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CASE STUDY TWO: Expand Total Available Market for Intel Processors
Objective
Increase the total available market for Intel processors (1996-2000)
to compensate for a slowdown in the corporate marketplace.
Strategy
Develop and implement a five-year roadmap to create 'new uses for new
users' of personal computers by developing a value proposition enabling the
consumer to justify buying a high-end computer for the home.
Tactics
Act as a catalyst for the creation of rich entertainment content to stimulate the penetration of broadband into the home and enable next generation applications including digital photography, games and music.
- Establish a pan-organizational team comprised of representatives from key business units and product groups including the Intel Architecture Labs, key platform business units and the marketing organization.
- Inventory joint resources (marketing, advertising, technology, developer relations, and venture capital) and establish a program.
- Execute the program in support of strategic corporate initiatives, typically tied to the capabilities of each new processor that was launched: Pentium II and MMX, Pentium III and 3D and broadband.
Implementation
Intel engaged with 'Hollywood' by establishing a demonstration lab at Creative Artists, a large talent agency, and invited studio executives, celebrities and key trade association and guild members to a gala event. With the lab as a base, the company developed relationships with the major television networks and motion picture studios using a three-phased program comprised of initial education (a technology briefing), identification of mutually beneficial projects, and negotiating deals around specific imperatives of a 1-3 year term and involving marketing, technology, match-making with partners, venture capital investment, and developer relations programs. Examples of such programs include:
- Virtual Jay: By harnessing Intel advertising dollars allocated to the launch
of Pentium III (powerful enough for 3D rendering/animation on the desktop), Pulse Entertainment, an
Intel optimized animation technology company, and The Tonight Show, created a "Virtual Jay Leno"
character that was introduced on the show and continued as a fixture on The Tonight Show Web site for
an extended period. The project generated significant press, was used as a demo for the Pentium III
launch, and served as a foundation for additional cross-media projects with NBC.
- Interactive Digital Television Pilot: To explore the application of a PC at the heart
of the next generation digital home entertainment center, as well as the digital set-top receiver, and to better understand the possibilities of
the digital transition, Intel partnered with television networks, internet content providers and a
satellite player to deliver interactive digital content to 200 households via Gateway Destination PC/TVs.
Illustrative of the complexity of the undertaking is the coverage of four CART auto races. A deal was
negotiated involving Intel, DirecTV, ABC (owners of the CART broadcast rights) and Quokka Sports
(providers of the interactive media overlay). Viewers not only received overall race coverage, but also
were able to view the race from the perspective of the driver of their choice, listen to conversation
between the driver and the pit crew and also view a virtual dashboard with crucial race data. Response
to this programming was overwhelmingly favorable.
In addition to deep involvement in the overall program, I specifically focused on the development of "Digital Sports." The strategic thinking was the following:
- Sports have a universal appeal. If Intel could make the PC a real value-add to the sports television viewing experience of millions of fans, this would expand the total available market for Intel chips.
- In the mid-90s, most homes did not yet have a broadband pipe for rich content. However, sports are statistics rich, which meant that the user could have a great experience on the PC, even without rich media (audio and video).
- Certain niche sports with a significant fan base are not well covered by either television or radio, but were ideally suited to the PC.
The Program
By combining advertising, sponsorship and marketing with technology and developer relations programs, Intel supported the major sports leagues to develop Web sites and then make them more compelling with rich media. In addition, I personally developed the company's Digital Sports Strategy and established the Intel Capital Sports Portfolio, which invested in promising young sports content, technology, and infrastructure companies to "show the way" and illustrate the possibilities of the digital future.
Examples include:
- CBS SportsLine was provided technology support to develop 'virtual communities,' rich media advertising and online fantasy sports.
- Quokka Sports provided 24/7 broadband coverage of the nine-month, 31,600-nautical-mile Whitbread Round the World Race of 1997-98 and allowed "virtual sailors" around the world to participate in the race (790,000,000 hits to the website by race end). Digital sensors on each boat transmitted up-to-the-minute data on the boat's precise location, its angle in the water, the ambient wind speed, and the water temperature. Digital cameras mounted on the main mast of each boat transmitted content via satellite to Internet users.
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SportVision provides technology for the virtual "First Down" marker for football, the "Virtual ads" behind home plate for baseball and a variety of features of the recent Olympics including "Virtual Flags" on the ice lanes. Its Internet cast applications provide virtual event attendance for hockey, baseball and auto racing enthusiasts who receive instantaneous event updates over the web, as well as statistics, match-ups and alert notifications. IceCast, DiamondCast and PitCommand contain integrated sponsor inventory to incorporate the marketer directly into the action.
Success Metrics:
- Increased demand for high-end Intel processors as evidenced by traffic ramp at rich media components of television studio and entertainment conglomerate Web sites.
- Rapid increase in number of homes with PCs and TVs in the same room combined with enormous traffic at sports sites during major events such as the Super Bowl.
- High PC home penetration and rapid proliferation of digital photography, MP3 music format, home video editing, multi-player gaming and other consumer benefits of the digital transition in fewer than five years.
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