University of Houston MARK 3337 Exam 2

Competition - Understanding it and knowing how to address it.

- Being able to discuss your strengths and weaknesses relative to the competition. - Do not refer to competition directly during sales presentations. - Only discuss competition if you know your facts. - Never criticize your competition (what happen in the Tommy clip) - Be prepare to add value.

Maintenance & service contracts.

- Customized service agreements that incorporates the customers special priorities, feelings or needs. - Customers often want information concerning maintenance and care requirements for the product they purchase.

Product Configuration Software

- Develops customized product solutions quickly and accurately - Incorporates customer selection criteria - Identifies options, pricing, delivery schedules. - Can integrate with customer relationship management applications

Price Strategy kinds and benefits

- Each stage of the life cycle - Setting price can be a complex process - Some firms set prices to maximize profit (porsche) - Others set a market share objective (walmart) - Pricing strategies reflect a products position in the marketplace

Selling Mature Products

- Emphasizes brand superiority - Emphasizes company superiority - Point out unique features - Provide quality customer service - Sustain existing market share

Implication Questions

- For the prospect to see HOW your business, service or product is the solution to their need. - Can only be conducted once the need is identified. - These questions help the buyer realize the costs of doing nothing outweigh the cost of the solution.

Situational Questions

- General data-gathering questions designed to help you find out some basic information - "I know ________. Can you tell me about ________?"

Types of Consumer buyers

- Habitual - Verity Seeking - Complex Buyer

Performance data & specifications

- Important when customer compares the merits of one product to another. - Knowing everything about how the product or service works.

Types of Organizational Buyers

- New-Task Buy - Straight rebuy - Modified rebuy

Needs Payoff Questions

- Questions the gain commitment to move the selling process forward. - Summarized the needs agreed upon by the client and ask for commitment to work together towards a solution. - "From our conversation today, It seem that you are searching for ______. I believe I can meet those needs. Would you be interested in learning more about what we can offer?"

Boiler room video - telemarketing

- Seller's name is Ron. - How to sell on a telemarketing call. - "It's not what I want, It's what you want."

The four SPIN questions

- Situational - Problem - Implication - Needs Payoff

Problem Questions

- These questions are meant to assess the needs or problems your client/prospect might have. - These provide the necessary answers to how YOU can be the solution. - "What are your current challenges with your current situation?"

Steps in the typical buying process.

1. Needs awareness 2. Evaluation of solutions 3. Resolution of problems 4. Purchase 5. Implementation

Product Positioning options

1. Position new and emerging products versus well-established products. 2. Position products with price strategy. 3. Position products with value-added strategies.

Product Information Categories/Parts to becoming a product expert.

1. Product development & quality improvement processes. 2. Performance data and specifications 3. Maintenance and service contracts. 4. Price and Delivery

Girard's Farris Wheel - how to prospect.

1. Referrals 2. Center of Influence 3. Directories 4. Trade publication and trade shows 5. Telemarketing, direct mail, email, and advertising 6. Websites and computerized databases 7. Cold calling 8. Networking

Sources of Product Information.

1. Web-based catalogs and other product literature developed by the company. 2. Sales training programs. 3. Plant tours, seeing production first hand. 4. Internal sales and sales-support team members. 5. Customers who use the product (testimonies) 6. use the product 7. read and understand publications.

New-Task Buy

A first-time purchase of a product or service. Depending on the cost or complexity of this purchase, the buying decision may require several weeks of information gathering and the involvement of many decision participants.

Cost Benefit Analysis.

A part of quantifying the solution. Calculates the actual cost of the purchase and savings the buyer can anticipate from the investment.

Return on Investment (ROI)

A part of quantifying the solution. Seen in Business-to-business selling. Often requires the collection of detailed financial information.

Straight Rebuy

A routine purchase of items needed by a business-to-business customer.

Product Strategy

A well-conceived plan that emphasizes becoming a product expert, selling specific benefits, and configuring value-added solutions.

Value Proposition

A well-informed customer will usually choose the product that offers the must value. Therefore, this set of benefits and values the salesperson configures to meet and exceed their customers' specific needs positions their product to do so.

Product Selling Model: Today's Salesperson

Acts as a partner - More courteous and trustworthy. - More knowledgeable - More understanding of customers - Provides service after the sale.

Product Selling Model: Today's Company

Acts as a team to provide - Delivery and instillation - Orientation and training - Quick response times - Credit options - Customer service

Emotional Buying Motive

Acts due to passion or sentiment. If two products are identical, the sales person who "connects" has the advantage.

Rational Buying Motive

Acts on reason or judgement.

Purchase

After all the customers obstacles and concerns have been overcome, the purchase decision is made.

Buying Motives

An aroused need, drive or desire that stimulates behavior to satisfy the aroused need.

Product Selling Model. (3-D)

Because of today's better-educated and more demanding customers, a successful product strategy should include a cluster of satisfactions that meet the needs of these customers... - Today's Product - Today's Salesperson - Today's Company

Differentiation

Being able to separate yourself, your product, and/or your company from that of your competitor. It is a key to building and maintaining a competitive advantage.

Patronage Buying Motive

Buy from a particular firm. Past experience was positive. Superior service, competent sales staff and/or product selection ----- Example: Only going to academy to buy Nike.

Product Buying Motive

Buyer believes one product is superior over another. Preference to specific brands, price, design/engineering. ----- Example: Only buying Nike over any other brand

Evaluation of Solutions

Buyers who experience need awareness usually begin searching for information that will help them evaluate possible problem solutions.

Organizational Buyers

Buys goods and services for use in the production of other products and services that are sold, rented or supplied to other. ----- - Decision made by many - Decision made to meet precise technical specs - Purchase is rational - Decision may be slow and complex

Customer Strategy

Carefully conceived plan that results in understanding the customer's perception and maximizing customer satisfaction and responsiveness. --- Requires that the salespeople, - Understand the buying process - Understand buyer behavior - Develop a prospect base

Complex Buyers

Characterized by a high degree of involvement by the consumer. Consumers are likely to be highly involved when the product is expensive, purchased infrequently and highly self-expressive. ----- Example: Car, House, Television, Cell Phone, Clothing, Universities... etc.

Variety Seeking Buyers

Characterized by low customer involvement, but important perceived brand differences. (Brand Loyal) ----- Example in class: Jiff Peanut Butter

Cultural Influence

Common language, environment and subculture. ----- Examples: Hispanics, African Americans, French

Reference Group Influence

Consists of the categories of people that you see yourself belonging to, and with which you habitually compare yourself. ----- Examples: Church, college major, sorority, fraternity... etc..

Features

Data, facts, or characteristics of your product or service. Often relate to craftsmanship, design, durability, and economy of operation.

Positioning

Decisions and activities intended to create and maintain a certain concept of the product in the customers mind.

Price Strategy drawbacks

Excessive focus on low prices and generous discounts. - High emotional involvement with brand - Low-involvement buyers focus on price - Role of price-quality relationship in sale - Many buyers, in B2B rank service over absolute price

Quantifying the solution.

In most situations, the price quotation should be accompanied by information that creates value in the mind of the customer. Which is the process of determining whether or not the proposal adds value.

Consumer Buyers

Individual and households who buy goods and services for personal consumption. ----- - Decision made by one - Purchase made by brand reputation, personal recommendation, or emotion - Buyer may have little product experience

Why is setting an agenda so important?

It helps to establish that the salesperson and customer will be working together to uncover needs and explore solutions. - Helps with what you're trying to focus on.

Guest Speaker: Name, Title, Key Topics

Jerad Romo, Director of HR for Sewell Automotive, What Sewell is, What their motto is, showed the customer service model (triangle) opposite of most car dealerships.

Prospect Base

Made up of current customers and potential customers.

Price Strategy

Maximize profit, maximize market shares and maximize product trial. Often reflects the products position in the product life cycle.

Product Selling Model: Today's Product

Meets and exceeds expectations. - Better quality - Larger selection - New-product improvements

Tommy Boy Video Clip - What did Richard (little guy) and Tommy (big guy) represent about selling the product.

Must KNOW your product. Richard (little guy) focused only on Features & Tommy (big guy) focused only on Benefits. Tommy lit the car on fire and bad mouthed the competitors. Cannot effectively sell your product when bad mouthing the competition.

Product Configuration Software example in class

Nissan website, build your own car to demonstrate Product Configuration Software.

Group Influences

People around us influence our buying decisions ----- Can be grouped into four major areas, - Role Influence - Reference Group Influence - Social Class Influence - Cultural Influence

Lowest to Highest level of Maslow's Needs...

Physiological - Primary/basic needs, (food, water, shelter) Security - Free from danger, (gun, health insurance, alarm for home) Social - Need to belong, (clothes we buy, social media) Esteem - Feel worthy in the eyes of others, (college degree) Self-actualization - Self fulfillment, tapping into full potential.

Target Positioning and Differentiation

Positioning - quality, first to bring luxury to mainstream. Differentiation - Expect more, pay less.

Pepsi Positioning and Differentiation

Positioning - uses pop culture to promote product. Differentiation - Try something new

Total Product Concept

Product, expected product, value-added product and potential product. (

Habitual Buyer

Requires very little consumer involvement and brand differentiation are usually insignificant. ----- Example in class: Tea Other examples: Shampoo, copy paper, laundry detergent.

Why the approach is important

Salesperson doesn't know, who the company is, what the companies product is, what the company stands for... etc. Good to ask SPIN to determine the need behind the need.

Role Influence

Set of characteristics and expected social behaviors based on the expectations of others ----- Examples: Father, mother, brother, student, position held at work... etc.

Video Clip: Seinfeld and the new jacket - what did it mean to Jerry and the relevance of George.

Social needs and the roles we play have an influence on what we buy. Jerry - Social need of jacket, confidence boost, feels successful in jacket. George - Expresses like for the jacket and has influence over Jerry.

Needs Awareness

The buyer recognizes that something is imperfect or incomplete.

Resolution of Problem

The customer is aware of a need, and has evaluated one or more solutions. The customer has resolved to do something. However, the customer is likely to have issues and concerns that must be resolved before moving ahead. ----- Especially true in the case of complex sales!

Product development & quality improvement processes

The original idea for a product or service is tested, modified and retested several times before it is offered to the customer.

Qualifying Prospects

The process of identifying prospects who appear to have a need for your product and should be contacted.

Bridge Statements

Transitional phrase or statement that connects a statement of features, with a statement of benefits.

Example of Total Product Concept in class

University of Houston Student. Product - higher education Expected Product- textbooks, classrooms, parking Value-added Product - Starbucks, study rooms Potential Product - A business degree.

Maslow's Needs.

Useful for gaining insight into buyers needs. As low-level needs are fulfilled, attentions shifts to fulfilling higher-level needs

Benefits

Whatever provides the customer with a personal advantage or gain. Answers the question, "How will I benefit from owning or using the product?"

Modified Rebuy

When your customer wants to modify product specifications, change delivery schedules, or renegotiate prices.

Implementation

repeat sales occur after value creation of timely delivery, superior instillation, accurate invoicing and follow up contacts. ----- The continuation of relationship with the buyer

Selling New Products

- Develop new expectations - Change habits - Establish new standards - Build product desire - Create new markets

Social Class Influence

Are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors ----- Examples: Religion, LGBT, Millennials

The purpose of asking SPIN questions?

Finding the need(s) behind the need(s)

Walmart Positioning and Differentiation

Positioning - Low cost, main market is family. Differentiation - Save money, live better.

Coke Positioning and Differentiation

Positioning - Universal, for everyone. Differentiation - Open happiness