Question 1: a. Intel’s product is intangible to the final user. Intel’s i386 SX was one of their most advanced products, but due to some legal issues it could not trademark it, making it vulnerable to its competitors. This shows that before the ‘Intel Inside’ strategy Intel’s product could not be differentiated amongst its competitors, even though it was Intel’s prodigy. And so the increase in competition and the aspect of no distinct functional or process benefits in the products made the consumers very confused. There was a need to create brand awareness among direct and indirect consumers.
Now microprocessors are not things that consumers would buy on a daily basis as they fall under the category of unsought products. And so Intel took a brave step initiated the ‘Intel Inside’ campaign promoting the microprocessors in a way that it made the consumers aware of this ‘chip’ being in a computer which credited those computers to be of good quality and technologically advanced. The use of the ‘Vacancy’ sign in the television commercials showed that Intel was always preparing for the future and advancing their technology and that their newest product was like a breakthrough.
Before this campaign Intel was subjected to focusing only on promoting it to only their immediate buyers, but after this campaign they made their presence felt in the eyes of the general public. This change of focus was more like a re-positioning tactic, as instead of marketing to PC manufacturing companies they decided to target their final consumers itself, which helped them build the consumer’s trust and familiarity with Intel, giving Intel a comparative advantage over other products.
By gaining the consumer’s trust Intel, could extend its product lines and depths with the acquired brand equity and raise itself as a premium product in future. Before the ‘Intel Inside’ campaign they used a Hi/Low pricing strategy by selling their 386 chip at the price of their 286 chip to not only boosted their sales but also strengthened their hold in the market at that time. Post the campaign they aimed at making their products were priced reasonable, as their print ads clearly read: ‘the affordable power source’.
The use of a blank line in their ‘Intel: The Computer Inside’ ad in front of numbers like 486 and 386, was a brilliant strategy, as it showed that there was something incomplete about it, and human minds are prone to completing things in their minds and so this blank line would make them wonder and they would want to find out the answer. But people were still not able to link it to the microprocessors in the computers, and so with the ‘Intel Inside’ campaign it made it very clear in the statement that there that computer had Intel microprocessors.
The statement was catchy and simple, which aimed at They played a smart move by sharing fifty percent of the advertising cost with manufactures that put their new swirl logo with ‘Intel Inside’ on the print ads, placing Intel right in front of the consumer’s eyes. This was their promotional tactic, which aimed at establishing the brand in the memory of the consumers; creating a favorable association and making them seem as a reliable brand, while ensuring the consumers that it was a good investment. . Intel chose the correct brand elements to promote, like it’s brand name and the new swirl logo and aimed at enhancing the logo and facilitating strong associations of the brand with the consumers. The branding aspect transferred attributes like safety and quality with the product. Next, leveraging secondary associations, like the Coop advertising with the PC OEMs was very effective because it aimed at building brand equity and increasing the visibility of the brand in the market.
Intel had innovative marketing strategies, which were in line with its business strategies. The television ads with the ‘Vacancy’ sign and the ‘Room for future’ and print campaigns like ‘the affordable power source’ were all marketing strategies that were related to the brand to help build customer relationships and increase familiarity with the product, which aimed at initiating product recall. They also targeted their marketing campaigns to the end user in simple and non-technical language while also raising awareness of the importance of microprocessors.
Post the ‘Intel Inside’ campaign Intel’s microprocessor product had its own niche, and was distinctly differentiated from its competitors, and hence Intel Inside was successful. Question 2: a. First I would figure out the Target market for AMD. It has been successful in the lower end microprocessor category, which Intel completely overlooked and it should completely take advantage of that. Criteria for AMD would be microprocessors; while the types would be low-end and the benefits would be that they are slowly gaining the market share from Intel.
Next the nature of the competition, AMD is number two while Intel is it’s main competitor. Its Class would be Microchip Processor Developers; Category would be Computer Ingredient; Type would be Technology. After Perceptual Mapping I came up with two alternative positioning strategies: One, AMD can completely position itself as a low-end microchip processor; Second, AMD can try positioning itself like what Pepsi did when it was competing with Coke – by adapting a completely opposite aspect from Intel.
By being a low-end microchip processor, they could try investing in Research and Development in figuring out ways in which they can give higher performance level with lower price strategies. After they research they can promote their brand as a cheap but high performance product and will be able to gain a lot of market share, as the economies are on a decline and people are willing to purchase reliable and high performance products that are at cheap or affordable rates.
The second approach would involve taking the younger, newer look. This approach would be more of a re-positioning strategy, as you might change the logo, get new brand elements, make your brand’s presence felt, create a completely new target market. You position this completely different to Intel’s attributes. b. I would choose approach one. Strengthening its current aspects that are already familiar with the brand is easier and more acceptable to the consumers.
AMD gained its market share by selling low-end microchips and so if the market strategies are positioned in ways to help build the brand in aspects of better lifestyle and better experience for the customer. It could leverage equity by tying up with another company, or redefining the relationship between an attribute and a benefit. They could also continue with the ‘bridging the gap between the rich and the poor aspect, as that is one of their USPs. Post research and development can help strengthen the position of the AMD with the whole high performance at a low price mantra.