5-1 9 TH EDITION CHAPTER 5 CREATING PRODUCT SOLUTIONS Manning and Reece PART III.

5-1

99THTH EDITION EDITION

CHAPTER 5CHAPTER 5CREATING PRODUCT CREATING PRODUCT SOLUTIONSSOLUTIONS

Manning and Reece

PART III

5-2

LEARNING OBJECTIVES-1 Explain importance of developing product strategy

Describe product configuration

Identify why sales people and customers benefit via thorough product knowledge

Discuss important kinds of product information sales people use to

create product solutions

5-3

LEARNING OBJECTIVES-2

Describe how knowledge of competition improves personal selling

List major sources of product information

Explain difference between product features and buyer benefits

Demonstrate translating product features into buyer benefits

5-4

PRODUCT STRATEGYDEFINED

”The product strategy is a well-conceived plan that emphasizes becoming a product expert, selling benefits, and configuring value-added solutions.”

Figure 5.1 5-5

STRATEGIC/CONSULTATIVESELLING MODEL

5-6

EXPLOSION OF PRODUCT OPTIONS

Over 30,000 consumer Over 30,000 consumer products are turned out products are turned out each yeareach year

GOOD NEWSGOOD NEWS is greater is greater consumer choice consumer choice

BAD NEWSBAD NEWS is with more is with more choice, buying process is choice, buying process is more complicatedmore complicated

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PRODUCT CONFIGURATION

Shows how different parts of your Shows how different parts of your product mix can combine to product mix can combine to

solve solve the customer’s problem the customer’s problem

Software for product configuration Software for product configuration – Can integrate with contact Can integrate with contact

management software like ACT!management software like ACT!– Incorporates customer selection Incorporates customer selection

criteriacriteria– Identifies options, pricing, delivery Identifies options, pricing, delivery

schedulesschedules

5-8

WRITTEN PROPOSALS Many clients ask for written Many clients ask for written proposals and some provide proposals and some provide detailed guidelines detailed guidelines

Most written proposals include Most written proposals include – Overview and BudgetOverview and Budget– ObjectiveObjective– Strategy Strategy – ScheduleSchedule– RationaleRationale

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YOUR PRODUCTSYOUR PRODUCTSYOUR PRODUCTSYOUR PRODUCTS

YOUR COMPANY & ITS POLICIESYOUR COMPANY & ITS POLICIESYOUR COMPANY & ITS POLICIESYOUR COMPANY & ITS POLICIES

YOUR COMPETITION & INDUSTRYYOUR COMPETITION & INDUSTRYYOUR COMPETITION & INDUSTRYYOUR COMPETITION & INDUSTRY

NEED TO KNOWS

5-10

PRODUCT INFORMATION CATEGORIES

Product development and quality Product development and quality improvement processes improvement processes

Product configuration Product configuration

Performance data and Performance data and specificationsspecifications

Maintenance and serviceMaintenance and service

Price and deliveryPrice and delivery

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PRODUCT DEVELOPMENT AND QUALITY IMPROVEMENT

DEVELOPMENTDEVELOPMENT--Be familiar with --Be familiar with

product historyproduct history

--Know stages of --Know stages of product testingproduct testing

--Link key features --Link key features & customer needs& customer needs

QUALITYQUALITY--Quality control --Quality control

involves measuring involves measuring against standardsagainst standards

--Extensive sales---Extensive sales-force training is key force training is key element of quality element of quality controlcontrol

5-12

PERFORMANCE DATA AND SPECIFICATIONS

Most clients interested in product Most clients interested in product performance and performance and

specificationsspecifications

Sales people must be prepared to Sales people must be prepared to answer performance-related answer performance-related questionsquestions

Data often critical when customer Data often critical when customer compares various productscompares various products

5-13

MAINTENANCE AND SERVICE CONTRACTS

Provide service-related Provide service-related information information in proposal and/or at in proposal and/or at time of sale time of sale

Understand customer’s service Understand customer’s service and and maintenance requirementsmaintenance requirements

Customized service agreements Customized service agreements add add value value

5-14

PRICE AND DELIVERY

Clients expect salespersons to be Clients expect salespersons to be well versed in price and well versed in price and

delivery delivery policies policies Giving salespersons price and Giving salespersons price and delivery decision power yields delivery decision power yields

strong positionstrong position Price objections often common Price objections often common

barrier to closing sale barrier to closing sale

5-15

QUANTIFYING SOLUTION

Process of determining whether Process of determining whether the the proposal adds value proposal adds value

Conduct cost-benefit analysisConduct cost-benefit analysis

See Table 5.1 for exampleSee Table 5.1 for example

5-16

KNOW YOUR ORGANIZATION

As closest-contact salesperson As closest-contact salesperson represents organization’s culture represents organization’s culture Organizational “culture” is Organizational “culture” is collection of collection of beliefs, behaviors, and beliefs, behaviors, and work work patterns common to firm’s patterns common to firm’s

employeesemployees Many prospects use a firm’s pastMany prospects use a firm’s pastperformance as index for current performance as index for current products/servicesproducts/services

Figure 5.2 5-17

GEAR

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KNOW COMPETITION AND INDUSTRY

Acquiring knowledge of Acquiring knowledge of competition key step competition key step

Knowing strengths and Knowing strengths and weaknesses of competing weaknesses of competing products allows you to products allows you to emphasize your benefitsemphasize your benefits

Prospects Prospects dodo raise questions about raise questions about competitioncompetition

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HANDLING COMPETITION

1.1. Avoid referring to competition Avoid referring to competition during sales presentationsduring sales presentations

2.2. Never discuss competition Never discuss competition unless you have facts straightunless you have facts straight

3.3. Avoid criticizing competition Avoid criticizing competition

4.4. Be prepared to neutralize Be prepared to neutralize competitor proposals by adding competitor proposals by adding value to yoursvalue to yours

5-20

BE AN INDUSTRY EXPERT

Sales people need to become Sales people need to become expert in industry they expert in industry they representrepresent

Need to move beyond product Need to move beyond product specialist to business analyst specialist to business analyst

Knowledge of industry must be Knowledge of industry must be both current and detailedboth current and detailed

5-21

APPLICATION: INDUSTRYEXPERTISE

Process often starts in college experience Read trade journals Regularly attend industry

seminars and conventions

Become active in industry associations; many have special student membership rates

5-22

SOURCES OF PRODUCT INFORMATION

1.1. Product literatureProduct literature

2.2. Sales training programsSales training programs

3.3. Plant toursPlant tours

4.4. Internal sales/support team Internal sales/support team

5.5. CustomersCustomers

6.6. Product itselfProduct itself

7.7. Trade publicationsTrade publications

5-23

BRIDGE STATEMENTSStatements or transitional Statements or transitional phrases linking features to phrases linking features to benefitsbenefitsSample bridgeSample bridge– This product is nationally This product is nationally

advertised, advertised, which meanswhich means you will you will benefit from more pre-sold benefit from more pre-sold customerscustomers

Best method for presenting Best method for presenting benefits to customersbenefits to customers

5-24

PRODUCT FEATURE VERSUS PRODUCT

BENEFITPRODUCT PRODUCT FEATUREFEATURE

PRODUCT PRODUCT BENEFITBENEFIT

CAN BE SEEN, FELT, MEASURED

PROVIDES ADVANTAGE OR GAIN …DEFINED BY THE CUSTOMER

Also see Table 5.2 in text. 5-25

APPLICATION: CONVERT AUTO FEATURES TO BENEFITS

FEATUREFEATURE 30 MILES PER GALLON DUAL AIRBAGS DISK BRAKES JAPANESE ENGINEERING 100,000-MILE WARRANTY

BENEFIT?BENEFIT?

Last slide Chapter 5. 5-26

BENEFITS NOT FEATURES

”I don’t think that we understood our real goal when we first started Federal Express. We (initially) thought we were selling the transportation of goods; in fact, we were selling peace of mind.”

Frederick Smith, Founder, Federal Express