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Advice Pool - Be Like Intel: Sandisk's Journey From Commodity to Recognized Consumer Brand
Technology companies often want to emulate Intel’s success in moving from a hidden ingredient inside personal computers to a brand that consumers recognize, value, prefer and pay a premium for. For most, however, that journey represents a task much easier said than done.
On the surface, the Intel Inside cam
On the surface, the Intel Inside cam
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
paign looks like a simple stroke of genius. Shell out a few million bucks for some well-placed television commercials, and in no time consumers will be insisting that your customers put your name on the outside of their product, right? If only it were that easy. What most people fail to realize is that the
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
remarkable success of the Intel Inside campaign -- or any campaign that seeks to turn a commodity into a recognizable consumer brand -- rests on two very important principles.
First, it requires the financial resources to support a lengthy consumer-oriented campaign. You don’t create a brand name overnight.
First, it requires the financial resources to support a lengthy consumer-oriented campaign. You don’t create a brand name overnight.
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
Second, and more important, it requires a dimension of value that end-user consumers actually perceive as important. Without both of these elements, branding campaigns won’t have enough muscle to convince consumers to demand your product above all others.
Let’s address the money issue first. At last coun
Let’s address the money issue first. At last coun
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
, Intel spends about a $1 billion a year in cooperative advertising with their major customers, such as Dell and HP. Add to that the $1 billion Intel’s customers spend and the total financial outlay to support the Intel Inside brand comes close to $2 billion a year. Or, as we say in the business, serious mo
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ey.
In general, Intel matches every dollar its customers spend on advertising that mentions the Intel Inside brand. For example, those hundreds of millions of advertising circulars that Dell sends out each year? Intel absorbs about half their cost. In fact, every time you see the Intel Inside logo or hear
In general, Intel matches every dollar its customers spend on advertising that mentions the Intel Inside brand. For example, those hundreds of millions of advertising circulars that Dell sends out each year? Intel absorbs about half their cost. In fact, every time you see the Intel Inside logo or hear
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
the Intel Inside sonic brand, you know that Intel paid for about half of the marketing costs. This enormous financial commitment is one reason why the Intel brand stands out from the crowd and why technologists easily point to it as one of their favorite brands.
On the end-user benefit side, the key word
On the end-user benefit side, the key word
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ere is “perception.” In this case, Intel has successfully convinced enough consumers that a computer with the Intel chip inside is the fastest available and therefore can handle any application they can throw at it. As a result, consumers perceive real value in the Intel brand, which is why the vast majorit
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
y of PCs rolling of the assembly lines carry that well-known sticker on the outside: Intel Inside.
Likewise, any commodity product or ingredient technology that hopes to develop a powerful consumer brand must similarly convince the buying public that their product is so superior that consumers won’t accept a
Likewise, any commodity product or ingredient technology that hopes to develop a powerful consumer brand must similarly convince the buying public that their product is so superior that consumers won’t accept a
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ything less. And that’s exactly what a little-known company called SanDisk is trying to accomplish.
Will SanDisk Be the Next Intel?
A leading provider of flash memory -- the tiny wafers that store digital music, photos and videos -- SanDisk is one of the primary beneficiaries of the soaring demand for cell
Will SanDisk Be the Next Intel?
A leading provider of flash memory -- the tiny wafers that store digital music, photos and videos -- SanDisk is one of the primary beneficiaries of the soaring demand for cell
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
phones, digital music players, digital cameras and game consoles. Over the past three years, revenues for the Sunnyvale (CA)-based firm have surged an average of 70 percent a year. This year, they’re tracking an increase of 19 percent, for a total of $2.1 billion in sales. Not surprisingly, SanDisk’s stock
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
has shot up 40 percent over the past 12 months.
Despite these glowing numbers, SanDisk faces a huge challenge. For the most part, memory is a commodity business, and prices can be harshly cyclical. Pricing wars frequently erupt overnight, and prices can take a nosedive almost as fast. During the summer o
Despite these glowing numbers, SanDisk faces a huge challenge. For the most part, memory is a commodity business, and prices can be harshly cyclical. Pricing wars frequently erupt overnight, and prices can take a nosedive almost as fast. During the summer o
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
2004, for example, flash memory prices plunged precipitously, causing SanDisk’s stock to drop 40 percent in four days.
To avoid ongoing pricing hiccups, SanDisk is striving to develop a strong brand that consumers will recognize and value. At the most basic level, this means convincing consumers to ask for
To avoid ongoing pricing hiccups, SanDisk is striving to develop a strong brand that consumers will recognize and value. At the most basic level, this means convincing consumers to ask for
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
a “SanDisk one-gigabyte card” for their digital camera rather than just any one-gigabyte card. Just as Intel has convinced personal computer buyers to insist on Intel as the “chip of choice.”
From where I sit, it seems like SanDisk has the first part of the consumer technology branding formula right. They
From where I sit, it seems like SanDisk has the first part of the consumer technology branding formula right. They
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
re spending millions on a worldwide advertising campaign that targets retail stores, magazines and even prime-time TV shows like The Simpsons and Survivor. In terms of sheer dollars, SanDisk isn’t shelling out as much hard cash as Intel, but it probably doesn’t have to. If fact, most companies don’t need to
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
spend nearly that much. They just have to commit enough financial resources to garner the attention of consumers.
SanDisk also seems to have the second part of the formula well underway by working hard to distinguish itself through technology that delivers real consumer benefits. Last year alone, SanDisk i
SanDisk also seems to have the second part of the formula well underway by working hard to distinguish itself through technology that delivers real consumer benefits. Last year alone, SanDisk i
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ncreased R&D spending by a hefty 48 percent to $125 million. The result has been a string of innovations -- waterproof memory cards, titanium cards, and secure memory cards with embedded fingerprint readers -- that have captured the attention of consumers because they offer compelling value.
SanDisk is als
SanDisk is als
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
working with wireless carriers to help protect consumers from fraud and identity theft. When faced with a lost or stolen cell phone, consumers can contact the carrier to remotely disable the card and keep sensitive personal data safe. SanDisk has even successfully offered new products in the gadget busine
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
ss. Last August, for example, the company introduced an MP3 player that quickly raced to first place in the category, only to be knocked off by Apple when it introduced the iPod Shuffle.
Does SanDisk have what it takes to make the leap from anonymous commodity provider to a recognized consumer brand like In
Does SanDisk have what it takes to make the leap from anonymous commodity provider to a recognized consumer brand like In
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
el? Only time will tell. In the meantime, I plan to follow them closely to see how their branding campaign continues to unfold and, more important, how the market responds. As someone who lives and breathes technology branding, I believe we can all learn a great deal from SanDisk’s ongoing branding efforts
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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