Marketing SPOTLIGHT INTEL Intel makes the microprocessors (or chips) found in most of the world's personal computers (PCs). In the early days, Intel chips were known simply by their engineering numbers, such as "80386" or "80486."While Intel positioned its chips as the most advanced, it soon learned that numbers can't be trademarked. Rivals launched their own "486" chips, and Intel could not distinguish itself from the competition. Worse, Intel's products were hidden from consumers inside PCs. With an unseen, untrademarked product, Intel had trouble convincing consumers to pay more for its high-performance chips. Intel's response was a marketing campaign that created history. It chose a trademarkable name (Pentium) and launched a marketing campaign to build awareness of the Intel brand. "Intel Inside" was Intel's effort to get its name outside of the PC and into consumers' minds. Intel used an innovative cooperative scheme to extend the reach of its campaign. It would help computer makers, who used Intel processors, to advertise their PCs if the makers also included the Intel logo in their ads. Intel also gave computer manufacturers a rebate on Intel chips if they agreed to place an "Intel Inside" sticker on the outside of their PCs and laptops. Simultaneously with the cooperative ads, Intel began its own ad program to familiarize consumers with the Intel name. The "Intel Inside" campaign changed Intel's image from a chip maker to a quality standard-bearer.The ads that included the Intel Inside logo were designed to create confidence in consumers that purchasing a PC with an Intel chip was both a safe and technologically sound choice. Between 1990 and 1993, Intel invested over $500 million in advertising and promotional programs designed to build its brand equity. By 1993, Financial World estimated the Intel brand to be worth $17.8 billion. Intel continues its integrated campaigns to this day. For example, when launching its Centrino mobile platform, Intel began with TV ads that aired in 12 countries. The ads include the animated logo and now familiar five-note brand signature melody. Print, online, and outdoor advertising followed shortly thereafter. Print ads ran in magazines and featured ads that targeted that magazine. For instance, an ad appearing in a sports magazine showed the logo in the center of a tennis racquet with the tagline "High performance laptop. No strings attached." Simultaneously, Intel held a "One Unwired Day" event that took place in major cities such as New York, Chicago, San Francisco, and Seattle. In addition to allowing free trial Wi-Fi access, each city held festival events that included live music, product demonstrations, and prize giveaways. Intel also set up free access demonstration sites (with wireless Centrino-powered laptops) in areas frequented by road warriors, such as San Francisco's airport. To boost interest in mobile computing, it partnered Zagat Survey to produce a mini-guide inserted into The New Yorker that identified more than 50 "Wi-Fi Hotspots"- namely restaurants and hotels-in the "One Unwired Day" cities. Finally, Intel ran online ads on Web sites such as CNET.com and Weather.com. Yahoo! created a Wi-Fi Center Web site co- sponsored by Intel and featuring Centrino advertising. The "Unwired" campaign was another Intel success of marketing integration. The $300 million campaign for the Centrino mobile platform helped generate $2 billion in revenue for Intel during its first nine months. It won the Innovation award in the Business Superbrands Awards 2003. Going forward, Intel will aggressively target opportunities outside of its traditional revenue stream in PCs. It will be moving beyond "Intel Inside" to "Intel Everywhere-Intel chips in every type of digital device, from cell phones to flat-panel TVs to portable video players and wireless home networks, even medical diagnostic gear. Intel is targeting 10 new product areas for its chips. If the new markets take off, they'll increase demand for PCs and services, bringing new revenues for Intel's core products even if its own new products do not succeed in these markets. Intel is also expanding globally. Its marketing efforts in Asia are exemplified by its aggressive drive in China, now the world's third largest chip market. Each "Meet Intel" seminar, featuring an array of PCs powered by Intel chips, attracts as many as 800 corporate clients. Such seminars follow after weeks of advertising in local newspapers targeting consumers directly. Intel is now one of China's largest foreign advertisers, with an annual budget of some $20 million. Today, Intel isn't just inside PCs in China; it is everywhere in China. It is one of China's largest venture capitalists, having invested over $200 million in 50 companies. It also employs over 3,000 workers, making it one of China's largest foreign employers. The Chinese don't know Intel as just the company with the "Intel Inside" sticker on their PCs, but perhaps as the most dominant high-tech brand in the country-a brand associated with progress itself. Intel believes that the bigger its brand, the more ably it can fend off competition and deal with China's determination to build chips of its own. Chengdu represents Intel's latest foray in China. With a population of six million, it ranks well behind China's largest and most industrialized cities. However, its land and labor prices are still low, and it has one of China's newest airports, roads, and telecommunications networks. It is also home to some of China's top engineering schools, making it a promising source of highly skilled labor-and PC buyers. Intel experienced it first-hand in 1998 when it held a PC party on the streets of Chengdu. The event turned out to be one of the biggest ever-more than 400,000 people showed up. Most important, as part of its "go west campaign targeting foreign investors, China's national government asked Intel to invest in building up Chengdu. And invest Intel did, the results of which can be seen all around town. It is building a large chip-testing plant in the city, which when completed would make Intel one of the largest private employers in town. Intel sponsors after-school projects and supports the local l-caf, one of the biggest gathering spots in China for teens to play computer games. It is spending millions to blanket the city in advertising. Intel ads are on local TV, billboards, placards in hotels and at the airport, and on nearly every surface in the city's largest computer store. Intel president Paul Otellini understands that the more committed Intel is to China, the more likely it is to thrive. "Companies can be rewarded for symbiotic relationships with China. If you're willing to invest there, they do give you the ability to get rewards," he says. Discussion Questions 1. What have been the key success factors for Intel? 2. Where is Intel vulnerable? What should it watch out for? ENDNOTES 1. Noah Brier, "Buzz Giant Poster Boy," American Demographics (June 2004): 11-16. 2. Some of these definitions are adapted from Peter D. Bennett, ed.,Dictionary of Marketing Terms (Chicago: American Marketing Association, 1995). "Nike Hones Rebel Reputation with Controversial Asia Ads," (December 8, 2004). 4. Joseph W.Alba and J. Wesley Hutchinson,"Dimensions of Consumer Expertise," Journal of Consumer Research 13 (March 1987):411-453. 3. 5. Wen Gong, Zhan G. Li, and Tiger Li, "Marketing to China's Youth: A Cultural Transformation Perspective," Business Horizons 47(6) (2004):41-50. 6. For an alternate communications model developed specifically for advertising communications, see Barbara B.Stern,"A Revised Communication Model for Advertising: Multiple Dimensions of the Source, the Message, and the Recipient," Journal of Advertising (June 1994): 5-15. For some additional perspectives, see Tom Duncan and Sandra E. Moriarity, "A Communication-Based Marketing Model for Managing Relationships," Journal of Marketing (April 1998): 1-13. 7. Brian Sternthal and C. Samuel Craig, Consumer Behavior: An Information Processing Perspective (Upper Saddle River, NJ: Prentice Hall, 1982): 97-102. 8. Demetrios Vakratsas and Tim Ambler, "How Advertising Works: What Do We Really Know," Journal of Marketing 63 (1) (January 1999): 26-43. 9. "Heavyweight Advertising Not Necessarily Lead to Higher Brand Awareness," (September 14, 2004). 3. What recommendations would you make to senior marketing executives going forward? What should they be sure to do with their marketing? Sources: Cliff Edwards, "Intel Everywhere?" BusinessWeek (March 8, 2004): 56(7):Scott Van Camp,"ReadMe. 1st,"Brandweek (February 23, 2004):17(1); "How to Become a Superbrand," Marketing (January 8, 2004): 15; Roger Slavens, "Pam Pollace, VP-Director, Corporate Marketing Group, Intel Corp B to B (December 8, 2003): 19; Kenneth Hein, "Study: New Brand Names Not Making their Mark," Brandweek (December 8, 2003): 12(1); Heather Clancy, "Intel Thinking Outside The Box," Computer Reseller News (November 24, 2003): 14; Cynthia L. Webb, "A Chip Off the Old Recovery?" (October 15, 2003); "Intel Launches Second Phase of Centrino Ads, Technology Advertising & Branding Report (October 6, 2003): 0; David Kirkpatrick, "At Intel, Speed Isn't Everything," Fortune (February 9, 2004): 34; Fred Vogelstein, "How Intel Got Inside," Fortune (October 4, 2004):73-78. 10. Sangeeta Mulchand, "Za Shifts Target After Cool Teen Response,"Media (October 8, 2004): 13. 11. Sangeeta Mulchand, "KFC Changes Tack in Thai Food Battle," Media (September 20, 2002); "KFC Thailand Remodels Brand Image with Themed Restaurants," Ad Age's Daily World Wire 7(236) (October 2, 2002). 12. Francine Brevetti, "Aligning Public Perceptions," Asian Business (December 1995):42. 13. This section is based on the excellent text, John R. Rossiter and Larry Percy, Advertising and Promotion Management, 2nd ed. (New York: McGraw-Hill, 1997). 14. James F. Engel, Roger D. Blackwell, and Paul W. Minard, Consumer Behavior, 9th ed. (Fort Worth, TX: Dryden, 2001). 15. Rossiter and Percy, Advertising and Promotion Management. 16. Engel, Blackwell, and Minard, Consumer Behavior. 17. Ayn E. Crowley and Wayne D. Hoyer, "An Integrative Framework for Understanding Two-Sided Persuasion," Journal of Consumer Research (March 1994): 561-574. 18. C.I. Hovland, A.A. Lumsdaine, and F.D. Sheffield, Experiments on Mass Communication 3 (Princeton, NJ: Princeton University Press, 1948): ch.8; Crowley and Hoyer, "An Integrative Framework for Understanding Two-Sided Persuasion." For an alternative viewpoint, see George E. Belch, "The Effects of Message Modality on One- and Two- Sided Advertising Messages," in Advances in Consumer Research, eds. Richard P.Bagozzi and Alice M.Tybout (Ann Arbor, MI: Association for Consumer Research, 1983):21- 26. 19. Curtis P.Haugtvedt and Duane T.Wegener, "Message Order Effects in Persuasion: An Attitude Strength Perspective,"