Product-Selling Strategies that Add Value Concepts and Practices.
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Transcript of Product-Selling Strategies that Add Value Concepts and Practices.
Positioning and Differentiation
Positioning involves those decisions and activities intended to create and maintain a certain concept of the firm’s product in the customer’s mind
Differentiation refers to your ability to separate yourself and your product from that of your competitors. It is the key to building and maintaining a competitive advantage
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Value Proposition
The set of benefits and values the company promises to deliver to customers to satisfy their needs
A well-informed customer will usually choose the product that offers the most value
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Redefining Products in the Age of Information
Products are problem-solving tools
People buy products if they fulfill a problem-solving need
Today’s better educated and more demanding customers are seeking a cluster of satisfactions
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Product Selling ModelToday’s product
Meets and exceeds expectationsBetter quality, larger selection
Today’s salespersonActs as partnerMore trustworthy, knowledgeable
Today’s companyActs as team to provideDelivery, training, credit, service
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Competitive Analysis
Effective selling is based on a comprehensive analysis of the competitive situation
Table 7.1, on the next slide, provides a template for competitive product analysis
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Product Positioning Options
Position new versus established products
Position with price strategies
Position with value added
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Selling New versusMature Products
Nature and extent of each stage in product life cycle determined by:Product’s perceived advantage over available substitutesProduct’s benefits and importance of needs met by
productFull spectrum of competitive activityChanges in technology, fashion, and/or demographics
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Application: Slipit® Case
SLIPIT® is a family of lubricating products marketed since 1939
Customers range from Otis Elevator to Pennsylvania House Furniture
Note how the label reflects benefits that also are used, in detail, in sales materials and on the Web at slipit.com
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Selling Products witha Price Strategy
Low-price emphasis
Consequences of low price tactics
E-commerce impact on pricing
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Various Forms of Discounts
Quantity: lower price for high quantity or dollar amount
Seasonal: price adjusted by time of year
Promotional allowance: give special price linked to special promotion or advertising campaign
Trade/functional discounts: given to wholesalers for special services
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Consequences ofLow Price Tactics
High/low involvement buyers?High emotional involvement with brandLow-involvement buyers focus on price
Importance of quality?Role of price—quality relationship in sale
Importance of service?Many buyers, particularly business-to-business,
rank service above absolute price
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E-commerce and Price
Transaction orientation: online sales persons mostly transaction-oriented, little value added
Buyers often well informed: online buyers visit a number of Websites
Adding value: again, adding value is very important
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Value-Added Selling
Progressive marketers add value with intangibles Increased service and courtesyPrompt deliveries, more innovations
Value-added approaches yield unique niche and competitive edge
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Four Product DimensionsGeneric Product
Generic product: basic product you are selling, describes product category . . . such as hotels, MP3 players, or insurance
Example: Every Smith Hotel offers guest rooms, meeting rooms, and other basic hotel services
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Four Product DimensionsExpected Product
Expected product: Everything that meets the customer’s minimal expectations beyond generic product
Example: Every Smith Hotel offers not only guest rooms—but the rooms are very clean and spacious
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Four Product DimensionsValue-Added Product
Value-added product: Salesperson offers customers more than they expect
Example: Every Smith Hotel recalls your newspaper preference, wake-up time, and that you require wirelessInternet access
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Four Product DimensionsPotential Product
Potential product: What remains to be done, what is possible, anticipating customers’ future needs
Example: Every Smith Hotel plans to offer complete office support services
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Value Creation for . . .Transactional buyers
Involves emphasis on eliminating costs, avoiding delays
Consultative buyersInvolves custom-tailored solutions to deliver more
real benefits
Strategic alliance buyersRequires leveraging the full assets of the
company; investments go well beyond the sales force