Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
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December What is the evolving role of Product Marketing in the Semiconductor Equipment and Materials space?
A: It is evolving from a focus on centralizing all data relative to an individual product/product line to a focus on optimizing operations and profits.

The Product Marketer, through coordination of functional activities, is now often primarily responsible for the continuous review, analysis, and improvement of his/her product line to assure on-going profitable growth and market position.

November How are people from different Asian countries alike and different?
A: A mistake that many professionals from Western countries make when they travel to Asia is to treat all Asians alike. Each Asian culture has its unique characteristics and exhibits a strong "National Pride". To be effective a newcomer to foreign business travel should take advantage of the many available on-line articles and off-line books and pamphlets that discuss the characteristics of a specific culture. Also business associates who have experience in (or are from) a specific country can be a great source of information.

However, there are several cultural similarities that exist within this region of the world. The basis for the similarities is the impact of Confucianism and Buddhism. Confucianism being the paramount influence in the culture, the primary precepts of Confucianism are as follows: absolute loyalty to a hierarchical structure of authority, duty to the parents, strict order, a defined form of conduct, separation of the husband and wife, and trust between friends.

October We find that many technology sales team members are not familiar with the "Elevator Pitch" and don't see it as useful for them. What can the "Elevator Pitch" do for you?
A: It can open the door for further discussion about what your company has to offer. It is very useful in talking with potential customers at trade shows and can be used on any initial contact with an employee of a potential customer.

What is it? It is a three to four sentence motivational statement about who you are and what your company does. Properly constructed it allows you to create a favorable impression in the first 15-20 seconds and leave the contact wanting to know more. It should be simple, engaging, offer a potential problem solution, and be true.

Spend some time constructing it, memorize it, try it out, and modify it whenever you find it is not effective.

September What is the breadth of Product Marketing/Management responsibilities?
A: As stated by Jim Bagley, former CEO of AMAT and Lam Research, it crosses 4 major areas: CREATE (Engineering)- i.e. product definition, managing the life cycle, etc.; MAKE (Operations)- i.e. forecasting, managing costs & risks, product introduction, etc.; SELL/SERVICE- i.e. understand market and key customers, communicate content, functionality & value, assist sales, etc.; and INFRASTURCTURE (HR, Finance, IT, Legal, etc.)- i.e. articulate business model, drive team to meet business/financial contributions. This involves a pre-birth to death management for a profitable product or product line. Product success is fully the responsibility of Product Marketing/Management.
August What is the best way to push back a good customer's unrealistic product request?
A: First, before responding you need to make sure the request is unrealistic. Second is to measure it’s profitability to you – if it doesn't meet your profitability standards, don’t do it. Third is to determine if it is covered by your current MRD (Market Requirement Document) - if not, you could well be diverting engineering resources from satisfying the MRD in a timely manner.

Regardless of the above conclusions the best way to lay it out to the customer would be similar to, "We can certainly do that and the cost to you (make sure it covers all costs - engineering, impact on other product development, etc.) is XXX." Expect push back from the customer here, but this will be a test if the customer need is real. Do not lower the realistic cost and you may find them determining it isn’t worth it and may back down from their request.

July In negotiations the customer often doesn't care if it ends in a "win-lose" situation as long as they are the winner. How can we also be a winner in those situations?
A: You can make a true "win-win" by making the pie bigger rather than cutting it differently. We do this by recognizing that many negotiated issues have different perceived payoffs to the different parties. Capitalizing on that perceived difference gives you the means of making the pie bigger.

If you were a manufacturing equipment supplier it is to your advantage to provide equipment operator training. Without it, you will continually be called with problems and have to send an engineer to the customer to solve the problem. Further, the customer will be dissatisfied with your equipment and not purchase from you in the future. So you actually "save" a lot of money by providing the training. If the training has a stated price of $10,000 and you give it for free as a concession during a negotiation, the customer perception is they gained $10,000. It didn't cost you $10,000, but saved you a much larger figure in engineering travel and time as well as future business. You have a "perceived win-win" from a pie made bigger by listing a price on something you were motivated to do for free.

June Our product is actually a commodity. There is not substantial differentiated customer benefits from what our product offers and what our competitors offer. How do we get an edge up?
A: First off you need to be meaningfully differentiated or the only thing you have to offer is lower price and that is a slippery slope toward business failure. Look to incorporate some customer beneficial design changes in your product, if possible.

However, there is another path which is often the most effective. Look beyond the physical product to the total package you offer the customer. Some of what that can provide is discussed in our question and answer of April 2015.

May Purchasing refuses to discuss or even let me talk about the values our product offer their company. They focus only on price and insist both we and the competition are completely interchangeable. What do I do?
A: Recognize it is their job to do that and today many buyers receive incentive pay for the price reductions they achieve. So, they are motivated to do what you describe. You need to make sure you have well-defined, provable value differentiation. Then sell the value of that differentiation to the operational people who will benefit from it. During negotiation with purchasing you should refuse to focus on price and repeatedly return the conversation to your values. Your pushback on purchasing combined with behind-the-scenes pressure from the operational people will help you maintain your revenue margins.
April There seems to be a disconnect between our engineering staff and our customers. How do I remedy that?
A: New products/product changes need to be "market" versus "technology" driven. The market defines the need, technology (engineering) then finds a way to satsfy that need.

The need should be identified through extensive interaction with the market and key customers and then communicated to engineering via a Market Requirement Document (MRD) written by marketing. There should be procedures and reviews in place to ensure the MRD is the governing word. However . . . that doesn't ensure the engineering mind will appreciate what is defined and accept it as the objective. Therefore, it is important to include key engineering people in customer interviews.

March You have developed a Market Requirement Document (MRD) for a new/modified product with full input from a key customer. After the engineering project has begun that customer introduces new "unrealistic" requirements. What should you do?
A: First recognize that change costs your company money and may cost time. You should not be afraid to either say "no" or transfer those costs (with profit) to the customer.

First, however, put the customer on the spot to test if the requirement is important or even real. There are a number of ways to do this. An often effective way is to say to the customer; "There is an xx% chance we can do that effectively and the cost to you will only be $xxxxx. Would you like to go ahead with that change?"

Often, the customer will balk at the price or the risk of less than 100% success and back off on their own.

February What is market segmentation and why would you employ it?
A: Introduced to the marketing community by the late Wendell Smith in 1956, segmentation has developed from an academic concept to a viable “real-world” planning strategy. It was first recognized in consumer markets and rejected by B2B markets. But over the past two decades it has risen significantly in prominence with high-technology businesses. It has become a proven concept for increasing sales and improving overall market performance.

Based on a comprehensive study by Allen Stines in cooperation with Pennsylvania State University in 2007, segmentation was rated as the top B2B competency required out of a pool of 153 marketing issues. The study found that superior performing companies use innovative market segmentation criteria and processes to find customers with similar needs and behaviors. This allows for targeted products and promotions.

Why engage in market segmentation? In one word, PROFIT. Or in three words, PROFIT, PROFIT, PROFIT!

January Why has equipment marketing to semiconductor device makers and foundries shifted from a focus on "market" to a focus on "customer segments"?
A: The main reason is that today the requirements are different for each customer and there are significantly fewer customers in the market. Samsung, Intel, TSMC each --not collectively-- make up 20 -25 percent of CapEx. On the supplier side ASML, AMAT, Lam, TEL, KT, DNS make up 60 percent of CapEx capture.