7-1 Product-Selling Strategies that Add Value Selling Today 10 th Edition CHAPTER Manning and Reece 7.

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Product-Selling Strategies thatAdd Value

Selling TodaySelling Today10th Edition

CH

AP

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R Manning and Reece

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Positioning and DifferentiationPositioning and Differentiation

• ___________ involves those decisions and activities intended to create and maintain a certain concept of the firm’s product in the customer’s mind

• ____________ refers to your ability to separate yourself and your product from that of your competitors. It is the key to building and maintaining a competitive advantage

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Value PropositionValue Proposition

• The set of benefits and values the company promises to deliver to customers to satisfy their needs

• A well-informed customer will usually choose the product that offers the most value

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Redefining Products in the Age of Information

Redefining Products in the Age of Information

• Products are problem-solving tools

• People buy products if they fulfill a problem-solving need

• Today’s better educated and more demanding customers are seeking a cluster of satisfactions

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Product Selling ModelProduct Selling Model

• Today’s product

• Meets and exceeds expectations

• Better quality, larger selection

• Today’s salesperson

• Acts as partner

• More trustworthy, knowledgeable

• Today’s company

• Acts as team to provide

• Delivery, training, credit, service

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Product-Selling ModelProduct-Selling Model

FIGURE 7.1

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Competitive AnalysisCompetitive Analysis

• Effective selling is based on a comprehensive analysis of the competitive situation

• Table 7.1, on the next slide, provides a template for competitive product analysis

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Competitive Analysis

Worksheet

Competitive Analysis

Worksheet

TABLE 7.1

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Product Life Cycle StagesProduct Life Cycle Stages

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Product Positioning OptionsProduct Positioning Options

• Position new versus established products

• Position with price strategies

• Position with value added

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Selling New versusMature Products

Selling New versusMature Products

• Nature and extent of each stage in product life cycle determined by:

• Product’s perceived advantage over available substitutes

• Product’s benefits and importance of needs met by product

• Full spectrum of competitive activity

• Changes in technology, fashion, and/or demographics

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Product-Selling Strategiesfor Positioning

Product-Selling Strategiesfor PositioningFIGURE 7.2

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Selling Products witha Price Strategy

Selling Products witha Price Strategy

• Low-price emphasis

• Consequences of low price tactics

• E-commerce impact on pricing

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Various Forms of DiscountsVarious Forms of Discounts

• Quantity: lower price for high quantity or dollar amount

• Seasonal: price adjusted by time of year

• Promotional allowance: give special price linked to special promotion or advertising campaign

• Trade/functional discounts: given to wholesalers for special services

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Consequences ofLow Price TacticsConsequences ofLow Price Tactics

• High/low involvement buyers?

• High emotional involvement with brand

• Low-involvement buyers focus on price

• Importance of quality?

• Role of price—quality relationship in sale

• Importance of service?

• Many buyers, particularly business-to-business, rank service above absolute price

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E-commerce and PriceE-commerce and Price

• Transaction orientation: online sales persons mostly transaction-oriented, little value added

• Buyers often well informed: online buyers visit a number of Websites

• Adding value: again, adding value is very important

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Value-Added SellingValue-Added Selling

• Progressive marketers add value with intangibles

• Increased service and courtesy

• Prompt deliveries, more innovations

• Value-added approaches yield unique niche and competitive edge

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The Total Product ConceptThe Total Product Concept

FIGURE 7.3

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Four Product DimensionsGeneric Product

Four Product DimensionsGeneric Product

• Generic product: basic product you are selling, describes product category . . . such as hotels, MP3 players, or insurance

• Example: Every Smith Hotel offers guest rooms, meeting rooms, and other basic hotel services

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Four Product DimensionsExpected Product

Four Product DimensionsExpected Product

• Expected product: Everything that meets the customer’s minimal expectations beyond generic product

• Example: Every Smith Hotel offers not only guest rooms—but the rooms are very clean and spacious

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Four Product DimensionsValue-Added Product

Four Product DimensionsValue-Added Product

• Value-added product: Salesperson offers customers more than they expect

• Example: Every Smith Hotel recalls your newspaper preference, wake-up time, and that you require wirelessInternet access

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Four Product DimensionsPotential Product

Four Product DimensionsPotential Product

• Potential product: What remains to be done, what is possible, anticipating customers’ future needs

• Example: Every Smith Hotel plans to offer complete office support services

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Value Creation for . . .Value Creation for . . .• Transactional buyers

• Involves emphasis on eliminating costs, avoiding delays

• Consultative buyers

• Involves custom-tailored solutions to deliver more real benefits

• Strategic alliance buyers

• Requires leveraging the full assets of the company; investments go well beyond the sales force