Intel - The Component Branding Saga

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Case Details:

Case Code : MKTG038
Case Length : 13 Pages
Period : 1997 - 2002
Pub Date : 2002
Teaching Note : Available
Organization : Intel
Industry : OEM
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Need for a Component Brand

Since the development of PCs in the late-1970s, the marketing of IT related software and hardware was mainly driven by computer vendors and software publishers. However, Intel relied completely on its computer-vendor customers otherwise known as Original Equipment Manufacturers (OEMs) to convey to end users the benefits of using an Intel processor...

Marketing The Microprocessors

The company developed a component branding strategy that aimed at gaining consumer confidence in Intel as a brand. It decided to run campaigns that would demonstrate the value and benefits of buying a processor from a leading company in the industry. The most innovative aspect of this strategy was the decision to communicate directly with end-users. This was a very novel idea for a 'pure technology' company. Intel's decision was eyed with suspicion by industry observers as no other company in the industry had ever done this before.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

It was reported that even many within the company also had the same opinion. Intel however decided to go ahead with its plans, and with the help of an advertising agency, Dahlin Smith and White, designed a campaign for its products. The company adopted a new tagline -'Intel...

What Lies Ahead?

All was not well with Intel as it moved into the 21st century - in 2001 its profits decreased drastically to $ 1.29 billion. Though the company felt that the global IT slump and the US economic slowdown were partly responsible for this decline, the lower average selling prices of microprocessors and a decrease in sales in general were the main culprits. The decline in sales was believed to be caused by the bad publicity caused by antitrust investigations carried out on the company by the European Commission. This investigation was carried out because of several complaints against Intel for using 'abusive marketing practices.'...


Exhibit I: The 'Bunny People' Advertisement
Exhibit II: What's in a Microprocessor
Exhibit III: Intel's Microprocessor Timeline
Exhibit IV: Intel - Net Revenues & R&D Expenditure (1992-2001)
Exhibit V: Intel - Consolidated Statements of Income (1999-2001)
Exhibit VI: Intel's Competitors

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