1. 5 Chapter Sales Knowledge: Customers, Products, Technologies
McGraw-Hill/Irwin
ABC’s of Selling, 10/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Main Topics The Tree of Business Life: Knowledge
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
What’s It Worth? Pricing Your Product
Know Your Competition, Industry, and Economy
5-2

3. Main Topics, cont... 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
5-3

4. The Tree of Business Life: Knowledge
Guided by The Golden Rule:
Be an expert on everything associated with your product(s)
Use wisdom when applying knowledge
Remember, customers rely on you to truthfully provide knowledge and wisdom
Realize that people do not care how much you know until they know how much you care T T
Ethical
Service T T T T T T T T
Builds
T r u e
Relationships T C I
5-4

5. Sources of Sales Knowledge
Sales training
Experience
5-5

6. Sources of Sales Knowledge
Sales Training – effort put forth by employer to provide the opportunity for the salesperson to receive job-related attitudes, concepts, rules, and skills that result in improved performance
Education, Reading, and Word-of-mouth

7. Sources of Sales Knowledge
Experience – the critical source
Selling is a skill developed through experience

8. Knowledge Builds Relationships
Knowledge increases a salesperson’s confidence,
and,
Knowledge increases a buyer’s confidence in the salesperson.
Thorough knowledge about your product is needed to gain the buyer’s confidence.
More knowledge, more confidence mean more relationships,
and…
More relationships mean more sales

9. Know Your …
5-9

10. Know Your Customers
Find out all you can
5-10

11. Know Your Company General company information:
Company growth and accomplishment
Policies and procedures

12. Know Your Company’s Policies & Procedures
The salesperson should let the buyer know:
How his order will be processed
How long it will take for her to receive her order
The policy on returned goods
How to open a new account
What to do if he receives the wrong shipment

13. Know Your Company General company information, cont.:
Production facilities
Service facilities – promise of prompt repair services can help make a sale

14. 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
5-14

15. Understand the channel of distribution
Know Your Resellers
Understand the channel of distribution

16. The Channel of Distribution

17. Know Your Resellers Understand the channel of distribution
Know as much about each channel member as possible
Likes and dislikes of each channel member’s customers
Product lines and the assortment each one carries
When each member sees salespeople
Distribution, promotion, and pricing policies
What quantity of which product each channel member has purchased in the past
5-17

18. Advertising Aids Salespeople

19. Why Spend Money on Advertising?
Main ingredient of a firm’s promotional effort
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
5-19

20. 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 sales calls
5-20

21. Types of Advertising Types of Advertising Differ: National advertising
Retail advertising
Cooperative, or co-op, advertising
Trade advertising
Industrial advertising
Direct-mail advertising
Internet advertising

22. Types of Advertising National Advertising Retail Advertising
Reaches all users of the product across the country
Ford, GM, GE, IBM, Coca-Cola
Retail Advertising
Used by retailers to reach customers within a geographic area
Cost for national-brand advertising paid by retailer or shared

23. Types of Advertising, cont.
Cooperative Advertising
Conducted by retailer, paid by manufacturer or shared
Trade Advertising
Undertaken by manufacturer directed toward the wholesaler or retailer
Trade publications

24. Types of Advertising, cont.
Industrial Advertising
Aimed at individuals and organizations who purchase products for use in manufacturing other products
Direct-mail Advertising
Ads, samples, and coupons mailed directly to the consumer or industrial user to expose him to or remind him of the product
May solicit response

25. Types of Advertising, cont.
Internet (Web) Advertising

26. Sales Promotion
Promotional tool that simulates consumer purchasing and dealer interest by means of short-term activities
Supplements personal selling, advertising, and public relations
Examples: free samples, prizes, contests, and cents-off coupons

27. Sales Promotion Generates Sales
Consumer sales promotion
Business sales promotion

28. Sales Promotion Techniques
B2B
Trade Shows
Portfolios
Deals
Catalogs
Conventions
B2C
Coupons
Cents-off Promotions
Sampling
Premiums
Sweepstakes
Contests
Bonuses
Catalogs
Demonstrations
Special Events
Lotteries
In-store Displays
See Learning Goal 5: Explain the importance of various forms of sales promotion, including sampling.
See text pages:

29. Sales Promotion Generates Sales, cont.
Point-of-purchase (POP) displays
Shelf positioning
Shelf facings
Premiums

30. Premiums Premium Purposes of Premiums
Article of merchandise offered as an incentive to the user to take some action
Purposes of Premiums
Promote customer sampling of new product
Introduce new product
Encourage point of purchase display
Boost sales of slow products

31. Sales Promotion Generates Sales
Premiums
Sweepstakes and contests
Consumer premiums
Dealer premiums

32. Sales Promotion Generates Sales
Sales promotion on the Internet

33. Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer

34. Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer
5-34

35. 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
5-35

36. Exhibit 5-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations
5-36

37. Know Your Competition, Industry, and Economy
Understand competitors’ products, policies, and practices
5-37

38. Personal Computers and Selling
The top 10 PC applications include:
Customer/prospect profile
Lead tracking
Call reports
Sales forecasts
Sales data analysis
Sales presentation
Time/territory management
Order entry
Travel and expense reports
Checking inventory/shipping status
5-38

39. Exhibit 5-6: Top 10 PC Applications
5-39

40. Knowledge of Technology Enhances Sales and Customer Service,
Three Areas of Sales Force Automation
Personal Productivity
Communications with Customers and Employer
Customer Order Processing and Service Support
5-40

41. Knowledge of Technology Enhances Sales and Customer Service
Personal Productivity
Contact management
Calendar management
Automated sales plans, tactics, and ticklers
Geographic information systems
Computer-based presentations
5-41

42. 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
GPS and PDA
5-42

43. Exhibit 5-8: Salespeople Rely on Mobile Technology to Serve Their Customers
GPS Device
Cell Phone
PDA
5-43

44. Sales: Internet and the World Wide Web
The Internet
The World Wide Web
Web page
Links
Surfing the Internet
5-44

45. Exhibit 5-9: Web Sites Can Provide Valuable Information to Salespeople
5-45

46. Global Technology Provides Service
Increased worldwide interaction
5-46

47. Technology Etiquette Netiquette – etiquette on the internet
Cell Phones
Voice Mail
Faxes
Speakerphones and Conference Calls
5-47

48. Summary of Major Selling Issues
Company knowledge includes information on a firm’s:
History
Development practices
Procedures
Products
Distribution
Promotion
Pricing
5-48

49. 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 powerful selling tools in sales presentations
5-49

50. Summary of Major Selling Issues, cont…
Salespeople 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
5-50

51. Sales Arithmetic and Pricing
Chapter 5 Appendix
Sales Arithmetic
and Pricing
5-51

52. Types of Prices List price – standard price charged to customers
Net price – after allowance for all discounts
Zone price – based on geographical location
FOB shipping point – buyer pays transportation charges – title transfers
FOB destination – seller pays all shipping costs
5-52

53. Discounts Lower the Price
Quantity discounts
Noncumulative – one-time
Cumulative
Cash – ex. 2/10 Net 30
Trade – Wholesaler / Retailer
Consumer
5-53

54. Exhibit A: Various Promotional Allowances Available to Resellers
5-54

55. Exhibit B: Types and Examples of Discounts
5-55

56. Resellers: Markup and Profit
Gross profit
Net profit
Channel-of-distribution markup
Markup arithmetic
Return on investment
5-56

57. What Is the Percent Markup?
$1.00 = cost to retailer
$1.00 = dollar markup
$2.00 = selling price
5-57

58. What Is the Percent Markup?, cont…
It depends on whether you use
Selling Price, or
Cost
Dollar markup is divided by either selling price or cost to retailer
5-58

59. What Is the Percent Markup?, cont…
$1.00 = cost to retailer
$1.00 = dollar markup
$2.00 = selling price
Selling price = 50%
Cost = 100%
We use selling price in calculating the percent of markup
5-59

60. 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
5-60

61. Exhibit C: Example of Markup on Selling Price in Channel of Distribution
5-61

62. Exhibit D: Example of Using Unit Cost
5-62

63. Exhibit E: Profit Forecaster for Granola Bars Shown to Buyer
5-63

64. Organizations: Value and ROI
Value analysis
Product cost compared to true value
Unit costs
ROI is listened to
5-64