Selling Today CHAPTER 6 PRODUCT-SELLING STRATEGIES THAT ADD VALUE 9TH EDITION Selling Today Manning and Reece CHAPTER 6 PRODUCT-SELLING STRATEGIES THAT ADD VALUE

LEARNING OBJECTIVES-1 Describe positioning as a product- selling strategy Discuss product differentiation in personal selling Explain how today’s customer is redefining products Describe how to sell products at various stages of product life cycle

LEARNING OBJECTIVES-2 Explain how to sell your product with a price strategy Explain how to sell your product with a value-added strategy List and describe the four dimensions of the total

PRODUCT POSITIONING DEFINED ”…Those decisions and activities designed to create and maintain a certain concept of the firm’s product in the customer’s mind. A product’s position is the customer’s concept of the product’s attributes relative to the concepts of competing products.”

PRODUCT SELLING MODEL TODAY’S PRODUCT TODAY’S SALESPERSON --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 Figure 6.1 next slide. See Figure 6.1.

REDEFINING PRODUCTS IN AGE OF INFORMATION Products are problem-solving tools People buy products if they fulfill a problem-solving need Demanding consumers seek clusters of satisfactions

PRODUCT - SELLING MODEL Figure 6.1. Figure 6.1

PRODUCT LIFE CYCLE STAGES INTRO GROWTH MATURE DECLINE

LEXUS

PRODUCT POSITIONING OPTIONS POSITION NEW vs. ESTABLISHED PRODUCTS POSITION WITH PRICE STRATEGIES POSITION WITH VALUE-ADDED

SELLING NEW vs. MATURE 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

PRODUCT SELLING STRATEGIES FOR POSITIONING Figure 6.2. Figure 6.2

APPLICATION: SLIPIT ® CASE SLIPIT® is a family of lubricating products marketed since 1939. Customers range from Otis Elevator to Pennsylvania House Furniture. Note how the new “test” label reflects benefits which also are used, in detail, in sales materials. Product, images, trademark, copyright 2004, Slipit Industries Inc., Highland, NY, used by permission.

SLIPIT CASE Product and images copyright 2004, Slipit Industries Inc., Highland, NY. Label design by Paul Slaninka, Jr.

SELLING PRODUCTS WITH PRICE STRATEGY LOW PRICE EMPHASIS CONSEQUENCES OF LOW PRICE TACTICS E-COMMERCE IMPACT ON PRICING

VARIOUS 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

CONSEQUENCES OF LOW 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

E-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

VALUE - 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

THE TOTAL PRODUCT CONCEPT Figure 6.3. Figure 6.3

FOUR PRODUCT DIMENSIONS GENERIC PRODUCT GENERIC PRODUCT—Basic product you are selling, describes product category… such as hotels or MP3 players EXAMPLE: Every Smith Hotel offers guest rooms, meeting rooms, and other basic hotel services.

FOUR PRODUCT DIMENSIONS EXPECTED PRODUCT EXPECTED PRODUCT—Everything that meets the customer’s minimal expectations beyond generic product EXAMPLE: Every Smith Hotel offers not only guest rooms—the rooms are very clean and spacious

FOUR PRODUCT DIMENSIONS VALUE - ADDED PRODUCT VALUE - ADDED PRODUCT— Salesperson offers customers more than they expect EXAMPLE: Every Smith Hotel recalls your newspaper preference, wakeup time, and that you require high-speed modem in room

FOUR PRODUCT DIMENSIONS POTENTIAL PRODUCT POTENTIAL PRODUCT—What remains to be done, what is possible, anticipating customer’s future needs EXAMPLE: Every Smith Hotel plans to offer complete office support services

COMPETITIVE ANALYSIS Effective selling is based on comprehensive analysis of the competitive situation Table 6.1, next slide, provides a template for competitive product analysis

COMPETITIVE ANALYSIS WORKSHEET Table 6.1.

ADDING VALUE– THE FUTURE ADDING VALUE WILL BE EVEN MORE IMPORTANT IN FUTURE AS: -- Product life-cycles shorten, some are now under 6 months --Buyers will anticipate more customized solutions to their problems -- New economy shifting rapidly toward a service economy Instructor Note: In personal computers and peripherals, new models are often cycled 3-4 times each year. Last slide Chapter 6.