Industrial Marketing

Place and Promotions Strategy

Pre pare d By:­

Raval Chandrashe khar R
DBIM­SURAT
2008­10
INTRODUCTION
 Integrated Electronics Corporation (Intel Co.
Ltd.)

 World's largest semiconductor chip maker

 Started as a memory controllers company and
switched to microprocessors

 Unprecedented growth in PC market guided
Intel to change its business operations and
domain

 Intel is a known household name today

Introduction Contd…
 Founded in 1968 with primary emphasis on
producing semiconductor memory for
mainframe computers and minicomputers
 Began developing microprocessors in early
1970s
 Secured contract to provide microprocessors
for IBM personal computers in 1980
COMPANY PROFILE
§ Established in 1968 by three engineers to develop
technology for silicon based chips.
§ This led to the formation of Intel (Integrated
Electronics)
§ Main buyer was Busicom, a Japanese company that
manufactured calculators.
§ 4004, world’s first microprocessor chip made by
Intel was released in 1971
§ After the success of 4004, Intel released the 8008
microprocessor in 1972, which was used in a PC
called Mark-8.
§ Released 8080 in 1974 and 8086-8088 in 1978. the
later was chosen by IBM to make new PCs and it
became a huge success
§ This was followed by the release of 80286, which
was the first processor that could run programs
written for its predecessor.

Breakthrough Moments for INTEL
 Started marketing computer chips directly to
consumers, instead of design engineers, in
1988
 Red X Campaign
 Created “umbrella” brand for successive
products
 Developed two generations of chips at the
same time
 Initiated very successful co-opperative
advertising program.
 Introduction of Celeron brand for low-end PC
market.

Intel’s Core Competency
Intel Corporation has three elements of its core


competency:
 Underlying process technology

 Being able to manufacture in high volume

 Doing sophisticated high-volume design



 This has helped the firm to achieve high

brand loyalty and growth in this segment, and
has made the leader in microprocessor
segment.

Important Strategic Alliances
 Emulex – technology initiative for processors
 Cisco – networking expertise
 DreamWorks – for creating high end 3D animations
 Oracle – health care products
 Nokia – innovations in mobile computing devices,
combine the performance of powerful computers
with high-bandwidth mobile broadband
communications and ubiquitous Internet
connectivity.
 Close partnerships with DELL, HP and Gateway
Product portfolio and strategies
 Product Categories  Strategies
 Processors (core processors,
Core i3, i5 and i7 are the
latest)
 Motherboards
 Networking – Adapters for
wireless and Ethernet
networks
 Chipsets (enhanced
capabilities for audio, video
and communication)
 Consumer Electronics – media
processing, demodulators
and tuners
 Software Products – compilers,
tune analyzers etc.
 Storage devices
 Health systems
 Continuously innovate so as
to make products hop
between introduction and
growth stage
 Customized products –
Community PC (Intel India)
 Earlier Supplier Involvement

 High investment in R&D to
improve manufacturing
process, to ensure speed
of delivery to market
 Adopts a preemptive
competitive strategy.
 Promotional Strategies
 Pull strategy – “Intel Inside Campaign”


 Global Events - Intel Developer Forum (IDF) & Intel Extreme

Masters
 Corporate Responsibility Initiatives - Intel Teacher Program
and Intel World Ahead Program.
 Trade Shows - “Computex” in Taipei, “Consumer Electronics
Show s in Las Vegas” etc.
 Support Programs – Intel Software Partner Program
 Social Media – Intel Blogs, Inside Scoop, Software Network
and Community Discussions

 develop technology for silicon
CORE BUSINESS

ØBUSICOM ( JAPANESE CALCULATOR MANUFACTURING C

ØMARK - 8 ( WORLD ’ S FIRST HOME PC )
MAJOR BUYERS
ØALTAIR
ØIBM
Ø To create awareness among PC users about Intel and its
products .
Ø Most PC users were not even aware of the availability of
advanced processors and their cost - saving performance
Ø 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 ’.
Ø Initially , interactive marketing and B2B interactions
increased customer awareness among business users .
Ø Creating a strong brand to communicate with the consumers .
Ø To present the microprocessor as a ‘ key component ’ and ‘ not
WHY BRANDING INTEL??
just a component ’ in the computer .
ELEMENTS OF MARKETING INTEL
 Promoted Intel ’ s MMX
technologically featured
people ( bunny people )
ü
 Company ’ s chief executive was
also a part of it . This
portrayed that employees at
all levels were equally
committed to innovation .
ü
 Catchy , unusual campaign went
THE “ BUNNY PEOPLE ”
on to become the most well
remembered advertisement .

INNOVATIVE ADVERTISING
ü Intel Inside Program to promote and support
e - commerce marketing activities undertaken
by computer manufacturers .
ü Entered tie - ups for innovative web - based
marketing and sales deals .
ü By doing so , it marketed its chips as a
component brand during online PC purchases
throughout the world .
ü Sold merchandise such as books , T - shirts ,
pens , etc . through itsBRAND
INCREASING websiteVALUE
to popularize
the Intel logo
ü Set up the Intel Inside Online Network , a
web - based tool that managed business
transactions related to the company ’ s coop
advertising program .
ü
INTEL ’ S BAD FORTUNES
 PROBLEM INITIATION FOR THE COMPANY – 21 ST
CENTURY

ublicity for Intel due to complaints of ‘ abusive marketing pra

Led to virtual stranglehold on the microprocessor market .

antage of this situation by increasing its focus on marketing

AMD launched a multimedia campaign similar to that of Intel .

cessors were reasonably priced and were of competitive qualit

cus on high quality products and process and communicating the same t

omer involved with the company by increasing interaction through media

Interactive marketing to increase and sustain business users .

THE ROAD AHEAD

ajor investments in R / D to make new technologically advanced produc

Market research - to understand the needs of the customers .

 Customers
 Original equipment manufacturers (OEMs) and
original design manufacturers (ODMs) who make
computer systems, cellular handsets and
handheld computing devices, and
telecommunications and networking
communications equipment.


 PC and network communications products users

(including individuals, large and small businesses,
and service providers)


 Other manufacturers, including makers of a wide

range of industrial and communications
equipment.
Distribution Channel
Distribution Channel
 Partners with VARs (Value Added Resellers) - For instance
Core Corporation is leading VAR in Japan for Intel

 Helps in recruiting Deployment Value Added Resellers

 IPDs (Intel Product Dealers)

 Programs for channel members
 - Intel Channel Partner Program
 - The Intel Channel Conference


 SCQI (Supplier Continuous Quality Award) is awarded

every year to motivate quality from suppliers


Achieving Supply Chain Efficiencies
 Addressing uncertainty based on a planning approach
consisting of three methods; the Product Transition
Index (PTI), the Transition Playbook, and the Transition
Dashboard


 Efficient capacity planning



 Open architecture standard called OPENSTAR* for

semiconductor test equipment is used.


 Unified global procurement solution.



 Use of automated data systems and tools - RosettaNet

Pricing
 For its Premium Customers like Dell it provide’s its

new technology exclusively to them and not to any

other manufacturer so that they can have better

market grip, for this Intel charge’s huge premiums

from them.

 Intel trims the price of its older generation product

line’s while introducing a new product so as to

move out its inventory of older version and gives

the product a death before it reaches to decline

Pricing
 Pays rebates and financial incentives to OEMs and dealers to
push Intel products. Intel Has been once accused of
making such payments illegally by AMD.

 Pricing is strongly driven and influenced by competition from

AMD specially in markets like US where AMD has a
stronger grip- Evident from the price cut initiatives taken
by company in mid 2009. The prices of five different
versions of the Intel Core 2 Quad processor were cut by as
much as 40 percent.

Empowered employees and training
 Intel University - training courses offer in-
person and online opportunities for learning
and applying new skills.


 Tie ups with universities for carrying out R&D

 - ParLab at UC Berkeley
 - UPCRC at Univ. Illinois
 - Intel Visual Computing Institute at
Saarland University


 Research@Intel Day - A yearly program

conducted to display newer technologies on
which personals are working.

Strategic Mapping
 Intel’s strategy is to be at the heart of new
developments in home entertainment,
security, medical care, etc.


In te l
INTEL AND ITS B2B STRATEGIES
Place

 B2B project structure

§ Intel’s Initial E-business project structure was
more off based on order takings on phone and
face to face.
§ Intel created a self-service extranet called E-
business program. Access to the site was
restricted to Intel’s authorized business
partners and customers.
INTEL AND ITS B2B STRATEGIES
PLACE


§ E-business strategies
§ Broaden and deepen sales outreach- Borderless World on
web.
§ Target middle tier for better efficiency.

§ Improve customer service by delivering personalized

information

§ E-business infrastructure
§ Servers

§ OS and Databases

§ Application development
INTEL AND ITS B2B E-BUSINESS
STRATEGIES- PLACE

§ Results
§ Intel’s Web orders replaced non-Web orders

§ Intel’s network infrastructure improvements in

the year 2000 made it one of the best
efficient and secured E-Business Infrastructure
and resulting into more than 75% order
takings on its web-portal.
§ Today INTEL gets 100% of its orders on web.
 Non­Web Orders Web­orders

100%

80%

60%

40%

20%

0
1997 1998 1999 2000 2001
Place- Distribution
 Manufacturing Unit- Usually it places its manufacturing unit
considering the locations of its major suppliers like Dell and
HP but in many cases these firms have place themselves
near Intel’s manufacturing units. As both are highly
dependent on each other for cost efficiencies.

 Mode of Transportation
 Air- When sending orders over the boundries Intel uses air
transports. It is no more interested in sea route because of
time factors.

 Roadways- Where roadways is available and feasible it also

delivers through roadways. E.g US, and European countries.
Few Must learn lessons from Intel


§ Tailoring to customer’s needs

§ Complementing rather than cannibalizing
traditional ways of competing.
§ Anticipating changes and focusing on
continuous quality improvement.
LESSONS LEARNED AND SUCCESS
FACTORS
§ Delivering personalized Web content
§ Focusing on quality of connections with
customers and customer relationships.
§ Providing worldwide support and customer
training.
§ Designing good E-business architecture
Thank You