History of Intel

From the dawn of the personal computer in the late 1970s, marketing was mainly driven by computer vendors and software publishers. During that time the rapid technical advances of Intel processors had played a central role in transforming the PC from a basic production and business management tool in the 1980s into a rich new information, entertainment, education tool, along with being a business device. The processor was driving the rapid increase in the performance, which in turn helped systems run more smoothly, quickly and reliably. But Intel relied on its PC vendor customers to convey this message; these were OEMS, otherwise known as Original Equipment Manufacturers. Thus it had little brand identification among users, who knew no more about the processor than they did the company that built the engine in their cars.

In fact computer users were generally unaware of what advanced processors were available or of the continually improving cost performance that was being delivered by "Moore's law" (industry guiding principle, named after Intel's co-founder and Chairman Emeritus Gordon Moore, that states that the number of transistors on a microprocessor roughly doubles every 18 months to two years). Intel believed people needed to know more about the processor and the company behind it. So in 1989 an Intel marketing manager Dennis Carter formed a small group and for the first time launched a program aimed at marketing a microprocessor, the 386SX, to the Information Technology (IT) managers who purchased PCs for business.

This effort was successful; IT learned about the new 386SX and converted to it rapidly. However several challenges quickly emerged, such as legal issues. In the late 1980s Intel assumed its 386 and 486 processors were protected trademarks; no other company could use them. But when the courts ruled that they were not trademarks, it opened the door for rivals to use them at will. The time was ripe for a new marketing program.

In order to correctly communicate the benefits of new processors to PC buyers it became important that Intel transfer any brand equity from the ambiguous and unprotected processor numbers to the company itself, while raising awareness of its name. Intel invested billions of dollars in developing cutting edge technology and billions more in assuring performance and reliability. A stronger brand was needed to communicate this to consumers, separating Intel from the pack.

Clearly, marketing directly to the end user was a novel idea for a semiconductor company. Although the company was widely recognized among computer manufacturers, the brand had little name recognition amongst end users, despite the fact that Intel microprocessors were the "brains" inside their PCs. The media raised questions as to whether a pure technology company could play in the same league with Proctor and Gamble*, General Motors* and McDonalds*. Even to many within the company, the program seemed like a stretch.

A second issue was that the processor, although a key component of personal computers, was only a component. To effectively market this component to the PC buyer it was important to work with the manufacturer of computers. After all, the processor was buried deep inside the computer and despite its significance it was hard to tell which processor the PC contained before it was purchased.