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Intel: From microprocessors manufacturer to a technology brand

Intel Corporation, founded by Robert Noyce and Gordon Moore, started in 1968
developing processors for an early stage computer industry in the Silicon Valley. Since different
architectures of processors were being developed, the company focused on making their
architecture the standard in the market. Only in 1980, IBM selected Intel as their exclusive
microprocessor architecture, giving Intel a chance to expand the brand influence in the
microchip industry.

The company recognized a shift in the general focus of the personal computer industry
toward mass-market, and decided to focus on advertising for the consumer, which used to
choose their computer based solely on the manufacturer’s brand image. This move allowed
Intel to raise brand awareness and preference, specially based on the performance of the
processors, allowing Intel to become the largest manufacturer of microprocessors.

However, during the nineties, competitors closed the technological gap, requiring Intel
to differentiate itself. Losing in court over the “386” trademark made Intel realize that a
planning for their brand was necessary, and a long-term strategy as well. Intel focused on two
paths to build a strong brand, communicate with customers about Intel brand, and also develop
relations with OEMs who used Intel processors. Using the “Intel Inside” campaign, the company
was able to let consumers know how to identify their technology and what you would be
getting when acquiring an Intel powered PC. It was extremely successful because was able to
deliver the performance message without requiring extensive computer knowledge. Meanwhile
co-op campaigns with manufacturers subsidizing ads and promoting products generated closer
relationships and trust over the brand, allowing Intel to bring their logo on ads and packaging
subsequently and boosting Intel “Inside” even more.

Intel’s introduction of new products also had to change, and when the new Pentium
processor was launched, the company made an effort to make industries quickly adapt to the
new nomenclature. Mixing technology advance and user-focus in a marketing plan of over $500
million, ad-campaigns were generated and extensively awarded, allowing Intel to set the
standard in the industry with annual growths over 30% compound. The second and third
generation of Pentium processors experienced the same effect, carrying the legacy of the sub-
brand.

Although Pentium was a major success, Intel believed that a segmentation of their
products was needed to reach better other markets, especially cheaper processing units.
Dividing the Celeron, Pentium and Xeon brands in three performance categories it allowed to
reach more markets protecting each brand equity and having the powerhouse “Intel” name
behind. It was an intelligent decision in terms of market reach, however the company lacked in
distributing resources to develop all the brands, causing the poor performing ones (Celeron) to
affect Intel’s brand.

With the rising mobile market, Intel developed processors for mobile devices, the
Pentium M category. However what made them stand were the ability to develop a platform
where all the components would come together, in a bundle, receiving the name Centrino. It
allowed Intel to boost sales of other components at the same time it had a better performance
with a system fully compatible. Nevertheless, a maturing PC market and strong competition
required the company to comprehend better how to evolve their brands and regain the market.
Therefore, the company wanted to position itself as more than a microprocessor company,
embracing technology platforms.

Intel Inside was still strong in consumer’s minds, and new rebrands did not caught up to
the expectations. Both “Leap Ahead” and “Multiply” did not bring anything that would help
understand the companies’ vision and the fierce competition with AMD was affecting their
revenues. As Intel continued to innovate, the new Atom Chip for powering portable devices
represented a jump into the connected world. Although the recession hit hard in computer
sales and made the company have significant drops in earnings, Intel was focused in delivering
tomorrow’s products while competitors were scaling back.

Bringing back the good-better-best way of thinking, they divided their lines in to Core i3,
i5 and i7, so consumers could understand clearly what they were getting, also bringing back the
Intel name (Intel Core I7). As soon as the economy rose again, PC sales rose to a new record,
giving the boost the company needed to implement their brand strategy. “Sponsors of
Tomorrow” campaign allowed the company to convey the idea that its strength is not the today
product, but the one that is to come in the future. Now, the company should bring this idea to
reality or risk losing its credibility in the future.

Bringing Intel’s vision to reality

Intel’s brand evolution from the initial semi-conductor manufacturer to the giant global
leader in microprocessing reflects an interesting case to be evaluated under the Brand
Resonance Model proposed by Kevin Keller. The companies’ brand positioning is switching from
a product manufacturer to a technology enabler, and wants to be able to explore what
consumers think, feel, to build a stronger connection with the brand. The model allows us to
understand what stages are stronger and which ones the company should focus to deliver this
message effectively.

Analyzing Intel from the Salience perspective, it is clear how deep the brand has its roots
in the processors market. The brand’s awareness and recognition are extremely high, especially
because of the “Intel Inside” campaign and its extensive reach through packaging and stickers
in computers. It is also enhanced by the co-op ads that features the company logo in parallel
with the OEMs and, independently if those brands may be competitors, Intel holds enough
power to generate attraction to the consumer. Although the depth of brand awareness might
not appear large, mostly because the end consumer does not hold enough knowledge to fully
understand the product, its breadth is intense, with a multitude of situations where the brand
is mentioned to the consumer as synonym of quality and reliability.

When it comes to Performance, Intel surpasses all other competitors by far. Even
though the company had a few bumps during its evolution with cheaper processors, such as the
Celeron, it seems the company found a strategy to evolve in a rational and satisfying way for
the consumer. Known as Moore’s Law, Intel alternates the evolution of processing speed with
evolution in architecture in each new product developed, giving time for the company to create
new processing units and deliver better experience for the customers.
 In relation to the OEMs, Intel tries to distinguish itself by bringing the latest technology
with a reasonable price, with margins of 26% over 23% of most competitors. Associations with
companies such as Apple and Samsung help the brand to be remembered as a high
performance and reliable brand, reaping part of the equity value of brands that possess a
higher contact with the customer. Intel now is using this power to try to push the industry to
become more sustainable, utilizing more ecofriendly materials and processes, assuring the
position as innovator.

According to the Imagery meaning of the brand, where intangible and more extrinsic
aspects of the brands can be explored, seems to be where Intel is trying to focus the most right
now, together with Feelings and Resonance. Sponsors of tomorrow and Intel Inside try to
develop the brand personality and associate an experience value to the consumer. Comparing
the ads for those campaigns and the ones currently released in the press, it is clear the message
they want to deliver: “we allow you to have the utmost technological experience”. Intel can rely
on something other competitor do not have as much, heritage and history, to be used as
background for new innovations, assuring what they create will become standard eventually.

Analyzing Intel from the Judgements perspective, it is important to consider especially

OEMs opinions about the brand and how it affects them, since the company passed through
difficult situations in the past regarding the bundling of their systems into a closed package and
caused friction with device manufacturers. Intel should not force a closed system, but rather
demonstrate how this kind of system is better when packaged together. It is important that the
brand communicates itself as a credible enabler and that it is superior than other competitors.
The uniqueness it can provide is also beneficial for the OEMs, because they will increase their
brand quality and consideration for a product powered by Intel.

For Intel, it is very difficult to evoke deep Feelings in the consumer directly and
immediately. The main reasons are related to the fact that the consumer hardly ever see their
product (always incased inside the device), and the consumer tends to relate itself more with
the manufacturer than with Intel. After all, if your computer does not work anymore, you are
more likely to blame brands like Apple, Asus or HP, but rarely Intel. Therefore, the company
should rely on evoking feelings that increase gravity, such as security, social approval and self-
respect, assuring for the customer that buying an Intel powered device supports positive
experiences and make them feel better about the result of their work and themselves.

Lastly, we have Resonance, which speaks to the level of loyalty, attachment, community
and engagement the brand can produce. From Intel’s website we can observe three specific
touchpoints where Intel is working in this area. The first being the Intel Ambassador Program,
where employees become part of the influence and communication network of new products.
It is an immersive move to generate loyalty from the employee advocating for the brand and
expand this feeling to the consumer. Second is being able to provide online shopping of their
products to close the gap Intel-OEM-Manufacturer. It is an intelligent move to increase brand
engagement and create a community, but it risks the complaints of Intel selling dealers reach
manufacturers, and cause a breach in the feeling of respect for the brand. And the third one is
through reaching their audience on the web, where Intel covers a range of affinity keywords in
search ads to address the business IT community (for example “what is big data?”) and takes
those searchers to B2B pages; or the development of forums for discussion online about
product development directly with consumers creating the sense of community and
engagement in building the future of microprocessing.

Therefore, it becomes clear what Intel wants to become, the high-performance brand
behind all technological products we use daily, creating a deep relation from the upstream
world of chip sets, to downstream in computers, smart phones and other devices. The strategy
of the brand generates a lot of expectation for the consumer, eager to see what will be “the
next big thing”, causing their reputation to be at stake in each and every new product launch.
Another important aspect is differentiation from its competitors. The brand cannot rely solely
on being a high-performance brand, because new powerful competitors are emerging (Apple is
developing its own processor), but instead needs to increase the brand resonance with
customers based on feelings that can increase brand gravity levels, backed up by its heritage
and reliability. The company has moved beyond being a microprocessor brand, but now needs
to create a long lasting and deep connection with future consumers, especially for the mobile
world.
References

Intel: Building a Technology brand case.

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