Product-Selling Strategies that

Add ValueConcepts 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

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

Today’s better educated and more demanding customers are seeking a cluster of satisfactions

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Product Selling ModelToday’s product

Meets and exceeds expectationsBetter quality, larger selection

Today’s salespersonActs as partnerMore trustworthy, knowledgeable

Today’s companyActs as team to provideDelivery, training, credit, service

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Product-Selling Model

FIGURE 7.1

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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

TABLE 7.1

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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:Product’s perceived advantage over available substitutesProduct’s benefits and importance of needs met by

productFull spectrum of competitive activityChanges in technology, fashion, and/or demographics

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Product-Selling Strategiesfor Positioning

FIGURE 7.2

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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 brandLow-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

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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 courtesyPrompt 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

FIGURE 7.3

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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 customer’s minimal expectations beyond generic product

Example: Every Smith Hotel offers not only guest rooms—but 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 buyersInvolves custom-tailored solutions to deliver more

real benefits

Strategic alliance buyersRequires leveraging the full assets of the

company; investments go well beyond the sales force