In the past several years, AMD has been steadily losing market share ever since Intel released its highly successful processors, Intel Core Duo 2. Now, AMD will be trying be releasing its new line of processors "Vision", the focus not on surpassing the performance of Intel's but on personalizing the product to suit the customer's lifestyle.
Topics covered: 4.2 Market Planning, 4.3 Product, 4.5 Promotion 1.5 External Environment
Microcommentary: 4.5 Promotion
AMD probably has already done a lot of market research to understand the current needs of consumers and designed the "Vision" processors to fulfill exactly that need. However, the most important aspect in the birth stage of the product life cycle is promotion. AMD needs to do a lot of informtional promotion to let consumers realize the advantage that AMD's vision has over Intel's processors. The worst thing that can happen is for consumers to assume that AMD's new products will be inferior as well based on past misconceptions. AMD may have to do some under-the-line promotion to give consumers incentive to be willing to purchase their new products. If AMD can get across the message that their processors are cheaper and more cost-effective, it would be an appealing factor in the current economic climate. Of course, all of this must be done with consideration of the financial budget and also the current inventory.
Hi Jason,
回覆刪除Nice article. I personally found this article interesting. While I agree with you that promotion plays a significant role in the product's life cycle, I'd say for AMD's Vision processor, the most important aspect is research and development - a point during which, if the research is done wrong, or if development is not reliable/deep enough, AMD's investment into the Vision processor is a complete waste. On another note, I do agree with you on the point that AMD will have to focus on below-the-line promotional methods. I'd like to add that using demonstrations of Vision and perhaps direct marketing would be AMD's two most effective ways to market Vision in regards to BTL ideas. This is because by demonstrations, AMD is proving to their potiential consumers of Vision's compatability with their daily technology interactions. Direct marketing would also help since Vision is more focused on suiting the consumer's needs. This way, direct marketing to certain market segments could help convince consumers that the AMD Vision processor is right for them.
Once again, interesting article and a job well done. :)
Sam.
PS: Can you change your site language back to English? (Dashboard > English) If I didn't know 意見 meant thoughts, I would never comment on your blog ;) Thanks!
Hi,
回覆刪除Under the current economic climate, I believe that how AMD copes with the recession may be a significant factor in deciding their sales. I agree that price reductions is a good method that may generate more sales, especially right now. People are much more aware of prices during recessions, and if AMD can get across the message that their chips are much cheaper, than they may gain a significant amount of customers. Moreover, if they decides to reduce their product's price, then AMD should consider cost reductions, such as finding alternative suppliers who offers a better price, or try and cut energy bills. The amount of cost they reduce may have a large impact on their overall profits.
However, gaining market shares from their biggest competitor, Intel, may be a very difficult task. Firstly, Intel is a larger business and as a result, they may be able to experience economies of scale, allowing them to improve efficiency and reduce their product's price in order to gain more customers. Secondly, since Intel is the market leader, cusomters may be willing to pay a higher price for their products. Intel is also a more established brand, and as a result, they have better brand recognition. Therefore, while their promotion strategies may help boost their sales, they may not gain a significant portion of market share.
Hi Jason. As you point out, when thinking about promotional strategies businesses need to consider their consumers needs and wants. AMD is in the interesting position that they must consider developing their image to their business partners (Dell, HP, etc.) and their end consumers. Thanks for sharing the article and your insights.
回覆刪除Hi Jason,
回覆刪除Cool article... I certainly agree with your point that promotion is an important factor to boost the sales of this new chip and the market share in the industry. However, i personally believe that below the line promotion may not be the best choice of promotion for AMD to promote their new product. AMD, as mentioned by Mr Opfer, should consider above the line promotion with their partners such as Dell, HP, Adobe... This way, the promotion will be a lot more effective than having promotions merely by AMD. Furthermore, using the above the line promotion with their partners can help AMD to take advantage of their partners' large economies of scales, which means the promotion can reach a larger number of customers, and the promotion will probably be more interesting and appealing. Nevertheless, AMD must consider the current economic state of depression. This may highly affect the sales of this new product negatively despite all the promotions AMD will do. Therefore, AMD should have an intensive research about the market currently before pushing the full promotion of the product.
but anyhow, great ideas and great article
goodjob
:)
thank you for your comments
回覆刪除This is an interesting article for us to discuss about. I think AMD can really consider in learning at Apple in terms of how they promoted their iPod and how that changed their whole status and competitiveness of their company. Apple began few years ago in promoting the new iPod with a lot of ways. For example, having student fairs and discounts to promote their product. Moreover, they used a lot of innovate ideas to keep their brand young and suitable for the students. Additionally, they created a brand image that everyone had an iPod.
回覆刪除AMD could certainly look deeply with the promotion strategies of the iPod and learn to promote theirs. AMD is currently in a great disadvantage in terms of their market share. Luckily, Intel has not been too aggressive in terms of promoting theirs, which gives an opportunity for AMD to sell theirs and to get their market share. More importantly, it is vital that adequate of both primary and secondary research is done before starting a product and promoting it. Because if the promotion target or segment was incorrectly aimed, the firm may suffer from severe lost of profit and in the long term the staff morale.