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AMITY BUSINESS SCHOOL

AMITY UNIVERSITY
----------UTTAR PRADESH----------

INTEL CASE STUDY

SUBMITTED TO:- SUBMITTED


BY:-

Mr. Prem Kumar Akriti Sharma


108E07

Dimple Kumari Raghav 108E06

Nadeesh Mahajan 108E52

Neha Ganju
108E19

Pankaj Kumar Jatia 108E30

Pooja Soni 108E13

Premanshu Shekhar 108E28

Ravinder Singh 108E50

Shulabh Dharmavat 108E33


Sujeet
Chowdhary 108E41

Why was it a strategic decision to brand ‘Intel’? How did it bring about the customer Pull
towards an ingredient brand?

Intel found it difficult to differentiate its products in the mind of the consumers. Thus it became
absolutely necessary to establish a brand identity which would distinguish Intel as a brand from
its competition.

• Also Intel was innovating constantly. Therefore in the wake of new products and
technologies, Intel wanted to develop a brand equity.

• Intel was the market and technology leader and was the first one to produce new products
but there were competing products that were carrying the same or similar names. Due to
similar names there was a growing confusion among the consumers as to which
generation of microprocessor actually belonged to Intel. This was termed as an ‘alphabet
soup’. Thus, it became imperative that Intel needed to create a brand image so that it
could distinguish itself from its competitors.

When Intel finally lost the 386 case to AMD, Dennis Carter, the Vice President recognized the
urgency to create brand Intel so as to offset any negative impact that the loss would create.
Therefore the need to create brand “Intel” was more of a strategic decision and a new processor
branding strategy was formulated.

Customer Pull Strategy

During the early 1980’s , the focus of the personal computer industry shifted to mass market,
non-technical users and home PC users. When Intel recognized this shift, it changed its strategy
to a pull strategy than a push strategy. What Intel essentially did here was that it redirected the
advertising efforts that were initially focused towards computer manufacturers to actual
computer buyers. What was happening during this time in the PC industry was that the choice of
the consumer was based on a Company’s brand image and they were less concerned about the
internal components of a computer.

Thus, when Intel focused on advertising for consumers, what it tried to do was
• Create an awareness of the brand

• Create a preference for brand Intel as the microprocessor inside the PC

So even though MIS was still its primary target market, Intel recognized the need to target the
retail sector as well, since those buyers were also a significant market segment.

“An ingredient brand can boost the image of a host brand” How would you justify this
with reference to Intel? What are the challenges faced by Host brands?

“An ingredient brand is a component of a product that has its own brand identity.” In this
case, Intel is the ingredient brand and all the computer manufacturers using Intel chipsets are the
host brands.

The ingredient is highly differentiated, usually supported by patent protection, and so adds an
aura of quality to the overall product and it is central to the functional performance of the final
product. Intel had done a great job on making “INTEL INSIDE” stand for power, ability to do
what u want to and cutting edge technology. This not only helps Intel, but also boosts the sales of
the manufacturers who use its microprocessors.

This is how Intel has made it:-

• It is evident from the case that, after it’s introduction in the market in 1971, it was
continuously growing while introducing various microprocessor chips time to time,
which became the back-bone of various computer manufacturers and by 1990 it was a
$3.9 billion company which was an ingredient of almost 80% of all the IBM and IBM
compatible machines.

• By late 1980’s the customers know the computers by their names i.e. Compaq, Dell,
IBM and not by their ingredients. So, Intel started a brand campaign in order to create
awareness and to build brand preference for Intel microprocessor inside the PC. The
campaign was so effective that within months, buyers were asking for the computers
equipped with then introduced Intel386 SX chip. So, it’s campaign increased the sales of
the host brand as well.

• Intel is the most trusted brand in microprocessors and is a symbol of quality and
performance. From a wide range of micro-chips from a low cost 286 to the powerful P5,
it has consistently delivered quality and performance at its best. So, when such a brand is
associated with the host brand, automatically it boosts the image of the host brand.

• It’s brand image promises safety and technology. So, it positioned its products as
premium products and charged premium prices as the customers were thinking that they
are buying personal computers powered by “ Creators of Microprocessors”. So, the
brand using Intel as an ingredient would also be considered as a premium product.

• The ingredient brand should have that kind of brand image which should not only shield
it from competition for ingredient brand, but also for the host brand. Intel with it’s
performance and continuous innovation created a brand image that reduced the
competition in it’s own domain and also helped the host brand in improving its image
and position in the market.

• In 1991 Intel introduced it’s Intel Inside campaign, in which it’s associate’s brand
computer and it’s print ad will have an Intel Inside logo. Intel was giving rebate to those
using this and was bearing 30-50 % cost of the print ads of the OEM’s. It benefited the
most to the third-tier manufacturers who had no brand-image. Print-ad was the only
source of communication to them, thus they started accepting this offer as they were
getting discounts on their ads. Moreover, now onwards they were associated with Intel,
which will add assurance of quality to their product. By the end of 1991 over 300 OEMs
were the part of it and was enjoying the brand-image of Intel as it was enhancing their
image as well.

Challenges faced by Host brands:

• The numerical sequence could be easily copied by the competitors so the host brand
could not have a patented product. Consumers could not comprehend the level of
satisfaction to expect from a microprocessor; also they got confused regarding the
generation of microprocessors that they were using. The host brand was muddled up and
could not create a brand identity for them.

• The host brand had a lot of competitors who could easily create a clone of the existing
product, thereby creating variety in the market, leading to confusion from the customer’s
point of view, as to which brand to buy.

• The ingredient brand can be the cause of converting the host brand’s point-of-difference
to point-of-parity. As in this case, considering the Intel Inside campaign, the host brands
had the threat of loosing their own brand identity with the popularity of the ingredient
brand. As Intel was giving this offer to all, so the host brand had a fear that the customer
will seek the overall product as same made by different companies. Hence it will weaken
their point of difference and will harm their brand identity.

Other general challenges to the host brands are:

• Generally, with the passage of time the host brand becomes more and more dependent on
the ingredient brand. Its success and failure totally goes into the hands of the ingredient
brand. It can find itself into great trouble, if the ingredient brand refuses to provide its
service or shifts to some other brand. So, it’s a challenge to the host brand that up to what
extent it should be dependent on the ingredient brand.

• If the host brand is using ingredient’s identity to promote its own product, then in any
case, if the ingredient brand fails, the host brand will suffer a lot and it will become very
difficult to gain its brand image again.

Select at least five examples of a Host Brand involved in a Co- branding effort and wherein
the ingredient brand has played a significant role to boost the image of a host brand?

The Ingredient’s Perspective

• A natural progression of branding the ingredient.

– Involves extending the brand franchise beyond the direct customer, ultimately to the final
consumer.

– Part of competitive marketing strategy.

– Industrial trade-names can evolve to become consumer brands over time - e.g. Teflon®, ABS

• A leadership characteristic.

– Once you “own” the attribute, difficult to be substituted.

The Ingredient’s Trade-off.

+ Builds sustainable advantage through preference and specification.

+ Supports price premium.

+ Secures business versus competition.

+ Potential to transfer positive equity from host brand.

- Can limit future strategic options - e.g. Intel in consumer electronics.

- Adds cost and complexity to business.

- Branding is rarely an ingredient supplier’s core competence.

- Risk of transfer of negative image from host brand.

The Host’s Perspective


• Ingredient brands provide reassurance of content & product performance.

• Allows host brand to concentrate on building “lifestyle” image, unencumbered by need to


communicate physical attributes & benefits.

• Relative ingredient brand strength, positioning and life-cycle all factors in decision.

The Host’s Trade-off.

+ Leverage ingredient brand to increase perceived value, quality and performance.

+ Gain market acceptance where ingredient brand profile is stronger than host’s.

+ Increased distribution channel acceptance.

+ Preferential access to technology & marketing support from supplier.

+ Potential for higher margins & faster inventory turns.

- Higher costs (ingredient price and/or license fee).

- Risk of negative image transfer from ingredient -e.g. Teflon®.

- Ingredient’s image dominates host’s - e.g. Intel.

- Who else gets it?

- Lack of control

- Differentiator becomes leveler.

Lycra®: The Ingredient’s Story

• Synonymous with stretch.

• Consumer profile built over decades.

• 90%+ target consumer recognition, top-10

Apparel brand (Interbrand study)


1959 1974 1980 1997 2004

With Dockers
Maruti & MRF or JK tyres.

Dolby with PVR

Pillsbury Brownies with Nestlé Chocolate

Asian Paints Royale & TEFLON

Teflon is a trusted name from the house of Du Pont (Germany). Industrial products made with
Teflon® fluoropolymer resins have exceptional resistance to high temperatures, chemical
reaction, corrosion, and stress-cracking. The properties of Teflon® make it the preferred plastic
for a host of industrial applications and different processing techniques. Please choose the
category below that best describes how you prefer to view our Teflon® industrial products and
applications. Recently Asian Paints has rolled out a new campaign for Royale. Created by
Contract Advertising, the campaign focuses on the Teflon technology that the Royale is equipped
with, that helps protect walls from getting any stains or scratches. Royale has always been the
perfect backdrop for your most prized possessions. It's now India's first paint with Teflon surface
protector that ensures your walls remain protected from stains, bacteria, fungus and have a
smoother finish that lasts longer.

Thus the luxury of Royale and the durability demanded of consumers is effectively addressed
and Royale can now differentiate itself on the positioning of “Timeless Beauty”.

Make a swot analysis of Intel which would also cover its latest product offers?

Intel Corporation (Intel) is engaged in development of integrated digital technology platforms


and components for the computing and communications industries. The company offers
microprocessors, chipsets, motherboards, flash memory, wired and wireless connectivity
products, communications infrastructure components, including network processors, and
products for networked storage.
Strength

• Strength of the company today is its brand name itself because brand INTEL means
quality and speed.
• Leading market share in computer processors.
• Massive R&D budget- The computer processor market is highly R&D driven: Devices
are constantly getting faster, smaller, cooler, and more energy efficient. R&D into any
one type of processor can yield advancesin other types (the same principle that lead to
Intel’s current flagship processor, the Core 2, efficiency in the circuit to improve
performance, also allowed for a low-heat laptop version).We can observe its product
profile-
Desktop processors
• Intel® Core™ processor family
• Intel® Pentium® processor family
• Intel® Celeron® processor family
Server and workstation processors
• Intel® server processors
• Intel® workstation processors
Internet device processors
• Intel® Atom™ processor for netbooks and nettops
• Intel® Atom™ processor for Mobile Internet Devices
• Intel® Atom™ processor for embedded computing
Notebook processors
• Intel® Core™ processor family
• Intel® Celeron® processor family
Embedded and communications processors
• Intel® Architecture Processors
• Intel® Network Processors
• Intel® I/O processors
Desktop boards
• All Intel® Desktop Boards
• Intel® Desktop Boards Extreme Series
• Intel® Desktop Boards Media Series
• Intel® Desktop Boards Executive Series
• Intel® Desktop Boards Classic Series
• Intel® Desktop Boards Essential Series
• Intel® Desktop Boards Mature Boards
Server boards
• All Intel® Server Boards
Resources, technologies, and solutions
• Intel® High Definition Audio
Intel® Virtualization Technology (Intel® VT)
So we can say that INTEL has developed various products to cater to various needs and fit inside
the upcoming products.

Weakness
The absence of certain strengths may be viewed as a weakness. For example, each of the
following may be considered weaknesses:
• high cost structure
• lack of access to the best natural resources
• lack of access to key distribution channels
• Not currently in the ubiquitous computing market.
• R&D budget is tied toits existing market.
• A loss of revenue or conversion of its products into commodities would ruin the existing
paradigm.
• Correction of an identified defect.
• Protection through cover-up and prevention strategies to reduce the
exposure of your weaknesses.

• No market presence in GPUs (ceded the market for low-end, integratedGPUs to Nvidia).

In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a
large amount of manufacturing capacity. While this capacity may be considered a strength that
competitors do not share, it also may be a considered a weakness if the large investment in
manufacturing capacity prevents the firm from reacting quickly to changes in the strategic
environment.
Opportunities
• Intel has many opportunities with latest technological gadgets coming in and more than
anything INTEL has been creating opportunities for itself by investing heavily in its
R&D and it has made its ambitions clear by launching new tagline that is “Sponsorors of
tomorrow” so INTEL is creating its new way of moving forward and with technology
spreading to even the remote areas of third world country the sources of revenues are
many.
• The ubiquitous computing market.
• Intel also has a very good opportunity with their many new acquisitions, new products
and emerging technologies. They have jumped into e-commerce, consumer electronics,
Internet servers, and wireless phones.Intel may reap more benefit due to investment in
micron and samsung.
• High profit margin due to its efficient microprocessor.

Threats
• INTEL has successfully managed its threats till now and has always remained way ahead
of its competitors. No matter how much AMD tried but it never overtook INTEL. Even in
India brand INTEL reigns supreme but its competitors are trying hard and pushing in and
it even lead to price wars between the two. Slowing pc market may hamper intels profit.
• Dependency on rambus memory chip will badly effect its pentium 4 microprocessor
chips market along with existing.
• Lack of support to rambus from memory memory chip producer and chip maker will
make the situation more worse.

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