Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
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December It is generally more difficult for a woman executive or company representative to be accepted in Asia than it is in the United States. In what two Asian countries are women accepted in business situations more readily?

The Peoples Republic of China and then Taiwan. However, she will need to be properly introduced to the customer, usually by a respected agent. She will be perceived first as a "foreigner" and secondly as a "woman."

November What do we mean when we use the term Global Pricing Model?
A: The model normally means one price for all no matter where the customer is located in the world. The necessity for such a model comes about because the customer demands, and uses negotiating tactics to obtain, a single worldwide price on a product and related services.

Companies that participate in the international semiconductor industry must consider the pros and cons of a single global price for their products. Suppliers know that doing business internationally costs significantly more than doing business domestically and set international prices accordingly. On the other hand, large multinational customers are reacting negatively to the premiums they are being charged for "international pricing." The Global Pricing model partially addressed this issue.

October What is the difference between a Strategic Account Program and a Global Account Program?

It depends upon the person who is answering the question. To most people the terms Strategic Account Management (SAM), Global Account Management (GAM), and Key Account Management (KAM) are interchangeable. They are used to define programs for customer accounts that are of vital importance to the organization, and to which an inordinate share of corporate support resources are allocated.

To people skilled in the application of Key/Strategic/Global Account Management Programs, however, the words take on a distinction. A Key Account is one that is important to the company and may be managed on a nationwide or regional basis. A Strategic Account is similar except it is one that is crucial to the success of the company and it usually receives an enhanced level of attention compared to a Key Account. A Global Account is one that is crucial to the success of the company and is managed worldwide by a senior level manager–there are likely country or regional managers for the account that also report directly or dotted-line to the Global Account Manager. A Global Account Manager, for some larger companies, has his or her own staff of sales and service people for the account.

Strategic Account Management has matured to a reasonable level. Global Account Management, however, is still in its infancy due to the complexity of the cultural, legal, etc. environment within which it operates.

With most people, you should feel free to use the terms KAM, SAM, and GAM interchangeably. Even in our public training programs for this discipline, we use the term Key Account Management, but there is information for application at all levels.

September How are product differentiation and product performance related?

The term "product differentiation" is a marketing concept. Product performance refers to the technical functions of your product. You also can differentiate your product from a marketing standpoint, but if it doesn't meet a vital need and product performance is "ho hum", you will have limited success. To differentiate means convincing customers that your product is different from that of your competition. Performance supports the more powerful notion that your product is superior to the competition's. If you can demonstrate performance superiority, you will almost always win, if–you can get that image across to your customers.

August In the semiconductor industry, what is a "Budgetary Quote" and why is it used?

The budgetary quote is often an important step in getting the order. Sometimes a "quote" is requested by the prospective customer for budget planning purposes, and sometimes it is encouraged by the account manager to stimulate the customer's interest in taking the next step in the sales process. If there is missing information about the customer's requirement, it is best not to provide a firm quotation, even if requested. The two options are to delay submission of the quotation until the requisite knowledge is available, or prepare a clearly identified budgetary quotation.

Such a quotation should be clearly identified as "budgetary". Keys to success here are rapid response and clearly identifying in writing the budgetary nature of the quote along with its underlying assumptions. Also, your contacts should be verbally advised as to the budgetary nature of the quotation. This leaves room for changing the quote if any of the assumptions change.

July One of the characteristics that separates the semiconductor market from other markets and dictates "how" vendors sell into it, is its size in customers. How many world-wide semiconductor customers and fabs are there?

There are about 200 companies worldwide, but the top 25 have 80-90% of the IC revenue. 99.8% of the revenue is achieved by the top 100 companies. There are less than 1000 semiconductor fabrication facilities worldwide and only 500 that count significantly.

June In the semiconductor industry what do the terms "COO" and "OEE" mean?

They are predictive numerical analysis tools to compare one product against another, usually when a company is making a buying decision. COO means "Cost of Ownership" and OEE means "Overall Equipment Effectiveness." Today there are a number of software programs that make these calculations. Some are available for public purchase and others are created by vendors or customers for their own analysis.

May What is the "Annual Event" often used by companies in conjunction with trade expositions and why is it useful?

Many vendors develop an "annual" event for special, long-term customers. For example, an "annual" golf game, lunch at the Top-of-the Mark (at Semicon West) or dinner on Fisherman's Wharf. These annual events become a special anticipation for the customer and provide a closeness and friendship over time. The people invited are usually heavy-duty decision makers or influence brokers, "champions" in their companies, and expected to be in that position over a period of time.

April In the semiconductor industry, what is the difference between a "data sheet" and an "application note"?

Data sheets provide specific information. Customers expect to be able to glean from a data sheet information that is far more specific than a brochure. How big? How far? How fast? Wafers-per-hour? So, a data sheet should include a general product description that includes what it is and what it does - and sometimes why it does that. The features of the equipment should be covered, avoiding generalities and providing back-up data with statistics - the "How far? How fast?" with the conditions under which it goes that far and that fast.

Application notes, on the other hand, are primarily a narrative discussion of specific uses for equipment, software, components or materials. Most of the time they are produced when someone comes up with an unusual, unexpected or new method of using the equipment or material. App notes should include documented data that proves the application is of benefit for customers who implement the procedure or technique.

March According to United States law, does a warranty have to be explicitly stated in writing to be in force?

A warranty may be expressed or implied. Both have the same effect and operate as though the seller of the product or service had made an express guarantee.

February Where did the terms front-end and back-end come from and what do they mean?
A: The words were actually coined as a fluke. At Texas Instruments in the 1960s, the fabrication equipment was located at the front part of the manufacturing building and the test equipment at the back part of the building, hence "front-end" and "back-end." Today "front-end" for all IC manufacturers means wafer making and device making. "Back-end" means assembly, package, and test regardless of where it is physically located
January The declining of the rate of sales growth is an indication that your product has reached the "Maturity" stage in its life cycle. At this point, what are appropriate strategies?

In the semiconductor industry, equipment tends to mature in two or three years, and materials in four to five years. To defend products at this stage it has to be reliable, proven, and have the lowest cost of ownership. Pricing during this stage has to be competitive to hold on to market share. MARCOM should be targeted to improving customer perceptions, particularly handling adverse perceptions that may have developed.