Reversing the amd fusion launch
- 1. Reversing the AMD Fusion launch Akhilanand Kumar
- 3. APU the combination of CPU & GPU
- 4. CPU + GPU = APU • Moved from single, to dual, to quad cores • Invented APU in 2008. • Raised on a single piece of silicon with local access high speed. • But APU didn’t perform well on some test. • AMD wants to make the computing experience(HD Tv) • Intel fail with Itanium due to software incompatibility. • AMD Fusion “The Future is Fusion”, A campaign. • Totaling $10 M, was comprised of 1 page Ads in WSJB.
- 6. Re-Branding the AMD Ingredient
- 7. Re-Branding the AMD Ingredient • All products are different(logo, speed, size, no. of cores) • AMD purchased ATI(graphics enthusiasts) • In Nov 08, Mkt tm received finding from 2 studies(buying & Usage) • Team fixed on “Vision Tech from AMD” as Brands efforts. • Consumers want more than PCs like speed, tech & memory. • Intel’s mkt comm. Focus-Real world usage Experience. • Vision Brands Focus- consumer visual exp. By superior graphics. • Stop speed comparison, Start comparing usage scenarios. • For exam. :- Purchasing a car.
- 8. AMD’s Brands in the market in 2008 Finding A Vision
- 9. Examples of ATI GPU and Intel CPU Branded Together on the same computer after AMD purchased ATI
- 10. Key finding of the study
- 11. Key finding of the study
- 12. AMD segmented consumers into 3 cat Casual User Digital Hobbyist Content Creator
- 13. AMD’s mkt team presented OMEs • Dessau Noted “We wanted to show OMEs that VISION Brand would enable high-definition computing”
- 14. AMD Presentation Slides for VISION Brand
- 15. • AMD wanted to see side-by-side comparison with Intel’s offering. • Taylor wanted to see everywhere vision brand where user-ex matters most and expose RSAs at retailers such as best buy. • Vision logos would act as visual cue to speak customer in term of experience. • In Sep. 2009, VISION Brand launched its logo. • For the first yr. AMD offered OEMs a 75% refund on the full price of all print ads if they used VISION Brand. Re-Branding the AMD Ingredient
- 16. Example of Circular Ads Featuring VISION logo
- 17. AMD Channel Marketing Funds & Activities • AMD Customer funding • Marketing development fund • Training for retail sales Associates • POS marketing materials • Retailer fund for selling related activities
- 19. Fusion’s Future • Promoting AMD’s upcoming fusion tech., fall of 2009 • Industry analysts, OMEs & retailers needed convincing. • “sales-in” effort targeted at industry players, Soft vendors with #Visual performance, #power consumption, #form factor.
- 20. Performance • APU would not good with its performance on CPU benchmarks. • To best show unique capabilities of fusion, AMD employed #Internal R&D teams would develop benchmarks geared for APU #Optimizing applications for Fusin APUs(Nvidia & ATI) • Used open source code with supporting DirectX 11 & Dcompute • Internal team focused on software application • Cast a wide net, working with top companies & online gaming. • Motion DSP developed an app that installed in Fusion drivers. • Graphics capabilities of fusion APUs presented unique sales-in challenge when comparing performance.
- 21. power • Fusion enabled longer active & battery life than last one. • Because of integrated CPU & GPU on one piece of silicon. • Its(APU) microprocessor provides “all day BL” & • More responsive computer experience.
- 22. Form factor • Restructured its size & shape • Its included with high performing chips
- 25. Pricing fusion technology • APU’s price was lesser the separate CPU/GPU • They conjoint study to calculate how much consumers were willing to pay for better visual experience. • Llano at above to $100, higher than AMD’s average price • Zacate at around $50. • Ontario between $40-$50.
- 26. Pricing fusion technology • Consumers valued faster video editing up to 4 minutes faster and clearer video picture • Consumers did not value faster web page upload as they did not attribute this as solely • controlled by the processor • Consumers valued improvement in game-play over all other improvements • Consumers were willing to pay an additional $2 for VISION Premium level performance • Consumers were willing to pay an additional $13-$15 for VISION Ultimate level performance • Consumers were unwilling to pay any additional amount for VISION Basic level performance • OEMs were typically willing to pay ¼ of the price consumers were willing to pay
- 28. Focus on Llano • Sales-in message was best served by Touting Llano • AMD launches :-Lead with the best & biggest product • Llano would cover all mainstream & high-end products • Like A4, A6, & A8 would account for 70% Fusion sales • Zacate & Ontario would be for 30%.
- 29. Marketing directly to consumer • In 2010, AMD was pondering for a campaign because of fall of 2008 • A research explored that it could be • Kenyon, felt that strategy is placing emphasis on computer sellers. • Dessau was also not a big fan of engaging with consumers directly . • And also why we spend huge amount to get 5.975B processor unware people.
- 30. Marketing research studies on consumers
- 31. Marketing research studies on consumers
- 32. AMD mystery shopper Findings(may 2010) How well are RSAs communicating VISION messages & recommending vision system? What is the effect of in store merchandising on RSAs communicating & recommending VISION? How effective is in-store training coverage?
- 33. Intel in 2010 and beyond • Intel launched it’s best “Sandybridge” with 32nm technology. • It doesn’t support DirectX11 DirectCompute. • Not providing discrete-level graphics. • Dec. 2009, launched discrete GPU card “Larrabee”. • Offered Atom processer for mobile(08) & netbook(Jan. 2010). • Update core products e.g. “Faster, Smarter” #Celeron-entry level, Pentium-basic computing & Atom-Netbook. • Purchased air time during major TV events (Super Bowl & Oscars) • Stepped up towards social media. • Adopt direct marketing to consumers.
- 34. Planning for a Possible Reverse Launch
- 35. Planning for a Possible Reverse Launch • Reverse launch of Zacate & Ontario. • Decided to take a “Gate Review Zero” meeting. • Unifying the marketing team’s priorities leading up to a launch • Llano had been cornerstone of AMD’s marketing push. • Llano had been cornerstone of AMD’s marketing push. • After conformation of launch all are very consarned.
- 36. First wonder • How the sales and marketing strategy could be shifted if the reserve launch of Zacate and Ontario first than Llano were take place? • Call a “Gate Review zero” meeting • Unifying the marketing team’s priorities leading up to a launch • Llano had been cornerstone of AMD’s marketing push. • Llano had been cornerstone of AMD’s marketing push.
- 37. Second wonder • How to price Zacate & Ontario remained, but was complicated by the prospect of a reverse launch. • The AMD camp was divided into 2 parts #1 Passed along saving realized in manuf. to OMEs. #2 Raising the price, 18W Ontario could be used in 14” notebook
- 38. Third wonder • If AMD would need to offer to high-end product in place of Llano to satisfy OMEs and consumers at the higher tiers? • Sobon “can be package our exiting high-end discrete GPU cards with high-end CPUs & give concession to manufacturer” • Except battery life, it’s a good end user experience.
- 39. Fourth wonder • Should new logos be used to single something innovative was being introduced or should the existing VISION logos be kept? • They kept Llano logo with editing some color scheme or placing the word “new” across the exiting logos.
- 40. Fifth wonder • What to tell the channel partners and how the competition would exploit the situation? • Dessau reflected on the goals the “Gate Review Zero” meeting.
- 41. Ultimate wonder • How can we shift the sales-in message to the channel, How do we position to industry analysts, How do we break the news?, Do we need to invest heavily in a sales-out message to consumers? • Stay bold by being yourself. • Looked for differentiation points. • Reached 25% market share in the past but couldn't stay there.
- 42. Questions • What is the value proposition of Fusion technology for the PC channel? • Should AMD follow a 'Brazos First' strategy or wait upto 9 months when Llano processors will be available to debut Fusion technology? Consider the marketing implications of each option. • What is your assessment of the shift in branding by AMD to VISION? Does it map onto consumer buyin?
- 43. 1. Answers A low power consuming, compact device, delivering better quality graphics. This value proposition underlines the following benefits of the Fusion Technology- • Capability to run HD video • Smoother gaming experience • Video Stabilization • Vivid Presentations • Lower Power Consumption • “All day” battery life • Thin and Compact chip
- 44. 2. Answer • Brazos first strategy :- • Pros:- Being Pioneers in Launching "Fusion technology" into the market might give the competitive advantage for AMD. Can still target segments of netbook manufacturers and low end note book manufacturers • Cons:- Have to re-strategize the VISION branding (Brazos do not fit into ultimate space); might have to scale back the initial launch budget. Brazos being the low end fusion technology, it is bound to fail the hyped expectation that AMD has set through the excessive hype created by the fusion campaign
- 45. 2. Answer • Wait for 9 months and launch • Pros :- By waiting and launching the best technology available first (Llano), AMD can capture enthusiasm around Fusion technology in the market in a better way. 70% of the Fusion sales is expected to come from Fusion APU; delaying the process will make sure that this opportunity is not jeopardized. • Cons :- Have to be answerable to channel partners, might also lead to vulnerability in the competitive space. Marketing spend on the fusion technology has been huge, further delay in introducing the technology will lead to loss of revenue that was expected to achieve in 2010.
- 46. Conclusion: • Launch Brazos first: Doing so has the threat of failing the expectations OEMs and consumers have around fusion technology. However, by employing the Brazos first technology with a possible target of 30% of the market, it might help in gauging the performance of the technology at a very low risk of losing out on low end users only.
- 47. Marketing efforts that can be employed is listed as follows: • Since, there wasn’t much marketing done about the Brazos, there could be some discounts given for using Brazos, which will help in immediately gaining market traction. • Increase the In store merchandising to further develop the VISION awareness. • Employ further in store training for imparting the VISION awareness.
- 48. Fusion Technology and AMD’s competitive position against Intel • Fusion technology gives software developers more freedom to utilize the CPU and GPU simultaneously in a way they want to. Intel’s “Sandybridge” – which is expected to be similar to AMD’s Fusion – is said to offer improved integrated graphics only. • Intel’s GPU technology was almost a generation behind its CPU technology and hence it cannot match the graphics capability of AMD. • There is significantly more space given to GPU in AMD’s APU design that what Intel has given in Sandybridge. • There is clear difference in the focus of the two companies, where AMD is aiming for cutting-edge visual graphics, whereas Intel has given less importance to it.