Part 2
The Intel Inside started in 1988, when Dennis Carter, a technical assistant of Intel’s CEO Andy Grove, pointed out that the very success of the Intel microprocessors made the company faced challenges ironically; Moore’s law explains this well in that the demand for Intel’s microprocessors was not able to catch up the speed of Intel’s transition (upgrading) of microprocessors. Carter in this 2002 Harvard Business School case study said that nobody was buying Intel’s newest microprocessors such as 386 or 496 but stuck to the old 286 version of the chip.
Carter added that the problem may not be about the product itself but the marketing strategies at Intel, which may have not been successful in making consumers aware of the product differences. Despite negative perceptions around direct marketing to consumers (e.g. ads of Rowan & Martin’s Laugh-In) and Andy’s initial rejection of Carter’s idea, Carter kept pushing his suggestion to appeal to consumers directly the company name, and finally secured $5 million budget to proceed.
Carter conducted his experiment as follows. First, in the market research, he confirmed that consumers were not aware of produce differences between Intel chips. Next, he conducted a pilot campaign for six (6) weeks to see if he can change consumers’ perception in a single market, with his budget of $500,000. He used billboards to put the Intel logos, starting with a big ‘’286’’ (chip) in a circle and mark it with a red X and then adding the ‘’386’’ next to it in the next week. Sales of computers with Intel 386 microprocessor rose dramatically. The Red X campaign indeed created changes in perceptions that can make demand changes.
