Case - Inside Intel Inside
Intel has become one of the world’s most recognizable computer brands following its long-running Intel Inside campaign, which started in 1991 - Case - Inside Intel Inside introduction. Intel, initially a semiconductor-maker company, is based in Santa Clara, California. The five-note jingle was introduced the following year for its tenth anniversary which was heard around the world. It is one of the most powerful brands in the corporate world. It started developing microprocessors from the 70s and is known for its microprocessors.
Intel’s microprocessors are found in over 80% of the PCs sold worldwide. It can thus be inferred that Intel is in fact, the leader in the microprocessor market. The PC market incurred strong competition in formative years and Intel emerged as a strong player. Intel emphasized its brand name by carrying out the ‘Intel Inside’ brand ingredient program whereby it launched co-op advertisements incorporating the OEMs. This created an expansive brand awareness and recognition making consumers weary about microprocessors.
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Key Purpose. The purpose of this paper is to suggest the importance of marketing for Intel to execute a marketing practice that would give Intel a competitive advantage in addition to its innovative microprocessors status. Thus Intel Inside as a brand can provide value to its users. Five C’s Analysis: * Company: Intel is the world’s largest manufacturer of CPUs and chipsets. They dominate the Microprocessor industry with around 80% of the market shares. Their main priority is leading technology and they mainly focus on the reliability. These are its core brand attributes. Customers: Intel typically has two customer bases. The first is the business users who are mostly the OEMs like- Microsoft, DELL, Compaq, NCR etc. The second base consists of the consumers who use computers for business, educational or just for recreational purposes. * Competitors: Major competitions faced by Intel despite capturing 80% of the market share are from AMD (Advanced Micro Devices), Texas Instruments, Cyrix also the AIM alliance consisting of Apple, IBM and Motorola producing RISC chips. * Collaborators: For Intel major collaborators would include the Original Equipment manufacturers (OEMs).
These entities incorporate Intel products, which are basically their respective building blocks, in their macro-products. They have been very beneficial during the ‘Intel Inside’ brand ingredient promotional campaign whereby the co-op advertisements were carried out. Other collaborators include DELL and such who use Intel products. * Context: Intel is currently operating in such a market where the sales of desktop computers are declining in contrast to the quick rise in the sale of digital portable devices. In addition to the current market trend, the ever changing technological innovation is another aspect Intel needs to take care of.
Customer needs are also under constant change. This causes the product life cycles to be short either directly or indirectly. On top of it, Intel must abide by some regulations set by the Federal Trade Commission Authority. What benefit? Outstanding performance for digital media applications Value Proposition To whom? OEMs and End Users At what price? $64 to $4227 4 Ps Product: -Microprocessor -Sold under umbrella brand: ‘Intel Inside’ -Product Families: * Itanium – 1 A 64, Xeon, PIII Xeon – Servers and Workstations * Pentium 4, Pentium III and Celeron – Desktop Computers * Mobile PIII – M, Mobile Celeron – Mobile Computers
Price: -Full line of Microprocessors ranging from $64 to $4,227. -Cost of sales R&D and cost is very high. – Due to extreme rivalry among the competitor customers became more prices sensitive. Place: -End-aisle displays. Retail Stores and Hands-on demonstration -For advertising dollars to display logos in print ads and on computers they can make OEMs their partner. Promotion: -Two main features can be identified on campaign: Leading technology, reliability -OEM (Original Equipment Manufacturers) to display the logo of ‘Intel Inside’ in their ads and on computers. -Umbrella Branding: ‘Intel Inside’ Television ad: The ‘Star Wars’ Ad; 12 Pentium 20-seconds ad. -‘Red X’ campaign to promote 386 over 286. Key Issues Brand Extension: Intel is going through a tough situation as there is a rising demand for portable digital devices compared to the declining demand for desktop computers. So it is to be suggested whether Intel should go for a brand extension and start producing non-pc digital devices. Brand Dilution: However, if Intel goes for a brand extension, the company will face the problem of brand dilution and cannibalization, which in turn may wipe out the image created by Intel over years.
Marketing Strategy The highlight of this particular case was the fact that, Pamela Pollace the vice president and director of Intel Inside’s marketing operations was contemplating to extend its Intel Inside brand to other product categories. After thorough analysis of this case it would be wise for Intel NOT TO EXTEND its brand whatsoever. Instead Intel should continue to have its microprocessors solely for personal computers. Hence extending the brand could adversely affect the brand image of Intel Inside.
Over the years Intel Inside has been renowned for producing microprocessors that are safe and reliable, therefore extending Intel Inside brand to other electronic devices would be of immense risk. In addition such an extension would contradict the value proposition. Even if Intel goes ahead with the extension there will be a degree of uncertainty surrounding the move. Intel Inside is a high performance brand therefore if it fails to deliver the expectation of the market, which could result in brand dilution, eventually this will damage the brand equity which is going to be extremely difficult to restore.
Currently Intel produces and sells flash memory chips which are doing well. 60% of Intel’s flash memory goes to cell-phone market, and the other 40% goes by shipment to other PDAs and set-top boxes. But, this does not make considerable profit in the profit margin. On the other hand Intel’s key source of revenue is from the Desktop Computer Processor market segment which yields 39% of the total revenue compared to a mere 11% from Mobile Computer Processor. Therefore, it is best for Intel to continue its present activities instead of brand extension.
Action Plan Mobile/Notebook Computers: Mobile and Notebook computers have been an increasing mode technology which in future has the potential to dominate the tech industry making itself a prime product for general people to use as a substitute to the desktop or laptop computers. Given Intel’s reputation of accumulating 90% market share overall and a nearly 100% share in the corporate mobile market, it can be of a higher importance that Intel can focus on producing chips for the mobile and notebook computers.
Its overwhelming common features can provide Intel with a high competitive advantage alongside its reputed brand image where an “Intel Inside” branded mobile or notebook can create higher demand on public who are fans of computers with an “Intel Inside” logo attached to it. Differentiating Microprocessors: Intel can pursue segmentation oriented products that can be marketed to different types of consumers who would be beneficial through the product’s characteristics designed for the specific performance for that specific consumer’s desire and comfort. Intel can produce different microchips for engineers, students and so on.
In this process, Intel can create more customer affiliation where a better return can be generated. “Intel Inside” Campaign: As mentioned before, its reputed brand image is Intel’s biggest weapon of not only survival but also to prosper through its long run strategies. The successful ‘Intel Inside’ campaign might be carried out incorporating the OEMs and Co-op advertising. In this process, customers may evoke Intel’s legacy and success story from the 90s and the brand recognition might be strengthened. Thus, its present operations may be sustained and flourished.