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99THTH EDITION EDITION

CHAPTER 6CHAPTER 6PRODUCT-SELLING PRODUCT-SELLING STRATEGIES THAT STRATEGIES THAT ADD VALUEADD VALUE

Manning and Reece

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LEARNING OBJECTIVES-1 Describe positioning as a product-

selling strategy

Discuss product differentiation in personal selling

Explain how today’s customer is redefining products

Describe how to sell products at various stages of product life

cycle

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LEARNING OBJECTIVES-2

Explain how to sell your product with a price strategy

Explain how to sell your product with a value-added strategy

List and describe the four dimensions of the total

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PRODUCT POSITIONING DEFINED

”…Those decisions and activities designed to create and maintain a certain concept of the firm’s product in the customer’s mind. A product’s position is the customer’s concept of the product’s attributes relative to the concepts of competing products.”

See Figure 6.1. 6-5

PRODUCT SELLING MODEL

TODAY’S PRODUCTTODAY’S PRODUCT--Meets and exceeds expectations--Meets and exceeds expectations--Better quality, larger selection--Better quality, larger selection

TODAY’S SALESPERSONTODAY’S SALESPERSON--Acts as partner--Acts as partner--More trustworthy, knowledgeable--More trustworthy, knowledgeable

TODAY’S COMPANYTODAY’S COMPANY--Acts as team to provide--Acts as team to provide--Delivery, training, credit, service--Delivery, training, credit, service

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REDEFINING PRODUCTS IN AGE OF INFORMATIONProducts are problem-solving toolsProducts are problem-solving tools

People buy products if they fulfill a People buy products if they fulfill a problem-solving needproblem-solving need

Demanding consumers seek Demanding consumers seek clusters of satisfactionsclusters of satisfactions

Figure 6.1 6-7

PRODUCT - SELLING MODEL

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PRODUCT LIFE CYCLE STAGES

INTROINTRO GROWTHGROWTH MATURMATUREE

DECLINEDECLINE

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LEXUS

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PRODUCT POSITIONING OPTIONS

POSITION NEW vs. ESTABLISHED PRODUCTSPOSITION NEW vs. ESTABLISHED PRODUCTS

POSITION WITH PRICE STRATEGIESPOSITION WITH PRICE STRATEGIES

POSITION WITH VALUE-ADDEDPOSITION WITH VALUE-ADDED

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SELLING NEW vs. MATURE PRODUCTS

Nature and extent of each stage in Nature and extent of each stage in product life cycle determined by:product life cycle determined by:

1.1. Product’s perceived advantage over Product’s perceived advantage over available substitutesavailable substitutes

2.2. Product’s benefits and importance of Product’s benefits and importance of needs met by productneeds met by product

3.3. Full spectrum of competitive activity Full spectrum of competitive activity

4.4. Changes in technology, fashion, Changes in technology, fashion, and/or and/or demographicsdemographics

Figure 6.2 6-12

PRODUCT SELLING STRATEGIES FOR

POSITIONING

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APPLICATION: SLIPIT ® CASE

SLIPITSLIPIT®® is a family of lubricating is a family of lubricating products marketed since 1939.products marketed since 1939.

Customers range from Otis Elevator Customers range from Otis Elevator to Pennsylvania House Furniture.to Pennsylvania House Furniture.

Note how the new “test” label Note how the new “test” label reflects benefits which also are reflects benefits which also are used, in detail, in sales materials. used, in detail, in sales materials.

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SLIPIT CASE

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SELLING PRODUCTS WITH PRICE STRATEGY

LOW PRICE EMPHASIS LOW PRICE EMPHASIS

CONSEQUENCES OF CONSEQUENCES OF LOW PRICE TACTICSLOW PRICE TACTICS

E-COMMERCE IMPACT ON E-COMMERCE IMPACT ON PRICING PRICING

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VARIOUS FORMS OF DISCOUNTS

QUANTITY QUANTITY -- Lower price for high -- Lower price for high quantity or dollar amountquantity or dollar amount SEASONALSEASONAL-- Price adjusted by time of -- Price adjusted by time of yearyear PROMOTIONAL ALLOWANCE PROMOTIONAL ALLOWANCE -- Give -- Give

special price linked to special special price linked to special promotion or advertising campaignpromotion or advertising campaign TRADE/FUNCTIONAL DISCOUNTSTRADE/FUNCTIONAL DISCOUNTS-- -- Given to wholesalers for special Given to wholesalers for special servicesservices

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CONSEQUENCES OF LOW PRICE TACTICS

HIGH/LOW INVOLVEMENT BUYERS? HIGH/LOW INVOLVEMENT BUYERS? --High emotional involvement with brand--High emotional involvement with brand

--Low involvement buyers focus on price--Low involvement buyers focus on price

IMPORTANCE OF QUALITYIMPORTANCE OF QUALITY--Role of price—quality relationship in sale--Role of price—quality relationship in sale

IMPORTANCE OF SERVICE IMPORTANCE OF SERVICE --Many buyers, particularly business-to---Many buyers, particularly business-to-

business, rank service above absolute price business, rank service above absolute price

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E-COMMERCE AND PRICE

TRANSACTION ORIENTATIONTRANSACTION ORIENTATION----Online sales persons mostly Online sales persons mostly transaction-oriented, little value transaction-oriented, little value

addedadded BUYERS OFTEN WELL-INFORMED BUYERS OFTEN WELL-INFORMED

Online buyers visit a number Online buyers visit a number of of websiteswebsites ADDING VALUEADDING VALUE--Again, adding --Again, adding

value is very importantvalue is very important

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VALUE - ADDED SELLING

Progressive marketers add value Progressive marketers add value with intangibleswith intangibles– Increased service and courtesyIncreased service and courtesy– Prompt deliveries, more innovationsPrompt deliveries, more innovations

Value-added approaches yield Value-added approaches yield unique unique niche and competitive niche and competitive edgeedge

Figure 6.3 6-20

THE TOTAL PRODUCT CONCEPT

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FOUR PRODUCT DIMENSIONS

GENERIC PRODUCT GENERIC PRODUCTGENERIC PRODUCT—Basic product —Basic product you are selling, describes product you are selling, describes product category… such as hotels or MP3 category… such as hotels or MP3 playersplayers

EXAMPLE: Every Smith Hotel offers guest rooms, meeting rooms, and other basic hotel services.

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FOUR PRODUCT DIMENSIONS

EXPECTED PRODUCT EXPECTED PRODUCTEXPECTED PRODUCT—Everything —Everything that meets the customer’s minimal that meets the customer’s minimal expectations beyond generic product expectations beyond generic product

EXAMPLE: Every Smith Hotel offers not only guest rooms—the rooms are very clean and spacious

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FOUR PRODUCT DIMENSIONS

VALUE - ADDED PRODUCT VALUE - ADDED PRODUCT—VALUE - ADDED PRODUCT—Salesperson offers customers more Salesperson offers customers more

than they expectthan they expect

EXAMPLE: Every Smith Hotel recalls your newspaper preference,

wakeup time, and that you require high-speed modem in room

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FOUR PRODUCT DIMENSIONS

POTENTIAL PRODUCT POTENTIAL PRODUCTPOTENTIAL PRODUCT—What remains —What remains

to be done, what is possible,to be done, what is possible,anticipating customer’s future needsanticipating customer’s future needs

EXAMPLE: Every Smith Hotel plans to offer complete office support services

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COMPETITIVE ANALYSIS

Effective selling is based on Effective selling is based on comprehensive analysis of the comprehensive analysis of the competitive situation competitive situation

Table 6.1, next slide, provides a Table 6.1, next slide, provides a template for competitive product template for competitive product analysis analysis

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COMPETITIVE ANALYSIS WORKSHEET

Last slide Chapter 6. 6-27

ADDING VALUE– THE FUTURE

ADDING VALUE WILL BE EVEN ADDING VALUE WILL BE EVEN MORE IMPORTANT IN FUTURE AS: MORE IMPORTANT IN FUTURE AS: -- Product life-cycles shorten, some are -- Product life-cycles shorten, some are

now under 6 months now under 6 months

--Buyers will anticipate more customized --Buyers will anticipate more customized solutions to their problemssolutions to their problems

-- New economy shifting rapidly toward -- New economy shifting rapidly toward a service economya service economy