1. Negotiating Buyer Concerns C H A P T E R 13

2. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-2 Learning Objectives Describe common types of buyer concerns Outline general strategies for negotiating buyer concerns Discuss specific methods of negotiating buyer concerns Describe ways to deal effectively with buyers who are trained in negotiating

3. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-3 Step Four – Negotiating the Sale Anticipate buyer concerns Plan negotiating methods Initiate win-win negotiations

4. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-4 Negotiating the Sale Negotiation is working to reach an agreement that is mutually satisfactory to buyer and seller.

5. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-5 Planning for Negotiation Anticipate buyer concerns Review common types of buyer concerns Review methods of negotiating buyer concerns Prepare a negotiation worksheet

6. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-6 Typical Buyer Concerns No Need Product/Service Source of Supply Price Time

7. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-7 Tactics For Handling “No Need” Suggest closeouts of slow moving merchandise Trial offers Inventory purchase guarantees

8. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-8 Product/Service Concerns Not established Skeptical of popularity/future Personal distaste or dislike Satisfied with existing product/service

9. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-9 Handling “Source” Related Concerns Identify problems your company can solve Focus on profit points Focus on superior benefits to the buyer

10. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-10 Handling “Source” Related Concerns (Continued) Encourage trial orders Emphasize prospect’s obligation to their business Be visible

11. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-11 Common Price Negotiating Tactics Budget limitation Take-it-or-leave-it Split the difference

12. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-12 Handling Price Concerns Illustrate value through a cluster of satisfactions Reduce the focus on price Do not apologize for your price

13. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-13 Handling Price Concerns (Continued) Point out the Price/Quality relationships Explain the difference between price and cost Stand your ground Do not concede too quickly

14. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-14 Price – Iceberg Principle Price Favourable credit terms Assistance from salesperson after the sale Excellent technical assistance Quick Delivery Comprehensive warranty

15. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-15 Common Buyer Concerns “Price too high” “Think about it” “Talk to boss” “Need more quotes” “Set with current supplier” “Bad history”

16. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-16 Strategies For Negotiating Buyer Concerns Anticipate Buyer Concerns Know the Value of what you are offering Prepare for negotiations Understand the problem

17. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-17 Strategies For Negotiating Buyer Concerns - Continued Create alternative solutions Find some point of agreement Do not destroy the relationship with anger

18. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-18 Added-Value Negotiating This is a negotiating process where both the seller and the customer search for mutual value so they both feel more comfortable after a sale.

19. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-19 Methods of Negotiating Buyer Concerns Direct denial Indirect denial Feel-Felt-Found Questioning Superior Benefit Demonstration Trial Offer Third Party Testimony Combination Methods

20. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-20 Using a Negotiations Worksheet - Examples Buyer’s concern Type of concern Possible response “Fifteen cases of olives will take up valuable space in my receiving room. It is already crowded.” Product Direct Denial: “You will not have to face that problem. With the aid of our merchandising plan you can display 10 cases immediately on the sales floor. Only 5 cases will become reserve stock. You should move all 15 cases in about two weeks.”

21. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-21 Using a Negotiations Worksheet - Examples Buyer’s concern Type of concern Possible response “This is a poor time of the year to buy a large order of olives. People are not buying olives at this time.” Time Indirect denial: “I agree that it has been a problem in the past, but consumer attitudes seem to be changing. We have found that olives sell well all year long if displayed properly. More people are using olives in the preparation of omelettes, pizza, and other dishes. Of course, most relish trays feature olives. We will supply you will point-of-purchase material that suggests new ways to use this high- profit item.”

22. C H A P T E R 13 Copyright  2004 Pearson Education Canada Inc. 13-22 Using a Negotiations Worksheet - Examples Buyer’s concern Type of concern Possible response “I would rather not tie up money in a large order.” Price Superior benefit: “As you know, olives represent a high-profit item. The average margin is 26 percent. With the addition of our $1 per case allowance the margin will rise to about 30 percent. This order will give you a good return on your investment.”