Question 1: Discuss how Intel changed ingredient-marketing history. What did it do so well in those initial marketing campaigns?
During 1980s, Intel had developed the chips which set for personal computing which were known simply by their engineering numbers, such as “80386” or “80486” and then developing a series of product improvements. Competitors of Intel rapidly adopted the same naming convention and Intel had facing a problem to distinguish them. Therefore, Intel’s product names “286”, “386” and “486” could not be protected. At that time, Intel had facing difficult times to convince consumer to pay more for their high performance products. Thus, Intel had to find a way to become distinctive in what seemed to consumers to be a confusing, commodity marketplace. When Intel lost its battle for the “386” trademark, Intel created the ingredient-branding campaign and made history. They chose a name for its latest microprocessor introduction that could be trademarked, Pentium. In year 1991, the “Intel Inside” brand ingredient programme was almost 200 Other Equipment Manufacturers (OEM) partners with the objective of creating a consumer brand to make sense of the rapidly changing product cycles. Intel already had an established reputation as a quality producer of microprocessors among the Other Equipment Manufacturers (OEM).
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However, Intel needed to differentiate itself from its competitors and build a consumer brand and Intel believed it could position its chips as a premium product, which it could in turn sell at a premium price to computer manufacturers. To give computer manufacturers and their retail customers more reason to identify Intel in their market, Intel chose to market its product as a branded component. In year 1991, Intel launched the successful co-op program in which Intel gave the manufacturers significant rebates when they included the Intel logo in their PC advertising or when they place “Intel Inside” sticker on the outside of their PCs and laptops. The name “Intel Inside” became the 1st trademark in the electrical component industry which focused the entire organization around the brand and created a highly effective advertising campaign.
According to Whitwell (2005), 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 without the technical jargon. Many consumers were uncertain about the quality and reliability of microprocessors, and Intel found a way of taking away the mystery of the product, gaining the confidence of the end consumer that “Intel Inside” represented quality and reliability. The advertising results were stunning. For example, late in 1991, Intel research indicated that only 24% of European PC buyers were familiar with the Intel Inside® logos. One year later that figure had grown to nearly 80%, and by 1995 it had soared to 94% and continues at these high levels today. (Cited in Whitwell, S. Ingredient brand case study: Intel)
Whitwell, S., (2005, October 7). Ingredient Brand Case Study: Intel. Retrieved March 1, 2012 fromhttp://www.intangiblebusiness.com/store/data/files/360-Ingredient_branding_case_study_Intel.pdf
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