DifferentiatingBetween Market Structures
DifferentiatingBetween Market Structures
Intelmanufactures computer chips used in other brands such as HewlettPackard and Dell computers. Recently, Apple Inc has transitioned touse Intel processors and chips for all Apple products such as the MacBook computers. For a company that has no direct products sold to theconsumers, Intel has a very high profile and many people activelyseek computers with the Intel chips though they do not understand howthe chips work. They trust there is a relationship between Intel andquality and thus select computers with the “Intel Inside” label(Ulph, 2015). Intel is among the leading brands in informationtechnology with connections in all leading brands.
Inthe contemporary world, the perfect competition-marketing model has aglobal outlook because competition is encouraged provided theproducts meet the necessary requirements. The market share isdependent on branding campaigns rather than specific design bygovernment policy or the inability of another company to enter themarket (Ulph, 2015). For example, IMD is a big competitor and makeschips and other products in the same way Intel does. However, it isalso possible that the connection between Intel and the other bigorganizations such as Apple, Dell, HP, and Acer have establishedIntel as a virtual monopoly because of the high demand and itsinfluence in the market (Ulph, 2015). Recently, Intel chips haveshaped the generations of computers and the expectations ofperformance (Ulph, 2015). The Core I series of processors, marketedby Intel, influenced the marketing process for computers as computersdistributers use the labels to create an impression of vastimprovement in computer performance. The influence of Intel in themarketing process for computers and the exclusive brand ownership ofthe Core I Series of computers demonstrate the Intel operates in avirtual monopoly by virtue of owning the leading brands and thushaving unfair advantages over the competitors such as IMD (Ulph,2015). Therefore, the best categorization of the marketing strategyis the Monopolistic competition because despite the strength of thebrand, Intel has to consider the presence of competition.
Theconflict in the marketing structure is a function of the conflictbetween the ideal marketing conditions in the capitalistic economyand the actual conditions as a function of brand strength and pullingability. In this regard, it is possible to envision the effects ofdifferent marketing structures on the Intel Brand.
InOligopoly, few firms that control the market exclusively run themarket. For example, in the software industry, Mac OS, Windows, andAndroid are the dominant brand and they control the market. Androidis open source and used by many Smartphone makers while the likes ofMac and Windows are used exclusive on iPhones and Nokia smart phonesrespectively. A similar case is applicable to Intel because its maincompetitor is AMD and together, they control the majority of themarket. In the Oligopoly market structure, the company would beforced to adjust to the changes by the other marketing giants toremain in the market. Therefore, constant innovation and attempts tooutdo the competition are constants in the oligopoly marketingstructure.
Thereis an operating illusion that the current political ideologies createperfect competition. However, reality is that Intel has a bigger pullthan the competitors have and often sells its products at a higherprice than the rest of the competition. In a perfect competition,Intel would be forced to adjust the prices to fit the prices of allsimilar products. At the same time, the quality of the products wouldhave to rise to meet the market demands. In a perfectly competitivemarket, the pricing of products is determined by the competition.Brands have no significant strength and entry into the market isfree. Therefore, in the free market, Intel would have to adjust thecosts of all products and ensure highest possible quality to staycompetitive. However, the reality is that brands have a compellingallure to the markets and they create a barrier to new entry.
Monopoliesexist because of regulations, lack of business feasibility andinefficiency (Hutt & Speh, 2009). For example, if there aretwenty travelers between point A and point B and a plane carriesthirty passengers, it would not be feasible to have a competing planeto enter the market because it is inefficient. In the case of Intel,a monopoly would change the outlook of the business and eliminate thefuture orientation. Intel is future oriented to ensure it stayscompetitive. For example, the core I series replaced the duo core andthe core 2 duo computers in a very short space (Ulph, 2015). If thecompany was in a monopoly, it is possible they would have delayed therelease of the core I series processors and exhaust the demand of theearlier models. Therefore, a monopoly reduces the relevance ofinnovation in the marketing strategies. Therefore, a monopoly wouldincrease the profit margins by increasing the market share.
Inmonopolistic competition, there is more than one seller in the marketbut new entry is restricted by the prospect of overcoming theestablished brands. In the case of Intel, the company exists in theMonopolistic competition because its brand allure and that of IMDinhibit new market entrance (Ulph, 2015). The Monopolisticcompetition depends on the strength of one brand over the other, andrelaxation of a brand may result in it being replaced by the strongerbrand. Therefore, the monopolistic competition would compelinnovation in the same way as the free market though it presents theprobability of controlled prices among the established brands.Therefore, a competing brand in a monopoly reduced the margins ofprofits and increases innovation because of the aspect ofcompetition.
Inteluses the differentiation marketing strategy because she attempts tointroduce different products or create the impression that theproducts marketed under the Intel brand are different (Porter, 2010).Most people do not care about the processors. Introducing themarketing strategy that proclaimed the presence of Intel in thecomputers created the impression that there was something differentwhen an Intel Processor was present in the computers. At the sametime, the different generations of processors create the impressionof change and advancement and appeal to the intended audience(Porter, 2010). For example, one gets the impression that the core Iseries are better than the previous dual core processors.
Thedifferentiation strategy is very effective in the Monopolisticcompetition because due to the establishment of the brand as a marketleader, differentiation plays a role in convincing the buyers theyare affiliated to the superior brand. For example, computers with thecore I series are more expensive because they are associated withhigh performance. The current generation is fixated by trendingobjects. Therefore, introduction of a new product creates instantdemand even where the product is not a necessity. For example,despite the existence of functional computers in the dual coreseries, there was a rush to replace the computers with the new modelprocessors. In some cases, the computers remained exactly the same,only changing the processors. For example, the Dell Inspiron laptopsmerely changed the processors while everything else remained the same(Ulph, 2015). The price of the computers with the recent processorswent up. Therefore, creating different products creates demands andincreases the prices for the products.
Theissue of ethics in business is central to the contemporary marketsbecause consideration of ethical guidelines translates to good publicrelations (Hutt & Speh, 2009). Therefore, to increase the marketshare, it is important for Intel to account for ethicalconsiderations. For example, processors that consume less energy areappealing because they adhere to the modern theme of environmentalconservation. Therefore, such processors reduce the costs of energyfor the users and at the same time create the impression that Intelcares about the interests of the community.
Theconflict in the marketing structure is a function of the conflictbetween the ideal marketing conditions in the capitalistic economyand the actual conditions as a function of brand strength and pullingability. Intel is a powerful brand in the field of technology and itsapplication to different marketing structures presents an idealexample. Intel operates in a monopolistic market structure. Intelexists in the Monopolistic competition because its brand allure andthat of IMD inhibit new market entrance. Other market structuresdiscussed in the report have shown different views of marketstructures in regard to Intel.
Hutt,M., & Speh, T. (2009). Business marketing management: B2B (9thed.). Mason, Ohio: Thomson/South-Western.
Porter,M. (2010). Competitive strategy: Techniques for analyzing industriesand competitors. New York: Free Press.
Ulph,C. (2015). Marketing Strategies Used By Intel To Create A SustainableMarket Position An investigation to analyze the marketing strategiesused by Intel by examining strategic marketing issues and also theoptions facing the organization in building a sustainable co (1.Auflage ed.). München: GRIN Verlag GmbH.