Expert's Panel

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

Cite examples of effective promotions for capital equipment.

 (ep1096)
1. One the best I've seen would have to be Applied's "Total Solution" approach. It has really encompassed the whole industry. The word "solutions" is almost abused by everybody now. Companies are trying to project –integrated, complete, total, one-stop, come to us and you'll never lose your job—messages. Another one is "Intel inside." It has been very, very effective. I'm sitting here thinking do I want an Athlon in a new computer and a friend says, "You'll never lose if you get the Intel xx." The AMD is an incredible chip that is less costly, but I still keep thinking software developers are more likely to produce programs that are more Pentium than Athlon friendly.
2. When electroplating first got going a couple of years ago, Novellus ran a large promotion campaign—articles, papers at conferences, advertising—a blowout promotion on their electroplating system. Electronic News and several others ran articles on electroplating and always mentioned Novellus as the number one supplier. At that moment in time Novellus only had 2 systems in the field and Semitool had 40 systems installed. The promotion worked. Most people, at the time, believed Novellus was way ahead of the field.
3. I had the opportunity to work with an ad agency that was running campaigns for Tencor. They had traditional ads that talked about the usual things like features-benefits. At the time equipment costs were beginning to rise steeply. Engineers were not making the decisions, but it was being escalated to a higher level. The decision making fab managers were not really familiar with Tencor as a company. So they ran a series of ads in Electronic News. It showed a gentleman in a white lab coat, hand on a clipboard, walking up to talk to an engineer. Another man was standing there in a suit and tie, and the process engineer was saying to him, "Of course I checked it on the Tencor." The power of that ad, in a period of one year, elevated Tencor's image significantly in eight different areas.
4. A phenomenon with an interesting promotion was pioneered by Applied where it gave names to things as opposed to model numbers, like the Endura and Centura. Then Lam and others picked it up. Over a 15 – 20 year period the personalizing of product families has been very effective.
5. Across the board you watch what Applied Materials is doing. They are doing it effective across a wide product spectrum. They are making a "noise" about their thing on a regular basis. They are doing a terrific job of promoting awareness and product differentiation. For most of you this may not be a fair example, because you are looking a very resource rich company.
6. An example was a relatively small company with a brand new technology in an area where they are probably leading the market by a little bit. The question they faced is how to even get share of mind at all. They were able to get a portion of the front cover of SST. They were in Semiconductor International and two packaging magazines. At the exposition they had a booth and someone out front handing out postcards. They went from a position where everyone in the industry was saying, "no, I don't need this now - come back after two years" to 25 people in the hopper that might buy this machine in the next 12 months. It was done by hammering on the requirements and this new solution, while pulling every string they had to get space somewhere. With their PR Agency they worked the issue that would grab the customer and get space.
7. If you go talk to 50 semiconductor engineers that make buying decisions and you stress the elegance of your product or solution, it would make no sense to them at all. Hammering an idea over and over does have some effect, but what is an order of magnitude more effective is having a piece of equipment that does what you say it will do the first time you put it on a production floor. Sales sold the first one and service sold every one thereafter. Applied has already established their position following this approach. I am a bit surprised that they are spending so much money to continue to create awareness when their position has already been established.
8. The Novellus Concept One is an example. It was their first production product and they didn't have the resources that Applied of KLA have today to promote it. They refused to BETA site, which was the standard in the industry - instead the BETA was done in their own facility. They refused to make a single wafer system that the industry had demanded. Instead they made a batch system that could produce single wafer quality at a much lower cost. They used a simple promotion that said "Single wafer perfection, batch economics." They set up a Demo Lab that worked, brought people in for the day and showed them they could do 50 wafers in 50 minutes. They used a strong sales force with one-on-one contact. As a result, the industry beat a path to their door. They refused to BETA site; said to the customer "you come here;" and would not discount the equipment price - this established a strong position.
9. The Yield Management Seminar put on by KLA was a good example of a successful approach. Another one was when Ultratech went to "Mix and Match" and did a major promotional advertising thrust. In the lithography area was ASML's entry into the market with productivity solutions - smaller footprint and higher throughput system. They promoted that throughout the market and obviously had the product properly developed to support it. This made them a very successful company. The final one was Novellus which really came out with the productivity message first with the Concept One, and that certainly was what helped carry it through promotionally.