When Grf Andrs sailed to America from Hungary in 1957 he was so poor he couldn’t afford an extra vowel in his name. Before immigrating he first had to escape the Nazis, who threw his father into a forced labor camp, and then the wicked Soviet invasion of 1956. In the U.S., the brave and brilliant young man became known as Andy Grove, co-founder and CEO of Intel. With a stirring personal story, it’s no wonder he entitled his autobiography Only the Paranoid Survive. Grove turned out to be a talented engineer and a motivating manager. But he also created one of the greatest examples of “ingredient branding” — a little decal that simply said “Intel Inside.”
Before Grove came along many companies boasted about their components. Oldsmobile bragged about their Rocket V8, and in the 1970s Chrysler broadcast a sensuous ad with suave actor Ricardo Montalban purring over the Cordoba coupe’s “soft Corinthian leather.” In these examples, if you bought the Olds, you could get the Rocket V8. If you bought the Chrysler, you could pay up for the cowhide. But the engine and the seats still came from Oldsmobile and Chrysler. (By the way, the Corinthian leather started, not in Corinth but just across the border of Newark.)
Grove and Intel achieved something far more complex in the late 1980s – they persuaded buyers to demand that world-famous computer companies like IBM and HP insert Intel microprocessor chips into IBM and HP computers. Through Intel’s top-notch R&D and its clever marketing, customers who knew nothing about computing began marching into Radio Shack, Best Buy, and Staples and peppering salesmen with questions like: “Do I get the Intel 486 chip? When will you get the new Pentium? “ IBM, HP, Compaq, et al realized they could charge more if they used Intel chips because consumers believed (often correctly) that they were getting better performance for their money.
Other companies before and after Grove pursued ingredient marketing. You can buy Betty Crocker cake mixes with the “Splenda” sticker and Sony stereos with “Dolby” sound, for example. But those are easy cases: Splenda buyers know they are looking for a zero-calorie sugar substitute. Dolby users can push a button so that they can hear the enhancement and gauge the value of Dolby with their own ears. In the case of “Intel Inside” only a tiny proportion of users had any idea why an Intel would make their computing experience faster or more fun. Nonetheless, they demanded the decal. Andy Grove died yesterday at age 79, but not before this once-poor immigrant re-invented himself and the world of branding.