Inside Intel Inside

09.12.2016 |

Episode #5 of the course Most influential business school case studies by Magoosh

 

The Intel Inside case discusses one of the most successful marketing campaigns of the 20th century. While the case focuses on a decision faced by Intel’s VP of Marketing, Pamela Pollace, about whether to expand the Intel Inside campaign to new product lines, it also provides an in-depth discussion about the strategic benefits that effective marketing can provide.

The Intel Inside campaign began in 1989 when Intel realized that people didn’t fully appreciate the important role that processors play in PCs. In the 1980s, most people knew very little about how computers worked and did not consider processor speed as an important characteristic in making computer purchasing decisions. To help educate consumers and build Intel’s brand, Intel developed the innovative Intel Inside campaign. In exchange for putting the Intel logo on computers and in advertisements, Intel agreed to pay for half of the advertising costs for computer manufacturers. The campaign was hugely successful and helped make Intel one of the most valuable companies in the world.

In 2002, Intel had almost 80% market share in the PC processor market. However, the company was facing challenges. AMD was a lower-cost competitor that had been steadily growing its share. Further, the tech sector was in a major recession, and PC sales growth had slowed significantly.

The central decision of the case is whether Pollace should expand the Intel Inside campaign (by this point more than 10 years old) to new product categories like cell phones and PDAs. The campaign had been tremendously successful, and Intel did not have anywhere near the market share dominance in mobile devices that it had in PCs. However, Pollace was concerned that Intel was so closely associated with PCs that she was unsure whether the same campaign could even work in mobile.

In reality, outside of the case, Intel did not aggressively pursue the Intel Inside campaign for mobile. While it’s impossible to know “what could have been,” in hindsight this does look like a missed opportunity. The case takes on increased meaning from our current point in time. Since 2002, the computing world has been rocked by the advent of the smartphone, and Intel has not been anywhere near as successful with these devices as it was in the PC market. Indeed, Qualcomm—a chip manufacturer that barely factors in the original case—is now the clear market leader in mobile device processors.

The Intel Inside case prompts us to imagine the success Intel could have enjoyed if it had applied the same aggressive marketing to mobile devices as it did to PCs.

 

Recommended book

“Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company” by Andrew S. Grove

 

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