AMD's Consumer and Channel Marketing Initiatives

Abstract:This case is about the consumer and channel marketing initiatives adopted by Sunnyvale, California-based chipmaker, Advanced Micro Devices (AMD). Unlike its arch-rival Intel Corporation (Intel), which marketed its microprocessors to the consumers through several noteworthy (important) marketing campaigns, AMD did not market its microprocessors extensively to the consumers. The most notable marketing campaign launched by AMD was the 'AMD Me' campaign launched in 2002. It launched the AMD Commercial Channel Access Program in 2005 to meet the business needs of its partners. In 2009, the company launched the 'Vision' campaign that sought to make the PC buying process easier for consumers.

It extended its channel marketing initiatives by launching the Fusion Partner Program in 2009. Through this program, AMD sought to offer its partners customized tools and resources to boost their sales depending on their inimitable(unique) business models.

AMD's focus on marketing received appreciation from industry observers, experts, and channel partners. They felt that though AMD lagged behind Intel in marketing, it was making efforts to wean away a significant portion of the market share from the market leader by launching new technological solutions and effective marketing initiatives catering to both consumers and its channel partners. Experts felt that AMD was prepared to take on Intel aggressively in 2010 and beyond, but opined that the company still had a long way to go in order to catch up with Intel, which dominated the market.

Issues:

» Understand the issues and challenges in marketing/branding a component or ingredient branding.

» Analyze the consumer marketing initiative of AMD, particularly its Vision Campaign that sought to simplify the PC buying decision of consumers.

» Analyze the channel marketing initiatives adopted by AMD, particularly its new Fusion Partner Program.

» Understand the nature of the semiconductor industry and the competition in this market.

» Explore further branding strategies that AMD could adopt to garner more market share and enhance its competitive position.

Challenging IntelIn September 2009, Sunnyvale, California-based chipmaker Advanced Micro Devices (AMD) launched its first global partner program called the 'Fusion Partner Program' for its channel partners. Through this program, AMD sought to offer its partners customized tools and resources to boost their sales depending on their inimitable business models. Besides, the program was

expected to enable AMD to cut its costs while corresponding with its channel partners. On launching the program, David Kenyon (Kenyon), vice president of worldwide channel marketing at AMD, said, "AMD understands the critical importance of our partners in successfully driving customer adoption of our platforms and has launched the AMD Fusion Partner Program to ensure we're providing the right elements to help accelerate our channel partner business."

AMD was founded in 1969 in Sunnyvale, California. Unlike its arch-rival Intel Corporation (Intel), which marketed its microprocessors to the consumers through several noteworthy marketing campaigns, AMD did not market its microprocessors extensively to the consumers. The most notable marketing campaign launched by AMD was the 'AMD Me' campaign launched in 2002.

In 2009, the company launched the 'Vision' campaign that sought to make the PC buying process easier for consumers. AMD also marketed to its channel partners. It launched the AMD Commercial Channel Access Program in 2005 to meet the business needs of its partners. The company extended its channel marketing initiatives by launching the Fusion Partner Program in 2009.

Background NoteAMD, headquartered in Sunnyvale, California, USA, recorded revenues of US$ 5.808 billion with a net loss of US$ 3.098 billion for the year ended 2008. The company manufactured and supplied semiconductors, microprocessors, flash memory devices, and support circuitry for networking and communications applications.

Marketing - The AMD Way

While Intel was the pioneer in marketing microprocessors to the OEMs followed by marketing to the end users, AMD mastered the art of marketing by giving catchy names to its microprocessors.

For instance, in 1999, AMD launched its microprocessor under the name Athlon which meant 'champion of the games' in Greek...

AMD's Consumer Marketing Initiatives

Over the years, AMD extended its marketing initiatives by launching integrated branding and advertising campaigns including TV, print, and online elements, in order to directly market its microprocessors to the customers.

'AMD Me' Campaign:

One of AMD's most notable consumer marketing campaigns was the 'AMD Me' campaign. In 2002, for the first time in its 33-year history, AMD launched its largest global integrated branding and advertising campaign called the 'AMD Me' campaign with the punch line 'Challenge me.

AMD's Channel Marketing InitiativesEarlier Initiatives:

In 2005, AMD shifted its marketing by targeting its channel members rather than continuing to focus on its consumer marketing initiatives. It rolled out a program to attract distributors, system integrators, and Value-added resellers (VARs). The company planned to tap 60,000 to 70,000 resellers having their core focus on IT. Ben Williams, AMD's vice president of commercial systems, said, "We want to be a tech partner with the SI (System Integrator) community. They see us driving 64-bit and dual-core technology."...

Looking Ahead

In February 2010, a survey conducted by AMD revealed that the chipmaker had garnered 20.1 percent market share in the PC processor market for the year 2009 . The increase was attributed to AMD's focus on research and marketing of its semiconductor products.

Questions for Discussion:

1. Discuss AMD's methods to maintain and improve transactional relationships with channel partners.

2. AMD has focused on establishing collaborative relationships with its channel partners, especially solution integrators. What is the rationale behind adopting this type of buyer-seller relationship?

3. AMD followed a similar strategy of focusing on channel development through channel support strategies in India. Commenting on one such event, Haresh Bharia, National Distribution Manager, AMD India, said “This event aims to bring together various AMD partners, who along with AMD will help empower the channel to broaden their service offerings. As a part of our India mandate, AMD interacts with the channel on a regular basis, to provide better support to channels and broaden the scope of the AMD64 adoption in India.” To what extent do you think the channel support efforts of AMD will succeed in increasing its market share?