Chp 6 Sales Knowledge ppt

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Chp 6 Sales Knowledge ppt

  1. 1. 6- McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Sales Knowledge: Customers, Products, Technologies Chapter 6
  3. 3. Chapter 6 6-
  4. 4. The Tree of Business Life: Knowledge <ul><li>Guided by The Golden Rule : </li></ul><ul><ul><li>Be an expert on everything associated with your product(s) </li></ul></ul><ul><ul><li>Use wisdom when applying knowledge </li></ul></ul><ul><ul><li>Remember, customers rely on you to truthfully provide knowledge and wisdom </li></ul></ul><ul><ul><li>Realize that people do not care how much you know until they know how much you care </li></ul></ul>I T C Ethical Service Builds T r u e Relationships T T T T T T T T T T T
  5. 5. Sources of Sales Knowledge <ul><li>Sales training </li></ul><ul><li>Experience </li></ul>
  6. 6. Knowledge Builds Relationships <ul><li>Knowledge increases a salesperson’s confidence </li></ul><ul><li>Knowledge increases a buyer’s confidence in salesperson </li></ul><ul><li>More knowledge leads to more sales and more relationships </li></ul>
  7. 7. Know Your Customers <ul><li>Find out all you can </li></ul>
  8. 8. Know Your Company <ul><li>General Company Information </li></ul><ul><ul><li>Company growth and accomplishment </li></ul></ul><ul><ul><li>Policies and procedures </li></ul></ul><ul><ul><li>Production facilities </li></ul></ul><ul><ul><li>Service facilities </li></ul></ul>
  9. 9. Know Your Product <ul><li>Product knowledge may include: </li></ul><ul><ul><li>Performance data </li></ul></ul><ul><ul><li>Physical size and characteristics </li></ul></ul><ul><ul><li>How the product operates </li></ul></ul><ul><ul><li>Specific features, advantages, and benefits of the product </li></ul></ul><ul><ul><li>How well the product is selling in the marketplace </li></ul></ul>
  10. 10. Know Your Resellers <ul><li>Understand the channel of distribution </li></ul><ul><li>Know as much about each channel member as possible </li></ul><ul><ul><li>Likes and dislikes of each channel member’s customers </li></ul></ul><ul><ul><li>Product lines and the assortment each one carries </li></ul></ul><ul><ul><li>When each member sees salespeople </li></ul></ul><ul><ul><li>Distribution, promotion, and pricing policies </li></ul></ul><ul><ul><li>What quantity of which product each channel member has purchased in the past </li></ul></ul>
  11. 11. Advertising Aids Salespeople <ul><li>Main ingredients of a firm’s promotional effort </li></ul><ul><li>Types of Advertising Differ </li></ul><ul><ul><li>National advertising </li></ul></ul><ul><ul><li>Retail advertising </li></ul></ul><ul><ul><li>Cooperative, or co-op, advertising </li></ul></ul><ul><ul><li>Trade advertising </li></ul></ul><ul><ul><li>Industrial advertising </li></ul></ul><ul><ul><li>Direct-mail advertising </li></ul></ul><ul><ul><li>Internet advertising </li></ul></ul>
  12. 12. Why Spend Money on Advertising? <ul><li>Companies advertise because they hope to: </li></ul><ul><ul><li>Increase overall sales and sales of a specific product </li></ul></ul><ul><ul><li>Give salespeople additional selling information for sales presentations </li></ul></ul><ul><ul><li>Develop leads for salespeople through mail-ins and ad response </li></ul></ul><ul><ul><li>Increase cooperation from channel members through co-op advertising and promotional campaigns </li></ul></ul><ul><ul><li>Educate the customer about the company’s product </li></ul></ul>
  13. 13. Why Spend Money on Advertising?, cont… <ul><li>Inform prospects that a product is on the market and where to buy it </li></ul><ul><li>Reduce cognitive dissonance over the purchase </li></ul><ul><li>Create sales or pre-sell customers between sales calls </li></ul>
  14. 14. Sales Promotion Generates Sales <ul><li>Consumer sales promotion </li></ul><ul><li>Trade sales promotion </li></ul><ul><li>Point-of-purchase (POP) displays </li></ul><ul><li>Shelf positioning </li></ul><ul><li>Shelf facings </li></ul><ul><li>Premiums </li></ul><ul><li>Sales promotion on the Internet </li></ul>
  15. 15. What’s It Worth? Pricing Your Product <ul><li>Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the product </li></ul>
  16. 16. Exhibit 6.4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations
  17. 17. Know Your Competition, Industry, and Economy <ul><li>Understand competitors’ products, policies, and practices </li></ul>
  18. 18. Personal Computers and Selling <ul><li>The top 10 PC applications include: </li></ul><ul><ul><li>Customer/prospect profile </li></ul></ul><ul><ul><li>Lead tracking </li></ul></ul><ul><ul><li>Call reports </li></ul></ul><ul><ul><li>Sales forecasts </li></ul></ul><ul><ul><li>Sales data analysis </li></ul></ul><ul><ul><li>Sales presentation </li></ul></ul><ul><ul><li>Time/territory management </li></ul></ul><ul><ul><li>Order entry </li></ul></ul><ul><ul><li>Travel and expense reports </li></ul></ul><ul><ul><li>Checking inventory/shipping status </li></ul></ul>
  19. 19. Technology Etiquette <ul><li>Netiquette – etiquette on the internet </li></ul><ul><ul><li>Cell Phones </li></ul></ul><ul><ul><li>Texting </li></ul></ul><ul><ul><li>Instant Messaging </li></ul></ul><ul><ul><li>Email </li></ul></ul><ul><ul><li>Speakerphones and Conference Calls </li></ul></ul>
  20. 20. Price Sheets <ul><li>Prices </li></ul><ul><ul><li>List Price—standard price </li></ul></ul><ul><ul><li>Net Price—w/discounts </li></ul></ul><ul><ul><li>Zone Price </li></ul></ul><ul><ul><li>FOB Shipping Price </li></ul></ul><ul><ul><li>FOB Destination </li></ul></ul>
  21. 21. Discounts <ul><li>Discounts </li></ul><ul><ul><li>Noncumulative: one-time reduction </li></ul></ul><ul><ul><li>Cumulative: discount over a period of time </li></ul></ul><ul><ul><li>Cash discounts: pay bills w/in stated period </li></ul></ul><ul><ul><ul><li>i.e. 3/10 net 30 on $10,000 </li></ul></ul></ul>
  22. 22. Discounts Cont. <ul><li>Discounts </li></ul><ul><ul><li>Trade discounts: reduce prices to channel members (% off the list retail price) </li></ul></ul><ul><ul><li>Consumer: one-time price reductions manufacturer passes on to retailer or consumer (cents off labels) </li></ul></ul>
  23. 23. Markups <ul><li>Markup: dollar amount added to the product to determine the selling price </li></ul><ul><li>Gross Profit: money available to cover costs of marketing </li></ul><ul><li>Net Profit: money remaining after the costs of marketing and operations </li></ul>
  24. 24. Markups Cont. <ul><li>Percentage Markup on Selling Price </li></ul><ul><li>Amount added to cost = $2.00 = 40% </li></ul><ul><li>Selling Price $5.00 </li></ul><ul><li>Percentage Markup on Cost = Amount added to cost = $2.00 = 66.6% Cost = $3.00 </li></ul>
  25. 25. ROI-- Return on Investment <ul><li>$70,440 = total gross sales -55,260 = total investment $15,180 = total gross profit </li></ul><ul><li>27.5% ROI ($15,180/$55,260) </li></ul>
  26. 26. Value Analysis <ul><li>Determines the best product for the money </li></ul><ul><li>High-priced product may be better value than a lower-priced product </li></ul><ul><ul><li>How does your product’s features/benefits/advantages compare? </li></ul></ul><ul><ul><li>Can your product do the same job as the competitor’s? </li></ul></ul>
  27. 27. Value Analysis <ul><li>Three types: </li></ul><ul><ul><li>Product Cost to True Value </li></ul></ul><ul><ul><ul><li>Never discuss costs until you demonstrate the value of a product –Exhibit G </li></ul></ul></ul><ul><ul><li>Units Costs Break down price </li></ul></ul><ul><ul><ul><li>Computer sells for 1K, processes 50K in transactions </li></ul></ul></ul><ul><ul><ul><li>Unit cost is 2 cents per transaction </li></ul></ul></ul><ul><ul><li>ROI = Gross sales - Total Investment = Gross Profit </li></ul></ul><ul><ul><ul><li>Gross Profit /Total Investment = ROI </li></ul></ul></ul>
  28. 28. Case 6A.1—Claire Cosmetics <ul><ul><li>Cost for a dozen of each product </li></ul></ul><ul><ul><li>Cost for a floor stand and counter display </li></ul></ul><ul><ul><li>Profit on a floor stand and counter display </li></ul></ul><ul><ul><li>What are discounts—dozen of each product/floor stand/counter display </li></ul></ul><ul><ul><li>Determine markups for individual unit </li></ul></ul><ul><ul><li>Determine ROI on a floor stand and counter display </li></ul></ul>
  29. 29. Product Sales Pitch <ul><ul><li>Selling to buyer at Target </li></ul></ul><ul><ul><li>Pitch the product </li></ul></ul><ul><ul><li>5 minute time-frame (approx) </li></ul></ul><ul><ul><li>Be aware of verbal and nonverbal cues and be prepared to use a different tactic/strategy to get my attention </li></ul></ul>
  30. 30. Product Sales Pitch Cont. <ul><ul><li>Target is in need of new product for the Health & Beauty Dept. </li></ul></ul><ul><ul><li>You are the salesperson trying to get me to purchase product to put on my shelves </li></ul></ul><ul><ul><li>Know the product features/benefits/advantage </li></ul></ul><ul><ul><li>You can provide me literature/testimony/product demo </li></ul></ul><ul><ul><li>Know the product pricing—retail price (make up cost if need be) </li></ul></ul><ul><ul><li>Know the competition </li></ul></ul>
  31. 31. Product Sales Pitch Cont. <ul><ul><li>Identify the problem </li></ul></ul><ul><ul><li>Build interest and excitement </li></ul></ul><ul><ul><li>Give a testimony </li></ul></ul><ul><ul><li>Validate my objections/concerns </li></ul></ul><ul><ul><li>Create a decision/move the buyer to act/on the deal </li></ul></ul>
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