Intel Marketing - Branding

Not many years ago computer chips, in the eyes of consumers, were a generally unknown component of PCs - a commodity product. From a competitive standpoint, a computer chip is a typical commodity. Take one out, put another in, no performance difference. Chips are something most customers don't see, many don't understand, and large numbers don't care about.

But Intel has built a brand around a commodity. Today many personal computer users can recite the specification and speed of the processor, just like car owners can tell you if they have a V4, V6 or V8 engine. The awareness of "Intel" has grown along with the awareness of the chip, and today is associated with "technology leadership," "quality" and "reliability."

The company was founded in 1968 and went public in 1971. By 1997, it controlled 90% of the world's market for personal PC microprocessors. Although the market is more competitive today, Intel is still the largest chip manufacturer in the world.

The Intel brand is one of the top ten known-brands in the world, in a class with Coke*, Disney* and McDonalds*, according to various rankings.

Brand image of Intel

Brand image is the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory. There are two attributes that Intel wanted people to associate with the brand were safety (liability) and leading technology.

Ever since Robert Noyce & Gordon Moore founded the company in 1968,their focus was on developing semiconductor memory for mainframe computers and minicomputers. Intel was already a leading company at SRAM,DRAM,ROM ,etc. in the semiconductor memory industry. By the early 1970s,Intel was also developing microprocessors (also refered to “chips ” processors or CPU) ,which represent from 20% to 40% of PC’s manufacturing cost. With the secured contract with IBM personal computer in 1983, Intel immediately set out to become a leading chip supplier of the modern era of desktop computer. Intel had soon garnered a 70% share of the overall desktop microprocessor market within a few years. To sustain the technological lead in the microprocessor was not easy in 1990s. In 1991 Apple,IBM,and Motorolla (the “AIM” alliance) banded together to produce chips based on RISC architecture. Besides, Advanced Micro Devices (AMD) also become a major competitor since it cancelled the cross-licensing agreement (started from 1976) with Intel.

In order to continue leading the technology in microprocessor development, Intel implemented overlapping development cycles in 1990. Previously, Intel had waited until one generation of microprocessor was ready for production before beginning development of the next generation, Now Intel began to “doubling up” on its R&D investing & developing two generations of chips at the same time. As for observing how Intel care about its products’ safety (liability ), We can tell from a Pentium processor flaw discovered by an end user at which Intel was confronted with its first major product-related crisis. Intel ended up replacing thousands of microprocessors at a cost of USD475 million to save the negative publicity.

The Intel position has always been based on authenticity, quality and performance, supported strongly by consistent global campaigns. The Intel Inside logo is placed on all print advertising, print and point-of-sale merchandising, shipping cartons, packaging, and is used by world brand and OEM computer manufacturers. Supported by explanatory communication material, it has to a large extent succeeded in calming the fears of consumers who are doubtful of the performance of critical and complicated product elements they do not understand. The introduction of the Intel 'Bunny people' in astronaut-type attire in an attempt to humanise and add personality to product has not been so successful, being perceived by many as cold and impersonal.

Branding strategy of Intel

As the Moore’s law said, the development of new generation microprocessors is so fast that Intel can not afford to brand each new generation of product that was released. Marketers in Intel figured out with a solution to create an umbrella brand that could span successive generations of products. When Intel were facing a slow adoption of the 386 processor in the microporcessor market in 1988, They started to wondered if the problem had to do with Intel’s marketing, In the past, Intel focused its energy on marketing to the design engineers of computer manufacturers. But Intel realized those design engineers did not have the same influential power any more when PC market was growing rapidly. After the success of experiment at billboard advertising in a single market at Denver, Intel managers decided to deliver the marketing communication directly to consumers. The research showed that “Intel “ was to best brand name to use. Intel ended up choosing their tagline :”Intel, The Computer Inside” . and campaigning for “Intel Inside” label with OEM PC manufacturers.

Additionally Intel has developed individual product brands, as is the case with the Pentium and Pentium II range. The rationale for this is that a name like Pentium ( derived from the Greek word pent meaning five and alluding to the fifth generation of X86 computer chips ) provides a kind of shorthand which is more meaningful to the consumer, summarizing the benefits more easily.

Pentium II was positioned as a high performance product aimed at business and consumer users. More recently the Intel equivalent of a 'no frills' product range called Celeron has been introduced, still endorsed by the parental name, but meant for a different target audience. This is positioned around value, compatibility and quality.

With the branding strategy, consumers now are familiar that microprocessor (CPU) is most important part in a PC ,and Intel’s microprocessors means reliability and best performance.

Business strategy of Intel

Intel processors were not introduced under the “Intel Inside” umbrella to consumer until 1994 when Pentium processors were released. Since then, the ingredient branding strategy has been so successful to lead Intel into a great semiconductor company. At the initial stage, the “Intel, the Computer Inside”