1. Chapter 11 Strategic Understanding of Your Company, Products, Competition, and Markets PowerPoint presentation prepared by Dr. Rajiv Mehta

2. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 2 Chapter Outline Strategic understanding of your company Strategic understanding of your products Strategic understanding of your competition Strategic understanding of your markets

3. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 3 Learning Objectives After reading this chapter, you should understand: Why in-depth knowledge about your company, products, competition, and markets helps you become a more successful salesperson. How to evaluate your firm’s competition. Various sources of information and their potential uses. The growing professionalism in purchasing and its impact on personal selling. How to keep current on product developments, competitors, and markets. Royalty-Free, Digital Vision/Getty Images

4. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 4 Strategic Understanding of Your Company cont’d Company History It provides perspectives and insights that will serve the salesperson well through his or her career. Company Growth and Development The company's record of growth in sales, market share, profits, and new products are often questions asked of salespeople by prospects and customers. Company history, organization, mission statement, culture, philosophy, goals, objectives, strategies, tactics, policies, and procedures are among the first thing taught to sales trainees Royalty-Free, Photodisc/Getty Images

5. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 5 Strategic Understanding of Your Company cont’d Organization Structure New salespeople can learn a great deal about how management views the sales force by studying the sales force organization's structure — geography, product, function, markets, or some combination. Mission Statement Sets forth in writing the organization’s orientation, goals, basic values, and sense of purpose. Culture A set of formal or informal values, norms, morals, attitudes, beliefs, customs, and behaviors that establish the code of conduct for a group of people or an organization. Royalty-Free, Photodisc/Getty Images

6. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 6 Strategic Understanding of Your Company cont’d Goals and Objectives It outlines the long-run goals (qualitative) and short-run objectives (quantitative) that the organization seeks to achieve. Strategies and Tactics A strategy is a total program of action for using the resources to achieve a goal A tactic is a short-run, specific action that is part of the larger strategic plan Policies The predetermined decisions for handling recurring situations efficiently and effectively Chapter Review Question: Why is it important for salespeople to understand their company’s culture and that of the sales department? How would you suggest that a salesperson quickly learn about the culture of his or her company and department? © Royalty-Free/CORBIS

7. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 7 Strategic Understanding of Your Products Studies consistently show that the most effective salespeople tend to have the greatest knowledge about their own company's and their competitors' products Salespeople should have the following knowledge about their products: Where does the product come from? Where is it mined, grown, assembled, or manufactured? How does it get shipped to the present location? Does shipping significantly affect its quality or price? Who designed the product? How is the product made? What kind of machines produced it? Royalty-Free, Photodisc/Getty Images

8. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 8 Strategic Understanding of Your Products cont’d 3.How should the product be used? What are the manufacturer recommendations regarding care and maintenance? What can be learned from other customers who have used the product? Are there any special features or advantages that distinguish this product from competitive products on the market? 4.What kind of guaranty or warranty does the company offer on the product? What kind of repair and maintenance service does the company provide? Does the company have a service department or service centers? Where are they located? 5.What happens if a product is broken in delivery? Is the customer protected? What is the procedure for returning the product if it proves unsatisfactory?

9. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 9 Products from the Customer's Perspective Customers are trying to solve problems; they are benefit or profit-oriented For example, customers who buy a laser printer and an electric drill are looking for the benefits of neat, professional looking reports and neat, round holes Royalty-Free, Photodisc/Getty Images

10. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 10 Selling Multiple Products Product knowledge problem is compounded when salespeople must handle several product lines Royalty-Free, Photodisc/Getty Images

11. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 11 Interaction with Other Products Salespeople must know how products work together with other products, including those of other companies Royalty-Free, Photodisc/Getty Images

12. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 12 Knowledge About Product Service Post-sale service is an important part of the total product being considered for purchase by customers, so salespeople must be thoroughly informed about what customer services their customers expect and their companies offer Royalty-Free, Digital Vision/Getty Images

13. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 13 Table 11.1 Requisite Product Knowledge of Professional Salespeople

14. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 14 Table 11.2 Product Knowledge Worksheet

15. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 15 Strategic Understanding of Your Competition The Thomas Register is an excellent source of information about your competition Salespeople must know the features, advantages, and benefits offered by competitive products to sell the FAB of their own products Royalty-Free, Photodisc/Getty Images

16. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 16 The Thomas Register of National Manufacturers The Thomas Register (www.ThomasRegister.com) is the primary source of locating suppliers for most Fortune 500 companieswww.ThomasRegister.com Published annually, it provides information about 170,000 manufacturers of product categories, specific products, names of the companies, branches, top executives and their job titles, affiliation data, and credit rating Chapter Review Question: What is the Thomas Register? How might salespeople use it?

17. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 17 Competitive Analysis Worksheet A Competitive Analysis Worksheet (CAW) summarizes information on competitors—products they sell, competitive advantages and disadvantages, major customers, products that each customer buys and for what use, names of competitive salespeople, and their estimated sales volume A CAW is a helpful guide for salespeople in making comparisons with competitive products Royalty-Free, Digital Vision/Getty Images

18. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 18 Table 11.3 Competitive Analysis Worksheet

19. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 19 Strategic Understanding of Your Markets cont’d Where are your company’s present and future markets? How and why are these potential markets changing? Who are and will be its customers? Economic, technological, political-legal, cultural-social, and competitive environments trends. Anticipating and adjusting to changes in the environment. Chapter Review Question: Why is it critical that salespeople understand their company and their company’s products, competition, and markets? How might salespeople acquire this understanding?

20. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 20 Table 11.4 Companies Slow to Recognize Opportunities in Markets They Dominated

21. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 21 Keeping Informed Successful salespeople stay well informed about the industry they serve and about business in general An abundance of information about prospects and companies is prepared by financial companies such as Dun & Bradstreet, Standard & Poor’s, and Value Line Royalty-Free, Digital Vision/Getty Images

22. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 22 Keeping Informed cont’d Salespeople should regularly review data and articles in the following publications: Dun & Bradstreet's Million Dollar Directory (www.dnb.com)www.dnb.com Business Periodicals Index (www.silverplatter.com/catalog/wbpi.htm)www.silverplatter.com/catalog/wbpi.htm Business Week (www.businessweek.com)www.businessweek.com Wall Street Journal (www.wsj.com)www.wsj.com Forbes (www.forbes.com)www.forbes.com Fortune (www.fortune.com)www.fortune.com Standard & Poor’s (www.forbes.com)www.forbes.com Value Line (www.valueline.com)www.valueline.com Chapter Review Question: What are some of the off-line and online sources through which salespeople can find information to help them better serve customers? Royalty-Free, Photodisc/Getty Images

23. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 23 Table 11.5 Source of Information

24. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 24 Table 11.5 Source of Information cont’d

25. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 25 Table 11.5 Source of Information cont’d

26. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 26 Table 11.5 Source of Information cont’d

27. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 27 Table 11.5 Source of Information cont’d

28. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 28 Table 11.5 Source of Information cont’d

29. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 29 Table 11.5 Source of Information cont’d

30. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 30 Table 11.5 Source of Information cont’d

31. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 31 Table 11.5 Source of Information cont’d

32. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 32 Understanding Professional Buyers Professional salesperson not only understand their customer’s needs but the needs of the customer’s customers as well Salespeople also need to know how their products and services fit with the buying organization, e.g., the customer’s strategy, objectives, and goals Royalty-Free, Digital Vision/Getty Images

33. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 33 Professional Knowledge Is Essential The major attributes that buyers want in professional salespeople include: Thoroughness and follow- through Knowledge of product line Willingness to go to bat for buyer within the supplier's firm Market knowledge and willingness to keep the buyer informed Imagination in applying products to the buyers' needs Knowledge of the buyer's product line Diplomacy in dealing with operating departments Preparation for well-planned sales calls Regularity of sales calls Technical education Chapter Review Question: Name the ten attributes that industrial buyers say they like in salespeople.

34. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 34 Key Terms Mission Statement Sets forth in writing the organization’s orientation, goals, basic values, and sense of purpose. Culture A set of formal or informal values, norms, morals, attitudes, beliefs, customs, and behaviors that establish the code of conduct for a group of people or an organization. Strategy A long-run total program of action for using resources to achieve an overall goal.

35. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 35 Key Terms cont’d Thomas Register The primary source that most Fortune 500 companies use to locate suppliers. Published annually, it provides information about 189,000 manufacturers regarding product categories, specific products, names of the companies, branches, top executives and their job titles, affiliation data, and credit rating. Business Periodicals Index A cumulative subject index that lists business articles from more than 160 periodicals. Tactic A short-run, specific action that is part of the larger strategic plan.

36. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 36 Topics for Thought and Class Discussion 1.In what ways might the company’s stakeholders, other than customers, affect personal selling? 2.If you were a new sales trainee about to start a two-week training program, what instructional methods would you prefer? Why? 3.Why do you think the role of company purchasing agents is expanding? 4.Do you think it’s necessary for salespeople to know nearly as much about competitive products as they do about their own company’s products? Or is it sufficient to know just the major strengths and weaknesses of competitive products? Why?

37. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 37 Topics for Thought and Class Discussion cont’d 5.Why do you think so many product innovations come from smaller companies instead of the most dominant company in the industry? 6.Name some off-line and online sources that you have consulted to find information. What information were you looking for? Were you successful in finding what you needed?

38. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 38 Internet Exercises 1.Assume that you have just been recruited to work as a sales representative for a large company that manufactures medical devices and implants such as hip replacement joints. You need to learn about the industry and your company’s competitors quickly. Using some of the appropriate resources, such as Value Line (www.valueline.com), Standard and Poor’s (www.standardandpoors.com), Dun & Bradstreet (www.dnb.com), and/or Morningstar (www.morningstar.com), as well as sources of information identified in Table 11.5, conduct an industry competitive analysis by finding the following information:www.valueline.comwww.standardandpoors.comwww.dnb.comwww.morningstar.com a.Total number of medical device manufacturers b.Total industry annual sales for all medical devices and implants over the last five years c.Annual sales, market shares, profits, and earnings per share reported by your company’s five major competitors over the last five years d.Number of employees and the locations/regions of the country in which your company’s five major competitors operate e.Based on the information you find, describe the current industry trends.

39. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 39 Internet Exercises cont’d 2.As a follow-up to Exercise 1, to learn even more about your medical device and implant manufacturing company’s five most significant competitors, use the websites identified in the chapter or any other sources of information to find the following information: a.Company profiles b.Different product lines for medical device and implants manufactured by each competitor c.Strengths and weaknesses of each competitor

40. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 40 Internet Exercises cont’d 3.Assume that you work as a salesperson for a Fortune 500 company that manufactures copy machines. You need to learn about the industry and your company’s major competitors. Using some of the appropriate resources, such as Value Line (www.valueline.com), Standard and Poor’s (www.standardandpoors.com), Dun & Bradstreet (www.dnb.com), and/or Morningstar (www.morningstar.com), as well as sources of information identified in Table 11.5, conduct an industry competitive analysis by finding the following information:www.valueline.comwww.standardandpoors.comwww.dnb.comwww.morningstar.com a.Total number of copy machine manufacturers b.Total industry annual sales for all copy machine over the last five years c.Annual sales, market shares, profits, and earnings per share reported by your company’s five major competitors over the last five years d.Number of employees and the locations/regions of the country in which your company’s five major competitors operate e.Based on the information you find, describe the current industry trends.

41. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 41 Internet Exercises cont’d 4.As a follow-up to Exercise 3, to learn more about your copy machine manufacturing company’s five most significant competitors, use the websites identified in the chapter or any other sources of information to find the following information: a.Company profiles b.Different product lines for copy machines manufactured by each competitor c.Strengths and weaknesses of each competitor

42. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 42 Projects for Personal Growth 1.Contact two business-to-business salespeople and ask what their firms’ policies and procedures are for: a.Processing special rush orders b.Approving customer credit c.Delivery and installation of products d.Opening new customer accounts e.Handling returned or damaged goods 2.Ask each of the two salespeople you contacted in your work on Project 1 to describe their company’s culture. Is their sales department culture different from their company’s overall culture? If so, why?

43. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 43 Projects for Personal Growth cont’d 3.Choose a company of interest to you, then use (a) a trade association directory, (b) a business guide, (c) an index, and (d) a government publication to learn as much as you can about the company’s history, mission, organization of the sales force, products sold, markets served, and major competitors. Which source(s) proved most helpful? Write a three-page report summarizing what you discovered about the company that would be important in selling to that company. 4.Choose a favorite product or service that you have recently purchased, and then prepare a product knowledge worksheet comparing the product you bought to three competitive products you might have purchased.

44. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 44 Case 11.1: I’ll Cook His Goose 1.How do you think Mr. Stoner perceived Beth Morelli’s sales presentation? 2.What do you think Beth should have done differently? Why? 3.How would you compete with a competitive salesperson like Bill Reilly? 4.What advice would you give Beth if Mr. Stoner calls her later? What should Beth do if Mr. Stoner doesn’t call her?

45. Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 45 Case 11.2: Gee, What Could Have Gone Wrong? 1.What do you think Marty did wrong in his sales presentation? 2.Would Marty have benefited from using any sales aids? Explain. 3.What should Marty say to Mr. Burke when Marty calls back? Case 11.2 is found online at http://college.hmco.com/pic/andersonps2e.http://college.hmco.com/pic/andersonps2e