AFM211 Lecture Notes - Lecture 1: Netflix

7. If a survey is to be conducted to determine businesses’selection criterion for choosing PC and network communicationsproducts, which survey method should be used and why?

8. Design a questionnaire for determining businesses’ selectioncriterion for choosing PC and network communications products.

INTEL: Building Blocks Inside Out

The Intel Corporation (www.intel.com) was founded in 1968 tobuild semiconductor memory products. It introduced the world’sfirst microprocessor in 1971. Microprocessors, also referred to ascentral processing units (CPUs), often are described as the “brain”of a computer. Today, Intel supplies the building blocks for thecomputing and communications industries worldwide. These buildingblocks include chips, boards, systems, and software, and they areused in computers, servers, and networking/communications products.Most of Intel’s customers fall into two separate groups: theoriginal equipment manufacturers (OEMs) and the PC and networkcommunications products users. The OEMs manufacture computersystems, cellular handsets and handheld computing devices,telecommunications and networking communications equipment, andperipherals. The PC and network communications products usersinclude individuals, large and small businesses, and serviceproviders, who buy Intel’s PC enhancements, networking products,and business communications products through reseller, retail,e-business, and OEM channels. Intel is an increasingly globalcompany. Only 35 percent of its revenues are from North America,whereas Asia and Europe comprise 31 percent and 25 percent,respectively. Revenues for fiscal year 2010 amounted to $43.62billion. Intel has shown phenomenal growth as a company. Much ofIntel’s success can be attributed to innovation within itsmarketing department. This innovation was required to overcomeseveral obstacles. The main problem Intel faced was trying to sellan ingredient brand, which is a component of a larger product.Thus, the difficulty is in reaching consumers that will never seeyour product and might not even know what it does or why it isthere. Intel began marketing research in the 1980s because it washaving difficulty with its customers not upgrading from the 286 tothe 386 microprocessor. Marketing research showed that this was dueto a lack of customer awareness, and Intel set out to change that.It conducted a small but effective advertising campaign. In fact,in the process it realized that it had inadvertently created abrand in Intel. Because of the success of this small campaign,Intel began to realize the importance of marketing and marketingresearch and started to focus more effort and money on these areas.Marketing research revealed that in order to be effective in itsoverall marketing campaign, Intel would have to reach the consumersand convince them that what was inside the computer was asimportant as what was on the outside. This became the key elementof the “Intel Inside” campaign conducted during the early 1990s.This slogan helped Intel put a name with its products, and ithelped it encompass several of its products under one title.Furthermore, marketing research showed that it would be mosteffective to cross-market with its technology partners. This wouldhelp consumers understand the products that Intel helped make up.It did this by including the “Intel Inside” logo in its partners’ads. It also helped fund these advertisements. A problem withincluding its slogan in other ads is that Intel did not want tointrude on the commercials. It decided to help make the small logosink in by accompanying it with a jingle every time it wasdisplayed. This jingle has become extremely recognizable andsynonymous with Intel’s slogan. All of this helped Intel realizeits goal of increased consumer awareness. Longitudinal measurementof advertising effectiveness via marketing research revealed thatthe “Intel Inside” campaign was very effective. Intel’s next ideawas to come up with a name for its microprocessor. This would helpit to avoid using the numbering scheme, which was nonpatentable,and to find a name that consumers could identify their processorswith. After extensive marketing research, Intel chose the name“Pentium,” which it found generated positive reactions with itsconsumers. Intel has been marketing its processors under this nameever since. Between 1990 and 1993, Intel invested $500 million inadvertising to build its brand equity. By 1993, 80 percent ofpeople in the United States recognized Intel and 75 percent hadpositive feelings about the brand. Most important, 50 percent ofconsumers looked for the brand when they were shopping. By 1994,Intel had captured 95 percent of the microprocessor market, due inlarge part to its marketing efforts. Intel’s market share formicroprocessors slipped to about 80 percent in 2005 as a result ofincreased competition from its main competitor, AMD. On December30, 2005, Intel announced a major overhaul of its corporate andproduct branding, a move designed to symbolize the chip maker’stransformation into a supplier for products beyond personalcomputers. The changes included a new version of the company’s bluelogo—without the lowered “e” that had long been a part of Intel’sbranding—along with a new tagline, “Leap Ahead.” As of 2006, Intelno longer used the well-known “Intel Inside” logo. In 2009 tobetter align major product groups around the core competencies ofIntel architecture and manufacturing operations, Intel reorganizeditself into nine operating segments. The increased competitionmakes Intel’s marketing research efforts more important than everas it attempts to preserve its dominant place in the market. Intelhas been able to be very successful because of its focus ontechnology, brand image, and brand equity. Intel still faces futurechallenges, including increased competition, the opening of newmarkets, and the development of new products. Intel will continueto rely on marketing research to meet these challenges. ConclusionMarketing research has played a critical role in Intel’s phenomenalgrowth. Marketing research was instrumental in developing the Intelbrand, designing the “Intel Inside” campaign, and crafting the newlogo with the “Leap Ahead” tag line. Continued reliance onmarketing research will enable Intel to enhance its image as apreeminent building block supplier inside out.