strategic brand management intel building a technology brand
TRANSCRIPT
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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)
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Prelude
Urge for branding in microprocessor industry
Branding strategies by IntelProduct life cycle of microprocessorFuture challenges for Intel
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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
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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
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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
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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
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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
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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
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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
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Achievements of Intel Inside
Awarded with Marcom Award, Grand Marquis
Marketing research showed high end user awareness
Strongest image on quality and compatibility attributes
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Customer Based Brand Equity Pyramid
Salience
Performance Imagery
Judg ments Feelings
Resonance
Rati
onal path
Em
oti
onal path
Identity
Meaning
Response
Relationships
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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
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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
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Microprocessor Pentium Life Cycle
Introduction:Targeted to high end consumersPriced at $5000; double of 486
systemsLow accountability in Intel’s
revenues (10%)
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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)
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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
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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%
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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%
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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
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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
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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
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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
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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
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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
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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
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Intel Inside Brand Association
Intel Inside
Technology Leader
Quality
compatibility
CPU Brand
Company Name
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Answer 1
Weakness Intel Inside theme made it difficult to
diversify across other product lines apart from microprocessor without changing the theme
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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
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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
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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
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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
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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
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Thank You