sales knowledge: customers, products, technologies chapter 5 mcgraw-hill/irwin abc’s of selling,...
TRANSCRIPT
Sales Knowledge: Customers,
Products, Technologies
Chapter 5
McGraw-Hill/IrwinABC’s of Selling, 10/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
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
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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
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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
IT C
Ethi
cal Service
Builds
T r
u e
Relationships
TT T
T T T TT T T T
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Sources of Sales Knowledge
Sales training Experience
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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
Know Your …
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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
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 accountWhat to do if he receives the wrong shipment
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Know Your Company
General company information, cont.: Production facilities Service facilities – promise of prompt repair services
can help make a sale
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
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
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Advertising Aids Salespeople
Advertising Aids Salespeople
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 where to buy it
Reduce cognitive dissonance over the purchase Create sales or presell customers between sales
calls
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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
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
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
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Sales Promotion Generates Sales
Consumer sales promotion Business sales promotion
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
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Sales Promotion Generates Sales, cont.
Point-of-purchase (POP) displays Shelf positioning Shelf facings Premiums
Premiums
Premium Article of merchandise offered as an
incentive to the user to take some actionPurposes of Premiums
Promote customer sampling of new product
Introduce new productEncourage point of purchase displayBoost 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
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Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer
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
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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
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Knowledge of Technology Enhances Sales and Customer Service,
Three Areas of Sales Force Automation
1. Personal Productivity
2. Communications with Customers and Employer
3. Customer Order Processing and Service Support
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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
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Knowledge of Technology Enhances Sales and Customer Service, cont…
Communications with Customers and Employer Word processing E-mail Fax capabilities and support
Customer Order Processing and Service Support Salespeople's mobile offices GPS and PDA
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Exhibit 5-8: Salespeople Rely on Mobile Technology to Serve Their Customers
GPS DeviceCell 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 5-9: 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 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 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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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
Summary of Major Selling Issues, cont…
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Chapter 5 Appendix
Sales Arithmetic
and Pricing
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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
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Discounts Lower the Price
Quantity discounts Noncumulative – one-time Cumulative
Cash – ex. 2/10 Net 30 Trade – Wholesaler / Retailer Consumer
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Exhibit B: Types and Examples of Discounts
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Resellers: Markup and Profit
Markup Gross profit Net profit Channel-of-distribution markup Markup arithmetic Return on investment
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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
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What Is the Percent Markup?, cont…
$1.00 = cost to retailer
$1.00 = dollar markup
$2.00 = selling price
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• Selling price = 50%• Cost = 100%
• We use selling price in calculating the percent of markup
What Is Markup?
Markup is the dollar amount added to the product cost to determine its selling price
Markup is often expressed as a percentage
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Exhibit C: Example of Markup on Selling Price in Channel of Distribution
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Exhibit E: Profit Forecaster for Granola Bars Shown to Buyer
3-Day Special 2-Week Special Normal
Total storesDeal datesRegular cost per dozenLess allowance ($.53)Deal cost per dozenFeature priceCases purchasedTotal investmentTotal gross salesTotal gross profitReturn on investment (ROI)
100June 1 – June 30
$21.60- 6.36$15.24 1.39
500a
$7,620b
$8,340c
$720d
9.0%e
100
$21.60- 6.36$15.24 1.391,000
$15,240$22,680 $7,440
49%
100
$21.60
$21.60 2.19f
1,500$32,400$39,420 $7,020
22%g
a 5 cases per store d $8,340 - $7,620 = $720b 500 x 15.24 = $7,620 e $720 ÷ $7,620 = 9.0%c 500 x 12 = 6,000; 6000x $1.39 = $8,340 f $21.60 ÷ 12 @ case = $1.80 (regular cost)
g $7,020 ÷ $32,400 = 22%
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Organizations: Value and ROI
Value analysis Product cost compared to true value
Unit costs ROI is listened to
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