The recent major strategic brand shift by Intel proves yet again that brands drive businesses and not vice versa. In one fell swoop, Intel has further embraced the consumer by adopting a massive mindset change, but it took a new CEO to do it.
From Business to Brand When the Chips are Down
Intel has always been the world's number one micro-processor marketer, but has confined its efforts to the computer industry, and in particular, the PC segment. Focus is, of course, vital in building strong brands, and Intel achieved this with the ‘Intel Inside' brand. It supplemented this with product branding that acted as shorthand for consumers, for example, with the Pentium range.
The market for computer chips is now fairly saturated and PC growth has slowed down, facilitated by the simultaneous rise of mobile devices such as cellular phones. At the same time, Intel's rival – AMD – has been ‘chipping' away at its global market share. As a result, Intel has had to re-think its business and its branding.
The paradigm shift that Intel has undergone has been inspired by a new CEO Paul S. Otellini, and the CMO he recruited from Samsung Group, Eric B. Kim.
The Paradigm Shift: From Products to People
Like other great technology brands such as Nokia, Intel has come to realise that technology is of little use on its own. – it is what users get out of it that counts. Otellini says that to sell technology now, you have to do it in a way where it's much simpler, and by communicating more clearly what technology can do for customers.
The ‘Intel Inside' branding succeeded in getting people to view technology as reliable and trustworthy, but never really made a strong enough emotional connection that would take Intel into people's hearts, as opposed to just in their minds. As Kim says, “This evolution will allow Intel to be better recognized for our contributions, establish a stronger emotional connection with our audiences and strengthen our overall position in the market place”.
The new brand vision for Intel is summarised by Kim when he says Intel is “Helping people's lives improve” and that the company is “not just about making silicon” any more. This is great rhetoric, but Kim's former employer Samsung never managed to engage the consumer in a powerful, emotional way. Intel needs to make this happen, and to achieve this means changing the entire mindset of the company.
The new brand thinking at Intel has enormous implications for business direction and strategy, and will lead to extensive changes from product development to human capital. Instead of focusing on PC's, Intel will enter several new markets that include consumer electronics, wireless communications, healthcare and others. To do this, Intel will need a completely new mindset and a new breed of employees. The transformation has already started.
Whenever a new brand strategy is created, everything should change, and it is in process at Intel. Engineers no longer have the star status they once had, where the desktop group tended to rule. Intel is now bringing in huge numbers of different types of employees. They include ethnographers, sociologists, doctors and scientists. They will focus on consumer insight and product development, reaching deep into the minds of consumers to deliver added value products.
For example, one Intel doctor – a specialist in internal medicine – has been recruited to help develop digital health technologies by working with ethnographers. New products anticipated such recruitment include devices that will remotely monitor the vital signs of elderly people, and track the diet of those who suffer from Alzheimer's disease. The prognosis is that Intel could revolutionise the healthcare industry.
Intel also intends to enter the entertainment market using consumer electronics such as DVD's, game consoles, and cell phones. Other markets are also on the checklist, and strategic alliances with Apple, Nokia, Samsung, Google and Research in Motion are on the move. .
Intel will still be an ‘ingredient' brand, but will a changed line-up of product brands to replace the Pentium range, which is to be phased out. The Pentium range was introduced to make life easier for consumer – brand shorthand for understanding what various products did.
The new generation of micro-processors is called “Core”. Evidently, those with a single computing engine will be called “Core Solo” and those with two engines, “Core Duo”. A platform of technologies (chips plus software combined) called “Viiv” will focus on the home entertainment PC market, and the wireless Centrino” technology continues to be a platform for PC's.
The danger is that Intel will fail to spell out what the various product brand differences and capabilities are. Intel will have to be very careful not to confuse consumers, and will need clear brand architecture. In launching the new corporate and product branding, it is clear evident that a large communications exercise is inevitable.
The Cosmetics and the Cost
To signify the entire change in business and brand direction, Intel has changed its logo with the dropped “e” replaced by a ‘swoop' around the Intel name. It has also removed the famous “Intel Inside” tag line, replacing it with “Leap Ahead”. The need to educate consumers globally about all these changes, including what the tag line means to the end user, will not come cheap, and the investment in the re-branding and organizational change will be large. It must be remembered, however, that it is not how much a company spends on branding but how wisely it spends it. Intel needs to bring its new brand vision to life with clarity, precision and consistency.
Intel was rated as the fifth most valuable brand in the world in 2005. Eric Kim says, “Intel has one of the most valuable brands in the world, and we intend to grow the value of our brand as we evolve our company”.
The big question for Otellini and Kim is “will the re-branding bring about that result?”