computer.

ELEMENTS OF MARKETING :INTEL

BRANDING STRATEGY •TO COMMUNICATE WITH THE END USER.•GAINING CONSUMER CONFIDENCE IN INTEL AS A BRAND.

PURE TECHNOLOGY COMPANY •EMPHASIZED THE ROLE OF MICROPROCESSORS.•HIGHLIGHTED THAT INTEL PRODUCTS WERE TECHNOLOGICALLY ADVANCED.

COOP PROGRAM •SHARED THE ADVERTISING COST WITH OEMs FOR PRINT. ADVERTISEMENTS THAT INCLUDED THE INTEL LOGO.

WEB ADVERTISING •CONVEYED THE ROLE OF CHIPS IN GIVING THE CONSUMER A GOOD INTERNET BROWING EXPERIENCE.•SUPPORTED E-COMMERCE MARKETING.

The bunny people

• Promoted Intel’s MMX technologically featured people (bunny people)• Company’s chief executive was also a part of it. This portrayed that employees at all levels were equally committed to innovation.• Catchy, unusual campaign went on to become the most well remembered advertisement.

Innovative advertisingTO COMMUNICATE WITH THE END USER BY CREATING AWARENESS FOR INTEL PRODUCTS

GAINING CONSUMER CONFIDENCE IN INTEL AS A BRAND.

CREATED AN IMPACT AMONG END-CONSUMERS

PROJECTED INTEL AS A “PURE-TECHNOLOGY” COMPANY

EMPHASIZED THE INNOVATIVE AND TECHNOLOGICALLY ADVANCED PRODUCTS

SHOWED THE COMMITMENT OF THE COMPANY TOWARDS CREATING “NEW”

TOOK THE FIRST- MOVER ADVANTAGE IN THE INDUSTRY BY GOING FOR PRINT AND TELEVISION ADVERTISEMENTS

Increasing brand Value

Intel Inside Program to promote and support e-commerce marketing activities undertaken by computer manufacturers. Entered tie-ups for innovative web-based marketing and sales deals. By doing so, it marketed its chips as a component brand during online PC purchases throughout the world. Sold merchandise such as books, T-shirts, pens, etc. through its website to popularize the Intel logo Set up the Intel Inside Online Network, a web-based tool that managed business transactions related to the company’s coop advertising program.

Intel’s Bad fortune• In 2001, Profit decreased.• IT slumps and economic slowdown in US.• Lower average selling price and decrease in sales.• Bad publicity for Intel because of complaints of

‘abusive marketing practices’.• In 2002, it faced nationwide class action suit

regarding the performance of Pentium 4 processors.

Competition in the market

• Bad publicity for Intel due to complaints of ‘abusive marketing practices’.

• AMD took the advantage of this situation by focusing to marketing

• AMD also launched a multimedia campaign similar to Intel.

• Moreover. AMD processors were reasonably priced and were of competitive quality with that of Intel.

The Road head

• Putting the high quality products and process and communicating to the end users

• Interactive marketing to increase the business.• Major investment on R&D to invention and

innovation.• Market research to understand the customers.

Presented by:-• Sneha Sharma• Kuldeep Singh• Sanket Bhatia• Abhinav Singh• Prem Saini

THANK YOU