Magazine article Marketing

Intel Must Get beyond Its 'Chipmaker' Image

Magazine article Marketing

Intel Must Get beyond Its 'Chipmaker' Image

Article excerpt

Intel has been hit hard by the downturn in the tech sector. Cordelia Brabbs asks how the 'chipmaker' can drive awareness of its wider portfolio of products

A microchip. Admittedly not the sexiest product to market, but Intel has, through a huge adspend and its relationship with Microsoft, ensured that consumers know exactly who is powering their computer.

Its 'Blue Men' ads, by Euro RSCG Wnek Gosper, shot to fourth place in Marketing's Adwatch table a fortnight ago, proving that while its product may not be the most accessible, it is achieving stand-out and a high level of brand recognition.

But life is not all rosy for Intel. It has felt the chill wind of the global downturn in computer sales, and as a result is set to slash the price of its Pentium 4 chips by up to 19% in a bid to stimulate demand. Last week, its shares fell by 6.5%, and its first-quarter profits fell 64% to $1.1 bn ([pound]763m).

Over recent years, Intel has recognised the danger of only making chips for PCs, and has made a foray into other areas of technology to encourage PC purchase. By extending the value of PCs with consumer products, it in turn hopes to drive demand for PCs based on the Pentium 4.

The P4 was launched last November, backed by a global [pound]205m marketing campaign. It is designed for tasks such as audio and video processing, web browsing and 3D graphics.

Future devices that might be powered by Intel's chips include wireless internet appliances such as WebTablet, which allows internet access through a book-sized liquid crystal display screen, and ChatPad, for instant messaging and e-mail.

Intel has also tried to reduce its dependency on the PC market by investing in communications chips.

More immediately though, it has shifted its European ad account to Euro RSCG's London office from its Paris one.

Could this inspire a change of tack in the brand's ad strategy, and will it be enough to maintain its position as the world's largest chipmaker? We asked Rob Hoar, account director at Publicis, which handled the Intel account until 1996, and lain Ellwood, strategic director at Cobalt Consultancy, whose clients have included BT Ignite, Web top.com and Monster.com.

                              VITAL SIGNS
Year  1st Qtr revenues  4th Qtr revenues     Total
        ([pound]bn)       ([pound]bn)     ([pound]bn]
1997        4.4               4.5            17.3
1998        4.1               5.2            18.1
1999        4.9               5.6            20.3
2000        5.5               6.0            23.3
2001        4.6                -              n/a
Source: Intel

DIAGNOSIS

Intel cleverly set the agenda nearly a decade ago by 'encouraging' the (then) infinitely more revered PC brands, such as IBM and Compaq, to stamp the Intel Inside logo on most of the world's PC advertising. …

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