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

3. Chapter 6

4. Main Topics Chapter 6 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
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

5. Main Topics Chapter 6 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
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

6. Sources of Sales Knowledge
Sales training
Experience

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. Know Your Customers
Find out all you can

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

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. Know Your Resellers Understand the channel of distribution
Know as much about each channel member as possible

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

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

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

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

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

22. Exhibit 6-6: Top 10 PC Applications

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. 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

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

26. Global Technology Provides Service
Increased worldwide interaction

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

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

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. 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. Chapter 6 Appendix
Sales Arithmetic and Pricing

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

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

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

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

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

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

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

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

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