Intel cooks up marketing strategy for Centrino

July 21, 2003

BY MICHAEL KRAUSS

What do pizza and computer chips have in common? Perhaps a similar marketing strategy, though the high-tech marketing team at Santa Clara, Calif.-based Intel Corp. has really revolutionized the approach.

Back in the '70s, there weren't any prominent national pizza chains: no Domino's, no Little Caesars. The fast-food business was burgers and fries from McDonald's and Burger King. Then Pizza Hut, an emerging chain out of Wichita, Kan., hired Foote, Cone & Belding to launch a national advertising campaign. I recall Bruce Mason, the management supervisor on the account and later the CEO of FCB, told me the plan was to depict families enjoying the pizza-eating experience in the advertising. The message was that pizza is more of a celebration, more fun, whereas hamburgers are just fuel.

The goal was to popularize and grow the category. Since Pizza Hut was the largest factor in the market, if more people ate pizza while dining out rather than burgers, Pizza Hut would prosper.

Frank Carney, the client and one of Pizza Hut's founders, bought the strategy, and it helped Pizza Hut become the world's largest pizza chain. Carney sold it to PepsiCo Inc. in November 1977.

Today, Greg Sieck, vice president of Intel's sales and marketing and director of brand strategy and advertising, and Don MacDonald, director of marketing for the mobile platform group, are following a category-building strategy on a global scale.

They are the leaders of Intel's global product development and marketing program for Centrino, a new silicon microprocessor -- a series of related chipsets and technology that enables notebook computers to work more effectively while on the go. Yet you'd be hard-pressed to see the product as a silicon component if you reviewed the global Centrino ad campaign: What Sieck and MacDonald are promoting, like Mason and Carney before them, is the category experience. The ads, the collateral and the Web site all illustrate people enjoying the wireless computing experience.

Centrino is positioned as mobile technology. The aim is to convince anyone buying a notebook to look for the "Intel inside" logo with the Centrino trademark.

MacDonald likes to point out that in the early 1920s, radio was just a novelty until the first boxing match was broadcast. Suddenly, demand for radio sets grew as people began to hear and learn how the new technology could be applied. He foresees similar significant robust growth in mobile notebooks and wireless devices, once users gain a sense of how the technology can be applied. Hence, the Centrino campaign.

Centrino's genesis rests within Intel's strategic analysis and segmentation efforts and its aim of anticipating future customer needs. The Intel strategists identified four vectors of customer need and determined to exceed expectations with product development and branding efforts built around these four vectors.

They listened to customers and learned that being wireless was an important and growing need. There were additional needs to consider, as well. Customers wanted to be wireless and away from their power source for longer periods of time. They needed longer battery life. They also wanted products with a so-called form factor, including size, feel, shape and weight that were smaller and more compatible with being on the go. And they wanted processing power that would be high performance, so that users could play games, do calculations and basically continue to have high-powered computing applications even when mobile.

The Intel engineers set out to build a processor that could meet these multiple requirements. They worked throughout the industry to assure that the Centrino technology would connect seamlessly and ubiquitously. Their efforts guaranteed that Centrino could promise ease-of-use for wireless applications that other manufacturers might not deliver.

"With Centrino, we wanted to create strong and relevant promises to the consumer and back it up with leadership technology. That's where we come at it from a branding perspective," Sieck says.

The "Unwire" theme of the Centrino communications campaign, created by EuroRSCG's New York office, delivers just that kind of powerful brand promise. Intel is saying to its customers, "If you want the benefits of mobility, go for it. Just look for products that are equipped with the Centrino technology."

While this is a bold promise, Intel has made this type of promise before and succeeded handsomely. In the 1980s, Intel, known mainly for its engineering prowess, pulled off an enormous marketing coup. At a time when personal computers were first emerging, Intel persuaded computer hardware makers to carry its logo with the "Intel inside" bug on their products. It signaled to skeptical first-time hardware buyers they were purchasing a quality computer.

The "Intel inside" campaign is legendary, and helped turn Intel into a $ 26.8 billion global company.

Today's migration to mobility is likely to be one of those marketplace inflection points that Intel Chairman Andy Grove likes to talk about. Once again, Intel is ready and leading the way with its Centrino effort.

The chipmaker won't comment on the precise spending level behind Centrino, but Intel spokeswoman Claudine Mangano expects "Intel will spend more to launch Centrino than we did on the Pentium 4 product introduction." And she adds, "Back at the time of the launch of the P4, we said it would be a $ 300 million worldwide campaign."

At a time when marketing budgets are under intense scrutiny, especially high-tech marketing budgets, Intel's pocketbook is open. The result, thanks to solid technology and well thought-out marketing, will be continued market dominance.

"Even when things were looking worse," MacDonald says, "we felt we had a product, we had a business plan, and we had a marketing campaign. Craig Barrett (Intel CEO) and Paul Otellini (Intel president and COO) didn't blink.

"I have to give credit to Craig and Paul," MacDonald adds. "While everyone (outside Intel) stopped spending, they said, "The role of marketing is to invest in the future.' The money was made available to us. I think today we are seeing the results. We have a much better product in the marketplace, while our competitors were trying to trim dollars here and there."

Marketers everywhere, especially those who've previously cut spending, should be studying the impact of Intel's Centrino efforts. Personally, I think the Centrino program will pay off well for Intel. Mobile applications of technology are still in their early stages. If Intel can succeed in popularizing and growing the category, the benefits in terms of sales will be there.

Though Intel is famous for playing close to the vest with their numbers, reading between the lines you get a sense that the campaign is working well. I asked MacDonald how he's feeling with such an important program on his shoulders. He said, "It feels good because we're doing quite well commercially."

I suppose I should have offered to take Sieck, MacDonald and Mangano out for a pizza to celebrate their success. They deserve a lot more than burgers and fries.

Michael Krauss can be reached at michael.krauss@diamondcluster.com or news@ama.org.