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Presented to: Dr Ahmed Shalaby Presented by: Mohamed Badrawy Eman Asaad
INTEL¶s Background Hot Topics:
Comparing Branding for business & consumer markets Shifting Branding strategy from focus on functionality to focus on image/attitude Success factors for branding a component/ingredient Evaluation of INTEL¶s Segmentation & Targeting
a condition for being in business Competitive strategies of INTEL VS AMD (Advanced Micro Devices) How IMC contributed in the success of ³Pentium´ Branding AMD¶s proposed positioning to compete with INTEL INTEL¶s move to consumer electronic products. digital cameras. digital homes (how far is it from producing microprocessors?) TOWS .Agenda The development of PODs into POPs.
networking devices and equipment for accessing the Internet. By the early 21st century. and home networks. the company invented the microprocessor. a vital corporate culture." . The company's product line also includes chipsets and motherboards. local area networks. cellular phone base stations. with 11 fabrication facilities and six assembly and test facilities around the world. the "computer on a chip" that made possible the first handheld calculators and personal computers (PCs). flash memory used in wireless communications and other applications. Intel's microprocessors were found in approximately 80 percent of PCs worldwide. prowess in legal matters. laser printers. and embedded control mi crochips used in networking products. factory automat ion instruments. and other applications . and an ongoing alliance with software giant Microsoft Corporation often referred to as "Wintel. superior manufacturing proficiency. well-supported research and development. Intel has changed the global marketplace dramatically since it was founded in 1968.INTEL·s Background Intel Corporation is the largest semiconductor manufacturer in the world. Intel has remained competitive through a combination of clever marketing.
AMD used Intel's 386 model to introduce AM386 Intel lost the ³386´ trademark case against AMD Intel introduced Pentium Apple started using Intel processors. the 8-bit bus Intel introduced the 286 processor Intel introduced the 386 SX microprocessors Intel introduced the 486 processor. Intel leap ahead brand campaign 1968 1978 1982 1988 1989 1990 1991 1993 2006 .Intel Foundation by Robert Noyce and Gordon Moore Intel introduced the 16-bit 8086 processor followed by the 8088.
Intel introduced 8086 processor followed by 8088 which was mainly competed by Motorola Endorsement of 8088 microprocessor by IBM for its first PC In late 80¶s. launched successful products in 386 and 486 technology of microprocessor Threat from competitors with similar naming products. . AMD.INTEL·s Branding Issues 1/2 Branding for business In late 70¶s. Trademark battle with AMD over 386 naming convention of microprocessors March 1. Nex Gen Microsystems was emerging . 1991 INTEL lost the court battle for explanation of being generic and hence not trademark worthy against AMD.
more focus on actual computer buyers instead of computer manufacturers: Use of logo µIntel Inside¶ to highlight the presence of Intel chips inside PCs Co-op Marketing.INTEL·s Branding Issues 2/2 Branding for consumer markets Intel turned over to an alternative strategy getting away from using model numbers in brands to manipulating a full campaign using: ³Intel. . and home PC users. Intel believed that if they could gain consumer confidence as a brand. there was a significant shift in the general focus of the personal computer industry toward the mass-market. sharing advertising expenses with OEMs Advertising Program through print. they¶d be able to transfer the equity of the Intel brand to launch new products and technologies. billboard and spot TV ads to build equity Intel aimed to change it¶s image from a micro-chip maker to a quality standardbearer. the computer inside´ slogan In the late 1980¶s. INTEL Focus shift from µPush¶ (Computer manufacturers communication) to µPull¶ (Consumers communication). non-technical business.
In the third quarter of 1998. Intel¶s Pentium took 90% of the world¶s market share. Intel¶s share dropped down from 68% to 56% due to strong competition with AMD & Cyrix. 1997. Intel¶s share rose to more than 80% due to the Celeron chip technology 2005. From the third to the fourth quarter of 1998.Market Share Evolution From 1968 to 1978 Intel¶s market share was 100% 1992. Intel¶s share dropped below 30% against AMD gaining 20% of the microprocessor market. Intel controlled 84% of the market share in china against 16% to AMD. .
and Intel found a way of taking away the mystery of the product. and to explain to them the difference between the microprocessors´ ± without getting into the technical issues. They succeeded to fulfill their aim through. gaining the confidence of the end consumers that ³Intel Inside´ represented quality and reliability ³Intel Inside´ campaign aimed to ³educate both the retail sales associates and the consumer about the value of Intel microprocessors.Success factors for branding a component/ingredient Market Need was that many consumers were uncertain about the quality and reliability of microprocessors. Convincing consumers that is significantly impacts performance of end product Implanting the perception in Consumers minds that the chosen ingredient is superior to competitive offerings Clearly placed / positioned symbol or logo on product packaging or body Creating Push and Pull programs .
Evaluation of INTEL·s Segmentation & Targeting Intel¶s segmentation was based on price and performance. Having a technological product with its specifications upfront actually helps the customer appreciate the benefits and shortcoming at the time of purchase and prevents any dissatisfaction thereafter. Xeon performed poorly in comparison to Opteron and needed up gradation . Depending on it. the target market also differed.
³It¶s the same reason that people bought IBM for years and nothing else. a condition for being in business In the fall of 1999. AMD unveiled a 700 MHz version of its Athlon chip.´ said an executive with a computer reseller. however. Intel succeeded to implant the concept of reliability on its branded processor in any computer to assure its quality performance. The release of the 700 MHz Athlon put Intel in the unfamiliar position of trailing a competitor¶s technology advancements. which surpassed the latest Pentium in terms of performance.The development of PODs into POPs. rather than having it as an extra advantage in the past. Major PC manufacturers had been reluctant to buy AMD processors. and as of late 1999 none of the top PC makers used an AMD processor in its machines. Nowadays. the factor that made all OEMs or computer manufacturers mandate the inclusion of Intel processor as a base for its quality standard. the PODs are the inclusion of Intel¶s updated generation of processors .
AMD had increased 4 percent to a 17 percent share of the chip market. nine out of the top 10 PC makers were using AMD chips in their computers in 2000. ³AMD Shows It¶s Ready for Prime Time. In 2000. 2000. In addition. which critics partly blamed Intel¶s push to beat rival AMD to market with faster processors.´ Forbes. and delays in 1999 and 2000. AMD had increased 4 percent to a 17 percent share of the chip market. In addition. AMD was selling microprocessors to every major PC manufacturer. Intel¶s product delays enabled AMD to gain significant inroads in the PC microprocessor business. In 2000. The important issue for AMD was to keep pace with Intel¶s highest performing chips. nine out of the top 10 PC makers were using AMD chips in their computers in 2000. . which critics partly blamed Intel¶s push to beat rival AMD to market with faster processors.Competitive strategies of INTEL VS AMD (Advanced Micro Devices) Year 2000. April 13. shortages. By June 2000. a valuable point of comparison that helped AMD¶s stock rise 353 percent from 1999 to 2000. Many industry analysts considered AMD¶s revitalized business to be a ³serious challenge´ to Intel. shortages. and delays in 1999 and 2000. Intel experienced a number of product flaws. Intel¶s product delays enabled AMD to gain significant inroads in the PC microprocessor business. Intel experienced a number of product flaws.
How IMC contributed in the success of ´Pentiumµ Branding Launch: Andy Grove in an exclusive interview on CNN announced the new subrand name as µPentium¶ Developing Brand Awareness: Internal Focus: PR department monitoring all references in press to ensure that µPentium¶ is being used instead of µP5¶ or µ586¶ Advertising Famous advertising campaigns ± µbunny people¶. µBlue Man Group¶ Company Name Brand Associations Technolog y Leader Quality CPU Brand compatibil ity Consumer Response to various surveys highlight their association to the Intel brand .
´ AMD is changing the way the processor industry operates.Innovation. Our customer-centric. approach helps customers decide what is important to them while we are there to provide expert guidance. we will provide performance-per-watt at a lower price than Intel... From here we can leverage that brand to introduce desktop and mobile processors as well.AMD·s Proposed Positioning to Compete with INTEL ³Innovating. And finally. Our processors allow companies to achieve their ³green´ goals while still managing to increase performance. . Customers will relate the AMD brand to superior value in the computer server market segment.
. Concentrating on server processors and a customer-centric way to interact with our customers will allow us to differentiate ourselves from Intel.AMD·s Proposed Strategy to Compete with INTEL The goal of our new marketing strategy is to gain market share and favourably position AMD for the future. The time invested in establishing our customer-centric vision will provide a sufficient barrier to entry for Intel and give us a sustainable competitive advantage in the short term. Using this advantage we have time to build our brand and then leverage this image to enter the desktop market as well. The main premise of the strategy is a retreat to our core competencies so that we may invest the resources necessary to build a brand for ourselves.
acquired 12 companies for $6 billion Invested in 25 communication technology and over 125 internet-focused startups Exiting non-processor businesses Internet venture proved futile due to lack of experience and stiff competition from established players Exited non-processor business Stopped manufacturing network servers and routers on complaints from big customers of microprocessors ³I think we have cleaned up our product line. digital cameras. e-commerce and Internet hosting In 1999. CEO (2001) .INTEL·s move to consumer electronic products.Craig Barrett. digital homes (how far is it from producing microprocessors?) New Ventures Consumer electronics. In this difficult times [these peripheral businesses] were distracting us from our core strengths´ .
including an effort to install 3.000 terminals on seats at Madison Square Garden and a start-up called Vivonic. while net income dropped 70 percent to $3. Intel¶s new businesses rang up zero profits. Revenues plummeted 21 percent to $26. a Computer Sound Morpher.´ the company spent $50 million on over 20 new projects.5 billion. marketing manager for Intel¶s consumer products. the Intel Personal Audio Player. Craig Barrett. Said John Middleton. ³These products extend the business and the brand and they make the Internet more fun.6 billion.Performance Gap In 2000. For children. Intel introduced two new digital cameras. a digital music player. A former Intel executive said. the Me2Cam and the Pocket PC Camera. within five years he expected that every new business Intel ventured into would generate revenues exceeding $1 billion. ³They¶re dabbling in everything and overwhelming nothing´ .
toys. complained that Intel was competing against them.Performance Driver Intel exited non-processor businesses such as digital cameras. Intel stopped manufacturing network servers and routers after several of its big chip customers. . and networking hardware. including Dell and Cisco and Hewlett-Packard. streaming media software for online audio and video transmissions. The company shut down its Connected Products unit that made many of Intel¶s consumer products.
2. 6. Continuous demand for new & high performance technologies. Top brand equity. Presence of potential affiliations. Fast phase-out of PC technologies. 3. TOWS Opportunities 1.Strengths 1. High effective R&D Affordable resources (Human. Flocculation of planning strategies. 3. Cumulative experiences. Arising of new markets. Market Pioneer. Weaknesses 1. Strong competition. 4. SO WO W1O1: Monopoly of decision in some situations: Arising of new markets S4O1: Affordable resources: Arising of new markets S6O4:Strong relations with OEMs: Presence of potential affiliations Threats 1. Financial«) 5. Monopoly of decision in some situations. Flocculation in global economy. 2. 3. 4. Strong relations with OEMs. 2. Arising of new technologies in different fields. ST S3T1: fast paced innovation overcoming the fast paced phase out of PC technologies S2T3:Top brand equity: Strong competition S4T1: Affordable resources: Flocculation in global economy WT W2T3: Flocculation of planning strategies: Strong competition . 2.
Discontinuation of this theme would have meant drainage of efforts and resources put into building the brand Pentium. Depending on it. Having a technological product with its specifications upfront actually helps the customer appreciate the benefits and shortcoming at the time of purchase and prevents any dissatisfaction thereafter. Also. Intel¶s segmentation was based on price and performance.Summary Intel Pentium had garnered huge brand recognition through press. the target market also differed. Xeon performed poorly in comparison to Opteron and needed up gradation . introduction of processors happened every next year making it impractical to launch promotion campaign for every product. technical magazines and ads.