Product-Selling Strategies that Add Value Concepts and Practices

Product-Selling Strategies that Add Value Concepts and Practices

7 -2 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

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 7 -3

Fuji Xerox Value Proposition 7 -4 See the Website

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 7 -5

Product Selling Model Today’s product Meets and exceeds expectations Better quality, larger selection Today’s salesperson Acts as partner More trustworthy, knowledgeable Today’s company Acts as team to provide Delivery, training, credit, service 7 -6

Product-Selling Model FIGURE 7. 1 7 -7

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 7 -8

Competitive Analysis Worksheet TABLE 7. 1 7 -9

Product Life Cycle Stages 7 -10

Product Positioning Options Position new versus established products Position with price strategies Position with value added 7 -11

Selling New versus Mature Products Nature and extent of each stage in product life cycle determined by: Product’s perceived advantage over available substitutes Product’s benefits and importance of needs met by product Full spectrum of competitive activity Changes in technology, fashion, and/or demographics 7 -12

Product-Selling Strategies for Positioning FIGURE 7. 2 7 -13

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 7 -14

Slipit Case See the Website 7 -15

Selling Products with a Price Strategy Low-price emphasis Consequences of low price tactics E-commerce impact on pricing 7 -16

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 7 -17

Consequences of Low Price Tactics High/low involvement buyers? High emotional involvement with brand Low-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 7 -18

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 7 -19

Value-Added Selling Progressive marketers add value with intangibles Increased service and courtesy Prompt deliveries, more innovations Value-added approaches yield unique niche and competitive edge 7 -20

Value Added by Lexus 7 -21

The Total Product Concept FIGURE 7. 3 7 -22

Four Product Dimensions Generic Product Generic product: basic product you are selling, describes product category. . . such as hotels, MP 3 players, or insurance Example: Every Smith Hotel offers guest rooms, meeting rooms, and other basic hotel services 7 -23

Four Product Dimensions Expected 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 7 -24

Four Product Dimensions Value-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 wireless Internet access 7 -25

Four Product Dimensions Potential 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 7 -26

Value Creation for. . . Transactional buyers Involves emphasis on eliminating costs, avoiding delays Consultative buyers Involves custom-tailored solutions to deliver more real benefits Strategic alliance buyers Requires leveraging the full assets of the company; investments go well beyond the sales force 7 -27