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Product-Selling Strategies that Add Value

Product-Selling Strategies that Add Value. Concepts and Practices. 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

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Product-Selling Strategies that Add Value

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  1. Product-Selling Strategies thatAdd Value Concepts and Practices

  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

  3. 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

  4. Fuji Xerox Value Proposition See the Website

  5. 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

  6. 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. Product-Selling Model 7.1 FIGURE

  8. 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

  9. Competitive Analysis Worksheet 7.1 TABLE

  10. Product Life Cycle Stages

  11. Product Positioning Options • Position new versus established products • Position with price strategies • Position with value added

  12. Selling New versusMature 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

  13. Product-Selling Strategiesfor Positioning 7.2 FIGURE

  14. 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

  15. Slipit Case See the Website

  16. Selling Products witha Price Strategy • Low-price emphasis • Consequences of low price tactics • E-commerce impact on pricing

  17. 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

  18. Consequences ofLow 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

  19. 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

  20. 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

  21. Value Addedby Lexus

  22. The Total Product Concept 7.3 FIGURE

  23. 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

  24. Four Product DimensionsExpected 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

  25. 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

  26. 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

  27. 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

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