Q and A Archives

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2006

December Benchmarking is a very useful technique for auditing your current product performance or for determining what is required to create a 'best of breed' product. What is the ttechnique for benchmarking?
A: 1. Make a tabular list (by row) of the key characteristics of winning products (or product) in the target market, 2. rank the list by importance to the customer, 3. make a list (by column) of the primary competitors or competitive products in the target market, 4. quantify and note the characteristics of the winning products for each competitive offering, 5. include your products in the analysis. If done correctly, the exercise should tell you why your product is or is not doing well in the marketplace. The exercise is an excellent way to organize your thoughts about market requirements.
November If you are not the market leader with your product, what is the most important rule that must be followed in regard to the market leader?
A: Never meet the market leader head-to-head on his own turf! The odds are against you and you will likely lose. There are certainly exceptions to this, but can you afford to take the risk? Instead, examine the unsatisfied needs of your customer relative to what your product does. Then direct your positioning to that need, which is often a niche.
October There are six (6) major pieces of legislation covering commercial selling and buying transactions in the United States or by US companies. If you are involved in sales or marketing you need to be familiar with their major concepts. What are these laws?
A: Uniform Commercial Code (UCC), Federal Trade Commission Act, Sherman Antitrust Act of 1890, Clayton Act of 1913. Robinson-Patman Act of 1936, Foreign Corrupt Practices Act of 1977
September With a technical product the customer often asks for a special configuration. Should the Price Book, prepared by product marketing, attempt to cover these specials?
A:

The Price Book has to be detailed and proactive enough to deal with future requirements. It must also be comprehensive because it is integral to the activities that determine sales. The goal should be that the Price Book covers 90% of the potential applications. This saves time for product marketing as sales will not have to call you for special information. If you typically anticipate 50 to 100 customer questions that wonít have to be answered, that saves you from 3 to 300 hours of telephone time.

With a complete price book the customerís order is handled in an efficient way and the order becomes a combination of what is already in the Price Book. You get a clean order; the customerís expectations are clear; and engineering, operations and service know what to do.

August A prominent reference point in the semiconductor industry is the ITRS. It is an acronym for what and to what does it relate?
A:

ITRS stands for International Technology Roadmap for Semiconductors. It is an assessment of semiconductor technology requirements directed at ensuring advancements in the performance of integrated circuits. This assessment (roadmap) is a cooperative effort of global industry manufacturers and suppliers, government organizations, consortia, and universities.

It is a key reference point for the conception and design of new products for semiconductor manufacturing.

July Today, many suppliers to the semiconductor industry are finding their customers using PICOS, and other similar, program strategies and tactics against them. What is PICOS?
A:

PICOS (Program for Improvement of Cost Optimization of Suppliers) was the brainchild of Jose Ignacio Lopez de Arriotua, the head of procurement of General Motors in Europe and later Volkswagen. It began in the late 1980s-early 1990s and has morphed into a variety of supply chain management programs.

While it can be based on a desire for a true partnership between customer and supplier, it normally is a one-way street to enrich the customer at the expense of the supplier. On a strategic level it is designed to demoralize the supplier account team; turn every product into a commodity; and leave nothing but price to negotiate at the end of the sales cycle and beyond. On a tactical level, it begins at the front-end of the sales cycle and is a well coordinated plan that influences every member of the sales team, from junior to executive, and takes away all of the supplier initiatives.

June How many 300mm fabs were operating world-wide at the end of 2005?
A:

According to Semiconductor International Fab update there were forty-eight 300mm fabs in operation at that point in time.

May What is the key driving force of decisions in the semiconductor industry?
A: The key driving force of the semiconductor industry is efficiency: efficiency in power use, device design, device cost, and capital. For example, a well-run foundry represents a major advance in efficiency of capital, and such operations provide an efficient way in which device companies can bring new products to market with minimum capital investment. This key force is driving the rise of foundries and fables companies in the semiconductor industry.
April What is the most important pre-exposition (trade show) activity, relative to customers, that a supplier should undertake?
A:

In addition to any company-planned direct mail/email campaign that might go out prior to an exposition, a good sales team member should send personal letters or notes to key people in key accounts. The general subjects of a personal direct mail piece should focus on your personal invitation to the booth to see new products, to meet key company personnel, and/or to learn of a new technology or application that the customer might be able to use.

As that customerís contact with your company, you should know each of them well enough to know of something that might interest them. If not, invent some excuse to get them to meet you at the show. The purpose is to make a direct connection between the customer and your company's products and personnel.

Make sure that the letters are personal (not in the style of a form letter ). Carefully select the wording of the letter, making certain that it clearly conveys an appealing invitation. The most effective letters are done on personal stationary, not company letterhead. Make sure that the stationary is "different" (i.e., more elegant-looking) even if it has the company logo on top.

March The "proposal" (previously known as a "quotation") should be used as a selling document. How do you ensure this?
A:

The proposal for a high technology product often reads like a technical treatise. To move into the realm of a sales tool it should have a good cover letter that restates the key benefits of the product, specifically applied to the customer being addressed. In other words, it should have the value propositions prepared for that customer. Further, it should carry some closing statement(s) such as suggesting the time youíll be in touch to discuss delivery and other final arrangements. It should be appealing, hard-hitting and straight-forward.

February What would be considered the top two sales tools that should be made available to the sales force?
A:

The best two tools would be a (1) a current list of "benefits-features" that differentiate your product and give the salesperson the information to create "value propositions" specific to the customer and individual customer personnel, and (2) endorsements in the form of references and testimonials.

In some markets like, Taiwan, Japan, Korea and China endorsements are essentials. But even in other markets they are crucial, particularly in the semiconductor industry, where equipment and non-commodity materials decisions are often made on a "bet-your-job" basis. A bad decision could cost the company many millions and a good one can suddenly make the decision maker a hero.

January When negotiating, what is an "impasse" and how should you deal with it?
A: An impasse is when you hit an issue that cannot be resolved. I you stay on an issue where an agreement in principal cannot be reached, the negotiation cannot move forward and will shortly end. It is best, therefore, to shelve the issue and move on to other issues that can be resolved. As each party gives and receives concessions on the other issues, positions often soften on the shelved issue and agreement can be reached near the end of the negotiation.