Branding lessons -How did Intel build a brand around a commodity?-Ingredient Branding

UNDERSTANDING THE USERS

Except for programmers, gamers and scientists, the computer was a mystery for many target segments. Many of the end-users were uncertain about the quality and reliability of the computer product and they were not aware that microprocessor chip was a critical component. Intel sensed that microprocessor being a critical component of PC had an opportunity to enter consumer’s mind.

POSITIONING and DIFFERENTIATION

INTEL had already established it as a quality product manufacturer and an innovator among OEM companies — Operational excellence in creating complex new products with speed and good infrastructure. Intel believed that it could position its chips as a premium product. (Matches identity requirements of “Achievers” segment).

VALUES THAT WOULD RESONATE WITH CONSUMER

TRUST —Honesty is expected but Trust is earned. Intel had to show the world that the world’s best computers were driven by Intel’s chips. The one way to reach consumers was through well-known PC brands of that time. It needed to communicate that the reliability, quality, speed, consistent performance of PC, is controlled by Intel’s chip.

TILT THE ODDS

As Michael Porter pointed out that first step for “Competitive Advantage” is to look at a market segment where competitive forces are weak.

Intel chose a premium segment as the competitive forces were weak. They avoided middle-level pricing as it is a market for nobody. The first step was to create a brand awareness but the company needs to invest wisely in creating a meaningful brand.

INGREDIENT BRANDING

Ingredient Branding — Promotion of a brand within a brand to end user — Simon, H., and Sebastian, K.

Look for a Strategy to grow the market rather than just aiming to grow the company’s market share

For Intel, it was clear that the PC brands had to be encouraged to advertise so that the overall PC market could grow and would be beneficial to both the parties. Without mutual benefit, every programme would fail. To motivate its partners to advertise, Intel team announced a 6% rebate on its purchases of Intel microprocessors, which would be transferred into OEM partner’s advertising budget that paid for up to 50 percent of the advertising. The PC partners were asked to present the “Intel Inside” logo on the product and in their product advertisements. Advertising for computers exploded due to this program.

BRAND PORTFOLIO STRATEGY

Brand Portfolio Strategy also played a major role in ‘Intel’ branding’s success. It improved brand communication and increased brand awareness.

CONCLUSION

Intel Programme raised awareness for both processors and PC in general. Consumers and business decision makers(Achievers) alike started observing what was on the inside of the computer before making a purchase. Intel created an impression that it makes something that worth paying more for.
Intel reached market supremacy, created brand equity comparable to the level of a consumer goods manufacturing company and still continue to be a leader. Intel showed that Ingredient branding could be successful if it is well thought out.

Secular Humanist, Business Growth Consultant, Design Thinker, India. Reach me at mmshah8@gmail.com. or https://www.shahmohammed.com

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