Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
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December In the Life Cycle of products there is a “Declining Stage” where demand drops from its peak. What should your strategy be during this stage?
A: The objective here is typically to HARVEST. Your product offering is very mature, but you might add enhancements to extend the life. If this is possible, it can be very profitable. If you can market the old product and improve its position, improve its gross margin, perhaps through a re-birth with some new enhancement, or perhaps through some previously unforeseen applications, you are a successful marketer.

Pricing needs to be competitive if not more than competitive, in certain cases. You have been making this product for an extended period of time, so it should be cheaper to manufacture. Lower your pricing, sell to your installed base, and try to minimize the support issues.

It is not uncommon for a product in this state to profitably remain in the market for extended periods such as three years or more.

November In the context of advertising and promotion, what does the phrase "less is more" mean?
A: So often executives say, "We have a whole 8-1/2 inch page and we're paying $14,000 for it. Fill that space with words and get our messages across!" Unfortunately, this is precisely the wrong thing to do. To get above the noise of other ads and distractions, and get your message to those whom the ad is directed, you must have a clear, simple message that puts you in a position of attention. An ad, brochure or pitch pak filled with feature after feature, benefit after benefit, confuses. The prospect walks away overwhelmed with information and may not have any idea of the message you were trying to get across. Present the message simply, and make sure it is understood.
October In product marketing the term "common language" is often used. What does this mean?
A: "Common language" means everyone using the same terms and expressions related to products and services. The language that is used must come from the customers with whom you are working. It is their perception and understanding that really counts. You want to integrate this language into all promotional and introduction activities.
September In the United States, the Robinson-Patman Act prohibits selling at a different price to different customers. How is this interpreted and what are the exceptions?
A: Not all price differentials are illegal under the Robinson-Patman Act. Price differentials are considered to be lawful under any of three circumstances: (1) When the effect does not substantially lessen competition; or (2) The differentials are in response to changing conditions that affect the market for, or the marketability of, goods, such as seasonal obsolescence, physical deterioration of products, or going-out-of-business sales; or (3) The differentials do not exceed differences in the cost of manufacture, sale, or delivery resulting from differences in the quantity sold or from different methods of sale or delivery of product.
August Handling customer objections ihas been turned into a science. There are 5 steps to effectively handling an objection. What are they?
A: 1. Discover the "real" objection by using probing questions. 2. Be empathetic to the customer's objection, which is disarming and makes you a partner. 3. Convert the objection to a "question you can answer" - take it from a generality to the real underlysing problem. 4. Answer the question concisely and get concurrence that the customer believes the answer. 5. Rapidly get back to where you were in the sales interchange.
July How do you handle price objections?
A: Price objections are often nothing more than a ploy by the customer to obtain the lowest price possible from the vendor. This is particularly true today with Supply Chain Management Programs designed to turn all products into commodities in order to negotiate the absolute rock bottom price.

Sometimes, however, there is a real price objection. This occurs when the equivalent equipment, material, software, component or other product is being offered by your competition at a lower price and the customer does not perceive any significant difference between the two products.

The answer to this objection is "value propositions," focused upon the specific customer's needs. These "value propositions" should be presented early in the sales cycle, often throughout the sales cycle, and be used to positively differentiate your products or services, in terms of price, from your competitor. A price objection is ALWAYS a question of VALUE.

June What is DFM (Design for Manufacturability)?
A: High-yielding, state of the art designs in VLSI technology are extremely challenging due to miniaturization as well as product complexity. The design methodology called design for manufacturability (DFM) includes a set of techniques to modify the design of integrated circuits (IC) in order to make them more manufacturable, i.e., to improve their functional yield, parametric yield, or their reliability.
May What is the "team forecast" and what is its advantage?
A: The "team forecast" is a combined effort of the sales and marketing people. Marketing people track the overall trends in the marketplace while the sales people track the opportunities that exist to sell the company's products. Based on their judgment of the quality of the opportunities, sales people prepare the booking forecasts by product and region. The two groups then come together and negotiate to evolve the best estimate of the likely factory demand schedule. The team forecast is designed to manage the factory manufacturing or demand schedule so as to maximize profit and market share and to optimize inventory levels and customer responsiveness. The key to its success is the collective judgment of those people in the company with the most market visibility and customer experience — the marketing and sales people.
April Foundries and fabless semiconductor companies are producing an increasing share of the world's semiconductor devices. What is the implication for semiconductor equipment companies?
A: Increasing market share for foundries will translate into slower growth for the equipment industry because of greater efficiency of use. Foundries are generally conservative about new technology; however, they must lead in this area to gain capability and customers. So, there will be opportunities available.
March The American salesperson often falls short of success when faced with selling to the Japanese customer. What are the key reasons?
A: To the American buyer, you are expected to display confidence, extroverted characteristics and provide lots of information. For the Japanese customer, reverse the above. The quality of quiet humility, humble information and listening rather than talking is most admired. To the Japanese every little movement, word and physical expression has deep meaning. Much more than in America, the salesperson must pass muster long before the company or product is considered. A promise or hint of a promise should never be made unless you are sure that you can deliver, in spades—quality and service are much more important than price. Japanese customers never forget a favor or a mistake.
February Many members of a Key/Strategic/Global Account Team are often matrixed to the team. In other words they don’t report directly to the Key/Strategic/Global Account Manager. What are the most frequent problems encountered with matrixing?
A: From our experience, the following are the most common matrixing problems: Lack of complete management support—Agreed upon resource and time line commitments are not honored. Immature management—Mid and upper management are often focused upon “turf “rather than company success. A need for instant gratification—As the strategic selling process evolves, simply collecting required information and working out the process is neither fast nor cheap. It is a strategic activity, not a tactical one. There must be patience for longer range payback. Meeting quarterly sales objectives are not part of it.
January In selling big-ticket products and services, where does negotiation begin--before the sales cycle starts, after the sales cycle has been completed, or somewhere in the sales cycle?
A: Traditionally negotiation cannot actually begin until the customer decides it would like to have what the supplier is selling. Preparation, however, for the negotiation actually starts at the very beginning of the sales cycle. Seller positioning, differentiating arguments, the subtle introduction of questions on competitor's weaknesses, and other offensive activities must be handled in a manner that considers the likely negotiation issues and customer's offensive tactics. This is even more crucial today with the a large number of customers employing supply chain management techniques such as PICOS.