June 14, 2006
    leap ahead - the Intel way

Not wishing to become a reporting thespian Jornalist type, coming to you live (with a month or so delay) from the Experiential Summit in Chicago 2006, I have to confess that I took a particular interest not only to the topic but also to the presenter - Kevin Sellers, Intel’s Director for Corporate Brand & Strategic Marketing, who gave one of the most relevant and revealing key note speeches I have heard.

Sellers took us through Intel’s evolving marketing strategy and gave his personal insights into experiential marketing. Like most marketers present, he too focused not on the “one shot” event but on an experiential strategy that takes events into the realm of emotional connectivity.

A large hurdle, and one that I was fascinated to hear, was how do you communicate or market a product as boring as transistors? It’s not a product you can go and buy and worse of all it’s in someone else’s product. So how can you market a product that your consumer cannot interact with? This was the start of Intel’s strategy to market their innovation.

Sellers explained that they first had to step back and learn about their brand inside out - what tangible connectable items people were going to get excited about and the inherent benefits. This is considered by some, as the intersection where marketing meets finance, leading to the changing face of valuation, known to some as market to book ratio, whereby you analyze the market value of the company relative to its core book value (its assets).

You can see the trend where the valuation of the company that Wall Street is giving to companies is based on what really matters to people who are buying into the brand which derives from non tangible and non physical assets. This makes it harder and harder to maintain technology as a differentiator where the physical properties become secondary. Technical superiority is no longer a winning factor.

ThechinapriceCompanies are made to bring value to the bottom line and that has created a shift from a technology based strategy to a marketing one. In Business Week’s cover issue of  6 December 2004, entitled “The China Price”, Engardio notes that more than skilled workers and automation, China's unprecedented dominance rests in is its enormous scale, a supply infrastructure that enables you to buy every raw material from hundreds of vendors within easy driving distance of your factory, feverish domestic competition, and an entrepreneurial zeal by factories to satisfy a customer's every desire. In short, technology has democratized the world.

The competitive advantage is now horizontal. No longer does the technology company retain its competitive advantage where we will probably see within the next x years the China Price being replaced by the India Price, Nigeria Price or the Indonesia Price. China will no longer be where the low cost manufacturing can take place.

The world of commoditization, whereby we regard the PC as a commodity, is fuelled by what really matters to people and how they feel about the brand, how they connect and whether they are indeed prepared to buy it at a premium level. Starbucks is probably one of the most documented examples, within the last five years, of this new branded approach, whereby consumers are willing to wait in line to pay a hefty mark up for THE experience.

So returning to Intel’s challenge, it became clear to them that it was important to learn how to get consumers to experience an ingredient such as Intel.

They had figured out that their brand stood for reliability, safety and quality whereby Sellers adds cheekily that “no IT manager ever got fired for buying Intel”.  The challenge went further in that they had to get consumers to actually care about what was inside the computer. They chose to stay true to the Intel brand and extend it through to what they did best – “Intel made people care”. Consumers started buying computers and asking what was inside – Intel? Ok. Great I’ll take one. Did they really know what Intel was? No. They did however know what it stood for.

The Intel brand reached the mature state plateau, whereby the brand itself was no longer top of mind. The logic behind this was that just about everyone had a PC and therefore its commoditization lead to what had become more important – price. Consumers had become price sensitive as they assumed the PC and it’s components to be reliable, safe and of a high quality, regardless of the label.

Intel Leap ahead.™ was introduced to focus the market on one brand only, instead of having several brands under one major brand – Pentium & Intel for example. They realized at one stage that they were in fact becoming more like Procter & Gamble with proliferating brands all over the place – “a house of brands when really Intel should be a branded house” according to Sellers. 

Consumers connected less with the brand as a result of the lack of a brand architecture whereby Intel no longer communicated to the world what they stood for in a consistent and constant way, thereby directly impacting the value of the brand. [interbrand surveys]. The market was now a very different stage, with top brands focusing on their master brands, such as Google, Amazon, eBay and to a lot of people’s surprise Samsung.

The decision was taken to speak less about the technology and instead, carry through the image of the brand, its brand promise - the emotional connection with the consumer. Intel applied the “8 year old” theory whereby if you can communicate it to an 8 year old, and get them to understand it, then you’ve got the message right. Pentium became the “brain” of the PC and that’s how Intel was able to communicate the brand. Intel now makes numerous chips but it’s positioning itself as a provider, helping people communicate through mobile phones, computers, high definition video, security platforms.

It's strange though that they used Mariah Carey in their latest stab at marketing emotions, though few would repute the emotion in having Mariah sit on your lap, Intel’s actual message is so much deeper, emotional and intelligent that you have to wonder why they haven’t yet used their internal ad which hits the nail on the head. Intel and their role in the world, in our lives, through the emotional connections – just that, Intel helps us live our lives…

Posted by Nuno Machado Lopes in business strategy ,experiential mkt ,players ,smart marketing
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