Intel Industrial Mktg. | Intel | Microprocessor

Industrial Marketing

Place and Promotions Strategy

Pre pare d By:­ Raval Chandrashe khar R DBIM­SURAT 2008­10

INTRODUCTION
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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

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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” products
 Developed

brand

for

successive

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 and mobile ubiquitous broadband Internet communications 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

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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
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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

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CORE BUSINESS

develop technology for silicon

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 just a component ’ in the computer .

WHY BRANDING INTEL??

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 on to become the most well remembered advertisement .

THE “ BUNNY PEOPLE ”

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 VALUE INCREASING website 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 .

ajor

investments

THE ROAD AHEAD
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.

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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





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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* semiconductor test equipment is used. Unified global procurement solution. Use of automated data systems and tools - RosettaNet for

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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 inperson 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 strategy is to be at the heart of new Mapping  Intel’s
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 Ebusiness 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

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