Case Analysis Intel Sec a Group2

8/3/2019 Case Analysis Intel Sec a Group2

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Presented By:Group 1 (Sec. B)


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Introduction

Corporate Branding Strategy

386 could not be trademarked

Develop a trademark name Launch a corporate branding

campaign

2006: Retooled and launched IntelLeap Ahead campaign


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Company Background

Founded in 1968 by Robert Noyceand Gordan Moore

1978, 16-bit 8086 Processor 1979, 16-bit 8088 Processor

Competition with Motorola 68000

1980:- IBMs selection

1988:- Intel 386 SX

April 1989:- 486 Processor


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Microprocessor Industry inthe early 1990s

1986, only supplier of 386 and 486technology

0ct. 1990, AMD386 1991, Chips and Technology and

NextGen microsystems


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Intels Branding Issues

Late 1980s : Shift from PC industryto mass market, non technicalbusiness and home PC

Strategy shift


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Create Brand awareness and brandpreference

How to differentiate its products

June 1989: Mimicked Grafatti byspray painting over 286 and inserting386 SX

1991: Sold 8 million units


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Evolution of Intels BrandingStrategy

March 1991: lost 386 trademarkcase


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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 companys Intel


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Launching the Intel InsideProgram

1991:- $125 million in the next 18months

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


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Relationship with OEMs IBM was the first major OEM to use Intel Inside Logo, in April 1991.

Followed by Zenith Data Systems, Everex Systems, NCR Corp, DellComputers and AST Research but by then first tier companies like Compaq

and IBM left using the Intel Inside Logo.

Intels 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 futureusing special effects to take the viewer inside the computer.

Branding and Naming P5 As the numbers were not trade-markable, Intel decided to create a new

brand that would


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The Pentium Name

Announced October 20, 1992

Pentium Name chosen

Pent Fifth generation processor ium Elemental component

Great emphasis on PR and media


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Product Announcement

Employed extensively detailed ads

Elite positioning

For all but the most demanding users Went back to the roots


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Success

$500 million invested in advertising

Ingredient branding was the focus

Intel Inside

Competition ignored and rejected thestrategy

Won several awards:

Marcom award

Grand marquis excellence award


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Success (Contd.)

Intel conducted market research globally

Users perceived Intel as tech leader vs.AMD and Cyrix

Brand recognition increased highly afterthe campaign

Intel and Intel Inside confusing for non-

technical users Foreign languages also created a little

confusion


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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 theprevious year

1997 Pentium II launched

Used Super Bowl and Bunny People Ad

$100 million spent on campaign


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Renewed Competition

1998- HP and Compaq chose cheaper AMDand 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 ofmarket share from 68 to 56%


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Renewed Competition(Contd.)

1999 Release of Pentium III

Positioned as tool to enhance home PCuser`s Internet experience

Double advertising budget in 1998 $300million

More PC centered campaign

Featured trio Blue Man Group

Reinforced number III


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AMD in market place

AMD launched its Opteron chip against IntelsXeon in 2003

It was favored by HP, Sun microsystems and IBMas it consumed lesser electricity and generatedlesser heat

AMD also launched Turion chip against Centrino

It managed to beat Intel in many areas


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New Opportunities

Expansion in china as it was the 3rd largest marketfor 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


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Q 1 Wh t th t th


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Q.1 What were the strengthsand weaknesses of Intel Insidecampaign? Weakness

Conflict with 1st tier OEMs

Product is under advertised

Strengths

Clear conversion Build brand equity and pull preference

Co-op support from OEMs


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Q.2. Evaluate Intels continued the use of thePentium family of processors. Did Intel makethe right decision by extending the namethrough the Pentium processor? Flaws of the previous processor model names

Hence it took the right decision by extending the namethrough 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 andthis name became synonymous with processors


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Q. 3 Suppose you were the Chief Marketing Officer forAMD. How would you propose the company position itselfto better compete with Intel? Would you propose that

AMD institute an Inside like ad campaign?

AMD management does not believe in Inside campaigns.Besides, it is not recommended to imitate Intel to avoid a followerimage.

AMD is half the size of Intel, there was no need of similarmarketing strategy

AMD should focus on its core competencies, excel in thecommodity-like memory business, and try to be ahead in cutting-edge technology, support its brands Athlon 64 and Opteron and buila better experience and better lifestyle by bridging the digital gap

between poor and rich


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AMD should concentrate on Flash memory- mobile technology

They have a better, less expensive product, both consumer andbusiness.

strategy Is


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strategy. Ishaving a good/better/best product line( Celeron, Pentium, Xeon) the bestpositioning for Intel? Should itdiscontinue a line(s) and focus onother(s)?? Yes, it was a good segmentation strategy by

Intel

v Having a product line like Celeron, Pentium,Xeon, it will cover whole market from lowend to high end chip. So it was a good

positioning for Intelv No need to discontinue any line but try to

focus on speed and product performance

the companys executives make the right decision


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the company s executives make the right decisionin launching an entirely new brand identity? Did itmake the right decision in changing a 37 year oldIntel logo and dropping the Intel inside campaignfor Leap Ahead? What other marketing strategiesmight the company employ? Yes, a company like Intel must progress and

develop new applications for its products becausethe customer base is comfortable with technologyand have the buying power.

Not wasted the 37 year impression that they hadmade on the consumers consciousness, they havekept the essential logo and the Intel name.

Easy to use products that enhances life and theliveability of a home is the best way to go.

By using a strategy of combining products incomputer systems, Intel can sell more of its non-processor products by including them with IntelProcessors


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Intel has stated that Viiv-based PCs willfeature dual-core processing, remote controloperation, gigabit Ethernet controllers andwireless network cards. Viiv-based PCs will

also act as a personal video recorder with theaddition of a TV tuner card.

It will also feature a Quick Resume

Technology which will allow users to turn offand on the computer in a manner of seconds.

This new campaign has established anemotional connection with the customers. It

also credited the engineers behind Intel's

products such as digital cameras in 2000 only


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products such as digital cameras in 2000, onlyto withdraw after receiving complains fromOEM`s such as Dell. Does Intel face a similarissue with its move into the digital home?

Does this move too far outside its corecompetency 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

products such as digital cameras in 2000 only


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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 theneed of the times

Moves outside the core competency

products such as digital cameras in 2000, onlyto withdraw after receiving complains fromOEM`s such as Dell. Does Intel face a similarissue with its move into the digital home?

Does this move too far outside its corecompetency of producing micro-processors?


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Thank

YouMembers:Aadil Ahmed (01)Abhijeet Chowdhary (03)

Abhishek Sharma (05)Akshay Gopal (07)Ankur Dave (10)Arushi Goswami (18)

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Case Analysis Intel Sec a Group2