Transcript Mkt 173 Chap 5e - Business and Computer Science

Sales Knowledge: Customers,
Products, Technologies
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
5
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Chapter
5
Main Topics
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The Tree of Business Life: Knowledge
Sources of Sales Knowledge
Knowledge Builds Relationships
Know Your Customers
Know Your Company
Know Your Product
Chapter
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Main Topics
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Know Your Resellers
Advertising Aids Salespeople
Sales Promotion Generates Sales
What’s It Worth? Pricing Your Product
Know Your Competition, Industry, and Economy
Personal Computers and Selling
Chapter
5
Main Topics
 Knowledge of Technology Enhances Sales and
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Customer Service
Sales: Internet and the World Wide Web
Global Technology Provides Service
Technology Etiquette
Chapter
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The Tree of Business Life: Knowledge
T
T T
T T TT
T T T T
Builds
Guided by The Golden
Rule:
 Be an expert on everything
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Relationships
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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.
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
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Sources of Sales Knowledge
 Experience – the critical source
 Selling is a skill developed through experience
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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
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Know Your Customers
 Find out all you can.
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Know Your Company
 General company information:
 Company growth and accomplishment
 Policies and procedures
 Production facilities
 Service facilities – promise of prompt repair
services can help make a sale
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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
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
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Know Your Resellers
Understand the channel of distribution
The Channel of Distribution
Know Your Resellers
 Know as much about each channel
member as possible
 Likes & dislikes of each channel member’s
customers
 Product lines assortment each one carries
 When each member sees salespeople
 Their distribution, promotion, and pricing policies
 What and how much of a product each has
purchased in the past
Advertising Aids Salespeople
Advertising Aids Salespeople
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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
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Why Spend Money on Advertising?, cont…
 Inform prospects that a product is on the market and
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where to buy it.
Reduce cognitive dissonance over the purchase.
Create sales or pre-sell customers between sales
calls.
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Types of Advertising
 Types of Advertising :
 National advertising
 Retail advertising
 Cooperative, or co-op, advertising
 Trade advertising
 Industrial advertising
 Direct-mail advertising
 Internet advertising
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Types of Advertising
National 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
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
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
Types of Advertising, cont.
Internet (Web) Advertising
Promotion
I. Personal Selling
II. Non-Personal Selling
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Advertising
Sales Promotion
Public Relations
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
Sales Promotion Generates Sales
 Consumer sales promotion
 Trade sales promotion
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Sales Promotion Techniques
B2B
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Trade Shows
Portfolios
Deals
Catalogs
Conventions
B2C
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Coupons
Cents-off Promotions
Sampling
Premiums
Sweepstakes
Contests
Bonuses
Catalogs
Demonstrations
Special Events
Lotteries
In-store Displays
Sales Promotion Generates Sales, cont.
 Point-of-purchase (POP) displays
 Shelf positioning
 Shelf facings
 Premiums
 Sales promotion on the Internet
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Premiums
Premium
 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
Sales Promotion Generates Sales
 Premiums
 Sweepstakes and contests
 Consumer premiums
 Dealer premiums
Sales Promotion Generates Sales
 Sales promotion on the Internet
Exhibit 5-2: Advertising and Sales Promotion
Information the Salesperson Provides the Buyer
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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.
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Exhibit 5-4: Examples of Prices and Discounts
Salespeople Discuss in Their Sales Presentations
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Know Your Competition, Industry, and
Economy
 Understand
competitors’
products, policies,
and practices.
 Keep informed
about the industry
and the economy
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Personal Computers and Selling, Exhibits
5-6 and 5-7
 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
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Knowledge of Technology Enhances Sales
and Customer Service
 Personal Productivity:
 Contact management
 Calendar management
 Automate sales plans,
tactics, and tickets
 Geographic information
system
 Computer-based
presentations
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Knowledge of Technology Enhances Sales
and Customer Service, cont…
 Communications with Customers and
Employer (allows for quick delivery of information to
customers and employers):
 Word processing
 E-mail
 Fax capabilities and support
 Customer Order Processing and Service
Support (shortens sales and delivery cycle)
 Salespeople's mobile offices
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Exhibit 5-9: 3M’s Salesperson Bob Burr Uses
Mobile Technology to Serve His Customers
GPS Device
Cell Phone
PDA
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Sales: Internet and the World Wide Web
 The Internet
 The World Wide Web:
 Web page
 Links
 Surfing the Internet
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Exhibit 5-10: Web Sites Can Provide
Valuable Information to Salespeople
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Global Technology Provides Service
 Increased worldwide interaction
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Technology Etiquette
 Netiquette – etiquette on the internet
 E-mail
 Cell Phones
 Voice Mail
 Faxes
 Speakerphones and Conference Calls
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Summary of Major Selling Issues
 Company knowledge includes information on
a firm’s:
 History
 Development practices
 Procedures
 Products
 Distribution
 Promotion
 Pricing
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Summary of Major Selling Issues, cont…
 To reduce conflicts and aid channel members in
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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.
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Summary of Major Selling Issues, cont…
 Success in sales requires knowledge of the
many technologies used to sell and service
customers.
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Appendix A: Sales Arithmetic and
Pricing
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Chapter
5
Sales Arithmetic and Pricing
 Salespeople should be able to confidently
discuss price, discounts, and credit policies
with customers.
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Types of Prices
 List price – standard price
 Net price – after discounts
 Zone price – based on geographical
location
 FOB shipping point – buyer pays shipping
 FOB destination – seller pays shipping
 Ownership
 Price discrimination
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Discounts Lower the Price
 Quantity:
 Non-cumulative
 Cumulative
 Cash
 Trade – percentage off list retail price
 Consumer
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Exhibit 5A-2: Types and Examples of
Discounts
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Resellers: Markup and Profit
 Markup
 Gross profit
 Money available to cover costs marketing product,
operating the business, and profit
 Net profit
 Money remaining after costs of marketing and
operating the business are paid
 Channel of distribution markup
 Markup arithmetic
 Return on investment
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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
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What Is the Percent Markup?
$1.00 = cost to retailer
$1.00 = dollar markup
$2.00 = selling price
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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.
 Selling price = 50%
 Cost = 100%
 We use selling price in calculating the percent
of markup.
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What Is the Percent Markup?
It costs a company $6 to manufacture a
product that it sold for $10 to a wholesaler
who in turn sold it to a retailer for $12. A
customer of the retailer bought it for $24.
What is the markup on selling price for
each member of this product’s channel of
distribution?
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Exhibit 5A-3: Example of Markup on Selling
Price in Channel of Distribution
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Exhibit 5A-4: Example of Using Unit
Cost
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Exhibit 5A-5: Profit Forecaster for Granola
Bars Shown to Buyer
Total stores
Deal dates
Regular cost per dozen
Less allowance ($.53)
Deal cost per dozen
Feature price
Cases purchased
Total investment
Total gross sales
Total gross profit
Return on investment (ROI)
a
5 cases per store
b
500 x 15.24 = $7,620
c
500 x 12 = 6,000; 6000x $1.39 = $8,340
Skip video
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3-Day Special
2-Week Special
Normal
100
June 1 – June 30
$21.60
- 6.36
$15.24
1.39
500a
$7,620b
$8,340c
$720d
9.0%e
100
100
$21.60
- 6.36
$15.24
1.39
1,000
$15,240
$22,680
$7,440
49%
$21.60
d
$8,340 - $7,620 = $720
$720 ÷ $7,620 = 9.0%
f
$21.60 ÷ 12 @ case = $1.80 (regular cost)
g
$7,020 ÷ $32,400 = 22%
e
$21.60
2.19f
1,500
$32,400
$39,420
$7,020
22%g
Organizations: Value and ROI
 Value analysis
 Product cost
compared to true
value
 Unit costs
 Return on
investment (ROI)
is listened to
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Organizations: Value and ROI
 How do your product’s features, advantages, and
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benefits compare to the product currently being
used?
Can your product do the same job as your
buyer’s present product at a lower price?
Does the buyer’s current equipment perform
better than required? (Equipment too good for
present use?)
Will a higher-priced, better-performing product be
more economical in the long run?
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End of Chapter 5
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
5