The intelligence of Intel's branding
Intel Branding. Why Some Brands Work
In general, BMW, Chrysler, Chevy, and Ford all get the job done, but BMW does it a little better and with more style. The BMW is more expensive, but you get what you pay for, right? Even though a BMW is considered to be a better car, most consumers go with the Ford purely on price. Forget about brand for a moment. Consider if BMW and Ford were the same price. Which one would you choose now?
Let’s even suggest that, for a limited time only, the BMW is cheaper. Now which one? Obviously this proposition is relatively extreme for how things actually work in the marketplace, but it is a fact that superior products are typically charged at a premium.
Consumers are well aware that they would never be able to buy a new BMW for a lesser or equal price than a Ford, Honda or Toyota. But what about in other industries? Does this always ring true? Clearly this is not always the case in the computer industry.
Intel branding has long dominated the computer chip market. They developed cutting edge products during the dawn of personal computers and have done an excellent job in branding its company and product. Intel’s logo and audio “chime” that is in every commercial are etched in our minds. Intel stands for trust, performance, and being “inside” your computer, making consumers believe that, without Intel inside, your computer is a second-class citizen. (Download a PDF Share Thief Article on AMD and Intel here)
Best Is Not Success
However, Advanced Micro Devices (AMD) chips are considered to be better and are actually less expensive by some experts. (Read a recent look at AMD here) They perform better at lower clock speeds, do not run as hot as Intel, have a 64-bit technology that can run at 64 or 32-bits at the same time, and their dual core chips allow far superior multitasking than their Intel counterparts. In addition, AMD chips cost less and generally require a less expensive motherboard. However, AMD has never had more than a 20% share. In fact, in data compiled by Mercury Research for the end of 2005, saw AMD’s share at about 16.6% and Intel’s share at 82.2%. If the chips are better and they are less expensive, why do they have less than quarter of share that Intel does? The discrepancy: Brand. Intel branding is better.
It comes as no surprise that a branding company would suggest the reason a company is not optimizing it’s potential is because of a lack of brand meaning. One could also argue that intel branding has engaged in less than fair competitive practices as evidenced by a pending suit filed by AMD.
AMD’s biggest problem
But at its core, it is the absence of brand meaning that is AMD’s biggest problem. As previously stated, intel branding has done an excellent job of branding itself. To most computer users, Intel brings to mind certain associations. The idea of “Intel Inside” is a very powerful statement. It tells consumers that any computer without Intel inside is not a computer, and, as most casual computer users do not know a lot about computers, making sure they have an Intel Pentium chip in their computer means one less thing they have to worry about. Intel is a name consumers know and trust.
In many ways, it means more to consumers than HP, SONY, DELL, Gateway and any other computer manufacturer that you can mention. AMD means very little if anything at all. AMD has Shrek and (in a poor choice as history will bear out) Lance Armstrong as “spokesmen,” but AMD does not gain any ground with them. There is no “AMD Inside” imagery to which the consumer can build an emotional attachment. Rather, AMD’s messaging seems to focus on responding to or addressing Intel in some way. (Read about SONY’s failure here)
This is futile. AMD cannot compete with Intel’s deep pockets and intel branding focus and must concentrate on building their brand with the consumer. AMD has real opportunity to build their brand. They have a better, less expensive product, both consumer and business. A coherent brand is what they lack. AMD must find a connection to the consumer, and that connection has yet to be identified. AMD needs to address the questions, “when a consumer purchases a computer what does that say about who they are?” and, “What do people who purchase AMD computers believe to be true about the world in which they live in?” Do they believe that simplicity is better? Do they believe that a person’s worth can be understood by the choices they make? Responses to these questions bring about the beginning of brand.
They key is precepts
At Stealing Share, we begin our process by asking questions as part of our Preceptive Behavioral Modeling. Before we brand, we must understand. The answers to questions about consumer’s beliefs, which we refer to as precepts, are where brand is most effective. If brand correctly portrays consumer precepts, then it gives the consumer a reason to choose and connect. Thus, consumers must choose that brand because it is an extension of themselves. Not choosing the brand would feel like emotional suicide. Brand is not about pretty logos and catchy theme lines.
It is not about creating a glitzy name or about how the company views itself as a company. Rather, brand represents the consumer’s emotional “hook” to a purchase. Things like logos, theme lines, and names merely hang from this hook in order to convey the brand purpose. So far, Intel is the first and practically the only coat we see on the rack. Even Apple, the maverick of computer manufacturers, switched to INTEL chips because of intel branding — AMD was a viable option for them but the INTEL brand was simply preferred.