Intel’s power drive

As it attempts to launch new products directly to consumers, the semiconductor giant’s brand will be boosted by F1 racing. By Nathalie Kilby

This year is set to bring major change for technology group Intel. It is splashing out $2bn (&£1.16bn) on a global marketing campaign to unveil new strapline “Leap Ahead” as it phases out the renowned “Intel Inside” slogan and logo. Intel intends to develop consumer electronics, wireless communications and healthcare products, according to reports. The Pentium processor brand will also be scrapped amid the overhaul.

The announcement follows Intel’s worldwide partnership with BMW (MW December 15, 2005), the technology giant’s “biggest global brand tie-up to date”, according to global marketing chief Anne Lewnes.

The deal sees Intel become “corporate technology partner”, with its chips powering operations across BMW’s dealerships, the corporation and in its cars. The brand tie-up is worth tens of millions of pounds, according to Lewnes, and represents the next step in the company’s development.

She believes the BMW partnership is “natural”, saying the deal is perfect as the two brands are world-class innovators. She adds that the brand’s exposure, through its headline sponsorship of BMW’s Sauber Formula One (F1) racing team, will be formidable. The male-dominated F1 audience, with its keen interest in technology, is a core target market for the group, she says.

Lowndes admits that Intel “faces challenges in making the brand tangible”, adding that the F1 exposure may go some way to promoting the company in areas where people can visualise its benefits. Intel is a brand that has won many plaudits for its marketing and ability to transform a manufacturer of semiconductors into a household name.

Intel Corporation was founded in 1968 by Gordon Moore and Robert Noyce after they left US business Fairchild Semiconductor. Moore is now chairman emeritus of Intel, having been executive vice-president, and chairman and chief executive officer since 1979.

He is best known for Moore’s Law, a 1965 prediction that the number of transistors the industry would be able to place on a computer chip would double each year. Today, the company is the world’s largest chip manufacturer and a leading maker of computer, networking and communications products.

Gartner Research says revenue for the global semiconductor market – Intel’s core operation – will total $235bn (&£133.5bn) for 2005, a 6.9 per cent increase on the previous year.

Gartner vice-president Andrew Norwood says: “Strong growth in the flash market was a recurring theme in the 2005 market share rankings. The continuing strong demand for flashcard and USB flash drives, along with the successful launch of the iPod Shuffle at the start of 2005, and the release later in the year of the iPod Nano, will have driven this device market to its highest annual revenue performance ever.”

Intel is the top player in the semiconductor market. In 2005, revenues grew 14.3 per cent, twice the market average. Gartner says that in the previous three years, its growth rate had been below market average, but that its revenue for the year to December 2005 was $35bn (&£19.9bn), giving it a 15 per cent share. Its nearest competitor, Samsung, yielded revenues of $17.85bn (&£10.1bn), and a market share of 7.6 per cent.

Interbrand global managing director Jan Lindemann says Intel is ranked as one of the five most valuable companies in the world, and sees the BMW tie-up working well.

Stop any man or woman in the street, and a high percentage would be able to recall the Intel brand. “This is thanks mainly to the Intel Inside marketing campaign,” says Lindemann. The drive’s jingle and logo are as famous as those of brands such as Coca-Cola, Disney and McDonald’s, he claims. Advertising agency Dahlin Smith & White came up with the recognisable advertising strapline: “Intel. The computer inside.” This was later revised to “Intel Inside”.

Intel says this strategy was the result of the Intel Inside Program, which launched in 1991. It marked the first time a component manufacturer successfully communicated with mass-market consumers. According to Intel’s website, it is “one of the world’s largest co-operative marketing programmes”.

Lindemann says the manufacturer has managed to make its products a commodity in consumers’ eyes: “Brand recall is huge. The company is driven by technology and that is what has helped it grow, but its marketing strategy has helped to create a globally renowned brand.”

Against all odds, Intel created an iconic brand without any tangible consumer offering. It will hope this heritage will count for something as it prepares for a leap into new ventures.

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