1. 6-1

2. 6-2 Sales Knowledge: Customers, Products, Technologies Chapter 6 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

3. 6-3 Chapter 6

4. 6-4 Chapter 6 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin  Sources of Sales Knowledge  Knowledge Builds Relationships  Know Your Customers  Know Your Company  Know Your Product  Know Your Resellers  Advertising Aids Salespeople  Sales Promotion Generates Sales  Sources of Sales Knowledge  Knowledge Builds Relationships  Know Your Customers  Know Your Company  Know Your Product  Know Your Resellers  Advertising Aids Salespeople  Sales Promotion Generates Sales Main Topics

5. 6-5 Chapter 6 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin  What’s It Worth? Pricing Your Product  Know Your Competition, Industry, and Economy  Personal Computers and Selling  Knowledge of Technology Enhances Sales and Customer Service  Sales Internet and the World Wide Web  Global Technology Provides Service  Technology Etiquette  What’s It Worth? Pricing Your Product  Know Your Competition, Industry, and Economy  Personal Computers and Selling  Knowledge of Technology Enhances Sales and Customer Service  Sales Internet and the World Wide Web  Global Technology Provides Service  Technology Etiquette Main Topics

6. 6-6 Sources of Sales Knowledge  Sales training  Experience

7. 6-7 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

8. 6-8 Know Your Customers  Find out all you can

9. 6-9 Know Your Company  General Company Information  Company growth and accomplishment  Policies and procedures  Production facilities  Service facilities

10. 6-10 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

11. 6-11 Know Your Resellers  Understand the channel of distribution  Know as much about each channel member as possible

12. 6-12 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

13. 6-13 Exhibit 6-2: Advertising and Sales Promotion Information the Salesperson Tells the Buyer

14. 6-14 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

15. 6-15 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 a salesperson’s calls

16. 6-16 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

17. 6-17 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

18. 6-18 Exhibit 6-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations

19. 6-19 Know Your Competition, Industry, and Economy  Understand competitors’ products, policies, and practices

20. 6-20 Personal Computers and Selling  The top 10 PC applications include  Customer/prospect profile  Lead tracking  Call reports  Sales forecasts  Sales data analysis

21. 6-21 Personal Computers and Selling cont…  Sales presentation  Time/territory management  Order entry  Travel and expense reports  Checking inventory/shipping status

22. 6-22 Exhibit 6-6: Top 10 PC Applications

23. 6-23 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

24. 6-24 Knowledge of Technology Enhances Sales and Customer Service cont…  Communications with Customers and Employer  Word processing  E-mail  Fax capabilities and support  Customer Order Processing and Service Support  Salespeople's mobile offices

25. 6-25 Sales Internet and the World Wide Web  The Internet  The World Wide Web  Web page  Links  Surfing the Internet

26. 6-26 Global Technology Provides Service  Increased worldwide interaction

27. 6-27 Technology Etiquette  Netiquette - etiquette on the internet  Cell Phones  Voice Mail  Faxes  Speakerphones and Conference Calls  Pagers

28. 6-28 Summary of Major Selling Issues  Company knowledge includes information on a firm’s:  History  Development practices  Procedures  Products  Distribution  Promotion  Pricing

29. 6-29 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 a powerful selling tool in sales presentations

30. 6-30 Summary of Major Selling Issues cont…  Salesperson 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

31. 6-31 Chapter 6 Appendix  Sales Arithmetic and Pricing

32. 6-32 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

33. 6-33 Exhibit 6A-1: Various Promotional Allowances Available to Resellers

34. 6-34 Discounts Lower the Price  Quantity discounts  Non-cumulative  Cumulative  Cash  Trade  Consumer

35. 6-35 Exhibit 6A-2: Types and Examples of Discounts

36. 6-36 Resellers: Markup and Profit  Markup  Gross profit  Net profit  Channel of distribution markup  Markup arithmetic  Return on investment

37. 6-37 What Is the Percent Markup?  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

38. 6-38 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

39. 6-39 What Is the Percent Markup? $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price

40. 6-40 Exhibit 6A-3: Example of Markup on Selling Price in Channel of Distribution

41. 6-41 Exhibit 6A-4: Example of Using Unit Cost

42. 6-42 Organizations: Value and ROI  Value analysis  Product cost compared to true value  Unit costs  ROI is listened to

43. 6-43 Exhibit 6A-5: Profit Forecaster for Granola Bars Shown to Buyer