6-1

Sales Knowledge: Customers, Products, Technologies Chapter 6 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

Chapter 6 6-3

Main Topics The Tree of Business Life: Knowledge Sources of Sales Knowledge Knowledge Builds Relationships Know Your Customers Know Your Company Know Your Product Chapter 6 6-4

Main Topics Know Your Resellers Advertising Aids Salespeople Sales Promotion Generates Sales What’s It Worth? Pricing Your Product Know Your Competition, Industry, and Economy Personal Computers and Selling Chapter 6 6-5

Main Topics Knowledge of Technology Enhances Sales and Customer Service Sales: Internet and the World Wide Web Global Technology Provides Service Technology Etiquette Chapter 6 6-6

6-7 The Tree of Business Life: Knowledge The Golden Rule Guided by The Golden Rule:  Be an expert on everything associated with your product(s)  Use wisdom when applying knowledge  Remember, customers rely on you to truthfully provide knowledge and wisdom  Realize that people do not care how much you know until they know how much you care I T C Ethical Service Builds T r u e Relationships T TT TTTT TTTT

6-8 Sources of Sales Knowledge  Sales training  Experience

6-9 Knowledge Builds Relationships  Knowledge increases a salesperson’s confidence  Knowledge increases a buyer’s confidence in salesperson  More knowledge leads to more sales and more relationships

6-10 Know Your Customers  Find out all you can

6-11 Know Your Company  General Company Information  Company growth and accomplishment  Policies and procedures  Production facilities  Service facilities

6-12 Know Your Product  Product knowledge may include:  Performance data  Physical size and characteristics  How the product operates  Specific features, advantages, and benefits of the product  How well the product is selling in the marketplace

6-13 Know Your Resellers  Understand the channel of distribution  Know as much about each channel member as possible

6-14 Advertising Aids Salespeople  Main ingredients of a firm’s promotional effort  Types of Advertising Differ  National advertising  Retail advertising  Cooperative, or co-op, advertising  Trade advertising  Industrial advertising  Direct-mail advertising  Internet advertising

6-15 Exhibit 6-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer

6-16 Why Spend Money on Advertising?  Companies advertise because they hope to:  Increase overall sales and sales of a specific product  Give salespeople additional selling information for sales presentations  Develop leads for salespeople through mail-ins and ad response  Increase cooperation from channel members through co-op advertising and promotional campaigns  Educate the customer about the company’s product

6-17 Why Spend Money on Advertising?, cont…  Inform prospects that a product is on the market and where to buy it  Reduce cognitive dissonance over the purchase  Create sales or presell customers between sales calls

6-18 Sales Promotion Generates Sales  Consumer sales promotion  Trade sales promotion  Point-of-purchase (POP) displays  Shelf positioning  Shelf facings  Premiums  Sales promotion on the Internet

6-19 What’s It Worth? Pricing Your Product  Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the product

6-20 Exhibit 6-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations

6-21 Know Your Competition, Industry, and Economy  Understand competitors’ products, policies, and practices

6-22 Personal Computers and Selling  The top 10 PC applications include:  Customer/prospect profile  Lead tracking  Call reports  Sales forecasts  Sales data analysis  Sales presentation  Time/territory management  Order entry  Travel and expense reports  Checking inventory/shipping status

6-23 Exhibit 6-6: Top 10 PC Applications

6-24 Knowledge of Technology Enhances Sales and Customer Service  Personal Productivity  Contact management  Calendar management  Automate sales plans, tactics, and tickets  Geographic information system  Computer-based presentations

6-25 Knowledge of Technology Enhances Sales and Customer Service, cont…  Communications with Customers and Employer  Word processing   Fax capabilities and support  Customer Order Processing and Service Support  Salespeople's mobile offices

6-26 Exhibit 6-9: Salespeople Rely on Mobile Technology to Serve Their Customers GPS Device Cell Phone PDA

6-27 Sales: Internet and the World Wide Web  The Internet  The World Wide Web  Web page  Links  Surfing the Internet

6-28 Web Sites Can Provide Valuable Information to Salespeople

6-29 Global Technology Provides Service  Increased worldwide interaction

6-30 Technology Etiquette  Netiquette – etiquette on the internet  Cell Phones  Voice Mail  Faxes  Speakerphones and Conference Calls

6-31 Summary of Major Selling Issues  Company knowledge includes information on a firm’s:  History  Development practices  Procedures  Products  Distribution  Promotion  Pricing

6-32 Summary of Major Selling Issues, cont…  To reduce conflicts and aid channel members in selling products, manufacturers offer assistance in:  Advertising  Sales promotion aids  Pricing allowances  National, retail, trade, industrial, and direct-mail advertising create demand for products and are powerful selling tools in sales presentations

6-33  Salespeople should be able to confidently discuss price, discounts, and credit policies with customers  Success in sales requires knowledge of the many technologies used to sell and service customers Summary of Major Selling Issues, cont…

6-34 Chapter 6 Appendix  Sales Arithmetic and Pricing

6-35 Types of Prices  List price – standard price  Net price – after discounts  Zone price – based on geographical location  FOB shipping point – buyer pays  FOB destination – seller pays

6-36 Discounts Lower the Price  Quantity discounts  Non-cumulative  Cumulative  Cash  Trade  Consumer

6-37 Exhibit 6A-1: Various Promotional Allowances Available to Resellers

6-38 Exhibit 6A-2: Types and Examples of Discounts Skip videoVideo Help

6-39

6-40 Resellers: Markup and Profit  Markup  Gross profit  Net profit  Channel of distribution markup  Markup arithmetic  Return on investment

6-41 What Is the Percent Markup? $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price

6-42 What Is the Percent Markup?, cont…  It depends on whether you use  Selling Price, or  Cost  Dollar markup is divided by either selling price or cost to retailer  Selling price = 50%  Cost = 100%  We use selling price in calculating the percent of markup

6-43 What Is Markup?  Markup is the dollar amount added to the product cost to determine its selling price  Markup is often expressed as a percentage

6-44 Exhibit 6A-3: Example of Markup on Selling Price in Channel of Distribution

6-45 Exhibit 6A-4: Example of Using Unit Cost

6-46 Exhibit 6A-5: Profit Forecaster for Granola Bars Shown to Buyer Skip videoVideo Help

6-47

6-48 Organizations: Value and ROI  Value analysis  Product cost compared to true value  Unit costs  ROI is listened to

6-49 Video Help: Video One  The video should start automatically.  If it does not, you must move the mouse to the middle of the screen. When a hand icon appears the video is ready.  Click once anywhere on the screen to start video.  Click once during playback to pause/unpause video.  Press the space bar twice to stop video and continue presentation.  When video is over, click to continue presentation. Video Two