Expert's Panel

A collection of timely and important topics posed to our panel of experts.

You haven't talked much about market segmentation and the associated tactics to prevent cross over. Doesn't this basic marketing strategy play a role in our industry? How should we segment the market? How do we use segmentation?

 (ep10108)
1. It's hard to come up with rules except the rule that says a place where your competitor, who is leading you in a market and is not performing well, is an opportunity. If you handle it more effectively than your competitor it then becomes a market segment if you chose to make it one.
2. I generally use application, like product application, technology. The product and technology has its own direction. You're not going to make a wet etcher into a dry etch market. While the example is exaggerated, no amount of marketing is going to do that. I think our task is to identify the real use and true application and benefit of the technology and product we have before us. We need to make sure it is targeted correctly to satisfy that application in the customer's fab.
3. I don't see segmentation as a tactical issue. I don't think it's a weapon in any way. The customer pretty much sets the segments - there will be a collection of customers by feature size - that's one segmentation. There are a collection of segments by technology meaning AE Associates knows how to do RTP and Applied Materials knows how to do 5 or 10 things - that's how the markets are done by the marketing consultant groups. The last one is by application where you can do, for example, etchers: oxide etch, metal etch and poly etch. But none of these are weapons or tactically oriented. It's more "be aware of it and know where you're going." They're more goals - I'm going to be in that market and this market requires that kind of performance. With consumer marketing they do segmentation and use it as a weapon, but in this industry that just doesn't happen. There is not enough of it and the customers are much clearer about what they want.