Product-Selling Strategies that Add Value

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Product-Selling Strategies thatAdd Value

• Concepts and Practices

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Positioning and Differentiation

• Positioning involves those decisions and
  activities intended to create and maintain a
  certain concept of the firms product in the
  customers 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

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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

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Fuji Xerox Value Proposition
See the Website
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Redefining Products in the Age of Information

• Products are problem-solving tools
• People buy products if they fulfill a
  problem-solving need
• Todays better educated and more demanding
  customers are seeking a cluster of satisfactions

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Product Selling Model

• Todays product
• Meets and exceeds expectations
• Better quality, larger selection
• Todays salesperson
• Acts as partner
• More trustworthy, knowledgeable
• Todays company
• Acts as team to provide
• Delivery, training, credit, service

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Product-Selling Model
7.1
FIGURE
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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

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Competitive Analysis
Worksheet
7.1
TABLE
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Product Life Cycle Stages
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Product Positioning Options

• Position new versus established products
• Position with price strategies
• Position with value added

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Selling New versusMature Products

• Nature and extent of each stage in product life
  cycle determined by
• Products perceived advantage over available
  substitutes
• Products benefits and importance of needs met by
  product
• Full spectrum of competitive activity
• Changes in technology, fashion, and/or
  demographics

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Product-Selling Strategiesfor Positioning
7.2
FIGURE
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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

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Slipit Case
See the Website
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Selling Products witha Price Strategy

• Low-price emphasis
• Consequences of low price tactics
• E-commerce impact on pricing

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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

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Consequences ofLow Price Tactics

• High/low involvement buyers?
• High emotional involvement with brand
• Low-involvement buyers focus on price
• Importance of quality?
• Role of pricequality relationship in sale
• Importance of service?
• Many buyers, particularly business-to-business,
  rank service above absolute price

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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

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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

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Value Addedby Lexus
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The Total Product Concept
7.3
FIGURE
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Four Product DimensionsGeneric Product

• Generic product basic product you are selling,
  describes product category . . . such as hotels,
  MP3 players, or insurance
• Example Every Smith Hotel offers guest rooms,
  meeting rooms, and other basic hotel services

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Four Product DimensionsExpected Product

• Expected product Everything that meets the
  customers minimal expectations beyond generic
  product
• Example Every Smith Hotel offers not only guest
  roomsbut the rooms are very clean and spacious

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Four Product DimensionsValue-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
  wirelessInternet access

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Four Product DimensionsPotential 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

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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