Never believe that product naming is trivial. It’s the first thing people must remember before they decide to buy. That alone makes it one of the most important things an executive must do. For if they can’t remember you, they will never think to buy.
Confusion is a common problem throughout technology because so few pay attention to naming. Just try asking a sales person at a mega-store, like Fry’s Electronics, to explain the differences between most technologies. Most don’t even know the features. You have to break open the packages and read the manuals for that, because even the package surfaces are not very descriptive. So you can’t afford to do it with brand extensions that make no sense.
Apple made this mistake in the late eighties with brand extensions of the Macintosh. Confusing naming is a major reason why Apple further lost its leadership to the PC in the late eighties as the adjective for the PC slowly shifted from the IBM PC to the Intel PC. Microsoft was years behind with a GUI (Graphical User Interface) and this had given Apple a huge edge. But whenever you’d ask a store sales person which you should buy, they couldn’t explain the difference. So, you walked out unless you were an Apple fanatic.
The PC and Intel’s X86 world was much simpler. You could walk into a store and immediately figure out what was better. A 486 was better than a 386 – 66MHz was better than 33MHz. Admittedly, there were exceptions to these rules, but things weren’t nearly as confusing as with Apple. . The X86 brand became so strong that AMD, seeing a gold mine, jumped on it with its own AM386.
Then Intel lost a court ruling that would make the 1998 downturn painfully bad. Intel was forced to drop the X86 naming convention because, when they sued the others for using it, the court ruled the X86 trademark invalid because it was a number. Intel had quickly come up with Pentium, based on penta, the Greek word for five. Pentium became a massive success in 1995. But by 1998, all the variations had confused buyers and so they slowed buying. Even experts found it confusing.
It has been said that, in their haste Intel inadvertently overlooked the fact that version six would have been named Sexium, if they continued to use this scheme. However, Intel had more taste. Plus, they had actually sought to overcome an additional problem that branding in technology poses: with new generations coming out every two years or so, it is awfully difficult to get a brand into the consumer’s mind before the brand has to be tossed and a new one inserted. Brand insertion for mind share is incredibly expensive. Just look what it cost Agilent, when it was split out of HP. Because of this, Intel chose to expand using line extensions such as Pentium Pro™, Pentium II™, Pentium MMX™, etc. That was when the confusion began. You had to be an insider to know which one was better. Pentium Pro was an upscale version Pentium II, right? WRONG! Pentium II replaced Pro. If you can’t figure out which one is better, why buy something new?
Of course this wasn’t the only problem of 1998. The Asian financial crisis had triggered tough times. Yet the Fed injected enough money to keep the economy rising. So the problem wasn’t really the economy. People have limited resources, so they will pass the confusing thing up. The lesson is to solidly plan your branding and future product extensions so they are clear to the customer.
Adding to this confusion were the public leaks of Intel’s internal designations named after rivers: Klamath, Merced, Deschutes, etc. These internal code names created sixteen some odd brands for Intel to manage. Because they were leaks and Intel did little to manage them they became a problem. So people were soon asking if Klamath was the code name for AMD’s K7. Moreover, when Intel wanted to introduce the product, they had the problem of overcoming the code-named brand when establishing the brand for the official release. This is why today they manage all the names with a very public roadmap.
On top of all this came Celeron™ and Xeon™. But, which was faster? Celeron sounds like ‘cellerate’, so it should be faster, right? WRONG! It was actually the cheaper one. Xeon was the fast one. In the final analysis these product families did serve to segment the market: Celeron for the price conscious user, Pentium for the average user, and Xeon for the low end server. But the names were too foreign to the product’s purpose and so it took a fairly extensive marketing campaign to gain the mind share needed for people to remember the differences when they were buying. Fortunately Intel, being the great marketing company that they are, recognized the misstep and moved to fix it. As I predicted back then, Intel came out on top again as it was the only company with a full spectrum of products. Better yet, it was a spectrum that Intel had defined. Now that’s great marketing!
But the lesson to be learned is that if you get the name wrong, it will cost you. At the least, you will have to spend gobs more to gain mind share. At the most, it can cost you market leadership, as what happened to Apple.
By G Dan Hutcheson Copyright © VLSI Research Inc. All rights reserved.