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By, Dr. Daman Walia (13/09) Ashank Dayal Mathur (29/09) Abhinaw Shrivastava (67/09) Evenpreet Singh (131/09)
• Intel was founded in 1968 by Gordon E. Moore and Robert Noyce. • Intel's third employee was Andy Grove who ran the company through much of the 1980s and the high-growth 1990s. • In September 2009 , Intel had nearly 100,000 employees and 200 facilities worldwide. • Fortune 500 ranking - 49. • Stock symbol - INTC. • Worldwide offices and facilities – 249.
About Intel cont…
• Intel is the world's largest semiconductor chip maker. • The company is the inventor of the x86 series of microprocessors, the processors found in most personal computers during the 1980s. • Earlier processors like 4004, 8080 & 8086 were also developed by Intel. • Intel was an early developer of SRAM and DRAM memory chips.
Facilities across the Globe 4 .
1974 – The Intel 8080 microprocessor. took personal “risk” • Technology Innovation – Big idea.Building Brand Intel – Through Technological and Marketing Innovation • Intel (1968-77) . IC chips) • First microprocessor . new technology/business area: (semiconductors.“Trying to do things nobody else could” – Robert Noyce (co-inventor integrated circuit IC) • First 2 DRAM products not successes • 3rd product 1103 became world leader. – 90% of Intel revenues (concentrated) • Andy Grove joined. • 1981 – Intel wins the IBM PC Account 5 .
famous name • Standardized.Intel/IBM Advantage over Apple/Motorola Apple/Motorola • First to Market • Closed architecture • Sole-provider – Exclusivity – Proprietary Intel/IBM • Big. open architecture – Components – Software – Scale economies • Intel gets benefit of IBM marketing and strategy (derived demand) 6 .
Intel Microprocessor Progression Source: NBC1 2008 7 .
except to IBM – Compaq enters Desktop market with Intel 386 • 486 and WINTEL Collaboration: Emerging collaboration between MS & Intel – WINdows + INTEL = “WINTEL” platform • Hardware advance precedes software advance – Microsoft Operating System (new DOS) not ready for 386 – Need large installed base of hardware for software upgrade 8 .X86 Processors Change Everything • Intel 386 (1985) • Investments – $200 million for design – $800 million for production facilities – Decides not to license.
• 1991 – “Intel Inside” logo was introduced and the company’s co-op program with its OEM partners was officially launched. • Dennis Carter felt the need to create an umbrella brand. • Initial reluctance gave way to whole-hearted acceptance within a year. • Intel’s Co-op or Ingredient Branding – Innovative Marketing Strategy 9 .Building Brand Intel.“Intel Inside” • Intel got lucky with “Red X” Marketing Experiment being a success. 300 odd OEMs signed up by the end of the year.
-Growth opportunities outside the alliance. • Ingredient/Co-op branding at its best is a symbiotic relationship between the host and the ingredient brands. -Does the ingredient brand leverage the perceived value of the host brand and final product.A) sustainable over long term.Ingredient Branding • An ingredient is a component of a product which has its own brand. 10 . -Is the technology (C. • Important strategic considerations before opting for ingredient branding: -Is the ingredient core to functionality and tenders significantly different benefits than competitive offerings. simultaneously.
Some Ingredient Brands 11 .
Lycra® = recoverable stretch • Associations of quality & performance.Characteristics of an Ingredient Brand • A clear differentiating functional attribute -e. Intel® = microprocessor speed 4. 1.g. Teflon® = non-stick 2. • High target audience awareness. Dolby® = ultimate sound reproduction 3. relevance and 12 . preference.
ABS • A leadership characteristic. 13 .The Ingredient’s Perspective • A natural progression of branding the ingredient. • – Involves extending the brand franchise beyond the • direct customer. difficult to be substituted. ultimately to the final consumer. Teflon®.e. • – once you “own” the attribute. – Industrial trade-names can evolve to become consumer • brands over time .g. – Part of competitive marketing strategy.
• Supports price premium.The Ingredient’s Trade-off + • Builds sustainable advantage through preference and specification. • Secures business versus competition. Intel in consumer electronics. • Potential to transfer positive equity fromhost brand. • Risk of transfer of negative image from host brand.e. is rarely an • Branding ingredient supplier’s core competence. • Can limit future strategic options .g. 14 . • Adds cost and complexity to business.
• Relative ingredient brand strength. unencumbered by need to communicate physical attributes & benefits. positioning and lifecycle all factors in decision. • Allows host brand to concentrate on building “lifestyle” image. 15 .The Host’s Perspective • Ingredient brands provide reassurance of content & product performance.
• • • • • • • • Higher costs (ingredient price and/or license fee). Ingredient’s image dominates host’s . Lack of control - • 16 . Increased distribution channel acceptance. Preferential access to technology & marketing support from supplier.Intel.g.The Host’s Trade-off • + Leverage ingredient brand to increase perceived value.g. quality and performance. Gain market acceptance where ingredient brand profile is stronger than host’s. Risk of negative image transfer from ingredient -e. + Potential for higher margins & faster inventory turns. Teflon®.e.
Co-branding strategies Existing Market New Market Complimentary Target Market 17 .
18 .Ingredient Branding Dilemma • Exclusivity • Supplier choice • Brand pre-eminence • Ubiquity • Specification • Category relevance “Ingredient branding hurts the top-end players just as often as it helps the bottom-end players”. -David Aaker.
Exclusivity vs Ubiquity 19 .
• Intel had to help the consumers recognize its product through the brand Intel itself that connoted reliability and superior performance. • Essentially meant that Intel’s product clones could flood the market.The problem faced by Intel • Court rulings that chip labels with just numbers cannot be trademarked. 20 . • Consumers left baffled for choice and often left guessing about the authenticity.
21 . • Intel found a way of taking away the mystery of the product.without the technical jargon. gaining the confidence of the end consumer that "Intel Inside" represented quality and reliability. • Many consumers were uncertain about the quality and reliability of microprocessors. • The “Intel Inside” campaign aimed to "educate both the retail sales associates and the consumers about the value of Intel microprocessors. and to explain to them the differences between the microprocessors" .Intel Focus on Ingredient/Co-op branding • Intel Co-op Program marked the birth of brand Intel.
Prolific advertisement to create awareness about importance and superiority of Intel chips. 3.The Strategic Solution The program intended to levitate Intel as a brand through 3 strategic steps: 1. 2.Developing and using a brand logo in advertisements of OEMs. 22 .Engaging tier 2 and 3 OEMs in the program via profitable propositions.
Co-op Program Implementation • Designing a unique logo. • Direct advertisement aimed at organizational rather product communication thus enabling a ‘brand consumer connect. • Convincing tier 2 and 3 OEMs initially of the short term and long term benefits of alliance and engaging them. including premium brands IBM & Compaq. • Launched “Intel Inside®” in 1991 with 200 OEMs.’ 23 .
• By 2002 Intel broke into the list of top 10 most valuable brands. • Worldwide sales within a year of launch of IB strategy rose by63%. 24 . That. within 2 years of its launch soared wildly to 94% • From 200 OEM licenses in 1991 to over 1000 OEM licenses today. • Awareness of Intel logos prior to IB strategy was a meagre 24% in European PC market.Assessment of Intel’s Co-op Program • From 200 OEM licenses in 1991 to over 1000 OEM licenses today.
Brand Equity of Intel 25 .
670 mln 7 5 5 5 5 5 5 26 .Intel breaks into top 10 brands Year Brand Equity Interbrand Rank • • • • • • • • 2008: 2007: 2006: 2005: 2004: 2003: 2002: 2001: $31.860 mln $ 34.261 mln 7 $ 30.499 mln $ 31.588 mln $ 33.112 mln $ 30.954 mln $ 32.319 mln $ 35.
27 . • “Over-association” with microprocessor category a limitation.“Intel Inside” – The Flip side of Ingredient Branding • Failed with planned extension into consumer electronics. • More sub-brands expected for new bundled products or “platforms”. • Launched sub-brands in core microprocessor market.
University of Oxford Microsoft Corporation Yahoo 28 .Major Customers of Intel • • • • • • • Hewlett-Packard Dell Philips medical MUSICMATCH Inc.
Major Competitors • • • • • AMD Motorola Texas Instruments Cyris Chinese firms 29 .
Five Forces Model for Intel 30 .
Centrino Technology Wireless LAN Intel Centrino Chip sets Pentium M Intel Centrino marketing campaign is the most important revision to Intel’s marketing strategy since “Intel inside”. 31 .
32 . recognizable and memorable…” .Brand Sense by Martin Lindstorm …and Intel with its unique trademark sound has been doing just that for years now. • The Intel 3 second.Intel Jingle– A Success Story “Only about 9% of all companies make use of sound to make their brands more distinct. 5 melodies jingle is played after every advertisement of the computer OEM’s since 1995. Has contributed exponentially in making Intel a household name.
scale. and scale • Ingredient Branding – Allows focus. “piggy-backing” • Derived demand drives growth and rapid change. Marketing Innovation 33 . • Technology moves so rapidly that patents frequently become obsolete – protect by know-how. branding.Important Strategic Steps for maintaining leadership position • Stress upon where the most “value” is inside a computer. Intel Position Leader Goal Strategy Most Sales. High brand Technological equity Innovation. expertise.
THANK YOU 34 .