How to market a product that is invisible, and not directly consumed, popular among the masses?
This question grappled Intel in the late ‘90s. Their product was a commodity component not visible to the masses and only known to a select group. This is the story of how Intel built a brand around a commodity.
Intel was a dominant microprocessor brand in the 1980s. However, the competition was getting fierce with AMD slowly taking away their market share. Intel had to get inside the minds of the consumer. It was then that Madison Avenue came up with the most successful ‘ingredient branding’ campaign – Intel Inside.
Intel defines ingredient branding as “a promotion of a brand within a brand to the end-user”.
An ingredient of the product becomes a trigger point for buying decisions. Today, Intel Inside has almost become synonymous with Ingredient Branding, attesting to the success of the Intel Inside campaign.
The birth of Intel Inside:
With sales of only $500m at the time, Intel negotiated to put their processor into numerous original equipment manufacturer brands, such as Compaq and IBM.
They then committed a whopping $110m advertising the fact that Intel was inside, thus making Intel the component that justified the PC’s premium price. The PC partners were to present the “Intel Inside” logo on the product and in their product advertisement. Intel team announced a 6% rebate on its purchases of Intel microprocessors, which would be transferred into the partner’s advertising budget that paid for up to 50 percent of the advertising.
This initiative led to a rise in PC advertising, where the clients started briefing their agencies for an “Intel Inside”.
Success factors for Intel Inside
This begs the question - what led to the success of this campaign that led to a commodity becoming a brand?
Establishing the need: No campaign is successful unless the brand is able to address a need. Back in the 90’s people bought computers because of the software, the specs, or a friend’s recommendation. However, with the growth of the PCs, consumers were at a loss trying to figure out which is the best choice. Intel saw this as an opportunity.
Targeting the correct segment: The computer was a mystery to most people barring computer geeks like gamers and programmers. Intel decided to target a segment called “Achievers” - People who are knowledgeable, spend the majority of their time in gaining knowledge, reviewing information, and are major decision-makers in companies but they were not computer fanatics.
Positioning and Differentiation: Intel collaborated with some of the most well-known PC brands of the time. They positioned themselves as a premium product by showcasing that the world’s best PCs are run by Intel’s microchips (aligned to the esteem needs of the Achievers segment).
Concise and precise communication: “Intel Inside” — Findable, memorable, desirable. The sentence was easier to talk about, easier to remember for the consumers. No buzzwords, simple, precise, and concise communication.
Sonic branding and Peak-End Rule: Sonic Branding is when brands try to associate themselves with a particular sound (Examples – MI Ringtones, Hutch Pug advertisement). The peak-end rule is the theory that people judge experiences primarily by their peak and end. Intel smartly inculcated these 2 in their TV advertisements with the brand appearing in the end with a particular piece of music. (Example – Intel – Do Something Wonderful). That music has become synonymous with Intel. Ending well on a high note — helps in creating a positive impression and a special place in mind. The Intel music provides that pleasant sensation. Hence, making it easier to remember the Intel logo and sound.
Diverse Brand Portfolio Strategy: It was the norm to name microchips with numbers such as 486, 381, etc. Thinking from a consumer’s point of view, it is difficult to remember numbers; hence, they named their chip Pentium. Pentium eventually became a sub-brand and Intel Inside was an endorser for Pentium.
This allowed the brand to expand the Pentium brand further by launching Pentium 2, Pentium Pro, and Pentium 4. As we approached the end of the ‘90s, the demand for high-end servers and workstations grew. Intel realized that the Pentium brand was associated with PCs and needed a new brand to address this need of high-end technology at workplaces, and thus gave birth to their brand Xeon.
With time, the PC market matured and low-cost PCs saw a rise. As Pentium was heavily associated with the premium segment, they launched “Celeron”, a low-cost brand with Intel as an indirectly linked endorsement brand. They also developed products to meet the requirements of high-end business offices and the gaming industry. This diverse portfolio made sure Intel maintained the product branding across its segments and have a larger market share.
Keeping partners happy
The campaign wanted to gain mind-share among the masses however, no campaign can be successful unless they make sure they deliver their promises. For Intel, it meant keeping their PC partners happy.
Intel had a strong service support center, which in turn assured end-users of quicker solutions to the hardware problems related to chips. A strong R&D infrastructure helped the company to innovate and produce solutions as frequently as possible resulting in increased customer experience. Intel standardized many of its components so that the component can fit more than one vendor. This mutually benefitted OEMs and Intel for some time due to lowered costs and acted as a competitive advantage for Intel over other processor brands. They also made sure that the Intel Inside experience was felt in tradeshows.
Gary Shapiro, the CEO of the Consumer Technology Association recalls in an article,
“ They described a plan for a remarkable exhibit at the show that year, a centerpiece of their effort to shift the image of Intel from that of a chip company to that of a producer of a coveted, brand-name product that stood for performance. The display Intel was planning was so elaborate that we actually had to work out a deal so they could occupy the same exhibit space they would be using at another show taking place a month and a half earlier.
The booth was a hit, and for several years Intel built on its success at CES by rolling out ever-larger, more elaborate, and immersive exhibits showcasing the company’s cutting-edge technology. I will never forget being inside the “Intel experience” and feeling like I was touching the future."