Intel in UK
Great Advertising for Great Britain Executive Summary At the beginning of 1993, Intel faces a number of significant business challenges in the UK. Intel must launch its latest chip, the Pentium, in the 2nd quarter without prematurely killing the 486. Another issue is that competitors・ clone chips have been grabbing market share from Intel・s 386 chip and a new clone of the 486 is expected to be introduced 3rd quarter, 1993. Original Equipment Manufacturers (OEM・s) are Intel・s direct customers. Intel・s strategy, however, is focused on the end user. If Intel can convince end users that personal computers (PCs) with Intel chips are more valuable than those without Intel chips, they will have increased bargaining power with the OEM・s resulting in increased market share and profitability. The Intel Inside campaign is the embodiment of this strategy as it educates end users on the role of the microprocessor and projects Intel as the premier provider of quality components . Intel has further developed brand confidence in this position by the dramatic and visible improvements in end user applications that can be seen with each new generation of microprocessor that is introduced. While the Intel Inside campaign has been very successful at building brand image with end users in the US, it has not proven as effective in the UK. ... In the US, being the technology leader is seen as very positive and has assisted Intel in achieving its dominant position. The UK market, however, sees technology for technology sake as a negative. Since the market was relatively inexperienced with computer technology, Intel needs to first educate consumers on how they will benefit from advances in technology. To better understand this, Intel needs to determine what image will be seen as attractive to UK end users. While Intel has previously evaluated the market segments by Specifier, Business User and Home User, they should adapt a view that more appropriately addresses the needs of the end user. ... Intel・s marketing strategy should communicate different messages to these specific segments. They should continue to highlight the messages of quality and technology leadership associated with the Intel Inside campaign. ... In the short term Intel needs to focus its advertising on educating the Late Majority and promoting the 486. This should allow them to maintain the sales of the 486 and continue to build the brand image in the UK. ... Customers and Market Segments Intel has identified two distinct customer groups, Original Equipment Manufacturers (OEMs) and End-Users. While the OEM・s are Intel・s direct customer, they recognize the need to fully understand their customer・s customer, the end-user. ... PC OEM・S - Intel・s direct customers are personal computer OEM・s. UK market leaders IBM, Dell, and Compaq were forecasting a combined 34% market share for 1993. ... ； The result for Intel is that the PC OEM market in the UK consists of many different companies, making it more difficult for Intel to develop strong relationships with all the PC suppliers. ... Intel must convince OEM・s to pay a higher price for Intel products in the face of increasing competition. Intel needs an approach by which the OEM・s customers (the end users) will demand that Intel microprocessors be installed in their PC・s. In order to do this, Intel needs to effectively identify the various end-user market segments, their wants and needs, and develop a marketing strategy that will create an image in the consumers mind that Intel microprocessors are superior and create value. Leveraging the growing population of end-users, and using them to demand Intel products from the OEM・s, is a more powerful selling strategy than anything that Intel could directly do with the OEM・s themselves. This was the foundation upon which the ：Intel Inside； campaign was developed. ... In 1992 Intel was focused on evaluating the UK market by specifiers, business users, and home users. ... The regression compared the segments opinion of how well the ads emphasized one or more attributes to how willing they would be to purchase only PC・s with Intel microprocessors. ... To be the most effective, Intel should segment its market according to the needs and benefits sought by the end user. Intel should consider the applications and each of the different segments as well. Based on Kotler・s recommendations for defining market segments as Early Adopters, Late Majority, and Laggards, Intel can evaluate the segments related to their needs and benefits, demographics, growth potential, and profitability.